Siemens Aktiengesellschaft · XETR:SIE

Siemens Aktiengesellschaft — Siemens — Investor Day (February 2008)

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

1. Slide 1: Siemens Healthcare – Focus and deliver

   Siemens Healthcare – Focus and deliver Erich R. Reinhardt, CEO Healthcare Capital Market Day Siemens Healthcare Munich, February 28, 2008 Copyright © Siemens AG 2008. All rights reserved. Page 1 February 28, 2008 Capital Market Day Siemens Healthcare

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: What is on our mind?

   Copyright © Siemens AG 2008. All rights reserved. Page 3 What is on our mind? February 28, 2008 Capital Market Day Siemens Healthcare

4. Slide 4: Siemens Healthcare Sector: Driving Profitable Growth

   Siemens Healthcare Sector Driving Profitable Growth Munich, February 28, 2008 Erich R. Reinhardt Copyright © Siemens AG 2008. All rights reserved. Page 4 What is on our mind? February 28, 2008 Capital Market Day Siemens Healthcare

5. Slide 5: 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

6. Slide 6: Global organization aligned towards delivering financial results

   Global organization aligned towards delivering financial results Siemens Healthcare + + + Drive organic growth above market growth Deliver target margin Convert to cash Target margin 2010: 14-17% Diagnostics Imaging & IT Workflow & Solutions Target margin 2010: Target margin 2010: Target margin 2010

7. Slide 7: We have built a strong track record in business performance

   We have built a strong track record in business performance Healthcare sales & profit margin (reported) Highlights Profit Margin 11.7% 12.0% 13.2%* ƒ Margins increased despite dollar weakness and (IFRS): competitive environment through innovations. 15.0%** ƒ Headline revenue progression held back by

8. Slide 8: We are committed to reach our goals

   We are committed to reach our goals Organic growth above Group Profit Cash Conversion market growth Target Margin Rate Profit Margin: 14 - 17% 1 – growth rate 6% 1.04 5% 0.90 15.0%1) 12.0% FY06 FY07 FY06 FY07 FY06 FY07 Market growth 1) Excluding PPA and One Time Costs related to DPC, Bayer acquisiti

9. Slide 9: We hold #1 positions in each of our markets

   We hold #1 positions in each of our markets and will leverage the strategically best position Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro Diagnostics In Vivo Diagnostics (IVD) (Imaging) Diagnostics Imaging & IT Workflow & Solutions Health- Comput. Magnetic Ang

10. Slide 10: Trends in Healthcare determine our customers' goals

    Trends in Healthcare determine our customers’ goals Market trends … create demand and define … ... our customers’ goals ƒ Growing and aging ƒ Increased demand for population healthcare services ƒ Emerging rural ƒ Products for healthcare healthcare delivery in rural areas ƒ Cost pressure/varying ƒ So

11. Slide 11: Our customers' goals are our goals

    Our customers’ goals are our goals We help our customers to provide: To grow our business profitably ƒ high-quality and patient-centered care ƒ as preferred partner ƒ along the healthcare continuum ƒ we generate growth from workflow advantages and clinical excellence ƒ with best processes ƒ and turn

12. Slide 12: Our customers' success is based on improving workflow

    Our customers’ success is based on improving workflow Top 10 priorities by facility type in 2007 Hospitals in the United States Imaging centers Over 500 beds: 200–500 beds: < 200 beds: 1. Improving 1. Reimbursement 1. Reimbursement 1. Increasing workflow procedure volume 2. Improving 2. Increasing w

13. Slide 13: Growing our business as we solve customers' workflow needs

    Growing our business as we solve our customers‘ specific workflow needs best Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro Diagnostics In Vivo Diagnostics (IVD) (Imaging) How can I accept more patients on my schedule to compensate for reimbursement cuts? Head of

14. Slide 14: Early Detection has clear financial and clinical benefits

    Early Detection has clear financial and clinical benefits Example: Breast cancer % alive 15 years Early detection increases survival after diagnosis rate and reduces treatment cost Treatment cost ($000) 80% 140 70% 120 60% 100 50% 80 40% 60 30% 20% 40 10% 20 0% 0 No cancer Stage 0 Stage I Stage II S

15. Slide 15: Siemens is the only diagnostics company offering a full portfolio

    Siemens is the only diagnostics company offering a full portfolio Example: Breast cancer Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) ƒ Physical ƒ Assay sensitive to ƒ Mammography; ƒ Molecular ƒ Physical examination protein expression

