Presentation: "Vision 2020: Clear strategy – Strong execution" (J.P. Morgan European Capital Goods CEO Conference)

Vision 2020: Clear strategy - Strong execution

Joe Kaeser, President and CEO

JP Morgan European Capital Goods CEO Conference | Pennyhill Park, June 16, 2017

Unrestricted © Siemens AG 2017

siemens.com

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 forward to," "anticipate" "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. We may also make forward-looking statements in other reports, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens' management, of which many are beyond Siemens' control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the chapter Risks in the Annual Report. Should one or more of these risks or uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated.

This document includes - in IFRS not clearly defined - supplemental financial measures that are or may be non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation or as alternatives to measures of Siemens' net assets and financial positions or results of operations as presented in accordance with IFRS in its Consolidated Financial Statements. Other companies that report or describe similarly titled financial measures may calculate them differently.

Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Delivering sustainable profitable growth

Book-to-bill ratio Revenue

Guidance FY 2017:

Guidance FY 2017:

1.09 1.09

Book-to-bill >1.0x 1.07

1.0x

in €bn

75.6

+4% 1)

79.6

Modest comparable growth

+4% 1)

37.939.3

FY 2015

FY 2016

H1 FY 2017

FY 2015

FY 2016

H1 FY 2016

H1 FY 2017

Industrial Business - Profit & Profit margin

Earnings per share

in €bn

+13%

Guidance FY 2017:

Profit margin 11.0 - 12.0%

+22%

in €

+30%

6.74

7.20 - 7.70

7.88.7

4.1

5.0

12.5%

5.18 2)

10.1%

10.8% 10.7%

4.14

H1 FY 2017

FY 2015

FY 2016

H1 FY 2016

H1 FY 2017

FY 2015

FY 2016

Guidance FY 2017

1. Comparable, i.e. adjusted for currency translation and portfolio effects

   Unrestricted © Siemens AG 2017

2. Excluding €3.66 per share in portfolio gains from the divestments of the hearing aid business and our stake in BSH

   Targeted efficiency improvements announced

   Macroeconomic environment Siemens perspective on H2 FY 2017

   Moderate growth pattern continues; waiting for tangible news on Infra-invest

   Recovery momentum continues on broader scale

   Consumption supports short cycle growth O-B-O-R1) provides investment inflection

   Russia: Upside in Gas and Petrochemical Brazil: Another year wasted - Momentum shifts to Argentina

   India: Opportunities all over - could be enhanced with more stringent reforms in

   infrastructure

3. O-B-O-R: One Belt One Road

   PG:

   • Very competitive environment in contracting markets needs very focused go-to-market

   • Revenue clearly below prior year with subsequent impact on profitability

     DF:

   • Leadership in continued strong short cycle business drives market share gains

   • Mentor integration and MindSphere rollout weigh on margin; underlying levels OK

     PD:

   • Sector weakness and shift of resource allocation require structural changes

5. We execute and deliver now & in the future

6. We are attractively valued

7. We offer good return

8. We have a compelling strategy

9. We have a strong ownership culture

   Vision 2020 Milestones Guidance to market €1bn cost savings

   FY14 FY15 FY16 FY17

   €1.0bn

   €400m

   FY15

   FY16

   More details on pg. 13/14

   More details on pg. 15

   More details on pg. 16

   Underperforming businesses

   Project charges (€bn)

   The future in mind

   • Management development

Profit margin

1%

~6%

3%

~85%

in range

FY12

Avg. FY07 - 14

FY15

~0.2

~0.7

~1.2

• Next generation organizational efficiency ("Fleet of ships")

  -3%

  FY14

  FY15

  FY16

  FY17e

  FY 16

  H1 FY 17

  No negative net impact

  • Value chain disruption as an opportunity

More details on pg. 17

EV / EBITDA Multiple

Competitor S

Competitor A

Competitor G

Competitor R

Average Cap Goods1)

14.0x

8.7x

10.6x

10.9x

11.0x

10.8x

Source: Thomson Reuters; Next twelve months multiple as of June 8, Siemens and GE adjusted for SFS / GE Capital

1. Average Cap Goods contains GE, ABB, Rockwell, Schneider, Toshiba, Alstom, Philips, Bombardier, Dassault Systèmes, Emerson, Honeywell, Roche and Vestas

   Continued dividend increases for three years in a row

   (Payout ratio: 40-60% of net income)

