Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Q2 FY2009 Earnings Presentation
34 slides from Siemens Aktiengesellschaft's earnings presentation, Apr 29, 2009
Slide 1: TAP: Underlying Strength in Challenging Times
TAP: Underlying Strength in Challenging Times Peter Löscher, President and CEO Joe Kaeser, CFO Barbara Kux, Member of the Managing Board Q2 2009 Analyst Conference London, April 29, 2009 Copyright © Siemens AG 2009. All rights reserved.
Slide 2: Safe Harbour Statement
Safe Harbour Statement This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,”
Slide 3: TAP: Underlying strength in challenging times
TAP: Underlying strength in challenging times Our principles… Key takeaways Well positioned to weather the storm Acted early, decisively and with speed: Increase Project execution proven in Fossil and Mobility TRANSPARENCY SG&A project well on track to support performance Enforce Lowering
Slide 4: Solid performance in Q2 FY09
Solid performance in Q2 FY09 Robust b-t-b at 1.1x driven by impressive Energy b-t-b at 1.3x; no material order cancellations Orders down 10% y-o-y from a very strong quarter last year Strong organic revenue growth of 5%; excellent execution at Energy with 28% growth Total Sectors profit of €
Slide 5: Energy and Healthcare drive Q2 revenue growth
Energy and Healthcare drive Q2 revenue growth Order Revenue Q2 FY09 Order growth y-o-y 1) Q2 FY09 y-o-y growth1) growth1) Fossil: Siemens - 10% 5% Europe/C.I.S./Africa/ME -16% Iraq order (therein Germany) -12% Mobility: China Industry - 12% - 6% high speed Industry Automation -26% -19% Americas
Slide 6: Strong backlog balances short-term fluctuations
Strong backlog balances short-term fluctuations Resilient, installed base Strong backlog driven business models €bn Order backlog1) Industry: 87 IS: Recurring service business for water filters 23 IA: Software license and maintenance / update Industry 32 63 services BT: Security monitoring ser
Slide 7: Industry: Decisive actions taken in short-cycle businesses
Industry: Decisive actions taken in short-cycle businesses Key Financials Q2 Highlights €m New orders Revenue Underlying margin2) Significant slowdown in short-cycle businesses – -12%1) weak end-markets and significant de-stocking -6%1) 9,928 8,801 8,980 8,645 -460bp Short-cycle businesses saw s
Slide 8: Energy: Excellent order intake with strong book-to-bill
Energy: Excellent order intake with strong book-to-bill Key Financials Q2 Highlights €m New orders Revenue Underlying margin2) Orders down from record quarter last year -8%1) but b-t-b of 1.3x materially above 1 9,026 +28%1) 8,206 +200bp Excellent order intake at Renewable with large 6,364 contr
Slide 9: Healthcare: Solid performance in a challenging market
Healthcare: Solid performance in a challenging market Key Financials Q2 Highlights €m New orders Revenue Underlying margin2) Economic downturn and limited funding impact entire +1%1) +4%1) healthcare sector, especially in the U.S. and other 2,790 2,951 2,722 2,984 mature markets -230bp Top line
Slide 10: Most Fit4 2010 performance indicators in line with targets
Most Fit42010 performance indicators in line with targets Growth Cash Conversion >2x GDP1) 1 – growth rate 5% 2.87 4.4% 2% 1.19 0.98 0.95 -1.25% Q2 08 Q2 09 Q2 08 Q2 09 Global Insight April GDP 09 forecast at -2.5% 1) Current GDP target: -1.25% Q2 Target Q2 Target Profitability Capital Efficiency In
Slide 11: Industrial net debt increase mostly driven by gap in pension funding
Industrial net debt increase mostly driven by gap in pension funding €bn Net Cash from Operating Activities Adj. ind. Therein e.g. Adj. ind. ND/EBITDA1) ND/EBITDA2) Dividends paid -1.4 0.86x 1.12x Interest paid -0.1 FX effects on net debt -0.5 -8.9 Pension deficit -5.3 0.9 -5.3 OPEB -0.6 -
Slide 12: Increase in pension deficit slowing
Increase in pension deficit slowing Plan Assets performed negatively, both in equities and fixed income investments DBO remained unchanged as increase in discount rate compensated for service and interest cost €m DBO Q1 Q2 €bn FY 08 25.000 FY09 FY09 Assets Under- Assets 20.2 19.4 18.4 20.000 fun
