Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Q4 FY2018 Earnings Presentation
37 slides from Siemens Aktiengesellschaft's earnings presentation, Nov 8, 2018
Slide 1: Guidance fully achieved again – another strong year
Guidance fully achieved again – another strong year Joe Kaeser, President and CEO | Ralf P. Thomas, CFO Q4 FY 2018 Analyst Call | Munich, November 8, 2018 Unrestricted © Siemens AG 2018 siemens.com
Slide 2: Notes and forward-looking statements
Notes and forward-looking statements 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 “expect,” “look forw
Slide 3: Our agenda for today
Our agenda for today FY 2018: Delivered on our promises – position of strength Guidance FY 2019: Implementation year ahead Key growth initiatives paying off Vision 2020+ raising the bar for value creation Unrestricted © Siemens AG 2018 Page 3 Munich, November 8, 2018 Q4 FY 2018 Analyst Call
Slide 4: FY 2018 – Guidance achieved on all levels
FY 2018 – Guidance achieved on all levels Orders (€bn) Revenue (€bn) +8%1) +2%1) 85.8 91.3 82.9 83.0 Book-to- bill 1.10 FY 2017 FY 2018 FY 2017 FY 2018 Profit margin Industrial Business Basic Earnings per Share (€) (Excluding severance) (Excluding severance) 11.6% 11.3% 7.73 7.88 11.0% – 12.0% 7.70
Slide 5: Excellent progress on strategic priorities in FY 2018
Excellent progress on strategic priorities in FY 2018 Completion of Digitalization of Megaproject entire Norwegian in Egypt railway network MindSphere – Joint digital product Leading cloud based launches with IoT platform Bentley Systems Copyright: Bentley Systems Unrestricted © Siemens AG 2018 Page
Slide 6: Q4 2018 – Strong finish of Fiscal 2018
Q4 2018 – Strong finish of Fiscal 2018 Orders up due to strength Revenue growth IB profit margin excl. at MO, DF, PG and SHS accelerated severance up 100 bps +5% +5% 11.3% EPS lower on tax and Strong free cash flow of Healthy capital structure severance €3.3bn Industrial net debt/EBITDA €0.69 +38% 0
Slide 7: Customer confidence in a structurally challenged PG-business
Customer confidence in a structurally challenged PG-business Power and Gas (PG) Energy Management (EM) Orders Revenue Orders Revenue €bn €bn +13%1) -4%1) -17%1) +3%1) 3.6 3.7 3.6 3.3 4.0 3.3 3.4 3.4 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Profit Profit margin Profit P
Slide 8: BT: Success story continues; MO: Performing on all levels
BT: Success story continues – margin expansion on solid growth MO: Performing on all levels – ready for the Future of Mobility Building Technologies (BT) Mobility (MO) Orders Revenue Orders Revenue €bn €bn +2%1) +5%1) +22%1) +7%1) 1.9 1.9 1.8 1.8 2.3 2.8 2.2 2.3 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q
Slide 9: DF and PD: leadership and readiness for Vision 2020+
DF: Another impressive demonstration of leadership in the sector PD: Ready for the changes in Vision 2020+ Digital Factory (DF) Process Industries and Drives (PD) Orders Revenue Orders Revenue €bn €bn +17%1) +10%1) +6%1) +1%1) 3.0 3.4 3.1 3.4 2.3 2.4 2.5 2.3 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY
Slide 10: Strategic companies are mastering their challenges well
Strategic companies are mastering their challenges well Siemens Healthineers (SHS) Siemens Gamesa Renewable Energy (SGRE) Orders Revenue Orders Revenue €bn €bn +13%1) +4%1) +1%1) +15%1) 3.9 4.3 3.6 3.7 2.8 2.6 2.3 2.6 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Profit Pro
Slide 11: Delivering sustainable shareholder returns
Delivering sustainable shareholder returns Raising dividends for five years in a row Payout ratio: 40-60% of net income 60% 57% 52% 53% 2) 50% 49% 38% 40% €5.401) CAGR +5% 3) €3.70 €3.80 €3.50 €3.60 €3.30 €3.00 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 1) OSRAM stock distribution of €2.40 per
Slide 12: Value creation for all stakeholders
Value creation for all stakeholders New share buyback program of up to €3bn until Nov. 2021 launched Committed to further share buyback Profit sharing fosters equity culture # of employee shareholders (in thousand) >2x Σ €10bn executed New share buyback >300 in €bn 4.0 2.9 3.0 Up to 3.0 165 144 153
Slide 13: Continued focus on rigorous execution