   €3.00

   €3.00

   €5.401)

   €3.00

   +10%

   €3.30

   +6%

   €3.50

   +3%

   €3.60

   FY 2011

   FY 2012

   FY 2013

   FY 2014

   FY 2015

   FY 2016

   FY 2017e

   Committed to share buyback

   Up to €10bn share buyback within seven years

   4.0

   2.9 up to 3.0

   open volume

   Osram share price in €

   70

   60

   50

   40

   30

   Osram spin-off creates value

   >+180% return

   20 Issue price: €24

   CY 2012

   CY 2014-2015

   CY 2016-2018

   July 2013

   July 2014

   July 2015

   July 2016

   June 2017

2. Effect of OSRAM stock distribution to shareholders of €2.40 per share

   Clear strategic imperatives

   Biggest software business in the space

   Building NEXT GENERATION

   Healthcare

   More details on pg. 20/21

   Siemens - the REAL Digital Enterprise

   • Comprehensive

   • Integrated

   • Unique

     Creating a leading renewable energy player

     • >165,000 employees own Siemens shares

     • Mandatory share ownership for Top Management

     • Attractive share matching for employees

     • Compelling management incentive plan fully aligned with capital market forces

     • "Open" performance reviews based on WHAT and HOW including 360° feedback

3. More details on page 25

   "Always act as if it was your own company"

   One Siemens Financial Framework

   Siemens

   Growth:

   Siemens > most relevant competitors1)

   (Comparable revenue growth)

   Capital efficiency

   (ROCE2))

   15 - 20%

   Total cost productivity3) 3 - 5% p.a.

   Capital structure

   (Industrial net debt/EBITDA)

   up to 1.0x

   Dividend payout ratio 40 - 60%4)

   Profit Margin ranges of businesses (excl. PPA)5)

   PG

   11 - 15%

   WP 5 - 8%

   EM

   7 - 10%

   BT

   8 - 11%

   MO

   6 - 9%

   DF

   14 - 20%

   PD

   8 - 12%

   HC

   15 - 19%

   SFS6)

   15 - 20%

4. ABB, GE, Rockwell, Schneider, Toshiba, weighted; 2) Based on continuing and discontinued operations; 3) Productivity measures divided by functional costs (cost of sales, R&D, SG&A expenses) of the group; 4) Of net income excluding exceptional non-cash items; 5) Excl. acquisition related amortization on intangibles; 6) SFS based on return on equity after tax

   Value

   Strengthen core

   • Stringent capital allocation

     Scale up

   • Innovation initiative

   • Customer and market focus

   • Digitalization at work

     Drive performance

     • Continuous productivity improvement

     • Stringent project execution

     • Fix underperforming businesses

Ownership culture drives high performance team

2015 2016 2017 2018 2019 2020

Strategic direction

Operational consolidation

Optimization

Accelerated growth and outperformance

GOAL

INTENT

KPI

1

Implement stringent company gover-

nance with effective support functions

Live lean governance and

drive continuous optimization

€1bn cost savings by FY 2016 achieved

Continued productivity of 3-5%

2

Strengthen portfolio

3

Execute financial

target system

4

Expand global management

Sharpen our business focus in electrification, automation, and digitalization

Grow our company value

Get closer to our customers and markets

Tap growth fields

> 8% margin in underperforming businesses

15-20% ROCE

Growth > most relevant competitors

> 30% of Division and BU management outside Germany

5

Be a partner of choice

for our customers

Foster an intimate and trusting partnership

w

1

� 20% improvement in Net Promoter Score

ith our customers

6

Be an employer of choice

Unleash the full potential of our people

> 75% approval rating in leadership and diversity in SGES

7

Foster

Ownership Culture

Ignite pride and passion for Siemens,

through a new mindset and equity ownership

� 50% increase in number

of employee shareholders

Guidance FY 2017

EPS ("all-in")

Guidance Update

in €

6.74

FY 2016

6.80 - 7.20

FY 2017e

as of Q4 FY 16

7.20 - 7.70

FY 2017e

as of Q1 FY 17

We confirm our expectations for fiscal 2017 presented with our results for Q1 FY 2017.

We continue to expect modest growth in revenue, net of effects from currency translation and portfolio transactions, and anticipate that orders will exceed revenue for a book-to-bill ratio above 1.

We expect the profit margin of our Industrial Business in the range of 11.0% to 12.0%, and basic EPS from net income in the range of €7.20 to

€7.70.