Slide 13: Cash Conversion on track at 1.19 in Q2 09
Cash Conversion on track at 1.19 in Q2 09 Income from Continuing Free Cash Flow from Continuing Operations Operations €m Cash Conversion1) 1.19 1,623 Therein e.g. Outflows due to Effects e.g. transformation or 1,138 Capex -€654m structural initiatives and project charges Amortization, 955 ~€35
Slide 14: High financial flexibility and healthy liquidity position
High financial flexibility and healthy liquidity position Liquidity analysis Q2 09 Strong Cash position of €7.7bn €bn €6.5bn undrawn credit facilities 11.2 14.2 $3bn, maturity Aug. 2013, Libor + 15bp $5bn, maturity March 2012, Libor + 15bp Cash and €450m, maturity Sep. 2012, Libor + 15bp 7.7 e
Slide 15: High focus on capex and working capital management
High focus on capex and working capital management Working Capital turns back on track Capex spending tightly managed Total Groups Total Sectors Total Groups Total Sectors Capex / NWC1) Turns Depreciation 10 127% 130% 116% 9 8.6 115% 110% 110% Target 8.2 113% 8.0 Range 8 95% 7.4 7.8 90% 91% 7.2 88%
Slide 16: Corporate Treasury: Finance excellence at work
Corporate Treasury: Finance excellence at work Financial risks managed like a bank, but tailor-made to our needs as an industrial corporation Liquidity-, refunding-, FX-, and interest rate risks are managed separately Market conditions and required maturity profile are key decision factors whe
Slide 17: SFS: Continued solid performance
SFS: Continued solid performance Profitability and asset development Credit Exposure1) by Product 31.6% 31.4% Factoring Forfeiting 27.1% Secured Lending: RoE2) 39.8% ABL4) High Share of Collateralized 23.4% Receivables IBIT3) 307 329 286 Loans (in €m) 66 117 Capital Lease Total assets 11.3 12.0 11.9
Slide 18: SG&A costs reduced from 16.7% to 14.0% of revenue
SG&A costs reduced from 16.7% to 14.0% of revenue Absolute SG&A performance Relative SG&A cost development shows in P&L in % of revenue: -270bp 16.7% 14.0% -14% €bn 12.11) €bn 6.3 5.4 Q2 3.2 -22% Selling 8.9 2.5 5.4 -6% 4.3 Q1 3.1 2.9 G&A 3.2 1.1 FY07 H1 FY09 H1 FY08 H1 FY09 1) Baseline comparable i
Slide 19: Implemented measures show significant impact on enablers
Implemented measures show significant impact on enablers KPI for SG&A cost reduction Consultancy costs1) in €m IT costs, in €m -50% -30% 600 570 1,300 1,300 Costs 380 1,000 900 element 210 300 500 FY07 FY08 H1 FY09E FY10E FY07 FY08 H1 FY09E FY10E FY09 FY09 # of legal entities # of reporting units -4
Slide 20: Sectors on track to achieve their targets
Sectors on track to achieve their targets Sector breakdown of targets and achievements (in €m) Health- Cross- Corp. & Total Industry Energy care Sectors Other Ops SG&A 200 1,200 100 200 Sector 100 breakdown: 600 SG&A targets through 2010 5101) 1,030 Savings 55% 20% already 55% 60% 255% 86% achieved
Slide 21: Drive Supply Chain Management (SCM) within Siemens
Drive Supply Chain Management (SCM) within Siemens Importance External Spend1) External spend amounts to approx. €40bn SCM is an enabler to support profitability Pooled Directs Short-term Cross- Sector Utilize opportunities from economic environment 17% Managed 29% Falling raw material price
Slide 22: Path to sustainable performance in SCM
Path to sustainable performance in SCM Full Value Network Integration World-class Supply Chain Management – Value Focus 'Move to the next level' Traditional Purchasing – 'Global Value Sourcing' Cost Focus 'Changing what we buy' network to leverage innovation and technology Further consolidation
Slide 23: Clear targets for Value Creation in SCM
Clear targets for Value Creation in SCM Cross-sector Global Value Sourcing Supplier Management managed volume Increase cross-sector managed volume Increase share of Global Value Reduce number of suppliers by 60%1) by FY 2010 Sourcing to >25% mid-term by 20% mid-term +60% -20% >5pp ~19 bn1) >100k2) ~
