Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Investor Day (November 2006)
40 slides from Siemens Aktiengesellschaft's investor day presentation, Nov 10, 2006
Slide 1: Siemens well-positioned for the future
Siemens well-positioned for the future Annual Analyst Conference November 10, 2006 Preliminary unaudited financial statements that represent the basis of this Klaus Kleinfeld presentation have been changed. Please see the ad-hoc release of Dec. 11, Joe Kaeser 2006, at www.siemens.com/ir At this site
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. S
Slide 3: Fiscal 2006 - A dynamic and eventful year
Fiscal 2006 - A dynamic and eventful year Strong growth New orders € 96.3 billion (+ 15% YoY) Sales € 87.3 billion (+ 16% YoY) Solid earnings Net income € 3.1 billion (+38% YoY) Group Profit (total op. Groups) € 5.3 billion (+12% YoY) Massive portfolio expansion Initiated acquisitions of s
Slide 4: Key Figures Q4 and FY 2006
Key Figures Q4 and FY 2006 in millions of euros Q4 Δ in % FY 2006 Δ in % New Orders 22,616 (4) 96,259 +15 Sales 23,923 +8 87,325 +16 Group Profit from operations 1,251 +35 5,256 +12 Income from continuing operations 640 +29 3,160 + 3 EPS from continuing operations 0.72 +29 3.55 + 3 (in euros, not di
Slide 5: Fit4More positive – Clear sight on 2007 goals
Fit4More positive – Clear sight on 2007 goals Fit4More: Profit & Growth Program Performance Operational People Corporate and Portfolio Excellence Excellence Responsibility Solve Mobile Devices Execute Siemens Achieve high Achieve best-in- Finalize strategic Management System performance cu
Slide 6: Massive investments in profitable growth
Massive investments in profitable growth Focus areas Acquisitions Market position USFilter (5/2004) U.S. # 1 Bonus Energy (10/2004) worldwide # 5 Energy & offshore # 1 Environmental Care Flender (3/2005) Industry & Wind # 1 Robicon (7/2005) MV converters # 1 VA Tech (7/2005) VAI # 1 T&D # 4 Automati
Slide 7: Utilizing all market opportunities
Utilizing all market opportunities Regional distribution Growth rates 1996 vs. 2006 2005 – 2006 Siemens Siemens GDP 2x GDP growth = 7.8% Europe 5.8% 33% 8% 50% 2x GDP 66% Europe Siemens Americas 7.0% 20% 36% 26% Asia/Pacific 10.4% Americas 28% 17% Asia/ 15% 25% 11% Pacific MiddleEast, 12.0% Africa,
Slide 8: Solid transformation from SBS to SIS
Solid transformation from SBS to SIS* 10/01/06 04/01/07 * Siemens IT Solutions & Services Reporting as SIS* Former SBS situation SBS transition phase Future SIS structure aligned with other Siemens Groups PRS ORS SOL Global Sales & Regions Sales Sales Sales GZ GZ GZ GZ GZ Verticals Region D
Slide 9: New business model for SIS – 3 key levers for success
New business model for SIS – 3 key levers for success Volume ¾ Focus on Siemens industries e.g.: Automotive, healthcare, utilities, airports ¾ Joint go-to-market strategy Price ¾ Differentiation through unique set of competencies: - Total IT integration - Solution competencies - Industry know how Co
Slide 10: A&D - Sustained value enhancement
A&D - Sustained value enhancement profit A&D Business Cyclicality 1, 572 1,253 1,077 in € mn 981 865 806 708 740 723 10.1% 10.5% 10.9% 11.0% 8.4% 9.6% 12.2% 12.1% 12.2% % of Sales 1998 1999 2000 2001 2002 2003 2004 2005 comp. 2006 Page 10 November 10 Annual Analyst Conference 2006
Slide 11: A&D invests in process automation and regional setup