This outlook now includes portfolio changes already closed by the middle of fiscal 2017, particularly the acquisition of Mentor Graphics and the Gamesa merger, which are expected to burden Industrial Business profit margin and basic EPS from net income in fiscal 2017.

The outlook continues to exclude charges related to legal and regulatory matters as well as potential burdens associated with pending portfolio matters.

Note: FY 2016 weighted average number of shares of 809m

Gross margin improvement on track

+120bps y-o-y

Ongoing rigorous total cost productivity

in % of total cost base1)

28.6%

28.9%

29.9%

31.8%

~€3bn

~€4bn

At least 4% of

total cost base

~4%~5%

FY 2014

FY 2015

FY 2016

H1 FY 17

FY 2015

FY 2016

FY 2017e

Divisional productivity programs Functional productivity initiatives

Siemens Operating Model drives change towards a fast learning, innovative and agile company

Sales Excellence

PLM and Innovation

Production and Logistics

Project Business

Service Business

1. Total cost base: Sum of cost of sales, R&D and SG&A expenses

   Underperforming businesses (~€14.5bn revenue in FY 2016)

   Fiscal

   Year 2013 2014 2015 2016 2017e 2020e

   Profit

   Margin -4% -3% +1% +3% ~6% >8%

   Footprint adjustments ongoing Sharpened scope

   ~85%

   ~15%

   Fiscal 2017 expectations: In 6% range

   Under special management attention

   FY 2017 Priorities:

   • Clear accountability and tight monitoring

   • Rigorous execution of business plans with focus on sustainable competitiveness; e. g. set up of Mechanical Drives business as standalone company within Siemens

   • Partnering and divestitures remain an option

     April 16

     January 16

     Closing of acquisition

     1| Areas of growth? Closing of divestment to AtoS

     +

     Strategic alliance agreement

     (minor equity investment)

     Closing of acquisition Purchase price of US$4.4bn

     Nov 16

     March 17

     2| Potential profit pool? 3| Why Siemens?

     4| Synergetic value?

     5| Paradigm shifts?

     January 16

     Closing divestment of remaining assets to EQT

     Siemens Turbomachinery Equipment GmbH

     Divestment to Colfax announced

     April 17

     December 16

     Closing of merger

     Siemens 59% / Gamesa 41%

     Unrestricted © Siemens AG 2017

     Listing preparation announced

     Closing of

     50/50 joint venture

     Closing date

     Early focus on digitalization drives value and growth

     Revenue FY 2016

     Market CAGR FY17-20

     Strategic direction

     Digitalization

      Leader

     Siemens software

     ~€3.3bn

     Digital services

     ~€1.0bn

     ~+8%

     Strengthen leadership

     by combining software,

     Automation

      Global #1

     IoT operating system MindSphere

     Enhanced automation

     ~€18bn

     +12%1)

     Classic services

     +3-4%

     platforms & services

     Expand #1 position and utilize for digitalization

     Electrifi- cation

      Leader

     Enhanced electrification

     ~€42bn

     ~€17bn

     +1-2%

     Differentiate through enhanced offerings with automation & digitalization

     Note: Figures based on Industrial Business 1) Growth FY15 to FY16, rebased

     Acquisitions 2007

     2012

     2016

     2017

     Cooperation 2016

     Bringing together the virtual world of product development

     with the real world of production automation

     Integrating 3D simulation and test to create the digital twin of products to predict performance

     Simulating all the physics for a more precise digital twin of products Creating the "System of Systems" view of the Digital Enterprise with Electronic Design Automation and Embedded Software

     Complementing 3D-modelling Software for planning, construction and operation of infrastructure facilities

     MindApps

      Open ecosystem of applications

      Apps from Siemens, manufacturers, operators and app developers

     MindSphere

     01

     10 00

     01 10 11

     MindSphere

      Various cloud infrastructures: Public, private or on-premise

      Operational data integrated with the Digital Twin to optimize simulation and engineering (model-based analytics)

     01 10

     11 01

     00 0110

     10	10	10	10	10	01	10	01
     01	01	01	01	01	00	01	00
     01	01	01	01	01	11	01	11
     11	11	11	11	11	10	00	10

     10 1101

     10 01

     01 01

     01 11

     11 01

     1010

     0101

     01 0100

     00 0011

     MindConnect

      Installed base of millions of devices

      Open standards (e.g. OPC UA) for connectivity

      Secure plug-and-play connection of Siemens and 3rd party products

     Merger of Siemens Wind Power and Gamesa closed as planned

     Transaction description & rationale Key figures (pro forma, LTM Mar 2017; source SGRE Q1 17)

