Siemens Aktiengesellschaft · XETR:SIE

Siemens Aktiengesellschaft — Siemens — DB German & Austrian Corporate Conference 2008

28 slides from Siemens Aktiengesellschaft's conference presentation, Jun 4, 2008

1. Slide 1: Executing Our TAP Agenda

   Executing Our TAP Agenda Joe Kaeser, CFO DB German & Austrian Corporate Conference Frankfurt, Germany June 4, 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: Focused on three Sectors with strong end markets

   Focused on three Sectors with strong end markets High BUSINESS QUALITY in #1 or #2 positions Attractive markets with Cross- Three SECTORS sectoral tailwind from MEGATRENDS Energy Siemens IT Solutions and Services Increasing scarcity of Businesses from ~€20bn1) natural resources ƒ Power Generation De

4. Slide 4: Priorities are clearly defined

   Priorities are clearly defined Our Principles … Main Topics Clear focus on ƒ Portfolio priorities organic growth Increase ƒ Leadership structure New structure as of Jan 081) TRANSPARENCY Enforce ƒ Capital allocation Continued com- mitment to SBB2) ACCOUNTABILITY New targets for ƒ Target margins 2010

5. Slide 5: Q2 2008 – key figures and financial highlights

   Q2 2008 – key figures and financial highlights % Change Q2 2007 Q2 2008 nominal adjusted New orders (Cont. Op.) 20,850 m 23,371 m 12% 15%1) Sales (Cont. Op.) 18,001 m 18,094 m 1% 2%1) Group profit from Operations 1,781 m 1,203 m -32% 16%2) Income from Cont. Op. 1,286 m 565 m -56% -10%2) Net income (

6. Slide 6: Order growth confirms strong position in attractive end markets

   Order growth confirms strong position in attractive end markets Regional order growth 1) Continued strong order growth 2 x GDP (regional) Africa/NME/GUS 54% Germany 21% Asia / Pacific 19% China and Germany main Russia: +119% growth drivers Americas 10% China: +23% Rest of Europe 6% USA: +8% Continui

7. Slide 7: Key value drivers show strong earnings conversion

   Key value drivers show strong earnings conversion A&D Med PTD +310 bp +100 bp 17.5% 15.3% 16.3% +350 bp 14.4% 11.6% 8.1% 16.7% 14.2% 13.4% 12.5% Q2 2007 Q2 2008 Q2 2007 Q2 2008 Q2 2007 Q2 2008 PPA - € 10m PPA - € 35m PPA - € 37m PPA - € 50m OTC - € 2m OTC - € 9m OTC - € 52m Margin improvement driven

8. Slide 8: Update on Fit4 2010 comprehensive target system

   Update on Fit42010 comprehensive target system Cash conversion Capital structure Adj. industrial net debt / EBITDA 1 – growth rate 0.8x – 1.0x 1.73 0.76 0.86 Cash Capital 0.69 structure 0.37 0.04 FY 2006 FY 2007 Q2 2008 YTD FY 2006 FY 2007 Q2 2008 YTD Growth Capital efficiency >2x GDP ROCE 14 - 16%

9. Slide 9: SG&A cost reduction plan for € 1.2 bn in place

   SG&A cost reduction plan for € 1.2 bn in place Main drivers SG&A cost reduction ƒ Eliminating duplicate € bn, as reported1) functions on all levels by -10% new accountability principles 11.9 12.1 10.9 Target breakdown ƒ Reducing number of legal entities and reporting units Sales & ~8.9 ƒ Cutting ove

10. Slide 10: KPI for SG&A cost reduction

    KPI for SG&A cost reduction Consultancy costs, in EUR 1) IT costs, in EUR -50% -25% Costs 600′ 1″3 ~1″0 element 300′ <300′ Actual YTD 2010 E Actual 2010 E 2007 Q2 2008 2007 Number of legal entities Number of reporting units -40% -40% Complexity 1,800 ~1,700 900 900 drivers <1,000 ~500 2007 Q2 2008 T

11. Slide 11: Cutting and growing

    Cutting and growing SG&A reduction (absolute) SG&A reduction with growth at 2x GDP SG&A in EUR billions, as reported1) SG&A in terms of 330 bp sales (%)2) 16,7% 13,4% -10% GDP growth = 2% p.a. 12,1 10,9 410 bp 16,7% 12,6% GDP growth = 3% p.a. 480 bp 16,7% 11,9% GDP growth = 4% p.a. 2007 2010 2007 20

12. Slide 12: CFO's Macro-take on our industries

    CFO's Macro-take on our industries Energy ƒ Strong cycle to continue with some supply/demand volatility en route ƒ Current backlog of 1-3 years ƒ Pricing exists on both sides of the equation – suppliers also with strong pricing power ƒ New capacities are coming online > could impact pricing and fix