Continued focus on rigorous execution Gross margin improved Consistent productivity efforts +130bps in % of total cost base1) 29.9% ~€4bn ~€4bn ~€4bn 28.6% ~5% ~5% ~5% FY 2014 FY 2018 FY 2016 FY 2017 FY 2018 Net project charges reduced Cost and Value Engineering ahead of plan Impact in €bn in €bn, t
Slide 14: Guiding assumptions for Fiscal 2019
Guiding assumptions for Fiscal 2019 Macroeconomic environment No material impact for the businesses from geopolitical risk and macroeconomic factors 2 - 3% of revenue Pricing pressure Stable on short cycle Ongoing pricing pressure in power generation businesses Personnel cost inflation 3 - 4% increa
Slide 15: Fiscal 2019 – Significant swing in CMPA
Fiscal 2019 – Significant swing in CMPA Below Industrial Business – FY 2018 Expectations for FY 2019 in €bn • SFS: ~ FY 2018 level 1.2 0.1 • CMPA: volatile, negative, no material divestment gains 0.7 expected 8.8 -1.2 -€313m • SRE: dependent on disposal gains Therein: -1.2 Minorities -0.3 €900m Atos
Slide 16: Outlook FY 2019
Outlook FY 2019 We expect a continued favorable market environment, particularly for our short-cycle businesses, with limited 7.88 risks related to geopolitical uncertainties. 0.76 severance Mid point growth For fiscal 2019, we expect moderate growth in revenue, net of +11% currency translation and
Slide 17: We have achieved a lot with Vision 2020
We have achieved a lot with Vision 2020 Revenue (in €bn) Order Intake (in €bn) Order Backlog (in €bn) +9% +11% +32% 75.9 83.0 82.4 91.3 132 100 FY 2013 FY 2018 FY 2013 FY 2018 FY 2013 FY 2018 Net Income (in €bn) Profit margin IB Significant increase since 2013 in +290bps +39% Net Promoter Score and
Slide 18: Push for innovation drives growth and customer value
Push for innovation drives growth and customer value Increasing R&D investment… … to stay ahead €bn (% of revenue) Digital Factory Low code platform (Mendix) to speed > +40% up application development 6.7% Edge functionality for PLC portfolio Vertical applications: F&B, Batteries Siemens Healthineer
Slide 19: Industrial software gaining further market share
Industrial software gaining further market share Excellent performance (DF Software business) Important customer wins Revenue in €bn +12%1) CAGR +10-15% 3.6 2.6 FY 2017 FY 2018 FY 2020e 1) Comparable Continued investments to drive growth Rapid MindSphere expansion Profit impact in €m FY 2017 FY 2018
Slide 20: Shaping the digital transformation across all industries
Shaping the digital transformation across all industries Mobility Power Generation Services Building Technologies Winning lighthouse project Increasing offerings & capabilities Strengthen IoT competencies – recent bolt on M&A First-of-its-kind data analytics > 60 Digital products and services to ena
Slide 21: Vision 2020+: Raising the bar
Vision 2020+ Raising the bar Value Ultimate value creation Leading in all businesses Transformation Focus Anticipate markets and trends Raise Scope over scale the bar 2019 2020 2021 2022 2023 Key: Foster Ownership Culture and strengthen entrepreneurial focus Unrestricted © Siemens AG 2018 Page 21 Mu
Slide 22: Key principles to execute Vision 2020+
Key principles to execute Vision 2020+ and achieve lasting impact Embrace entrepreneurial freedom - best in industry Focus Support functions part of Operating Companies Transactional services bundled in Global Business Services Dedicated responsibility and accountability Accountability Clearly defin
Slide 23: Vision 2020+ implementation on track to go live April 1, 2019
Vision 2020+ implementation on track to go live April 1, 2019 Optimization Phase 3 Implement new Phase 2 organization Capital Market Day Prepare reorganization Phase 1 Innovation Day Refine principles and Vision 2020+ setup 2018 2019 August 2 October 1 Today January 1 April 1 May 8 Vision 2020+ New
Slide 24: Appendix
Appendix Unrestricted © Siemens AG 2018 Page 24 Munich, November 8, 2018 Q4 FY 2018 Analyst Call
Slide 25: New Siemens Financial Framework (as of April 1, 2019)
New Siemens Financial Framework (as of April 1, 2019) Ambitious financial goals based on benchmarks Siemens (targets over the cycle) Growth Siemens Cash conversion comparable revenue growth Industrial Businesses margin3) Cash conversion rate (CCR) 4 – 5% 11 – 15% CCR = 1 – growth rate4) Capital effi
