Siemens Media Summit 2008
Value creation through technology leadership and operational excellence
Heinrich Hiesinger CEO Industry Sector, Siemens AG
London, June 23 – 24, 2008
The Industry Sector has a market potential of approximately €480 billion
Industry Sector Industry Automation (IA)
Drive Technologies (DT)
Market potential Industry Solutions (IS)
In billions of Euros +14% Osram Drive Technologies Industry Automation
Building Technologies (BT)
Mobility
Osram
Mobility (MO)
Employees: ~210,000 Seite 2
June, 24th 2008
Heinrich Hiesinger
20 45
480 25
420
50 95
85 95 85
Industry Solutions
90
Building Technologies
95
115
2007
2010
100
Revenue: ~€40 bn Siemens AG
1
Leadership businesses in sustainable growth markets
Opportunities for growth
Invest in sustainable growth markets
Three-quarters of businesses in leadership positions
Trends of significance for Siemens Industry
Market growth of selected Industry businesses p.a. (2007-2010)
Market positions of selected Industry businesses (2007)
Resource scarcity
Environmental care
Increasing energy demand
Productivity improvement
Metals Iron and steel production
5%
Drives for Windpower Opto-semiconductors PLM software Traffic solutions
Urbanization / Mobility growth
20%
9%
8%
11%
#1
Water treatment
#1
Wind gear boxes
#1
Building automation
#1
Fire safety
#1
Opto-semiconductors
#2
Engineering&construction
#1
PLM software
#2
Traffic solutions
#1
Infrastructure logistics
#1
Automotive lighting
#1
Achieving > 2xGDP sales growth and best-in-class profitability Seite 3
June, 24th 2008
Heinrich Hiesinger
Siemens AG
Value creation through portfolio optimization Major transactions since 2005
Acquisitions
Divestments / Carve outs
Productivity improvement UGS VATech (Metals business) Morgan Construction
Medical display business Wireless modules
Resource scarcity Flender Robicon
Electronic assembly systems (planned carve out)
Environmental care Chemitreat Group
Hydrocarbon services
Urbanization / Mobility growth OEZ Electrium Shinwah Electronics BJC
Global Tungsten and Powders 2)
Clear performance criteria for CAPEX 1) allocation within Industry Sector 1) Capital expenditure
Seite 4
2) Subject to approval of the antitrust authorities
June, 24th 2008
Heinrich Hiesinger
Siemens AG
2
Industry Sector – The reason why
Industry Sector Added value of Industry Sector
Higher market exploitation Utilization of best-in-class technologies Requirements of Industry Divisions
Portfolio optimization Cost synergies
Leading position in attractive markets
Strong talent expert pool
Convincing value proposition for our customers Clear positioning within competitive landscape
The Industry Sector provides platform for higher performance Seite 5
June, 24th 2008
Heinrich Hiesinger
Siemens AG
Establishing the leading industrial platforms across the portfolio
IA
DT
IS
MO
BT
Osram
Totally Integrated Automation Totally Integrated Power Software kernels
Simatic platform Network management & control system Industrial software platform
Modular platforms are a significant driver for quality and competitiveness – Divisions implement industry specific applications Seite 6
June, 24th 2008
Heinrich Hiesinger
Siemens AG
3
Superior customer benefit through technological leadership
Siemens answers
Sustainable solutions for efficient use of resources and energy
Integrated technologies for best-in-class productivity and flexibility
Holistic solutions for infrastructure and mobility
Seite 7
June, 24th 2008
Proof points Combined building and lighting solutions (Taipei 101) Energy contracting (Berlin) Environmentally friendly and efficient production processes – COREX (Baosteel Shanghai) Digital factory, worldwide data management (Volkswagen) Integrated motion control
Complete mobility (London) Security
Heinrich Hiesinger
Siemens AG
Combined building and lighting solutions to reduce energy costs & CO2 emissions by up to 80% Taipei 101 (BT, Osram and Energy project) 25,000 fluorescent lamps and 25,000 electronic gears for efficient energy use Electronic security system (500 cameras, 300 card readers, monitoring of 4,000 doors) Energy management & control system, chiller, fire alarm / lighting control
The Future is LED Energy efficient products already account for 60% of sales at Osram LEDs will account for more than 1/3 of general lighting market in 2020 Lighting innovations, e.g. for LEDs required for green field building projects
German Future Prize for Osram LED Team Seite 8
June, 24th 2008
Heinrich Hiesinger
Siemens AG
4
Siemens is the #1 partner for energy-efficient infrastructures
Clinical Center Bremerhaven, Germany
Holistic energetic analysis Performance contracting: efficient modernization with low investment 12-year service agreement with €830,000 in annual savings Reduction of > 4,100 tons of CO2 p.a.
