Siemens Aktiengesellschaft · XETR:SIE

Siemens Aktiengesellschaft — Siemens — Q4 FY2017 Earnings Presentation

36 slides from Siemens Aktiengesellschaft's earnings presentation, Nov 9, 2017

  1. Slide 1: Targets achieved – another outstanding year for Siemens

    Targets achieved – another outstanding year for Siemens Joe Kaeser, President and CEO | Ralf P. Thomas, CFO Q4 FY 2017 Analyst Call | Munich, November 9, 2017 Unrestricted © Siemens AG 2017 siemens.com

  2. 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

  3. Slide 3: Our agenda for today

    Our agenda for today FY 2017: Again a record year – we delivered what we promised Vision 2020: Fully on track – significant progress achieved FY 2018: Set direction for further value creation – development of “Vision 2020+” Guidance FY 2018: Another ambitious year ahead © Siemens AG 2017 Page 3 Muni

  4. Slide 4: Targets achieved – another outstanding year for Siemens

    Targets achieved – another outstanding year for Siemens Orders (€bn) Revenue (€bn) -2%1) +3%1) 86.5 85.7 79.6 83.0 Book-to- bill 1.03 FY 2016 FY 2017 FY 2016 FY 2017 Profit Industrial Business (€bn) Basic Earnings per Share (€) +10% Guidance: 10.8% 11.2% Guidance: 6.74 7.44 11.0% – 12.0% 7.20 – 7.70

  5. Slide 5: Q4 FY 2017 – Order boom boosts backlog

    Q4 FY 2017 – Order boom boosts backlog • Strategic direction set to create a European Mobility champion - Alstom MoU signed • Strong organic order growth +16% supported by all Divisions • Revenue up 1% organic on broad based growth compensating PG decline • Underlying IB margin at 10.5%1) - Strong o

  6. Slide 6: Setting the course for renewable energy, mobility and healthcare businesses

    Strengthen core Setting the course for renewable energy, mobility and healthcare businesses for long-term value creation 1| Areas of growth? Stake of 17.34% sold 2| Potential profit pool? 3| Why Siemens? 4| Synergetic value? 5| Paradigm shifts? Merger closed IPO plan for H1 MoU signed, expected Siem

  7. Slide 7: Executing Vision 2020: Push for innovation drives competitiveness

    Scale up Executing Vision 2020 Push for innovation drives competitiveness and customer value Higher R&D intensity continues… … and delivers impressive outcomes R&D expenses in €bn (% of revenue) Healthineers • Magnetom Terra – first 7 Tesla MRI ~+40% scanner for clinical use 6.2% • Unmatched visuali

  8. Slide 8: Leadership in Digital Enterprise strengthened

    Scale up Leadership in Digital Enterprise strengthened Siemens further gaining market share Revenue FY 2017 Market CAGR FY18-22 Strategic direction Digitalization Siemens software Digital services Strengthen leadership  Leader ~€4.0bn ~€1.2bn ~+8% in the Digital Enterprise MindSphere – IoT operatin

  9. Slide 9: PG - Structural market decline requires decisive adjustments

    Drive performance PG - Structural market decline requires decisive adjustments Example: Large Gas Turbine business (>100MW) Market Development (in # Turbines) Employee split Power and Gas incl. Service Asia/Pacific Middle East/Africa Asia/Pacific Europe, CIS, w/o GER 4% 11% Germany Americas Americas

  10. Slide 10: PG: Market contraction impacts top and bottom line; EM: Performance improvement

    PG: Market contraction impacts top and bottom line EM: Performance improvement on track Power and Gas (PG) Energy Management (EM) Orders Revenue Orders Revenue €bn €bn +17%1) -17%1) +23%1) -1%1) 3.6 4.5 3.6 3.4 4.1 3.6 3.4 3.2 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 P

  11. Slide 11: MO: All-time revenue high; BT: Great performance

    BT: Great performance completes best year ever MO: All-time revenue high – automation business drives profit Building Technologies (BT) Mobility (MO) Orders Revenue Orders Revenue €bn €bn +8%1) +7%1) +4%1) +11%1) 1.8 1.9 1.7 1.8 2.3 2.3 2.1 2.2 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q

  12. Slide 12: DF: Excellent short-cycle continues; PD: Trough reached

    DF: Excellent short-cycle continues – further market share gains PD: Trough reached, gradual improvement ahead Digital Factory (DF) Process Industries and Drives (PD) Orders Revenue Orders Revenue €bn €bn +6%1) +9%1) +9%1) +0%1) 2.7 2.9 2.8 3.2 2.2 2.3 2.4 2.4 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4

  13. Slide 13: HC: Capturing growth; SGRE: Strong order wins and challenges

    HC: Capturing growth – excellent margin SGRE: Strong order wins and challenges in operations Healthineers (HC) Siemens Gamesa Renewable Energy (SGRE) Orders Revenue Orders Revenue €bn €bn +7%1) +5%1) +84%1) +6%1) 3.9 3.9 3.7 3.7 2.8 1.2 1.6 2.3 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q

