Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Investor Day (December 2013)
35 slides from Siemens Aktiengesellschaft's investor day presentation, Dec 5, 2013
Slide 1: Siemens Infrastructure & Cities Sector - The powerhouse for intelligent infrastructure
Roland Busch | CEO Infrastructure & Cities Sector Siemens Infrastructure & Cities Sector - The powerhouse for intelligent infrastructure Capital Market Day London, December 5, 2013 Unrestricted © Siemens AG 2013. All rights reserved.
Slide 2: Safe Harbour Statement
Safe Harbour Statement This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forward-looking statements. These statements may be identified by words such as “expects,” “looks forward to,” “an
Slide 3: Powerful portfolio serving attractive markets: key messages
We have a powerful portfolio of businesses serving very attractive markets with high 1| profit pools 2| We made major steps in transforming the Sector towards higher profitability 3| We are driving project execution with discipline and focus 4| We will rapidly drive the margins to competitive levels
Slide 4: Infrastructure & Cities Sector in FY 2013
The powerhouse for intelligent infrastructure Infrastructure & Cities Sector in FY 2013 Revenue: €17.9bn Employees: approx. 89,500 Profit Margin: 1.6% (Underlying: 6.7%) EBITDA Margin: 3.7% (Underlying: 8.2%) Transportation & Logistics (T&L) Power Grid Solutions & Prod. (PGS&P) Building Technologies
Slide 5: Solution business pulls products and service business
Solution business pulls products and service business Our business mix FY 2013 Products Business mix (incl. a full year of Invensys Rail, • Locomotives excl. Postal & Baggage Handling) • Train signals, traffic lights, sensors • Circuit breakers, measuring and monitoring devices • Fire detectors, roo
Slide 6: Stable and balanced customer mix leading to high resilience
IC has a stable and balanced customer mix leading to high resilience Customer split by Revenue Limited correlation to cycle Utility and Federal industry customers and state owned companies Significant share of business à late and (infrastructure and short cycle industry) with limited cyclicity. Priv
Slide 7: More than 75% of our business significantly outgrew the market
More than 75% of our business significantly outgrew the market Regional split of Orders and market growth (CAGR FY 2011 to FY 2013) Europe, CAME1) Orders2) FY 11 – FY 13 +4% 2.2x market growth Employees approx. 56,500 63% % of Orders in FY 2013 In line with market growth Americas Tough comparison Or
Slide 8: IC performance affected by significant one-time charges in FY 2013
IC performance affected by significant one-time charges in FY 2013 EBITDA Margin Non-recurring items (Underlying) % €bn 0.9 12 EBITDA Margin Target Range 8%-12% 10 8.7% 8.2% 8.2% 0.5 8 8.3% 7.5% 6 4 3.7% 0.3 2 0.1 0 FY 2011 FY 2012 FY 2013 FY 2014e FY 2013 Transformation Project Invensys Total charg
Slide 9: Rail Systems: critical projects have stabilized
Project execution • Portfolio • Transformation Rail Systems: critical projects have stabilized Status of legacy projects Project Status Velaro D ü • Project execution according to project plan agreed with customer • Delivery to Deutsche Bahn for training purposes in 11/2013 Velaro Eurostar ü • Timel
Slide 10: Reliable project execution is key to success
Project execution • Portfolio • Transformation Reliable project execution is key to success Implemented improvement levers Stringent project selection Front-loaded engineering (platform, pre-tender) Supplier management: Reduced specifications and early engagement Monthly joint team meetings: Siemens
Slide 11: Focusing the portfolio to strengthen core and reduce complexity
Project execution • Portfolio • Transformation IC is focusing its portfolio to strengthen its core and reduce its complexity Overview of disposals and acquisitions Disposals/exits/ramp down Acquisitions/partnerships In process Postal and Baggage Handling Invensys Rail Rail Automation ü Infrastructur
Slide 12: Managing business mix towards higher product and service content
Project execution • Portfolio • Transformation We manage our business mix towards higher product and service content Optimization of our business mix FY 2011 FY 2013 Business mix Business mix (incl. a full year of Invensys Rail, excl. Postal & Baggage Handling) 38% 40% 40% 44% 18% 20% Solution Servi