A&D invests in process automation and regional setup Sales in € bn 12.8 Sales in € bn 12.8 +49% +49% Electrical 8.6 8.6 Installation Others for Buildings +115% Americas +214% Process Asia/Pacific Automation Factory Automation Europe 2002 2006 2002 2006 Page 11 November 10 Annual Analyst Conference 2
Slide 12: A&D very well positioned in the Asian market
A&D very well positioned in the Asian market Leading PLC suppliers in Asia (Including hardware, software & services) ABB 1% 7% Others Koyo-PLC Direct 2% Mitsubishi BR Industrial 2% 25.2% LSIS 3% #1 in China with 25% market share GE Fanuc 4% Omron 8% #1 in India Schneider with 33% market share 9% Ele
Slide 13: A&D – World market leadership expanded with complemented portfolio
A&D – World market leadership expanded with complemented portfolio Robicon Sales +89% YOY Siemens + Strengthened Robicon Robicon Perfect Harmony: most-sold MV 20% converter worldwide Starters / Converters Improved access to key growth sectors in Others #2 North America #3 #4 (Oil & gas, water/wa
Slide 14: PG - Power market offers ongoing opportunities
PG - Power market offers ongoing opportunities Market in € bn +3% p.a new equipment & service 179 22 Wind boom especially 155 7% p.a in US and Asia Wind 16 High Oil&Gas prices 39 drive investments Oil & Gas and 6% p.a 30 Growth in GTL and LNG Industrial Applications Replacements of power pla
Slide 15: PG - Driving profitable growth through optimized business mix
PG - Driving profitable growth through optimized business mix Sales in € bn 10.1 +4% p.a Service segment growth 30% 7.8 Service 21% Focus on components - GT/ST - Compressors Components 33% 48% - Oil&Gas solutions - Wind - Air Pollution Control Turnkey (EPC) 46% 22% World class EPC 2000 2006 Pr
Slide 16: Clean energy offers multiple growth opportunities
Clean energy offers multiple growth opportunities Wind Geothermal Power Stations 2.3 MW onshore turbine Conversion of heat from low-temperature springs 3.6 MW offshore turbine into electrical energy + 195% orders CO2-emission free base load supply + 350% profit Additional Service busin
Slide 17: Healthcare - We target #1 or #2 positions in new segments
Healthcare - We target #1 or #2 positions also in newly addressed high growth market segments Market in € bn currency adjusted ~ 67 Immuno + 7% ~ 51 + 6% p.a ~ 20 Molecular Newly addressed: ~ 15 In-vitro diagnostics* + 14% Already addressed: + 5% p.a Imaging systems ~ 47 Product related ~ 36 s
Slide 18: Med - M&A is an integral part of our Healthcare strategy
Med - M&A is an integral part of our Healthcare strategy Major Acquisitions Major JV / Investments Other selected M&A 2006: DPC 2004: Mochida (35%) 2005: Sensant 2005: CTI 2003: Dräger Med (35%) 2003: MRC 2004: CADVision 2002: Mindit (75%) 2001: Pointshare 2003: OMT 2000: Shared Medical 1997: Trixel
Slide 19: Medical hits profit target for six years in a row
Medical hits profit target for six years in a row and outpaces market growth Highlights Group profit margin 15.1% 14.8% 12.8% 12.9% Continuing in € bn 9.3 8.3 introduction of 7.8 7.4 8.1 8.6 trendsetting 7.1 7.6 “firsts”, e. g. New SOMATOM orders* Definition CT Sales* Further market share gains
Slide 20: Med - World's first integrated diagnostics company
