Siemens Aktiengesellschaft · XETR:SIE

Siemens Aktiengesellschaft — Siemens — Q4 FY2010 Earnings Presentation

32 slides from Siemens Aktiengesellschaft's earnings presentation, Nov 11, 2010

  1. Slide 1: Siemens' growth gains momentum

    Siemens’ growth gains momentum Peter Löscher, President and CEO Joe Kaeser, CFO Q4 FY 2010 and Annual Analyst Conference November 11, 2010 Copyright © Siemens AG 2010. 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: Key takeaways

    Key takeaways Strong operational Q4 performance ƒ Accelerated order intake and stabilizing revenue growth ƒ Record year for cash ƒ Major customer wins in Energy ƒ Ten Divisions with a profit increase versus strong Q3 but project charges in Industry Solutions and Workflow & Solutions Proposed dividen

  4. Slide 4: Q4 - Accelerated growth and excellent cash generation

    Q4 - Accelerated growth and excellent cash generation Siemens (continuing operations), in €m Q4 FY 09 Q4 FY 10 Change New orders 18,747 23,473 18%1) Revenue 19,714 21,229 2%1) Book-to-bill 0.95x 1.11x Profit Total Sectors 1,923 1,0643) -45% Net income 4) -1,0632) -3963) 63% Basic earnings per share

  5. Slide 5: Broad based growth with healthy operational profitability

    Broad based growth with healthy operational profitability Q4 FY10 Order growth y-o-y1) Q4 FY10 Orders Revenue Profit y-o-y1) y-o-y1) margin²) Europe/C.I.S./Africa/ME +15% Siemens 18% 2% (therein Germany) +10% Industry 15% 4% 9.0% Industry Automation 20% 16% 18.4% Americas +21% (therein USA) Drive Te

  6. Slide 6: Backlog strengthened by a number of major order wins

    Backlog strengthened by a number of major order wins Strong order backlog 1) Major orders in Q4 €bn Industry: 89 ƒ $290m order for new plate & Steckel mills / Brazil 87 ~39 ƒ Russian Railways ordered another 16 Desiro 14 trains for €174m Industry 29 28 ƒ US rail operator Amtrak ordered 70 electric l

  7. Slide 7: Free Cash Flow generation at exceptional high level in 2010

    Free Cash Flow generation at exceptional high level in 2010 €m Sustainable working capital management – improved net working capital turns: 7,013 NWC-turns Total Sectors 8.6 8.8 8.9 8.0 4,903 4,058 2007 2008 2009 2010 3,641 2,138 1,929 697 696 519 -801 FCF – FY 2010 -548 FCF – FY 2009 Payments of ~

  8. Slide 8: Growth pattern in bookings will impact Capex and Free Cash Flow development

    Growth pattern in bookings will impact Capex and Free Cash Flow development Advance payments / Billings in Excess Capex1) spending Capex / €bn Advance Depreciation payments Total Groups Total Sectors New orders & BiE 160% 50 16 127% ? 14 113% 116% 115% 40 12 110% 96% Target Range 95% 10 30 79% 8 Org

  9. Slide 9: Asset management performance softens adverse impact of discount rate deterioration on funded status

    Asset management performance softens adverse impact of discount rate deterioration on funded status Q3 Pension funding status €bn FY 09 FY 10 FY 10 €bn Assets 21.1 22.7 23.3 Assets 30 DBO 25.2 28.8 29.7 28 Defined Benefit Funded 26 - 4.0 -6.1 -6.4 Obligations (DBO) Status1) 24 Underfunding Discount

  10. Slide 10: Product mix and tight Opex control drive margin expansion

    Product mix and tight Opex control drive margin expansion Income Cont. Ops (before taxes) Gross profit €bn Profit Margin €bn Gross Profit Margin 7.02) 20.7 21.6 5.51) 9.2%2) 28.5% 7.2% 1) 27.0% FY 09 FY 10 1) excl. NSN impairment; incl. NSN impairment: profit €3.9bn, 5.1% margin FY 09 FY 10 2) excl.

