Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Investor Day (June 2010)
36 slides from Siemens Aktiengesellschaft's investor day presentation, Jun 29, 2010
Slide 1: Siemens Energy: The only integrated energy company
Siemens Energy The only integrated energy company Wolfgang Dehen CEO Energy Nuremberg, June 29, 2010 Capital Market Day Energy © Siemens AG 2010. 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: The only integrated energy company
The only integrated energy company 1. 1 Performance: Delivered what we promised 2. 2 Basics of the business: Did our homework & more to come 3. 3 Market development: Market drivers play to our strengths 4. 4 Growth initiatives: Prepared for more 5. 5 Looking beyond: Best setup for the future Page 3
Slide 4: The best team in the business
The best team in the business Energy Sector 2010 Team collaboration is one of the keys to success Wolfgang Dehen Make the numbers – no excuses – no surprises Ralf Guntermann Fossil Power Renewable Energy Power Power Oil & Gas Generation Energy Service Transmission Distribution Tom Blades Michael Süß
Slide 5: Recap CMD 2008: Energy Sector Priorities
Recap CMD 2008 Æ Energy Sector Priorities We delivered what we promised! Top line growth > market Meet the = Adding value Gross margin growth targets Bottom line: 11% (weak energy scenario) by 15% (strong energy scenario) establishing ROCE a high performance Cash conversion > 1- growth rat
Slide 6: We outperformed market and competition
We outperformed market and competition Volume FY 08 vs. FY 09 Growth €bn 949 742 Market 1) Energy -22% Market 1) FY 08 FY 09 €bn Siemens Energy vs. Competitors 33.4 30.1 -10% Siemens Orders Gained New market share: -27% Competitors 2) 2 percentage points FY 08 FY 09 FY 08 vs. FY 09 €bn Revenue 25.8
Slide 7: We delivered consistent, steady margin improvements
We delivered consistent, steady margin improvements… Profit margin in % of revenue Margin range: 11–15% 14.6 14.0 13.4 13.0 12.8 12.1 10.6 Outperformed average of competitors by 1.8 percentage points in FY09 6.9 6.9 14.6%: Best quarter since end of last gas boom E R: Undisputed profitability l
Slide 8: Order book and margin quality
… and will continue to do so Order book and margin quality € bn 50.0 47.1 44.7 Order backlog 34.1 shows solid growth Managed economic equation: Improved gross margin FY 07 FY 08 FY 09 H1 10 Gross margin is health indicator of a company Gross margin in backlog Page 8 June 29, 2010 Capital Market
Slide 9: Rapidly improved ability to manage changing economic equation
Rapidly improved ability to manage changing economic equation… Lever Before 2008 After 2008 Business model Customer prices in transition Material cost productivity Factor costs Other cost productivity Gross margin = health indicator Page 9 June 29, 2010 Capital Market Day Energy © Siemens AG 2010. A
Slide 10: Resulting in significant cost savings
… resulting in significant cost savings Purchasing savings accelerated Productivity gains improved €m €m FY 07 FY 08 FY 09 FY 07 FY 08 FY 09 Non-conformance costs reduced SG&A target overachieved NCC in % SG&A in % of revenue of revenue -2.5pp 9.1% 8.7% 6.6% FY 07 FY 08 FY 09 FY 07 FY 08 FY 09 Page
Slide 11: Broad range of additional cost savings initiatives under way
Broad range of additional cost savings initiatives under way Process improvement initiatives by division (already started, targets for FY 10-13) Examples Oil & Gas Fossil Power Generation Renewable Energy Complexity reduction Operational excellence Industrialization Two business units instead Pl
Slide 12: Highlights
Highlights Financials Outperformed competition in growth and margin development Significant cost improvements Highest and healthiest backlog ever Technology Largest off-shore wind farm contract awarded Next-level advanced gas turbine established in Europe and US World-record in 800 kV HV
Slide 13: Markets will return to 2008 record levels in the mid term
