Siemens Aktiengesellschaft · XETR:SIE

Siemens Aktiengesellschaft — Siemens — Investor Day (February 2008)

33 slides from Siemens Aktiengesellschaft's investor day presentation, Feb 28, 2008

1. Slide 1: Siemens Healthcare – Financial Performance

   Siemens Healthcare – Financial Performance Klaus P. Stegemann, CFO Healthcare Capital Market Day Siemens Healthcare Munich, February 28, 2008 Copyright © Siemens AG 2008. All rights reserved.

2. 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,”

3. Slide 3: Discussion items

   Discussion items 1 Financial overview 2 Driving financial performance Copyright © Siemens AG 2008. All rights reserved. Page 3 February 28, 2008 Capital Market Day Siemens Healthcare

4. Slide 4: Healthcare delivering profitable growth

   Healthcare delivering profitable growth Healthcare sales and profit margin (reported) Comments Profit margin (IFRS): 11.7% 12.0% 13.2%* ƒ Profit margins increased despite 15.0%** dollar weakness and competitive environment With Diagnostics pro-forma 11.7 ƒ Headline revenue progression With Diagnosti

5. Slide 5: We are driving a more balanced regional portfolio

   We are driving a more balanced regional portfolio Sales by destination Sales by origin Others Others 7% Europe 10% Asia 39% Asia Europe 15% 34% 11% USA USA 43% 41% Status: 2007 Status: 2007 Copyright © Siemens AG 2008. All rights reserved. Page 5 February 28, 2008 Capital Market Day Siemens Healthca

6. Slide 6: Dollar has shown progressive depreciation vs. Euro

   Dollar has shown progressive depreciation vs. Euro … Euro to Dollar development 30 Sept 2004 to 31 Jan 2008 €/$ Change in 1,10 average -4% +3% -8% -9% Dollar rate vs. 1,15 Euro (PY) 1,20 1,25 1,30 1,35 1,40 1,45 1,50 1,55 2005 2006 2007 2008 Copyright © Siemens AG 2008. All rights reserved. Page 6 F

7. Slide 7: Underlying revenue growth has been solid

   … while underlying revenue growth has been solid Sales development 2004 to 2007 (all amounts €m) +8% +8% +20% +19% 9,851 +6% -5% +1% 8,227 +2% +5% +9% -2% 7,626 +1% 7,072 Organic Currency Acquisitions Organic Currency Acquisitions Organic Currency Acquisitions 2004 2005 2006 2007 Copyright © Siemens

8. Slide 8: Reported and underlying profitability continues to increase

   Both reported and underlying profitability continues to increase … Healthcare profit margin development Excluding Diagnostics PPA and one-time costs 17.0% 15.0% 15.7% 12.2% 14.0% Momentum 13.2% 12.5% in business driving 11.7% 12.0% improvements in profitability Basis for target margin 2005 2006 2007

9. Slide 9: Operating profitability improvements despite USD headwinds

   … driven mainly by operating profitability improvements despite USD headwinds Profit development FY 2005 to FY 2007 (excluding Diagnostics PPA and one-time costs) +330 BPS +20 BPS 15.2% +70 BPS 15.0% +260 BPS 14.3% 11.7% 2005 Operational Acquisitions Dräger Medical 2007 improvement 10% disposal IFRS

10. Slide 10: Pro-forma 2007 revenue breakdown

    Pro-forma 2007 revenue breakdown Baseline 2007 revenue analysis (all amounts €m) Basis for organic growth ca. -4% +13% 11,600 to -5% 11,100 +5% Positive organic sales growth in 9,851 2008 and gain market share 2007 Bayer Dade Behring Baseline Estimated Baseline Diagnostics 11 months excluding 2008 c

11. Slide 11: PPA and one-time costs impact operating margins significantly

    PPA and one-time costs currently impact our operating margins significantly 1,475 175 All amounts €m 1,300 418 86 180 BPS 332 13.2% 320 BPS 15.0% 15.7% 12.5% Operating PPA/OTC Group Operating PPA/OTC Group profit* Diagnostics profit* profit Diagnostics profit *Excluding gain on sale of 10% stake in