Med - World’s first integrated diagnostics company Leading position in attractive In-vitro diagnostics market (IVD) Rapid growth Attractive margins Strong Cash flow Number 3 position1) in IVD, almost level with number 2 Strong position in immunodiagnostics and gene based analysis Workflo
Slide 21: Outlook for fiscal 2007 – We'll reach our Fit4More goals
Outlook for fiscal 2007 – We’ll reach our Fit4More goals Growth of 2x global GDP (w/o effects from deconsolidation) All Groups expected to reach target margins 2007 will be a good year for Siemens Page 21 November 10 Annual Analyst Conference 2006
Slide 22: Shaping the company drove financing requirement
Shaping the company drove financing requirement 5,256 (1,4) Juniper proceeds (net) € +0.5 bn +0,4 (0,6) +3,738 Infineon proceeds (net) € +1.1 bn +0,1 Acquisitions € (2.4) bn thereof: DPC (net of cash) € (1.3) bn CAPEX € (3.2) bn (tangible & intangible assets) Reversal of (3,115) Juniper gain € +356
Slide 23: Siemens raised € 9bn debt financing during last quarter
Siemens raised € 9bn debt financing during last quarter Financing Strategy Financing strategy Goals Goals Diversification of investors and product base Maximize demand, minimize costs Currency congruent financing Reduce currency volatility risk Balanced maturity profile Match funding
Slide 24: Cash flow generation has widely followed volume growth
Cash flow generation has widely followed volume growth Volume in € Cash Flow in € 100 bn 12 bn New Orders 10 bn 90 bn 8 bn Sales 80 bn 6 bn 4 bn 70 bn 1.2 1.3 0.8 2 bn 0.5 60 bn 0.1 0 bn 2002 2003 2004 2005 2006 2007 Aspiration Net Cash excluding Acquisitions / Divestments 1.2 Cash Conversion: Incom
Slide 25: Most Groups improved NWC turns
Most Groups improved NWC turns Ranking NWC Turns 2006 NWC turns* absolute vs. PY 7.4 1 PG Ò 2 SV Ô 2006 3 I&S Ò 4 TS Ò 5 SBS Ô 6.9 6 7 Osram Med Ò Ô 8 A&D Ò 2005 9 PTD Ò * Total Operations Groups excluding Com and Other Ops. 10 SBT Ô Group specific programs in place for FY 2007 Page 25 November 10 A
Slide 26: CAPEX PPE vs. depreciation – Operating Groups
CAPEX PPE vs. depreciation – Operating Groups PPE Capex x 100% Depreciation 144% 122% 106% 115% Target 100% Range 98% 95% 2003 2004 2005 2006 2007 Clear reversal of trend in CAPEX targeted for FY2007 Page 26 November 10 Annual Analyst Conference 2006
Slide 27: Tighten CAPEX discipline – prioritize by value contribution
Tighten CAPEX discipline – prioritize by value contribution Profiteers Top Groups CAPEX Target Range below/ CAPEX Target Range high moderate above 100% significant above 100% Capital Efficiency Siemens- Average Substance Keepers CAPEX Target Range significant below 100% CAPEX Target Range above 100%
Slide 28: Tighter adoption of changes in capital market parameters to WACC
Tighter adoption of changes in capital market parameters to Weighted Average Cost of Capital (WACC) p rev io u s WAC C WAC C n ew (F Y 2 0 0 6 ) (s tart F Y 2 0 0 7 ) SBS 7 .5 % 8 .5 % A&D 6 .5 % 7 .5 % I&S 7% 8% SBT 7% 8% PG 7% 8% PTD 7% 8% TS 7% 8% SV 7% 8% Med 7% 8% O s ram 6 .5 % 7 .5 % 1) SF S
Slide 29: Cash flow becomes regular part of incentives
Cash flow becomes regular part of incentives Target ¾ Accountability for Cash Flow efficiency Incentive System old: new: ¾ Regular variable ¾ Cash Flow target income based on integrated into EVA only regular variable compensation ¾ Sporadic top down Cash Flow incentive Page 29 November 10 Annual
Slide 30: 20 years of regular dividend increases
