Siemens Semiannual Press Conference. April 26, 2007

Transcription

1 Siemens Semiannual Press Conference April 26, 2007

2 Siemens in the second quarter of FY 2007 Siemens successfully concluded its Fit4More program All Groups reached or exceeded their margin ranges Group profit from Operations rose 49% year-over-year, to billion Revenue rose 10% to billion New orders increased 9% to billion Slide 2

3 Key figures - Q2 FY 2007 in millions of euros Q2 FY 2007 (in %) Q2 FY 2006 New orders 23, ,529 Sales 20, ,824 Group profit (from Operations) 1, ,314 Net income 1, Earnings per share (in, not diluted; change in ) Net cash (continuing operations) (901) 538 Slide 3

4 New orders Strong growth with 9% Groups Q2 FY 2007 (in mio. ) (in %) Regions Q2 FY 2007 (in mio. ) (in %) SBS A&D 4, I&S 2,434-1 SBT 1,364 3 PG 5, PTD 2, TS SV 2,678 3 Med 2, Osram 1,189-1 Europe excl. Germany Germany 8, ,826 Americas 6,332 Asia-Pacific 3,396 Middle East / C.I.S. / Africa % ,810 Q Q in bn Slide 4

5 Revenue growth 10% Outstanding growth in the Power Groups Groups Q2 FY 2007 (in mio. ) (in %) Regions Q2 FY 2007 (in mio. ) (in %) SBS 1, A&D 3, I&S 2,172 2 SBT 1, PG 3, PTD 1, TS 1, SV 2,687 3 Med 2, Osram 1,189-1 Europe excl. Germany Germany 6, ,860 Americas 5,376 Asia-Pacific 2,892 Middle East / C.I.S. / Africa % ,703 Q Q in bn Slide 5

6 All Groups reached or exceeded their margin ranges Groups Profit margin Q2 FY 2007 Margin ranges SBS 5.2% 5 6% A&D 14.2% 11 13% I&S 4.6% 4 6% SBT 7.5% 7 9% PG 10.7% 10 13% PTD 8.1% 5 7% TS 5.0% 5 7% SV 6.3% 5 6% Med 13.4% 11 13% Osram 10.5% 10 11% SFS* 52.6% 18 22% Status * Return on equity Slide 6

7 Fit4More - A great success Achieved what we set out to do Fostered profitable growth Company value substantially increased Two-pronged successfully applied to company portfolio Innovation leadership strengthened Successful execution of enabling programs Operational Excellence People Excellence Corporate Responsibility All Groups reached their margin ranges Revenue growth of > 15% p.a. 1) Company value increased 54% 2) Successful reorientation of major parts of portfolio Acquisitions of ~12 bn. 3) in our successful businesses Significant investments in organic growth Established Siemens Management/ top+ System further implemented Talent development and leadership excellence significantly strengthened Top ranking within Dow Jones Sustainability index, but serious compliance issues 1) Revenue growth total operations Groups from Q to Q excl. Com 2) April 2005 until end of day April, 23rd 3) Volume of acquisitions since April 2005 Slide 7

8 Two-pronged strategy successfully implemented in bn. ~ 75-33% +60% ~ 80 ~ 50 e.g. Sale of Dematic Reorientation of I&C incl. JV Nokia Siemens Restructuring SBS Acquisitions Organic growth SIS Reorganization Sales FY04 Strategic Reorientation Sales after strategic reorientation Strengthening our strengths Q2 FY07 trailing 4 quarters Slide 8

9 We significantly strengthened our strongest businesses Application fields Energy & Environmental Care Automation & Control, Industrial & Public Infrastructures Healthcare Acquisitions Market position VA Tech (7/2005) T&D # 4 Wheelabrator (10/2005) U.S. leader in flue gas desulphurization Sustec (5/2006) leading in gasification Kühnle, Kopp & Kausch (7/2006) leading in ST<5MW Bonus Energy (10/2004) worldwide # 5 offshore # 1 USFilter (5/2004) U.S. # 1 Flender (3/2005) Industry & Wind # 1 Robicon (7/2005) MV converters # 1 VA Tech (7/2005) VAI # 1 Electrium (12/2005) UK # 3 UGS (01/2007) leading in PLM software CTI Molecular Imaging (3/2005) # 2 Diagnostic Products (4/2006) IVD overall # 3 Bayer Diagnostic (6/2006) ImmunoD # 2 Slide 9