12. Slide 12: Better transparency: PPA and acquisition-related one-time costs

    Better transparency: PPA and acquisition-related one-time costs from Diagnostics PPA and one-time costs (all amounts €m) PPA effects (non-cash) 370 one-time costs* 200 230 175 50 107 170 180 180 68 2007 2008E 2009E 2010E * one-time costs include 23 in 2007 and 20 in 2008 (estimate) relating to inven

13. Slide 13: Driving Diagnostics productivity and synergy realization

    Driving Diagnostics productivity and synergy realization Diagnostics synergy bridge (all amounts €m) 500 Realization of synergies ahead of plan Productivity 240 240 160 Q1 2008 Diagnostics Synergies 260 100 operating margin 21.5% excluding PPA and one- time costs Target Productivity Dade Bayer Diagn

14. Slide 14: Summary of Diagnostics financial deliverables

    Summary of Diagnostics financial deliverables 2008 ƒ Positive impact on underlying margins ƒ Final year of integration costs 2009 ƒ Further positive margin impact ƒ Dade Behring EPS accretive to Siemens 2010 ƒ Improved quality of earnings ƒ Sector EVA higher than level before Diagnostics acquisition

15. Slide 15: Strongly committed to achieving target margins

    Strongly committed to achieving target margins Margin Program Date ranges Healthcare Fit4More Fit4 11-13% Q2 2007 Fit42010 13-15% FY 2007 14–17% Workflow & Imaging & IT Diagnostics Solutions 14–17% 11–14% 16–19% 15% 10% 6%/13%* 2007 Performance – unaudited preliminary numbers *13% excluding one-time

16. Slide 16: Acquisitions in Diagnostics give a powerful sales and profit profile

    Acquisitions in Diagnostics gives Healthcare a powerful sales and profit profile Pro-forma sales Pro-forma operating profit by division (2007) by division (2007) Imaging Imaging Diagnostics & IT Diagnostics & IT 28% 60% 35% 56% Workflow & Workflow & Solutions Solutions 12% 9% Note: 2007 pro-forma fi

17. Slide 17: Strong position to outgrow market and perform at top end of margin range

    Strong position to outgrow market and perform at top end of margin range in 2010 Imaging Workflow Sector Diagnostics & IT & Solutions Healthcare Market pos.1) #1 Siemens1) Siemens Siemens Siemens1) 20061) #2 GE Varian Roche GE #3 Philips Sonova Abbott Philips Market growth 2007-082) +2-3% +5-6% +5-6

18. Slide 18: Discussion items

    Discussion items 1 Financial overview 2 Driving financial performance Copyright © Siemens AG 2008. All rights reserved. Page 18 February 28, 2008 Capital Market Day Siemens Healthcare

19. Slide 19: Driving financial performance

    Driving financial performance 1 Organic growth 2 Increase profit 3 Unlock more cash conversion ƒ Innovations & ƒ Continue successful ƒ Improve quality of workflow: exploit productivity program earnings strong product pipeline ƒ Rigorous control on ƒ Reduce capex spend ƒ New markets / spending ƒ Opti

20. Slide 20: Sales organization driving organic sales growth

    Sales organization of over 13,000 driving organic sales growth Goals ƒ Improving CRM1) process and gain market share: ƒ Leverage customer opportunity imaging and diagnostics ƒ Drive training programs across sales force Europe 42% ƒ Increase market transparency 35% ƒ Leverage revenue from installed b

21. Slide 21: Tight R&D project management and controls

    Tight R&D project management and controls Executing on control Strict project management Nov 06 Dez 06 Nov 07 Dez 07 Sep 06 Feb 07 Mrz 07 Aug 07 Sep 07 Feb 08 Mar 08 Okt 06 Jan 07 Jun 07 Okt 07 Jan 08 Apr 07 Mai 07 Apr 08 Mai 08 Jul 07 9 More than 7,000 people employed in Plan total Mai. 08 Apr. 08