  14. Slide 14: Below Industrial Business FY18 remains volatile

    Below Industrial Business FY18 remains volatile Below Industrial Business – FY 2017 Expectations for FY 20181) in €bn • SFS: in line with FY 2017 0.2 0.6 • CMPA: positive due to portfolio gains, volatility remains 0.5 9.5 -1.1 • SRE: in line with FY 2017, dependent on disposal gains Attributable to

  15. Slide 15: Strong cash conversion across most divisions

    Strong cash conversion across most divisions PG and SGRE weigh on free cash flow in Q4 Industrial business free cash flow – FY 2017 Industrial business free cash flow – Q4 FY 2017 €bn flat €m 5.9 7.5 4.2 7.5 -30% 4.0 2.8 3.2 1.5 H1 FY 16 H2 FY 16 FY 2016 H1 FY 17 H2 FY 17 FY 2017 Q4 FY 16 Q4 FY 17 ©

  16. Slide 16: Continuous productivity drives operational performance

    Drive performance Executing Vision 2020 Continuous productivity drives operational performance Gross margin improvement on track Ongoing rigorous total cost productivity in % of total cost base1) 29.9% 30.1% ~€4bn ~4bn ~€3bn 28.9% 28.6% ~4% ~5% ~5% FY 2014 FY 2015 FY 2016 FY 2017 FY 2015 FY 2016 FY

  17. Slide 17: Underperforming businesses show clear progress

    Drive performance Executing Vision 2020 Underperforming businesses show clear progress Underperforming businesses (~€15bn revenue in FY 2017) Example: Intelligent Traffic Systems Business Fiscal 2013 2014 2015 2016 2017 2020e Year Profit -4% -3% +1% +3% ~6% >8% Margin Fiscal 2017 achievement Order g

  18. Slide 18: Delivering sustainable shareholder returns

    Delivering sustainable shareholder returns Dividend yield of 3.1% Continued dividend increases Payout ratio: 40-60% of net income 60% 57% 50% 52% 49%2) 38% 40% €5.401) +4% p.a. 3) €3.70 €3.60 €3.50 €3.30 3.00 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Dividend payout ratio Dividend per share 1) Effect

  19. Slide 19: Value creation for all stakeholders

    Value creation for all stakeholders Committed to share buyback Siemens profit sharing €bn Endowments in €m2) 400 Up to €10bn share buyback within seven years 100 4.0 100 200 2.9 up to 3.0 open volume FY 2015 FY 2016 FY 2017 Total • Strengthen ownership culture through share distribution 1.2 • Target

  20. Slide 20: Assumptions for FY 2018 as basis for guidance

    Assumptions for FY 2018 as basis for guidance Macroeconomic environment • Continued geopolitical tension, improving global investment demand Pricing • Pricing pressure around 2.5% of revenue Personnel cost inflation • 3 - 4% increase Productivity • In the range of 3 – 5% productivity target Capex •

  21. Slide 21: Industrial Business Profit Margin - Outlook FY 2018

    Industrial Business Profit Margin - Outlook FY 2018 Guidance 12.0% 11.2% €+385m 11.2% 11.1% €-118m 11.0% €-175m €-138m €9.5bn €9.3bn €9.4bn Reported IFRS 15 Delta IFRS 15 eCar gain Pension plan Severance adj. IB Profit Margin IB Profit IB Profit amendment IB Profit excl. Severance FY17 FY17 FY17 FY1

  22. Slide 22: Earnings per share - Outlook FY 2018

    Earnings per share - Outlook FY 2018 in € Guidance 7.70 +9% 7.44 -0.10 7.34 +2% 7.20 -0.35 7.09 eCar gain -0.22 -0.29 +0.39 Pension plan amendment -0.13 ARO Hanau -0.57 Primetals +0.28 Reported EPS IFRS 15 Delta IFRS 15 EPS IB effects CMPA effects Severance adj. EPS FY17 EPS excl. FY17 FY17 Severanc

  23. Slide 23: Outlook FY 2018

    Outlook FY 2018 Earnings per share Outlook in € 7.70 +9% We expect a mixed picture in our market environment in fiscal 2018, ranging from strong markets for our short-cycle businesses to unfavorable +2% dynamics in our energy generation markets, as well as geopolitical 7.20 uncertainties that may re

  24. Slide 24: FY 2018 – Setting direction for next strategic level

    Siemens Vision 2020 execution well advanced FY 2018 – Setting direction for next strategic level Value “Vision 2020+” Scale up • Customer and market focus • Digitalization at work Strengthen core • Innovation push • Healthcare IPO • Setting up Siemens Alstom • Successful integration of acquisitions