16. Slide 16: The market requires workflow-oriented IT

    The market requires workflow-oriented IT to reach highest productivity, clinical and financial results Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) Lab and radiology data for diagnosis and staging Quantitative res

17. Slide 17: Our customers' decisions are both product and solution oriented

    Our customers‘ decisions are both product and solution oriented Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) Radiography/Angiography Oncology Computed Tomography Magnetic Resonance Cardiology Molecular Imaging Imm

18. Slide 18: Organization designed to focus on all business opportunities

    Organization designed to focus on all business opportunities Siemens Healthcare Erich R. Reinhardt CFO Klaus Stegemann Diagnostics Imaging & IT Workflow & Solutions Jim Reid-Anderson Bernd Montag Tom Miller Radiography/Angiography Oncology Computed Tomography Magnetic Resonance Cardiology Molecular

19. Slide 19: Growing and well diversified market

    Growing and well diversified market 3-4% 57 59 2008 2010 22 Diagnostics 5-6% 5-6% 21 5 5 Workflow & Solutions 5-6% 6-7% 31 32 Imaging & IT 2-3% 5-6% 2007 2008 (in € billions, currency adjusted) Copyright © Siemens AG 2008. All rights reserved. Page 19 February 28, 2008 Capital Market Day Siemens Hea

20. Slide 20: US Market: Temporary effect on current spending

    US Market: Temporary effect on current spending US market currently weak Previous example: MRI in the 90’s ƒ DRA(1) currently slows down investments into new imaging systems units CAGR 8% ƒ Conclusion for healthcare provider ƒ Postponing capex ƒ Cost reduction ƒ Increasing # of patients to maintain

21. Slide 21: Growing faster than the market: Executing on the business model

    Growing faster than the market: Executing on the business model New placement drives growing Attractive follow-on business revenue stream Year 1 new placement Year 2-5 follow- ƒ Growing market share in on revenue placements is driving growth revenue in the installed base and Imaging € €↑ follow-on r

22. Slide 22: We leverage business drivers to spur organic growth

    We leverage business drivers to spur organic growth ƒ Solving our customers‘ workflow needs best. Innovations and workflow solutions provide financial, clinical and operational results. ƒ Opening up new markets and new customer groups ƒ Leveraging broad installation footprint and customer satisfacti

23. Slide 23: We will grow our margin to 14-17% in 2010

    We will grow our margin to 14-17% in 2010 ƒ Command higher margins for the unique solutions and innovations we bring to our customers – time-to-market is critical ƒ Increase profit conversion by turning volume growth into margin growth - rigorous productivity, cost and synergy programs ƒ Expand prof

24. Slide 24: We will generate cash as we grow

    We will generate cash as we grow ƒ Improve quality of earnings to better cash flow ƒ Make disciplined choices around capital investment opportunities ƒ Optimize working capital + + + Drive organic growth above market growth Deliver target margin Convert to cash Copyright © Siemens AG 2008. All right

25. Slide 25: Innovations and optimized workflow drives profitable organic growth

    Innovations and optimized workflow drives profitable organic growth Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) Market Share gain +500 bp +1400 bp +700 bp 2007 2002 Computed Magnetic Interventional Tomography Res

26. Slide 26: Creating mindshare by proven workflow results

    Creating mindshare by proven workflow results Solving key workflow needs Example of a US hospital(1): 120% 100% 98% ƒ Substantial improvement in key 100% 91% CMS(2) core measures in CHF 80% 77% ƒ Results exceed state averages 60% 63% significantly 40% ƒ Technology helps enhance 23% decision making,

27. Slide 27: We turn mindshare into market share: Soarian contracts

    We turn mindshare into market share: Growing number of Soarian contracts Many live locations, Growing number of contracted modules workflow implementation growing ƒ 174 modules live across customers ƒ 170 active implementations +22% p.a. 450 ƒ 135 Soarian workflows at 31 locations in 427 active use

28. Slide 28: We grow above market growth in emerging markets

    We grow above market growth in emerging markets Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) China India (in RMB bn) (in INR bn) 7.5 3.2 +17% p.a. Sales to +24% p.a. Sales to Chinese Indian customers customers 2.5

29. Slide 29: We enjoy an attractive innovation pipeline

    We enjoy an attractive innovation pipeline We open up new markets and win share Opening new markets by reaching Leading technology at low cost “visionary” low price levels ƒ Customer price significantly below $1m in the US (up to $500,000 savings) ƒ 1500 out of 3000 community hospitals have no or on