  11. Slide 11: Project P1000 drives reduction of complexity and improved transparency

    Project “P1000“ drives reduction of complexity and improved transparency Cost driver – Legal entities # Legal Entities r Key levers -40% ƒ Key actions that have been taken ƒ More aggressive approach of Sector / Cluster 1.800 to reduce the number of legal entities 1.600 1.300 ƒ Reduction of time-cons

  12. Slide 12: Below the sector line offers midterm potential

    “Below the sector line” offers midterm potential – 2011 still impacted by clean-up Q4 FY 10 ‘Below Total Sectors’ What to expect going forward €m NSN: ƒ Equity Investments continue to be materially 1,064 241m loss impacted by NSN (incl. one-offs) ~400m ƒ SIS: Carve out broadly on track incl. signifi

  13. Slide 13: We successfully completed our Fit42010 program

    We successfully completed our Fit42010 program Growth compared to GDP Cash Conversion (continuing ops.) Organic growth 2x GDP 1 – growth rate CCR 10% 9% 4% 4% 3.09 4) 1.73 3) 1.29 1.50 0.96 0.88 0% FY 07 FY 08 FY 09 FY 10 Ø 07-10 3) excl. NSN impairments 4) excl. DX impairments and strategic reorien

  14. Slide 14: New strategic direction focused on capital efficient growth

    After successful transformation new strategic direction is focused on “capital efficient growth” Basic restructuring and Sustainable Transformation focusing efforts value creation One Siemens ƒ Outperform Fit42010 revenue growth relative to Focus: Fit4More ƒ Transparency competition and ƒ Accountabl

  15. Slide 15: One Siemens: Framework for sustainable value creation

    Framework for sustainable value creation One Siemens The integrated technology company Financial target system Outperforming Capital efficiency Capital structure revenue growth Adjusted industrial net ROCE (cont. ops.)1) Growth (nominal) > debt / EBITDA Siemens most relevant competitors 15 – 20% 0.5

  16. Slide 16: Leverage strengths to accelerate profitable growth

    Leverage strengths to accelerate profitable growth Strategic directions 1 Focus on Be a pioneer in Provide a leading Strengthen our innovation-driven technology-driven environmental portfolio growth markets markets portfolio 2 Get closer to our Grow in Expand our service Intensify our customers emer

  17. Slide 17: Extension of Environmental Portfolio - ambitious target set for 2014

    Extension of Environmental Portfolio – ambitious target set for 2014 1 Renewable energies Revenue Environmental Portfolio €bn Target CAGR: 10% > 40 ~28 Environmental technology 2 Original target for 2011: ~25 3 Energy efficiency FY 10 FY 14e ƒ 270 mio. t CO2 abatement at our customers in 2010 throug

  18. Slide 18: Localization and footprint expansion key for emerging markets growth

    Further localization and footprint expansion is key for accelerated growth in emerging markets Market growth Siemens share in Emerging Markets Revenue3) Employees3) CAGR €bn +12% +3.6% +17% 23.1 111.7k 10.6 62.1k ~€43tr ~€52tr Emerging FY 05 FY 10 FY 05 FY 10 32% +6.0% 36% +€4.8tr Markets1) 19% 30%

  19. Slide 19: Significant increase of dividend to €2.70 proposed

    Significant increase of dividend to €2.70 proposed € Dividend Payout Ratio 1) Dividend per share 3.0 100% 2.70 90% 2.5 80% 2.0 70% 58% 53% 1.60 1.60 1.60 60% 1.5 1.45 56% 50% 43% 1.25 1.35 1.10 36% 1.00 1.00 43% 46%3) 40% 1.0 40% 23% 35% 33% 34%3) 30% 0.5 20% 10% 0.0 0% 2001 2002 2003 2004 2005 2006

  20. Slide 20: Outlook 2011

    Outlook 2011 ƒ With continuing improvement in Siemens’ markets, we expect organic order intake to show a clear increase compared to fiscal 2010 ƒ Supported also by our already strong order backlog, we expect revenue to return to moderate organic growth ƒ We anticipate income from continuing operatio

  21. Slide 21: Appendix

    Appendix Page 21 Q4 FY 2010, Analyst Conference, November 11, 2010 Copyright © Siemens AG 2010. All rights reserved.