10 : Accelerating Profit & Growth People Excellence Develop talent globally Strengthen leadership development Attain high performance culture Strengthen expert careers Operational Excellence People Excellence Portfolio Performance Optimize capital efficiency with ROCE of 14 16% Attain cash conversion rate of "1 growth rate" Sustain 2x GDP growth Achieve new margin ranges Portfolio Build on our strengths in Energy & Environmental Care Automation & Control, Industrial & Public Infrastructures Healthcare IPO of Siemens VDO Corporate Responsibility Execute Siemens Management System (powered by top + ) with focus on Innovation Customer Focus Global Competitiveness Operational Excellence Corporate Responsibility Achieve best-in-class in Corporate Governance Compliance Climate protection Corporate Citizenship Slide 10

11 Company targets address all value drivers Growth Outpace world economic growth with a growth rate > 2 x GDP Profitability Improved profitability on Group level through new margin ranges Additional target to optimize Siemens overall profitability and more efficient capital utilization Cash Stronger focus on cash to finance future growth and investments Growth ROCE 1) Cash conversion 1) 14-16% 1- growth rate > 2 x GDP 10.0% 0.6 FY 2006 FY 2010 FY 2006 FY ) Continuing operations Slide 11

12 Margin ranges raised for nine out of eleven Groups Margin ranges Fit4More Q2 FY 2007 SBS-SIS 5 6% 5.2% A&D 11 13% 14.2% I&S 4 6% 4.6% SBT 7 9% 7.5% PG 10 13% 10.7% PTD 5 7% 8.1% TS 5 7% 5.0% SV 5 6% 6.3% Med 11 13% 13.4% Osram 10 11% 10.5% SFS* 18 22% 52.6% New margin ranges Fit % 12-15% 5-7% 7-9% 10-14% 7-10% 5-7% 7-9% 13-15% 10-12% 20-23% * Return on equity Slide 12

13 Our strategy: Strong businesses in attractive markets High quality of our businesses PG PTD Osram A&D I&S SBT TS SV Med SIS #1 or #2 position Attractive markets with tailwind from megatrends Application fields Megatrends Demographic Change Urbanization Increasing scarcity of natural resources Growing need for environmental care Growing demand for health- and elder care Increasing mobility Growing demand for safety and security Regional shift of economic gravity Energy & Environmental Care Automation & Control Industrial & Public Infrastructures Healthcare Slide 13

14 Power Generation: Growth through innovations and acquisitions New H-Frame turbine: World's most efficient turbine, efficiency > 60% (CCPP) Reduces CO 2 emissions by t p.a. compared to today's best in class Siemens Wind Power Entry into strongly growing wind energy market via acquisition of Bonus Energy No. 1 in offshore wind parks Wheelabrator Air pollution reduction technology U.S. leader in flue gas desulphurization Advanced burner technology Slide 14

15 Automation: High energy savings through new drive systems Robicon Perfect Harmony medium-voltage converter Compact design, even smaller footprint Enabling exact control of motor speed according to requirements Potential energy savings of up to 50% by replacement of conventional drives with variable speed drives New energy saving motor range with aluminum housing Highly efficient motors with copper rotors Significant increase of efficiency, e.g. from 77% to 84% Slide 15

16 Acquisition of UGS is on track UGS Siemens A&D Digital Factory: #2 CAx (1) : #2 cpdm (2) : #1 Factory design Product design PLM (3) TIA (4) TIP (5) Automation design Manufacturing Factory automation: #1 Process automation: #3 Electrical installation tech.: #2 Winning combination Closing expected in Q3 FY 2007 Integration preparations on track Enabling solutions with unique benefits for our customers: Higher productivity Higher product quality Shorter time to market More flexible production First supplier offering both, hardware and software for complete product lifecycle (1) Computer aided design, engineering and manufacturing (2) collaborative Product Data Management Slide 16 (3) Product lifecycle management (4) Totally integrated automation (5) Totally integrated power