Energy-saving partnership with Berlin, Germany
Energy management for 76 properties Modernizing existing plants Reduction of CO2 emissions by 25% per year (Æ 16,200 tons of CO2) Guaranteed energy costs savings: €1.4 million annually
EU Energy Service Award 2006 and 2007 for BT Seite 9
June, 24th 2008
Heinrich Hiesinger
Siemens AG
Cost-efficient use of raw materials while decreasing emissions: COREX technology in metals processing
COREX C-3000 Plant Shanghai Baosteel
COREX vs. conventional Feed material: Iron ore, non-coking coal Capacity: 1.5 million t/a hot metal Significantly less process related off-gas emissions:
[g/t hot metal]
1,000
Three Industry Divisions involved, project management by Industry Solutions Start-up: December 2007
1,000
810
800 600
310
400 200
40
45
100
0
SO2 Conventional
Dust
NOx
COREX
Reduction of emissions by 80-95% Seite 10
June, 24th 2008
Heinrich Hiesinger
Siemens AG
5
Customized mass production requires speed and flexibility – as in car manufacturing
Digital design and manufacturing for VW
Product Lifecycle Management (PLM) 1,100 different car models in 2015: Customers require diversity at affordable price Volkswagen (VW) and Audi decided to implement Siemens PLM for worldwide product data management Higher speed-to-market through integrated plant engineering and virtual commissioning
Unified planning and production speeds up time-to-market by 50% and more Seite 11
June, 24th 2008
Heinrich Hiesinger
Siemens AG
Intermodal solutions for London's mobility: Complete Mobility – A holistic approach …
Needs for integrated urban transport
Solutions by Siemens 1,200 Desiro regional rail cars: Optimized connections between suburbs and city Heathrow Express: Fast connections into the city Satellite-tracking system for buses: Determine position in real time Toll monitoring system: Reduces daily car traffic within the city
Commuter and regional transport Airport links Fleet management City tolling Metro and light rail system Integrated traffic management Parking management
Overall competence for intermodal solutions: Traffic congestion and overall traffic reduced by about 16%; 150,000 tons of CO2 emissions cut annually Seite 12
June, 24th 2008
Heinrich Hiesinger
Siemens AG
6
… with integrated system know-how …
London Congestion Charging
Automatic Number Plate Recognition (ANPR) High-resolution camera for extended lane coverage (2 lanes) Processing vehicle number plate information at roadside Scalable embedded PC platform for easy system extension, e.g. combined ANPR and traffic control system Video detection and optical character recognition from Postal Automation
Four Siemens Sectors / Divisions use ANPR technology in different areas
Telematics know-how from Traffic Solutions
Outstanding recognition performance for tolling and enforcement up to 95% read rate Seite 13
June, 24th 2008
Heinrich Hiesinger
Siemens AG
... and state-of-the-art products.
drive s n e m ie It's a S
Whrightbus Gemini in London Town, powered by Siemens hybrid technology drives: Seite CO 14 2 savings of June, 24th 2008 Heinrich Hiesinger 30% Fuel and
Siemens AG
7
Cross-Sector utilization of leading technologies
Energy
Industry
Distributed control for power plants and high voltage DC transmission
Core technologies
Drive systems and controllers for wind power
Integrated standard
Drive systems and distributed control for Oil & Gas
Healthcare
Totally Integrated Power and building technologies for hospitals RFID technology (e.g. serialization for e-pedigree)
products and systems
Basic technologies, expert and knowledge management by Corporate Technology Seite 15
June, 24th 2008
Heinrich Hiesinger
Siemens AG
Cross-Sector potential in full use at Bangalore International Airport
Bangalore International Airport
Siemens One in full scope Power supply, medium/low voltage distribution IT-Systems, communication Check-in systems, safety/security, X-ray devices Fire detection and alarm Airfield lighting, baggage handling (3,600 bags/h), passenger boarding Building management, escalators
Five Divisions of Industry Sector + Energy Power Transmission, Siemens IT Solutions and Services and Siemens Financial Services involved
40% equity stake by Siemens Project Ventures
By 2015 capacity of up to 29 million passengers a year
Integrated Siemens approach for greater security and efficiency Seite 16
June, 24th 2008
Heinrich Hiesinger
Siemens AG
8
In Sum – What’s the value?
Technology leadership with superior customer benefit
Growth Differentiation
2x GPD
Target margins IA DT IS BT MO Osram
9-13%
Sector synergies Divisional productivity programs Mobility in motion SG&A program for Industry Sector
Portfolio optimization CAPEX control Asset management
Cash 1-growth
ROCE 1) support for Siemens
1) Return on Capital Employed
Seite 17
June, 24th 2008
Heinrich Hiesinger
Siemens AG
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,” “will,” “project” 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 our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens 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; changes in business strategy; the outcome of pending investigations and legal proceedings, especially the corruption investigation we are currently subject to in Germany, the United States and elsewhere; the potential impact of such investigations and proceedings on our ongoing business including our relationships with governments and other customers; the potential impact of such matters on our financial statements; as well as various other factors. More detailed information about certain of these factors is contained throughout this report and in our other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC's website, www.sec.gov. 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. EBITDA (adjusted), Return on capital employed, Free cash flow, Cash conversion and Net debt are Non-GAAP financial measures. A reconciliation of these amounts to the most directly comparable IFRS financial measures is available on our Investor Relations website under www.siemens.com/ir, Financial Publications, Quarterly Reports. 'Group profit from operations' is reconciled to 'Income before income taxes' of Operations under 'Reconciliation to financial statements' in the table 'Segment Information'.
Seite 18
June, 24th 2008
Heinrich Hiesinger
Siemens AG
9