13. Slide 13: Financial Calendar

    Financial Calendar June 2008 Post Q2 roadshows with CEO and CFO in Paris (June 3), New York and Boston (June 9-10), London (June 12), Frankfurt (June 13) June June 4, 2008 Deutsche Bank German & Austrian Corporate Conference – Joe Kaeser, CFO June 12, 2008 JPMorgan Pan-European CEO Conference – Pete

14. Slide 14: 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

15. Slide 15: 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

16. Slide 16: 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

17. Slide 17: Siemens Investor Relations Team

    Siemens Investor Relations Team Michael Sen +49-89-636-33780 Gerald Brady +1-408-492-4439 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 Webpage: http://www.siemens.com/investorrelatio

18. Slide 18: Backup

    Backup Page 18 June 4th, 2008 DB German & Austrian Corporate Conference Copyright © Siemens AG 2008. All rights reserved.

19. Slide 19: TAP – consistent execution against plan

    TAP – consistent execution against plan Reporting dates Milestones (deliverables) November 2007 ƒ New organization approved Supervisory Board ƒ Managing Board incl. Sector CEO approved ƒ Sector CFO named December 2007 ƒ Division CEO and CFO named January 2008 ƒ New target margins for Energy and Indu

20. Slide 20: Profitability targets close the gap to best competitors

    Profitability targets close the gap to best competitors Reporting dates Milestones (deliverables) November 2007 ƒ New organization approved Supervisory Board ƒ Managing Board incl. Sector CEO approved ƒ Sector CFO named December 2007 ƒ Division CEO and CFO named January 2008 ƒ New target margins for

21. Slide 21: New organizational setup in place – leadership, governance and people

    New organizational setup in place – leadership, governance and people Reporting dates Milestones (deliverables) November 2007 ƒ New organization approved Supervisory Board ƒ Managing Board incl. Sector CEO approved ƒ Sector CFO named December 2007 ƒ Division CEO and CFO named January 2008 ƒ New targ

22. Slide 22: Regional clusters: more transparent, faster and closer to the customers

    Regional clusters: more transparent, faster and closer to the customers ~190 Countries 20 Clusters ~70 Regional Companies ƒ Increased sales efficiency across countries Expected benefits ƒ Bundling of central functions within clusters ƒ Optimized span of control for Sectors and Regions Page 22 June 4

23. Slide 23: Key G&A improvement areas and levers identified

    Key G&A improvement areas and levers identified Reported G&A cost, € bn Key improvement areas Baseline FY 2007 ∼3.2 Leverage new ƒ Consolidation of headquarter central functions from 8 Groups into 3 Sectors sector organization (e.g., in accounting, controlling, communication) Leverage new regional ƒ

24. Slide 24: Levers for sales cost reduction and efficiency gains

    Levers for sales cost reduction and efficiency gains Reported sales cost, € bn Key improvement areas ƒ Bundling of infrastructure in Clusters FY 2007 ∼8.9 ƒ Integration of legal entities ƒ Streamlining of sales mgt. structures ƒ Discontinuation of major IT projects ƒ Bundling of shared services to d

25. Slide 25: € 2 bn share buyback tranche successfully executed

    € 2 bn share buyback tranche successfully executed Reporting dates Milestones (deliverables) November 2007 ƒ New organization approved Supervisory Board ƒ Managing Board incl. Sector CEO approved ƒ Sector CFO named December 2007 ƒ Division CEO and CFO named January 2008 ƒ New target margins for Ener

26. Slide 26: PG project review completed – no additional material impact

    PG project review completed – no additional material impact Project Review completed Main actions taken Volume1) (€ bn) 12.6 ƒ Rigorous Limits of Authority process √ (100%) ƒ Single cycle ƒ Projects close to completion 80% ƒ Selective intake of new turnkey contracts ƒ 'Core business' combined cycle

27. Slide 27: Business mix will drive higher Fossil PG margins

    Business mix will drive higher Fossil PG margins Backlog in Fossil Turning turnkey backlog into sales € 22.5 bn Backlog in € bn 08/03/31 6.6 New orders in 07- 5.9 08 more profitable 2,2 1,8 1,5 than older projects 3,0 71% 29% 1,3 0,5 Challenges from Turnkey Olkiluoto - project 4Q 07 Turned New 2Q 08

28. Slide 28: Outlook 2008

    Outlook 2008 ƒ Organic revenue growth for the fiscal year will be twice the rate of GDP growth ƒ Group Profit from Operations will match prior year’s level ƒ Income from Continuing Operations will match prior year’s level This outlook excludes earnings impacts that may arise from legal and regulator

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