17 Healthcare: Strong organic growth through innovations Tim 1) technology: Most successful innovation in MR Higher image quality, more patient comfort, optimized workflow in MR 50% higher patient throughput, up to 50% reduction in examination times syngo DynaCT: Eliminates need to move patients to a CT during interventions CT-like inter-operational images with an angio suite no time loss and no additional risk for patient 1) Total imaging matrix Slide 17

18 : Accelerating Profit & Growth People Excellence Develop talent globally Strengthen leadership development Attain high performance culture Strengthen expert careers Operational Excellence People Excellence Portfolio Performance Optimize capital efficiency with ROCE of 14 16% Attain cash conversion rate of "1 growth rate" Sustain 2x GDP growth Achieve new margin ranges Portfolio Build on our strengths in Energy & Environmental Care Automation & Control, Industrial & Public Infrastructures Healthcare IPO of Siemens VDO Corporate Responsibility Execute Siemens Management System (powered by top + ) with focus on Innovation Customer Focus Global Competitiveness Operational Excellence Corporate Responsibility Achieve best-in-class in Corporate Governance Compliance Climate protection Corporate Citizenship Slide 18

19 Outlook: We believe we can do even better Compliance: Zero tolerance Strong focus on cash and capital efficiency Continued profitable growth FY 2007: Maintain operating momentum built up in first half year Slide 19

20 Appendix Slide 20

21 Key figures HY1 FY 2007 in millions of euros HY1 FY 2007 (in %) HY1 FY 2006 New orders 48, ,196 Sales 39, ,800 Group profit (from Operations) 3, ,391 Net income 2, ,862 Earnings per share (in, not diluted; change in ) Net cash (continuing operations) (2,061) (186) Slide 21

22 Disclaimer This presentation contains forward-looking statements and information that is, statements related to future, not past, events. These statements may be identified by words as expects, looks forward to, anticipates, intends, plans, believes, seeks, estimates, will or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens control, affect its operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens worldwide to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from: changes in general economic and business conditions (including margin developments in major business areas); the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; changes in currency exchange rates and interest rates; introduction of competing products or technologies by other companies; lack of acceptance of new products or services by customers targeted by Siemens worldwide; changes in business strategy; the outcome of pending investigations and legal proceedings; our analysis of the potential impact of such matters on our financial statements; as well as various other factors. More detailed information about our risk factors is contained in Siemens filings with the SEC, which are available on the Siemens website, and on the SEC s website, Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed sought, estimated or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated. Slide 22

23 Reconciliations and definitions Group profit from Operations is reconciled to Income before income taxes of Operations under Reconciliation to financial statements on the table Segment information. See Financial Publications/Quarterly Reports, Q2 FY2007, Financial Statements at our Investor Relations website under ROE (Return on equity) margin for SFS was calculated as SFS' income before income taxes divided by the allocated equity for SFS. Allocated equity for SFS for the financial year 2007 is billion. The allocated equity for SFS is determined and influenced by the respective credit ratings of the rating agencies and by the expected size and quality of its portfolio of leasing and factoring assets and equity investments and is determined annually. This allocation is designed to cover the risks of the underlying business and is in line with common credit risk management standards in banking. The actual risk profile of the SFS portfolio is monitored and controlled monthly and is evaluated against the allocated equity. Siemens ties a portion of its executive incentive compensation to achieving economic value added (EVA) targets. EVA measures the profitability of a business (using Group profit for the Operating Groups and income before income taxes for the Financing and Real estate businesses as a base) against the additional cost of capital used to run a business, (using Net capital employed for the Operating Groups and risk-adjusted equity for the Financing and Real estate businesses as a base). A positive EVA means that a business has earned more than its cost of capital, and is therefore defined as valuecreating. A negative EVA means that a business is earning less than its cost of capital and is therefore defined as valuedestroying. Other organizations that use EVA may define and calculate EVA differently. To measure Siemens' achievement of the goal to grow twice the rate of global GDP we use GDP on real basis (i. e. excluding inflation and currency translation effects) with data provided by Global Insight Inc. and compare those growth rates with growth rates of our revenue (under IFRS). In accordance with IFRS, our revenue numbers are not adjusted by inflation and currency translation effects. Slide 23