Slide 13: Greater emphasis on selection criteria for solution business
Project execution • Portfolio • Transformation Greater emphasis on selection criteria for solution business Attractive ROCE and profitable growth with low risk Benefits of solution business Selection criteria • Is a competitive edge for us • High product and service share • Pulls product and • Limit
Slide 14: Clear selection criteria for bid or no-bid decisions
Project execution • Portfolio • Transformation Clear selection criteria for bid or no-bid decisions Turnkey projects within IC Successful turnkey projects No-bid decision Example Metro Riyadh Example Crossrail (Rolling Stock) • Order of €1.6bn, no civil works included in our scope! Seemingly attract
Slide 15: Transformation clears the way to our EBITDA Margin Target Range
Project execution • Portfolio • Transformation Transformation clears the way to our EBITDA Margin Target Range Impact of productivity program €bn Productivity program Gross Margin Approx. 7% improvements 6.0% • Pricing power • Manufacturing 1.0 • Purchasing OPEX improvements • R&D • Sales Profit Vol
Slide 16: Improving pricing quality is a focus matter
Project execution • Portfolio • Transformation Improving pricing quality is a focus matter Strict pricing Doubled price enforcement for standard low voltage governance products in Germany Advance + $10m Profit impact on LMV Low Voltage & Products in analytics US by transforming cherry pickers into v
Slide 17: Leaner and focused sales approach leads to savings of approx. €150m
Project execution • Portfolio • Transformation Leaner and focused sales approach leads to savings of approx. €150m Focused investments into sales Focused approach of investments into growth regions Increased sales and right-sizing of others productivity Right-size in 36 countries; closing 22 divisio
Slide 18: We invest in our sales set-up
Project execution • Portfolio • Transformation We invest in our sales set-up New sales set-up of LMV and BT products, SG to join in FY 2014 Utilities, Global National Value added OEMs3), Example China DSOs1), accounts accounts partners, panel Orders (LMV and BT products) muncipalities and EPCs2) dis
Slide 19: City account management is USP channel for IC Sector
Project execution • Portfolio • Transformation City account management is USP channel for IC Sector Key successes in FY 2012 and FY 2013 in focus cities More than 200 top Asia Americas Europe leads, most cross- Hong Kong Charlotte London divisional • MTR Shatin Central Link – • Charlotte LightRail •
Slide 20: IC is active in attractive markets
IC is active in attractive markets All IC markets grow at least with world GDP Focus on intelligent infrastructure market €bn Long term Urbanization approx. market growth 200 CAGR "Green" Transportation made more productive, Transport 80 4%-6% economy safer and sustainable Efficient energy flow and
Slide 21: IC drives the market towards increased intelligent infrastructure
Strategy • Growth Drivers IC drives the market towards increased intelligent infrastructure Further growth for decades to come – Four stages of infrastructure development 4 stages of infrastructure 3.0 development 2.0 1.0 Fully integrated, intelligent Intelligent infrastructure infrastructure • Inte
Slide 22: IC is the market leader in intelligent infrastructure automation
Strategy • Growth Drivers IC is the market leader in intelligent infrastructure automation Infrastructure & Cities portfolio examples Examples Rolling stock Road and rail Power and Buildings utility grids incl. data centers Manage- • Intelligent remote • Rail IT • Meter data management • Building pe
Slide 23: Intelligence of infrastructure yields quantifiable customer benefits
Strategy • Growth Drivers The intelligence of infrastructure yields significant and quantifiable benefits for our customers… Power and Rolling stock Road and rail utility grids Buildings Impact of Integration of renew- 20-30% 20-30% capacity increase intelligence with driverless trains ables: 25-40%
Slide 24: Benefits captured in our customer projects