22. Slide 22: Benchmarking drives best-in-class performance

    Benchmarking drives best-in-class performance Frequency Implement findings ƒ Benchmarking (1-3 years) 9 Act immediately on results - Cost - Innovation 9 Commitment to address gaps ƒ Quality & Regulatory (ongoing) 9 Follow-up across organization ƒ World-class purchasing (ongoing) Execute to ensure be

23. Slide 23: Rigorous productivity program in place

    Rigorous productivity program in place Execute on productivity Delivering productivity road map (all amounts €bn) 0.80 9 Established 10+ years 0.75 9 All BU have same methodology 0.65 11% p.a. 9 2,000+ measures implemented annually 9 Special focus on fixed cost 9 Implementation measured by 2005 2006

24. Slide 24: Efficiency in purchasing is driving down cost

    Efficiency in purchasing is driving down cost Global purchasing Number of suppliers 9 Increase share of LCC -15% purchasing 25,000 9 Standardize supplier terms 21,250 9 Synergies in Diagnostic 9 Strategic partnership with key suppliers 2007 2008 Standardization Æ Reduced costs Copyright © Siemens AG

25. Slide 25: Delivering savings out of SG&A program

    Delivering savings out of SG&A program Current status Key activities ƒ Leverage progress made via productivity program December January February March … September October ƒ Key synergy lever with Base lining Benchmarking Detailing Implement Diagnostics Target setting ƒ Cross-sector synergies in Shar

26. Slide 26: Improving cash conversion

    Driving organic cash generation out of working capital Operating working capital turns* ƒ Increase standard parts Inventory ƒ Better scheduling in supply chain 7.0x 6.7x ƒ Improve installation 6.1x times at customer sites 6.0x Receivables ƒ Better customer 6.0x satisfaction reduces debtor days ƒ Red

27. Slide 27: We do what we promise

    We do what we promise Organic growth Group profit Cash gaining market share target margin Conversion Rate Profit margin: 14-17% 1 – growth rate 1.04 0.90 15.0%1) 12.0% 6% 5% 2006 2007 2006 2007 2006 2007 Market growth 1) Excluding PPA and one-time costs related to DPC, Bayer acquisition and gain on

28. Slide 28: Focus and deliver

    Focus and deliver Driving profitable growth and cash returns Getting the most out of the integrated diagnostics company Achieving best-in-class cost position incl. SG&A reduction Innovating for fast growth and competitiveness + + + Drive organic growth above market growth Deliver target margin Conve

29. Slide 29: Siemens – Answers for life

    SIEMENS Answers for life.

30. Slide 30: Reconciliation and Definitions for Non-GAAP Measures (I)

    Reconciliation and Definitions for Non-GAAP Measures (I) Group profit from Operations is reconciled to Income before income taxes of Operations under Reconciliation to financial statements on the table Segment Information. See our Financial Publications at our Investor Relations website under www.si

31. Slide 31: Reconciliation and Definitions for Non-GAAP Measures (II)

    Reconciliation and Definitions for Non-GAAP Measures (II) Average calculation for CE*: Year-to-Date Q1 2 Point average: (CE ending Q4 Prior year + CE ending Q1) / 2 Q2 3 Point average: (CE ending Q4 Prior year + CE ending Q1 + CE ending Q2) / 3 Q3 4 Point average: (CE ending Q4 Prior year + CE endin

32. Slide 32: Reconciliation and Definitions for Non-GAAP Measures (III)

    Reconciliation and Definitions for Non-GAAP Measures (III) Our capital structure target is based on an Adjusted industrial net debt divided by EBITDA (adjusted). For the calculation of Adjusted industrial net debt, we subtract from Net debt (defined as Long-term debt plus Short-term debt and current

33. Slide 33: Siemens Investor Relations Team

    Siemens Investor Relations Team Michael Sen +49-89-636-33780 Florian Flossmann +49-89-636-34095 Sabine Groß +49-89-636-35755 Dr. Martin Meyer +49-89-636-33693 Christof Schwab +49-89-636-32677 Dr. Gerd Venzl +49-89-636-44144 Susanne Wölfinger +49-89-636-30639 Webpage: http://www.siemens.com/investorr

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