30. Slide 30: Rigorous productivity and cost program drives margin improvements

    Rigorous productivity and cost program drives margin improvements MED productivity program 2005 - 2007 Highlights 0.80 ƒ Methodology successfully €bn 0.75 introduced as part of 0.65 turnaround in 1990s 11% p.a. ƒ Productivity program is lifeblood of organization and key in driving profitable organic

31. Slide 31: We execute on a Low Cost Country Strategy

    We execute on a Low Cost Country Strategy Europe (incl. GER) 40% 39% Americas 41% 46% 16.9 3.9 15 v € ) Asia Pacific 17.5 4.5 10 19% v € ) 15% 8.3 1.5 10 v Employees (in thsd.) € External Sales (in €bn) v € ) ) Important Manufacturing Status: September 30, 2007 Copyright © Siemens AG 2008. All right

32. Slide 32: We execute on a Low Cost Country Strategy: Goals

    We execute on a Low Cost Country Strategy Europe Goals (incl. GER) 40% 39% ƒ We leverage low cost country opportunities along the complete value chain: Americas ƒ41% Build46% R&D innovation strength 16.9 3.9 15 ƒ Utilize low cost position for manufacturing ƒ Attract talent pool v € ) Asia Pacific ƒ

33. Slide 33: We ensure first mover's advantage to build unique solutions

    We ensure first mover’s advantage to build unique solutions that drive higher margins Healthcare IT Siemens: Shared Medical Systems Siemens: GSD Philips: Stentor Philips: Visicu GE: IDX Integrated in-vivo and in-vitro diagnostics Siemens: CTI Siemens: DPC Siemens: Bayer Dx Siemens: Dade GE: Amersham

34. Slide 34: We created the world's leading diagnostics company

    We created the world’s leading diagnostics company Acquisition of DPC, Bayer, Dade Market leadership €bn ƒ Fully integrated plat- Siemens 3.3 Dade forms; mid/low volume labs Behring ƒ Market leader in customer Roche 1) 3.2 service Abbott 2.3 ƒ Broad portfolio ƒ Lab automation Beckman 1.9 Bayer ƒ Mol

35. Slide 35: Significant Synergies in Diagnostics are being realized

    Significant Synergies in Diagnostics are being realized Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) Cost and productivity measures €240m 9 Identification of synergies well on track Synergies €260m Total: €500m Co

36. Slide 36: IVD provides significant additional opportunities for Siemens Healthcare

    IVD provides significant additional opportunities for Siemens Healthcare as a whole Workflow-oriented IT Diagnosis Prevention and Early Therapy Care Detection In Vitro In Vivo Diagnostics Diagnostics (IVD) (Imaging) “Partner of choice” Innovation leadership IT integration Grow market share and insta

37. Slide 37: Winning key institutions and lead market change

    “Partner of choice” Winning key institutions and lead market change “ I was really excited to learn about the Siemens acquisition of the IVD companies. Since industry sources report that 60 to 90% of all medical decisions are based on clinical laboratory and diagnostic modality testing, I believe th

38. Slide 38: Innovation leadership drives new business opportunities

    Innovation leadership … drives new business opportunities In vitro diagnostics CA-IX(1) In vivo diagnostics ƒ Plasma and tissue(2) Synergies ƒ PET CA-IX test(2) to based CA-IX test to ƒ Bio-medical expertise localize the invasive detect cancer ƒ R&D resource alignment tumors ƒ Sharing (pre-)clinical

39. Slide 39: IT integration enables new quality of clinical and financial results

    IT integration … enables new quality of clinical and financial results Lab information Siemens ADVIA system Centaur XP ASTM order & result ƒ Lab studies ordered to monitor ƒ Soarian workflow management system treatment response/disease continuously monitor and analyze progression of metastatic breas

40. Slide 40: Grow market share and installed base

    Grow market share and installed base By leveraging our footprint ƒ Largest Korean laboratory customer ƒ Competitive conversion to Siemens in IVD based on ƒ Strong customer relationship in vivo diagnostics with Siemens ƒ Strong workflow automation ƒ Test vol.: 2m tubes/year 12m tests/year ƒ Sales amo

41. Slide 41: Creating value based on best portfolio, synergies and leverage

    Creating value based on best portfolio, synergies and leverage of first diagnostics company ƒ Margin expansion to 14-17% by 2010 by innovations, best in class cost position and growing installed base business ƒ Leveraging best portfolio within overall sector Æ Healthcare Sector EVA in 2010 higher th

42. Slide 42: 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

43. Slide 43: SIEMENS Answers for life.

    SIEMENS Answers for life.

44. Slide 44: 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

45. Slide 45: 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

46. Slide 46: 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

47. Slide 47: 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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