Slide 24: Macro indicators: Much worse than previous downturns
Macro indicators: Much worse than previous downturns Global GDP growth ISM Purchasing Manager Index 6 July 08: % change YoY GDP forecast 09 65 Expanding economy July 08 4 60 55 49.5 2 2.9% 50 0 45 40 36.3 -2 35 Contracting economy -4 -2.5% 30 97 98 99 00 01 02 03 04 05 06 07 08 09e 1) 97 98 99 00 01
Slide 25: What we expect for the remainder of 2009
What we expect for the remainder of 2009 Growth target remains unchanged: 2x global GDP growth1) Total Sectors profit is expected to exceed the prior year level of €6.6bn Growth in income from continuing operations expected to exceed growth in Total Sectors profit This outlook excludes portfol
Slide 26: TAP: Consistent execution against plan
TAP: Consistent execution against plan Reporting dates Milestones (deliverables) January 2008 New target margins for Energy and Industry Sector Q1 call and AGM Target margins for Divisions April 2008 Update on SG&A project Q2 analyst conference Start reporting in new structure July 2008 Ou
Slide 27: Financial calendar
Financial calendar May May 7-8, 2009 Post-Q2 roadshow with CEO / CFO (Frankfurt, London) May 18, 2009 EPG conference with CEO and CFO (Florida) May 26, 2009 Debt Roadshow (London) June June 4, 2009 SFS Conference Call with SFS CEO June 10, 2009 JPMorgan Pan-European CEO conference (London) – Peter L
Slide 28: Siemens investor relations contact data
Siemens investor relations contact data Mariel von Drathen +49-89-636-33780 Munich Office +49-89-636-32474 US Office +1-408-464-2004 Internet: http://www.siemens.com/investorrelations Email: [email protected] Fax: +49-89-636-32830 Page 28 Q2 Analyst Conference, April 29, 2009 Copyright ©
Slide 29: Reconciliation and Definitions for Non-GAAP Measures (I)
Reconciliation and Definitions for Non-GAAP Measures (I) To supplement Siemens' Consolidated Financial Statements presented in accordance with International Financial Reporting Standards, or IFRS, Siemens presents the following financial measures: Adjusted or organic growth rates of Revenue and ne
Slide 30: Reconciliation and Definitions for Non-GAAP Measures (II)
Reconciliation and Definitions for Non-GAAP Measures (II) Adjusted or organic growth rates of Revenue and orders In its financial reports, Siemens presents, on a worldwide basis and for its Sectors and Cross-Sector Businesses, the percentage change from period to period in Revenue as adjusted for cu
Slide 31: Reconciliation and Definitions for Non-GAAP Measures (III)
Reconciliation and Definitions for Non-GAAP Measures (III) Return on Capital Employed, or ROCE Return on capital employed, or ROCE is Siemens’ measure of capital efficiency. Siemens uses this financial performance ratio in order to assess its income generation from the point of view of its sharehold
Slide 32: Reconciliation and Definitions for Non-GAAP Measures (IV)
Reconciliation and Definitions for Non-GAAP Measures (IV) Cash conversion rate and free cash flow Cash conversion rate, or CCR is a operational performance measure, which shows us how much of our income we are converting to free cash flow. Siemens defines cash conversion rate as free cash flow divid
Slide 33: Reconciliation and Definitions for Non-GAAP Measures (V)
Reconciliation and Definitions for Non-GAAP Measures (V) Net debt Siemens defines net debt as total debt less total liquidity. Total debt is defined as Short-term debt plus current maturities of long-term debt plus long-term debt. Total liquidity is defined as Cash and cash equivalents plus current
Slide 34: Reconciliation and Definitions for Non-GAAP Measures (VI)
Reconciliation and Definitions for Non-GAAP Measures (VI) Compensation for Limitations Associated with Siemens' Supplemental Financial Measure Siemens provides a quantitative reconciliation of each supplemental financial measure to the most directly comparable IFRS financial measure either in this d