Strategy • Growth Drivers … which are captured in our customer projects Intelligent infrastructure examples Power and Rail Road utility grids Buildings Driverless metro in London: 20% less traffic, India: Improved availability Building automation in Nuremberg enables 50% 17% reduction in com- of dis
Slide 25: China a success: cross-divisional focus leading to growth
Strategy • Growth Drivers China a success: Cross-Divisional focus leading to strong, margin-accretive growth IC China business progress Leverage synergies FY 2012 FY 2013 Push cost optimization in go-to-market • Improving SCM1) and 27% • Joint LMV/BT/SG sales force Sector manufacturing performance O
Slide 26: India and Thailand: high profile project wins
Strategy • Growth Drivers India and Thailand: High profile project wins India Bangkok Broad IC SG footprint secures project wins Urban transport systems MRTA1) and BTS2) IC SG with broad footprint in India: • > 700k passengers/day • Value chain completely localized – • 54 train sets from R&D to sale
Slide 27: RL is well positioned in the Russian market
Strategy • Growth Drivers RL is well positioned in the Russian market Current market coverage Set-up High Speed Commuter Coaches Locomotives Service • Localization of up to 90% in Russia • Strong partners Products 8 plus 8 Sapsan 1,254 Lastochka 200 RIC 221 E-Locos Full maintenance (Velaro RUS) high
Slide 28: Smart Grid: bringing automation to electrical distribution
Strategy • Growth Drivers Smart Grid: Bringing automation to electrical distribution Strong foundation in Emphasis on transmission automation distribution automation Achievements • Market CAGR1): Approx. 5% • Market CAGR1): > 10% • PGS&P Order increase in • Degree of automation 2012: 95% • Degree of
Slide 29: Critical Power: strong performance in attractive growth markets
Strategy • Growth Drivers Critical Power: Strong performance in attractive growth markets Example LMV Data Center Oil & Gas Chemical Orders Orders Orders +59%1) +4% +8% FY 2012 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 1) Direct Order growth from data center customers, combined for BT and LMV Unrestri
Slide 30: Collaborative portfolio and account management in data centers
Strategy • Growth Drivers Collaborative portfolio and account management generates profitable growth Data Centers Strong foundation Emphasis on Data Centers Achievements • Complete solution portfolio (power, • Joint approach of BT and LMV • Strong funnel ramp-up HVAC1), fire safety & security) provi
Slide 31: Innovations: sustainable investment in R&D
Strategy • Growth Drivers Innovations @ Infrastructure & Cities Sector Sustainable investment We spent approx. 4% of sales on R&D (> €700m) Location of R&D resources Developm. of R&D resour- in FY 2013 ces in low cost countries in FY 2013 Lo cost Low Lo 30% 30% countries Maintenance ~15%1) FY 2011 F
Slide 32: Innovations: improving market leader positions
Strategy • Growth Drivers Innovations @ Infrastructure & Cities Sector Improving market leader positions Managing the new energy age Unattended train operation Protection family: SIPROTEC 5 Inspiro-Metro with Trainguard MT Lowest TCO1) in the market due to • Highest level of automation, no attendant
Slide 33: Summary of key messages
We have a powerful portfolio of businesses serving very attractive markets with high 1| profit pools 2| We made major steps in transforming the Sector towards higher profitability 3| We are driving project execution with discipline and focus 4| We will rapidly drive the margins to competitive levels
Slide 34: The right management team makes it happen
The right management team makes it happen Left to right: Ralf Christian, LMV Division Johannes Milde, BT Division Jan Mrosik, SG Division Roland Busch, Sector CEO Hannes Apitzsch, Sector CFO Sami Atiya, MOL Division Jochen Eickholt, RL Division Unrestricted © Siemens AG 2013. All rights reserved. Pa
Slide 35: Reconciliation and definitions for non-GAAP measures
Reconciliation and definitions for non-GAAP measures This document includes supplemental financial measures that are or may be non-GAAP financial measures. Orders and order backlog; adjusted or organic growth rates of revenue and orders; book-to-bill ratio; Total Sectors profit; return on equity (af