30 years history of continuous dividend payment 2.0 1.6 dividend / share (€) % : 5.9 special dividend 006 77–2 € 0.67 Infineon IPO 1.2 R 19 CAG 0.8 0.4 0.0 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Slide 31: Appendix
Appendix Page 31 November 10 Annual Analyst Conference 2006
Slide 32: Robust growth in international orders
Robust growth in international orders FY 2006 FY 2006 Δ Groups Δ Regions (in millions of (in millions (in %) (in %) euros) of euros) Europe excl. Germany 29,117 +11 Com 13,571 +5 I&C Germany 16,523 +1 SBS 5,014 (23) Americas 24,651 +16 A&D 14,108 +32 Asia-Pacific 15,058 +26 A&C I&S 9,025 +26 SBT 5,2
Slide 33: Strong sales growth in industry and power segments
Strong sales growth in industry and power segments FY 2006 Δ FY 2006 Δ Groups (in millions Regions (in millions of (in %) (in %) euros) of euros) Com 13,080 +7 Europe excluding Germany 27,105 +11 I&C Germany 16,245 +4 SBS 5,157 (4) Americas 22,913 +20 A&D 12,848 +24 Asia-Pacific 12,871 +28 A&C I&S 8
Slide 34: Earnings from Operations substantially improved
Earnings from Operations substantially improved Group profit Profit +12% Groups Target (in millions of euros) margin (in %) (Δ in % YOY) (in %) 5,2561) 4,6871) Com 283 (33) 2.2 8 - 11 in SBS (549) +20 (10.6) 5-6 millions A&D 1,572 +25 12.2 11 - 13 of I&S 289 +73 3.3 4-6 euros SBT 234 +29 4.9 7-9 PG
Slide 35: We continue globalizing our business
We continue globalizing our business Germany Europe 34% (excl. Germany) 30% 31% 27% 19% Americas 23% 161 16.2 86 Asia-Pacific 26% 27% 22% 127 27.1 67 15% 15% 19% v € ) 104 22.9 78 v € ) 70 12.9 54 Middle East, Africa, CIS ) v € ) v € 3% 13 9% 8.2 1% 4 ) v Employees (thousands) 300 Employees by regio
Slide 36: Key figures – Pensions
Key figures – Pensions 1) Expect further update under IFRS According to 20F, in billions of euros FY04 FY05 FY06 Projected benefit obligation (PBO) 2) 20.8 25.0 26.2 Accumulated benefit obligation (ABO) 2) 20.0 24.0 24.2 Discount rate 3) 5.5% 4.5% 4.8% Fair Value of plan assets 17.7 21.5 23.5 Funded
Slide 37: Planned reporting changes in FY 2007
Planned reporting changes in FY 2007 IFRS as primary News: Dec. 2006 (effective 10/01/2006) (Financial statements FY05 - 06) SIS reporting start Q3 FY 2007 New Segment “ Strategic Equity Investments” (incl. BSH, FSC) start Q1 FY 2007 NSN moves into “Strategic Equity Investments” after closin
Slide 38: Financial calendar FY 07
Financial calendar FY 07 November 9 November 10 November Press conference Analyst conference IFRS Conversion, Financials FY 2005 and 2006 December Conference Call January 25 January AGM and first quarter results FY07 conference call April 26 April Semiannual results FY07 – conference call June June
Slide 39: Reconciliations and definitions
Reconciliations and definitions ”Group profit from Operations” is reconciled to ”Income before income taxes” of Operations under ”Reconciliation to financial statements” on the table ”Segment information”. See ”Financial Publications/Quarterly Reports, FY2006Q4, Financial Statements” at our Investor
Slide 40: Siemens Investor Relations Team
Siemens Investor Relations Team Marcus Desimoni +49-89-636-32445 Roland Bischofberger +49-89-636-36165 Frank Heffter +49-89-636-34095 Irina Pchelova +49-89-636-33693 Christina Schmöe +49-89-636-32677 Susanne Wölfinger +49-89-636-30639 Webpage: http://www.siemens.com Investor Relations e-mail: invest