Siemens Aktiengesellschaft · XETR:SIE
Siemens Aktiengesellschaft — Siemens — Q4 2019 Earnings Presentation
38 slides from Siemens Aktiengesellschaft's earnings presentation, Nov 7, 2019
Slide 1: Siemens delivers strong Q4, fiscal-year guidance fully achieved in all respects
Siemens delivers strong Q4, fiscal-year guidance fully achieved in all respects Joe Kaeser, President and CEO Siemens AG Ralf P. Thomas, CFO Siemens AG Analyst Call, November 7, 2019 Unrestricted © Siemens 2019 siemens.com
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
Slide 3: Our agenda for today
Our agenda for today Performance FY 2019 Status Project Powerhouse (Spin off) Status execution Vision 2020+ Outlook FY 2020 Unrestricted © Siemens 2019 Page 3 November 7, 2019 Q4 FY 2019 Analyst Call
Slide 4: FY 2019 – Initial guidance achieved on all metrics
FY 2019 – Initial guidance achieved on all metrics Orders (€bn) Revenue (€bn) +6%1) +3%1) Moderate growth 91.3 98.0 83.0 86.8 Book-to- bill FY 2018 FY 2019 1.13 FY 2018 FY 2019 Adj. EBITA margin Industrial Business (ex. severance) Basic Earnings per Share (ex. severance) -50bps +15% 12.0% 11.5% €6.9
Slide 5: Guidance – Keeping commitments
Guidance – Keeping commitments FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Unrestricted © Siemens 2019 Page 5 November 7, 2019 Q4 FY 2019 Analyst Call
Slide 6: Q4 – Strong finish
Q4 – Strong finish Orders Revenue IB Adj. EBITA margin excl. severance +2% +6% 12.5% EPS excl. severance Free Cash Flow Indust. ND/EBITDA €1.90 €5.3bn 0.6x Orders and Revenue growth comparable Unrestricted © Siemens 2019 Page 6 November 7, 2019 Q4 FY 2019 Analyst Call
Slide 7: Digital Industries (DI): Excellent Software business with clear market share gains
Digital Industries (DI) Excellent Software business with clear market share gains Orders Revenue Software and Process €bn +2%¹) Automation revenue -5%¹) 4.3 strongly up – 4.1 4.0 4.1 0.9 1.1 discrete automation with clearly weaker demand 3.2 3.2 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Key focus tight co
Slide 8: Ongoing weakness in discrete automation compensated by Software and Process Automation
Ongoing weakness in discrete automation compensated by continued strength in Software and stable Process Automation DI revenue share in vertical end markets Q4 FY 2019 - Key regions Automation (excl. Software) Trend next 3-4 quarters1) As of Q3/19 As of Q4/19 Orders -5% | Revenue +8% Moderate order
Slide 9: Smart Infrastructure (SI): Strong finish across the board
Smart Infrastructure (SI) Strong finish across the board Orders Revenue €bn +3%¹) Growth driven by solution +5%¹) and service – 4.0 4.4 4.1 4.4 slowing product business 1.4 1.5 2.6 2.9 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Strong profit conversion and opex control offset Adj. EBITA Margin Free Cash Fl
Slide 10: Gas and Power (GP): Strong execution in a continued difficult business
Gas and Power (GP) Strong execution in a continued difficult business Orders Revenue €bn +9%¹) Higher large orders in +2%¹) 5.7 new-unit business 5.2 4.9 5.1 2.1 2.3 2.8 2.8 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Strong service contribution Adj. EBITA Margin Free Cash Flow for profitable growth €m +167
Slide 11: Mobility (MO): Industry leading margins based on reliable execution
Mobility (MO) Industry leading margins based on reliable execution Orders Revenue €bn Revenue growth driven by -36%¹) +4%¹) 2.8 Rolling Stock and Service 2.4 2.5 1.8 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Sustainable margin Adj. EBITA Margin Free Cash Flow performance +90bps €m +237% 9-12% 570 11.3% 12
Slide 12: Performance of listed Strategic Companies
Performance of listed Strategic Companies Orders Revenue Orders Revenue €bn +4%¹) +8%¹) €bn 4.3 4.6 +15%¹) +11%¹) 4.1 3.7 3.1 2.9 2.6 2.6 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Q4 FY 18 Q4 FY 19 Adj. EBITA Margin Free Cash Flow Adj. EBITA Margin Free Cash Flow €m €m +69% +150bps 17-21
Slide 13: A promise delivered – efforts continue