Markets will return to 2008 record levels in the mid term Energy Sector total market (100% = 2008) FY 10 YTD v. FY 09 comparable: Bid number up 37% 120% Volume up 18% 100% 80% 60% Record levels Return to record levels before 2015 in 2008 40% Market Bottom contraction out in 20% in 2009 2010 0% 2008
Slide 14: Differences in regional growth segments underline transition of our sector
The differences in regional growth segments underline the transition of our sector Regional growth segments Power USA Brazil EU Middle East Russia India China Generation Solar Hydro Solar / Africa Nuclear Coal Solar ST 1) life Nuclear Nuclear Hydro Nuclear extensions Solar
Slide 15: Market drivers play to our strengths
Market drivers play to our strengths Market drivers Energy Sector strengths Oil & Gas 'Depletion' -> enhanced oil recovery World leader in compressors CO2 mitigation All-electrical oil & gas set up Deepwater exploration Subsea power grids World leader in efficient and flexible advanced
Slide 16: The oil & gas trends favor Siemens technology
The oil & gas trends favor Siemens technology Depletion CO2 Mitigation Unconventional Gas Drives enhanced Leads to deep- Drives efficiency Cheap and abundant gas drives… oil recovery water drilling requiring all-electrical …pipeline …gas power requiring driving subsea compression generation compress
Slide 17: Whatever the mix in power generation, we will win
Whatever the mix in power generation, we will win Power generation by energy carriers (in TWh) +2.5% p.a. 33,000 Renewables 17% (w/o Hydro) CAGR 15% Hydro +11.1% 20,000 3% 15% Nuclear 16% 15% 20% Gas Fossil 22% energy 2% Oil 5% sources 66% 53% 31% Coal 39% 2009 2030 Page 17 June 29, 2010 Capital Mar
Slide 18: The change in power generation mix has accelerated
The change in power generation mix has accelerated Mix prognosis: Development over time 9% 9% 14% 14% 17% Renewables 17% 6% 8% 9% 15% 15% 13% 14% 15% 15% Hydro 15% 13% 13% 12% 14% 15% Nuclear Fossil w/o Nuclear 66% 61% 61% 66% 60% 60% 61% 53% 54% Prognosis for 2020 2030 2020 2030 2020 2030 Year of t
Slide 19: Power generation market posed for recovery
Power generation market posed for recovery Indicators for energy market Global electricity demand growing by 2.8% in 2010 Examples for tight reserve margins again – 2008 record to be surpassed 1,000 TWh +2.8% 40 40 21 20,552 30 30 20,166 19,996 20 19,788 Germany 20 20 Target 18,993 Actual 19 Forecas
Slide 20: Global grid demands growing rapidly
Global grid demands growing rapidly The link between power generation and large Power supply infrastructure for large cities consumption centers (e.g. HVDC) (e.g. Gas-Insulated Switchgear) Heilongjiang 20 12 Jilin 18 14 Liaoning Xinjiang 13 Inrfar Mongolia Beijing Gansu Tianjin Hebei 1 15 16 Shanxi
Slide 21: We will take customer focus to the next level
We will take customer focus to the next level Key account management: sector-driven growth initiative Higher share of wallet Focus on fast-growing customers in emerging countries Already 67 key accounts in place Increase to 100+ key account managers until FY 11 Target additional € 2.4 billio
Slide 22: New emerging customers provide additional opportunities
New emerging customers provide additional opportunities Emerging new customers China National Petroleum Corporation expansion State-supported EPCs / trading Upstream Downstream Up / Downstream houses expand worldwide We are a local company to the EPCs / trading houses Japanese EPC expansion Kore
Slide 23: Technology and Innovation are our backbone for growth
Technology and Innovation are our backbone for growth R&D investment (FY 07 = 100%) Innovations and initial customers H-class gas turbine e.on and Efficiency / flexibility Florida Power & Light Index Direct Drive 3 MW Test operation since 50% less moving parts July 2008 Æ reliability / cost 147 114
Slide 24: SMART initiative: Best products at the right price for emerging markets
SMART initiative: Best products at the right price for emerging markets Simple Examples Maintenance friendly Affordable SIMOSEC Hybrid insulated switchgear Reliable from China Indoor switchgear, designed for 12 kV Timely to Market Customers: grid companies and real estate € 100 million expecte