  22. Slide 22: One Siemens cockpit

    One Siemens cockpit Financial target system Growth Margins compared to industry benchmarks Revenue growth (rolling 4 quarters Q4 FY 10) EBITDA Margins4) (FY10) Industry ~ 12.1% 10-15% Siemens -1% Energy ~ 14.7% 10-15% 0% Competitors1) -1% Healthcare ~ 20.1% 15-20% EBITDA margins in respective market

  23. Slide 23: The new definition of ROCE adjusted considers pensions and SFS

    The new definition of ROCE adjusted considers pensions and SFS Income before interest (FY 10) ROCE (FY 10) €bn Adjusted (cont. ops)1) 0.2 4.4 0.3 4.1 3.9 0.3 ∆ taxes on interest adj. 13.0% 0.3 0.1 old def: +0.1 new def: -0.1 10.4% Net income Other Taxes on Income SFS Other Interest cost ∆ Taxes on I

  24. Slide 24: Reduced net debt due to strong cash flow generation

    Reduced net debt due to strong cash flow generation €bn Adj. ind. Therein e.g. Adj. ind. ND/EBITDA • Net Income -0.4 ND/EBITDA 0.3x • Depreciation +2.0 0.1x (incl. 1.2 DX impairments) • Δ Net working capital +2.5 -0.8 Therein e.g. • Interest paid -95m -3.0 • FX effect on cash and +4.7 cash equiv. -0

  25. Slide 25: Consistent execution against plan

    Consistent execution against plan Reporting dates Milestones (deliverables) January 2008 ƒ New target margins for Energy and Industry Sector Q1 call and AGM ƒ Target margins for Divisions April 2008 ƒ Update on SG&A project Q2 analyst conference ƒ Start reporting in new structure July 2008 ƒ Outline

  26. Slide 26: Financial calendar

    Financial calendar Nov 11 – 12, 2010 November Q4 Analyst Conference and UK Roadshow (London) Nov 16 – 17, 2010 US Roadshow (New York, Boston) Nov 18, 2010 German Roadshow (Frankfurt) Nov 22, 2010 Swiss Roadshow (Zürich) December Dec 2, 2010 RSNA Investor tour (Chicago) Dec 8, 2010 French Roadshow (P

  27. Slide 27: 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: ƒ New orders and order backlog; ƒ Adjus

  28. Slide 28: 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 exceptions are orders with short overall contract terms. In this case, a separ

  29. Slide 29: Reconciliation and Definitions for Non-GAAP Measures (III)

    Reconciliation and Definitions for Non-GAAP Measures (III) Total Sectors Profit Siemens uses Total Sectors Profit to measure the sum of Profit of the three Sectors Industry, Energy and Healthcare. Profit of the Sectors is earnings before financing interest, certain pension costs and income taxes. Ce

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

    Reconciliation and Definitions for Non-GAAP Measures (IV) ROCE (adjusted) Starting fiscal 2011, Siemens is adjusting the ROCE definition. Net income (before interest), the numerator in the ROCE calculation, is defined as Net income excluding Other interest income (expense), net (excluding SFS), and

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

    Reconciliation and Definitions for Non-GAAP Measures (V) Adjusted EBITDA and adjusted EBIT at the Sector level Siemens also presents adjusted EBITDA and adjusted EBIT on the Sector level. Siemens defines adjusted EBITDA on the Sector level as adjusted EBIT before amortization (which in turn is defin

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

    Reconciliation and Definitions for Non-GAAP Measures (VI) Limitations Associated with Siemens’ Supplemental Financial Measures (continued) The supplemental financial measures reported by Siemens may be subject to limitations as analytical tools. In particular: ƒ With respect to new orders and order

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