Free Cash Flow A promise delivered – efforts continue Cash conversion rate (Industrial Businesses) Key factors CCR target '1-growth' 1.01 0.96 0.97 0.98 0.98 Working capital improvement by €1.1bn above CMD target of €1bn CCR 0.96 (as rep.) 0.86 0.89 0.79 0.80 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Slide 14: 3.5% average dividend yield
Sustainable shareholder return Attractive dividend policy and ongoing share buyback 3.5% average dividend yield 1) Dividend yield1) 3.0% 4.0% 3.7% 3.0% 3.3% 3.9% 2.9% 3.0% 3.8% 4.0%2) 5.403) €3.50 €3.60 €3.70 €3.80 €3.90 Dividend €3.00 €3.00 €3.00 €3.30 €2.70 Dividend payout Target: 46% 42% 51% 57%
Slide 15: Vision 2020+: Ultimate value creation
Vision 2020+ Execute on transformation Value Ultimate value creation Leading in all businesses, shaping change Transformation Anticipate markets and trends #RaisingTheBar Focus Accountability Adaptability 2019 2020 2021 2022 2023 Key: Foster Ownership Culture and strengthen entrepreneurial focus Unr
Slide 16: Siemens Energy spin off fully on track despite tight time table
Siemens Energy spin off fully on track despite tight time table Nov 7 March / April May June July September 2019 2020 2020 2020 2020 2020 Road- show Today Portfolio set-up defined Carve-out Spin-off- Extraordinary Capital effectiveness Report General Meeting Market Day Brand name announced Prospectu
Slide 17: Gas and Power portfolio strengthened
Gas and Power portfolio strengthened From Portfolio companies (POC) Gas and Power From Smart Infrastructure FY 2019 comparable FY 2019 comparable FY 2019 comparable Revenue €1.0bn Revenue: €19.3bn Adj. EBITA €44m Adj. EBITA-Margin: 3.8% Revenue €0.6bn Adj. EBITA €35m Process Solutions Revenue: €1.6b
Slide 18: Digital Industries – Cost optimization program accelerated
Digital Industries – Cost optimization program accelerated to sustain profitability in target margin range Main levers Impact cost optimization Integration synergies from Vision 2020+ in €m €40m • Two Divisions into one Operating Company 320 320 • Corporate functions shifted to Digital Industries •
Slide 19: Smart Infrastructure – Commitment to stay in target margin range in FY 2020
Smart Infrastructure – Commitment to stay in target margin range in FY 2020 FY 2020 Framework Revenue growth Adj. EBITA Cash conversion rate above market growth1) in target margin range 1 - growth Annual adj. EBITA improvement Stringent implementation – examples (CMD view confirmed) Reduction of 2k
Slide 20: Mobility - Attractive long-term growth opportunities
Mobility - Attractive long-term growth opportunities Industry leading margins Excellent resilient performance Strategic priorities, FY 2020 framework Book-to-bill 1.01 1.11 1.25 1.45 Revenue 8.2 8.8 8.9 7.9 in €bn ▪ Healthy order backlog of €33bn Comp. +6% +6% +11% +0% growth ▪ Favorable market envi
Slide 21: Stringent execution of lean governance and efficient corporate operations
Stringent execution of lean governance and efficient corporate operations Support functions, CMD view 05/2019 Current status >20% reductions Pooled but Support Functions in "demand-based", e.g. ▪ €500m savings target until FY 2023 confirmed scope: • Legal Savings: • Finance €500m until FY23, • HR ▪
Slide 22: Portfolio Companies (POC) – Clear progress to deliver on commitments
Portfolio Companies (POC) – Clear progress to deliver on commitments, equity investments remain negative and volatile POC FY19 POC FY 19 POC targets Revenue €5.5bn comparable confirmed Adj. EBITA margin -1.3% Revenue €4.6bn 1 Break even FY2020 Adj. EBITA margin -2.5% Siemens Logistics Process Soluti
Slide 23: R&D investment with clear focus on software, digital services and vertical applications
R&D investment with clear focus on software, digital services and vertical applications High level of R&D investment… … to stay ahead of the curve in €bn Digital Twin Digital Twin Digital Twin Digital Industries Product Production Performance >+40% Performance data Expand Digital Enterprise portfoli
Slide 24: Guiding assumptions for FY 2020
Guiding assumptions for FY 2020 Global macroeconomic development expected to remain subdued Business environment Risks related to geopolitical and geoeconomic uncertainties, particularly for short-cycle businesses Maintain high levels of investment in R&D (Software, Cloud, IoT), Opex and Capex go-to