Slide 26: Vision 2020+ operating model
Vision 2020+ Operating model based on purpose and ownership culture Purpose Businesses Corporate Development Services POC1) Siemens GP SI DI S-A2) SGRE SHS Financial Operations Services Strategy Regions Global Internet of Things Regional Lead Business Hubs Countries Services next47 Corporate Corpora
Slide 27: Financial cockpit – Q4 FY 2018
Financial cockpit – Q4 FY 2018 Orders Revenue Profit Industrial Business (IB) Net Income in €bn 5% Comp. 5% in €bn flat in €bn (flat) (nom.) (+2%) 23.7 23.7 22.2 22.6 2.1 2.1 -46% 1.3 10.3% 11.3% 0.7 Margin 9.5% 9.3% B-t-B 1.06 1.05 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 FY 18 Q4 FY 17 Q4 F
Slide 28: Sharply higher income tax mainly from Mobility carve out
Sharply higher income tax mainly from Mobility carve out Below Industrial Business – Q4 FY 2018 €m 116 -112 2,145 49 -451 Tax rate -279 @53.2% -60 -749 Therein: Minorities -€112m Pensions -€122m -€340m Corp. Items 659 681 22 559 IB SFS CMPA SRE Corp. Items PPA Elim. Corp. Tax Inc. Cont. Disc. Ops. N
Slide 29: Substantial all-in free cash flow improvement of +22%
Substantial „all-in“ free cash flow improvement of +22% Free cash flow (“all-in”) €bn +22% 3.3 5.8 4.8 0.9 0.8 0.9 FY 2017 Q1 FY 18 Q2 FY 18 Q3 FY 18 Q4 FY 18 FY 2018 Unrestricted © Siemens AG 2018 Page 29 Munich, November 8, 2018 Q4 FY 2018 Analyst Call
Slide 30: Net debt bridge – Q4 FY 2018
Net debt bridge – Q4 FY 2018 Q4 ΔQ3 in €bn • SFS Debt +24.2 +1.2 Ind. Net Debt/ • Post emp. Benefits -7.7 -0.1 EBITDA (c/o) • Credit guarantees -0.4 0.0 0.4x • Fair value adj. +0.3 0.0 (Q3 FY18: 0.6x) (hedge accounting) Operating Activities -20.9 -19.8 -3.4 16.4 therein: therein a.o.: therein a.o.:
Slide 31: FY 2018 deficit reduction – pensions and similar obligations
FY 2018 deficit reduction mainly due to extraordinary fundings in Germany and USA Q4 FY 2018 – Pensions and similar obligations Q1 Q2 Q3 Q4 in €bn1) FY 2016 FY 2017 FY 2018 FY 2018 FY 2018 FY 2018 FY 2018 Defined benefit obligation (DBO)2) (42.2) (36.9) (35.9) (36.9) (36.5) (36.2) (35.9) Fair value
Slide 32: Q4 FY18 Profit Bridge from SGRE to SAG disclosure
Q4 FY18 Profit Bridge from SGRE to SAG disclosure Different profit definitions at SGRE and SAG to be considered in models in €m disclosure (as of Nov 6, 2018) disclosure (as of Nov 8, 2018) 8.2% 215 -76 5.4% 5.4% 140 142 -7 8 2 -66 2.8% 66 73 EBIT Integration & PPA effects EBIT PPA effects Financial
Slide 33: Outlook for FY 2019 (Siemens Gamesa)
Outlook for FY 2019 As disclosed on Nov. 6, 2018 Comments FY 19 revenue coverage of 80%2 Additional synergies of 1.2% of revenues by fiscal year end 2019 included in margin expectations Guidance FY 19 Estimated impact of PPA amortization of intangible FY 18 FY 19 E1 fair value of €250m for FY
Slide 34: Q4 FY18 Profit Bridge from SHS disclosure to SAG disclosure
Q4 FY18 Profit Bridge from SHS disclosure to SAG disclosure Different profit definitions at SHS and SAG to be considered in models in €m disclosure (as of Nov 5, 2018) disclosure (as of November 8, 2018) 18.2% 18.1% 674 16.9% 17.1% 672 -38 627 634 38 -9 7 Profit Severance IPO costs Profit Consolidat
Slide 35: Outlook for Fiscal 2019 (Siemens Healthineers)
Outlook for Fiscal 2019 As disclosed on Nov. 5, 2018 Comparable revenue growth1) Adj. Profit margin2) Earnings per share (in €) 4 - 5% 17.5 - 18.5%3) +20 to +30%3) 3.7% 17.2% 1.26 2018 2019E 2018 2019E 2018 2019E • Continued strong growth in Imaging and • Execution on cost-savings program • Tax rate
Slide 36: Financial calendar
Financial calendar November 8, 2018 Q4 Earnings Release November 8 - 9, 2018 Roadshow UK (London) November November 9, 2018 2018 Roadshow Germany (Frankfurt) November 19 - 20, 2018 Roadshow US (Boston, New York) November 20, 2018 Roadshow France (Paris) January 15, 2019 January Commerzbank German In
Slide 37: Investor Relations contacts
Investor Relations contacts Investor Relations Internet: www.siemens.com/investorrelations E-Mail: [email protected] Telefon: +49 89 636-32474 Fax: +49 89 636-1332474 Unrestricted © Siemens AG 2018 Page 37 Munich, November 8, 2018 Q4 FY 2018 Analyst Call