  25. Slide 25: Key considerations for Vision 2020+

    Key considerations for “Vision 2020+” Brand value Business Simplified focus governance © Siemens AG 2017 Page 25 Munich, November 9, 2017 Q4 FY 2017 Analyst Call

  26. Slide 26: Appendix

    Appendix © Siemens AG 2017 Page 26 Munich, November 9, 2017 Q4 FY 2017 Analyst Call

  27. Slide 27: One Siemens Financial Framework

    One Siemens Financial Framework Clear targets to measure success and accountability One Siemens Financial Framework Siemens Growth: Capital efficiency Capital structure Siemens > most (ROCE2)) (Industrial net debt/EBITDA) relevant competitors1) 15 – 20% up to 1.0x (Comparable revenue growth) Total c

  28. Slide 28: Siemens Vision 2020 - Execution well underway

    Siemens Vision 2020 - Execution well underway, most targets already achieved by FY 2017 GOAL INTENT KPI Implement stringent company gover- Live lean governance and 1 nance with effective support functions drive continuous optimization €1bn cost savings by FY 2016 achieved Strengthen Sharpen our busi

  29. Slide 29: Financial cockpit – Q4 FY 2017

    Financial cockpit – Q4 FY 2017 Orders Revenue Profit Industrial Business (IB) Net Income in €bn +16% Comp. +1% in €bn in €bn (+16%) (nom.) (+2%) -10% 23.7 2.4 +10% 20.3 22.0 22.3 2.2 1.2 1.3 12.4% 10.5% B-t-B 0.93 1.06 Margin 10.9% 9.7% Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4 FY 16 Q4 FY 17 Q4 FY 16

  30. Slide 30: Net debt bridge – Q4 FY 2017

    Net debt bridge – Q4 FY 2017 Q4 ΔQ3 • SFS Debt +22.5 +0.4 Adj. ind. Net Debt/ • Post emp. Benefits -9.6 +0.2 EBITDA (c/o) • Credit guarantees -0.6 +0.1 0.9x • Fair value adj. +0.4 0.0 (Q3 FY17: 1.2x) (hedge accounting) Operating Activities therein a.o.: therein: • CAPEX -0.9 • Δ Inventories +0.6 • R

  31. Slide 31: Provisions decreased slightly in Q4 FY 17

    Provisions decreased slightly in Q4 FY 17, mainly due to positive returns on plan assets Q4 FY 2017 Key financials – Pensions and similar obligations Q1 Q2 Q3 Q4 in €bn1) FY 2015 FY 2016 FY 2017 FY 2017 FY 2017 FY 2017 FY 2017 Defined benefit obligation (DBO)2) (36.8) (42.2) (36.9) (39.0) (38.4) (37

  32. Slide 32: Q4 FY17 Profit Bridge from SGRE disclosure to SAG Profit disclosure

    Q4 FY17 Profit Bridge from SGRE disclosure to SAG Profit disclosure Explanation of different profit definitions at SGRE and SAG to be considered in models Q4 FY17 Profit Bridge (in €m) SGRE disclosure (as of Nov 6, 2017) SAG disclosure (as of Nov 9, 2017) Revenue Revenue Revenue Revenue 2,329 2,329

  33. Slide 33: Financial cockpit – FY 2017

    Financial cockpit – FY 2017 Orders Revenue Profit Industrial Business (IB) Net Income in €bn -2% Comp. +3% in €bn in €bn +11% (-1%) (nom.) (+4%) +8% 86.5 85.7 6.2 79.7 83.0 8.7 9.5 5.6 11.4% 11.7% B-t-B 1.09 1.03 Margin 10.8% 11.2% FY 16 FY 17 FY 16 FY 17 FY 16 FY 17 FY 16 FY 17 EPS (“all-in”) ROCE

  34. Slide 34: Invest in cloud-based business models overcompensated by traditional software

    Invest in cloud-based business models will be overcompensated by strong execution of traditional software business Software business within Digital Factory MindSphere Revenue (in €bn) • Current 'Platform as a Service' business plan with focus on CAGR: 10-15% partners in industrial IoT market ~3.4 ~2

  35. Slide 35: Financial calendar

    Financial calendar November 9 – 10, 2017 Roadshow UK (London) November 13, 2017 Roadshow France (Paris) November November 14, 2017 Roadshow Germany (Frankfurt) November 14 – 15, 2017 Roadshow U.S. (Boston, New York) December 15, 2017 December Innovation Day (Munich, Germany) January 9, 2018 Commerzb

  36. Slide 36: Investor Relations contacts

    Investor Relations contacts Investor Relations Internet: www.siemens.com/investorrelations Email: [email protected] IR-Hotline: +49 89 636-32474 Fax: +49 89 636-1332474 © Siemens AG 2017 Page 36 Munich, November 9, 2017 Q4 FY 2017 Analyst Call

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