Slide 25: Footprint improvements to continue
Footprint improvements to continue Example: Gas Turbines Example: Wind Turbines Acquisition of Bonus Relocation Dec 1, 2004 TODAY Industrialization Hamilton / CAN Nacelle moving line: into Charlotte / -35% cycle time USA in 2010/11 FY 09-10 Central Hub for Internationalization 60 Hz GTs China
Slide 26: Each division with unique strengths to win in the market
Each division with unique strengths to win in the market Growth levers by division Oil and Gas Fossil Power Generation Renewable Energy From well to wire One backbone of Energy Growth engine for Energy Subsea grid / marinization: pilot Efficiency / flexibility: H-turbine Internationalization,
Slide 27: Highlights
Highlights 120% Market Markets will recover in mid-term 100% 80% 60% Record levels Return to record levels before 2015 in 2008 40% Market Bottom Market segment drivers play to our strengths contraction out in 20% in 2009 2010 0% 2008 2009 2010 2011 2012 2013 Growth Technology and innovation in
Slide 28: Energy Sector transition driven by broad and diverse developments
Energy Sector transition driven by broad and diverse developments New business models Market Stimulus programs Major projects / visions Megawatt vs. ''Negawatt'' 120% 600 billion EUR Wind power grid 100% in North Sea 790 billion USD 80% ''Negative'' Off-shore wind power 60% Record levels
Slide 29: We win at every point in the energy conversion chain
We win at every point in the energy conversion chain ''Efficiency'' SCOPE MIX CCS Fossil CCS Up- Mid- Down- Wind stream stream stream Oil & Gas Solar Nuclear Smart E-car Consump- Infrastruc- Smart INTELLIGENCE Generation Smart Grid tion ture Page 29 June 29, 2010 Capital Market Day Energy ©
Slide 30: New wins trigger additional sales
New wins trigger additional sales Main power generation €1 rotating equipment solutions Initial Back-up Grid Service Additional revenue results in €x (calculated based on 1 GW) invest access invest service revenue Wind 100% +18% +16% +16% offshore WT Geno GT ST +50% WT Service Geno Wind 100% +46% +1
Slide 31: Siemens Energy: Aimed at industrial leadership
Siemens Energy: Aimed at industrial leadership Meet the targets by establishing Beat market and our best competitors in growth a high Stay in current performance range performance The only culture Integrated Energy Sticking Make the numbers – no excuses – no surprises to the Company Next lev
Slide 32: 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 supplemental financial measures: New orders and order backlog Adjust
Slide 33: Reconciliation and Definitions for Non-GAAP Measures (II)
Reconciliation and Definitions for Non-GAAP Measures (II) New orders and order backlog (continued) New orders are generally recognized immediately when the relevant contract becomes legally effective and binding. The only exception are orders with short overall contract terms. In this case, a separa
Slide 34: Reconciliation and Definitions for Non-GAAP Measures (III)
Reconciliation and Definitions for Non-GAAP Measures (III) Return on equity, or ROE In line with common practice in the financial services industry, Siemens Financial Services (SFS) uses return on equity, or ROE, as one of its key profitability measures. Siemens defines ROE as annualized Income befo
Slide 35: Reconciliation and Definitions for Non-GAAP Measures (IV)
Reconciliation and Definitions for Non-GAAP Measures (IV) EBITDA (adjusted) and EBIT (adjusted) Siemens defines EBITDA (adjusted) as EBIT (adjusted) before amortization (which in turn is defined as Amortization and impairments of intangible assets other than goodwill) and Depreciation and impairment
Slide 36: Reconciliation and Definitions for Non-GAAP Measures (V)
Reconciliation and Definitions for Non-GAAP Measures (V) Limitations Associated with Siemens’ Supplemental Financial Measures The supplemental financial measures reported by Siemens may be subject to limitations as analytical tools. In particular: With respect to adjusted or organic growth rates o