Slide 25: Below Industrial Business FY 2020 framework
Below Industrial Business FY 2020 framework Below Industrial Business – FY 2019 Expectations for FY 2020 €m ▪ SFS: ~ FY 2019 level 632 -71 145 -825 ▪ POC: Fully consolidated businesses profitable; equity 8,986 -1,133 investments remain negative and volatile -215 -1,872 ▪ SRE: dependent on disposal g
Slide 26: Outlook FY 2020
Outlook FY 2020 FY20 Framework Siemens Group FY20 Framework Siemens non-listed Companies ▪ Book-to-bill > 1 ▪ Moderate comp. revenue growth Comparable Adj. EBITA margin Mid point growth revenue growth expectation1) + 4% 7.00 Digital Industries Flat 17 - 18% 6.41 6.30 Smart Infrastructure Moderate 10
Slide 27: Stringent milestones for execution
Stringent milestones for execution (as of May 2019, CMD) New company structure operational as of April 1, 2019 First update on Corporate efficiency measures Q4 FY19, ongoing quarterly GP carve out effective by April 2020 GP partial spin-off by September 2020 Update on Mobility by Q2 FY20 GBS efficie
Slide 28: Appendix
Appendix Unrestricted © Siemens 2019 Page 28 November 7, 2019 Q4 FY 2019 Analyst Call
Slide 29: Siemens Financial Framework
Siemens Financial Framework Siemens (targets over the cycle) Growth Siemens Cash conversion (CCR) comparable revenue growth Industrial Businesses margin3) FCF IB / Adj. EBITA IB 4 – 5% 11 – 15% CCR = 1 – comp. growth rate Capital efficiency Capital structure Dividend payout ratio ROCE1) Industrial n
Slide 30: Siemens structure – entrepreneurial freedom for businesses
Siemens structure – entrepreneurial freedom for businesses Vision 2020+ structure as of April 1, 2019 Mid-term target Operating Companies Strategic Companies Accelerated + 2 ppts. POC DI SI GP MO SHS SGRE comp. revenue CAGR growth IoT Margin lift at + 2 ppts. Industrial Business CT / Next47 Service
Slide 31: Q4 FY 2019 – Net debt bridge
Q4 FY 2019 – Net debt bridge Ind. Net Debt/ EBITDA (c/o) in €bn Operating Activities 0.6x (Q3 FY19: 1.2x) 26.5 22.7 6.4 16.3 2.4 3.7 -1.6 -0.7 Net Debt Cash flows from ∆ Working Capital Cash flows from Financing and Net Debt Net Debt adjustments Ind. Net Debt operating activities investing activitie
Slide 32: Q4 FY 2019 – Pensions and similar obligations
Provisions increased in Q4 mainly due to lower discount rate Q4 FY 2019 – Pensions and similar obligations Q1 FY Q2 FY Q3 FY Q4 FY in €bn¹ FY 2016 FY 2017 FY 2018 2019 2019 2019 2019 Defined benefit obligation (DBO)² -42.2 -36.9 -35.9 -36.4 -38.4 -39.0 -40.3 Fair value of plan assets² 28.7 27.6 28.7
Slide 33: Q4 FY19 Profit Bridge from SHS disclosure to SAG disclosure
Q4 FY19 Profit Bridge from SHS disclosure to SAG disclosure Different profit definitions at SHS and SAG to be considered in models in €m disclosure (as of November 4, 2019) disclosure (as of November 7, 2019) 19.1% 19.0% 18.7% 18.6% 791 773 771 788 -18 -3 18 Profit Severance Profit Consolidation Adj
Slide 34: Outlook for FY 2020
Outlook for FY 2020 As disclosed on November 4, 2019 Unrestricted © Siemens 2019 Page 34 November 7, 2019 Q4 FY 2019 Analyst Call
Slide 35: Q4 FY19 Profit Bridge from SGRE to SAG disclosure
Q4 FY19 Profit Bridge from SGRE to SAG disclosure Different profit definitions at SGRE and SAG to be considered in models in €m disclosure (as of November 5, 2019) disclosure (as of November 7, 2019) 8.5% 250 -116 4.3% 4.5% 127 134 2.3% -7 0 7 -67 67 67 EBIT Integration & PPA effects EBIT PPA effect
Slide 36: Outlook for FY 2020
Outlook for FY 2020 As disclosed on November 5, 2019 Unrestricted © Siemens 2019 Page 36 November 7, 2019 Q4 FY 2019 Analyst Call
Slide 37: Financial calendar
Financial calendar November 7, 2019 Q4 Earnings Release November 7 - 8, 2019 Roadshow London November November 12 - 14, 2019 2019 Roadshow New York, Boston, Toronto November 14, 2019 Roadshow Frankfurt November 15, 2019 Roadshow Paris January 13, 2020 January 2020 Commerzbank Conference February 5,
Slide 38: Investor Relations contacts
Investor Relations contacts Investor Relations Internet: www.siemens.com/investorrelations E-Mail: [email protected] Telefon: +49 89 636-32474 Fax: +49 89 636-1332474 Unrestricted © Siemens 2019 Page 38 November 7, 2019 Q4 FY 2019 Analyst Call