     • Merger of the entire Siemens Wind Power business incl. Service with Gamesa closed on April 3, 2017

     • Creation of a global leader in the wind power industry with a

       well balanced geographic footprint and a large installed base

     • New management team appointed with Markus Tacke as CEO

       and Andrew Hall as CFO

     • Announcement of Rosa García as non-executive Chairwoman of the combined company's Board of Directors

     • New company brand reflects strengths of united company

     • Ownership: Siemens 59%, Iberdrola ~8%, free float ~33%

     • Global HQ and listing in Spain

     • Siemens to fully consolidate the combined and listed entity

       as of Q3 FY17

       Combined business1)

       Installed Base 76 GW

       Backlog €22.2bn

       Revenue €11.7bn

       LTM recurrent EBIT €1.2bn

       LTM recurrent EBIT Margin 9.9%

       Synergies €230m EBIT full impact in year 4 post closing

       1) Excluding transaction adjustments (e.g. effects from purchase accounting), incl. full consolidation of Adwen, stand-alone savings and normalization adjustments

       Leading position in key markets and resilient performance

       Distinct trends at work

       Profit margin

       CAGR

       (FX comp.)

       13.2%

       +4ppts

       +2.9%

       17.2%

       Transformation of Healthcare providers continues:

       Providers today seek relevant suppliers/partners

       Revenue

       in €bn

       Free cash flow

       in €bn

       11.1

       1.8

       +21%

       13.5

       2.2

       Industrialization Consolidation Health management

   • that understand challenges in a changing Healthcare market and

   • are able to address broad issues in multi-hospital provider systems

FY 20111) FY 2016

1. FY2011 financials excluding Audiology and Hospital Information Systems business

   Growth fields: We will further strengthen our attractive business

   Molecular Diagnostics Advanced TherapiesServices

   Build up molecular diagnostics portfolio utilizing our global presence and strong customer partnerships

   Grow rapidly into therapy: build upon our expertise in hybrid ORs and core imaging

   Build new services portfolio to solve system wide hospital challenges incl. clinical data analytics capabilities

   Transformation in the healthcare market continues…

   … listing best suited to manage transition

   • Paradigm shifts visible: Transition from

   • product business to solving hospital system wide challenges

   • fee for service to managing outcome based health

   • Race for customer relevance intensified

   • Competitor & provider consolidation ongoing

   • Investments required to respond to paradigm shifts

   • Strengthen and build position in identified growth fields

   • High strategic flexibility and capital allocation in light of changing healthcare market

   • Focus on key success factors continues

   STRENGTHEN THE HEALTHINEERS BUSINESS IN SIEMENS

   Ownership culture embedded in performance management

   WHAT targets

   • WHAT was achieved

   • Considers target achievements, overall results, a person's contribution to the company's performance

   HOW expectations

   • HOW were the results accomplished

   • Considers to what extent the expectations are met, a person's impact on others, feedback from those being affected by the person's HOW behavior

   Incentive System - Transparency through simplicity

   1/3

   1/3

   1/3

   Base compensation

   (Cash)

   1/3

   Variable compensation (Bonus in cash)

   1/3

   1/3

   Long-term

   stock-based compensation (Siemens Stock Awards)

   ROCE

   Earnings per share

   Performance of Siemens stock compared to 5 competitors

   Individual targets

   Plus share ownership guidelines - e.g. for President and CEO: 3 times base compensation

   Q2 FY 2017

   Another strong quarter - profitable growth continuing

   • Successful closing of Siemens Gamesa merger and Mentor acquisition

   • Orders +1% at €22.6bn despite tough comps - excluding €3.1bn Egypt orders up +17% Substantial volume from large orders and base orders clearly up

   • Accelerated revenue growth to +5% supported by all Divisions; book-to-bill at 1.12x

   • Strong quarter with 8 out of 9 Divisions in or above target range

   • Industrial Business margin expansion to 12.1% (+120bps) driven by strong operational execution

   • Net income stable at €1.5bn impacted by higher tax rate - EPS at 1.79€

   • Strong Industrial Business free cash flow of €2.0bn, up 32% y-o-y

   Financial cockpit - Q2 FY 2017

   Orders

   Revenue

   Profit Industrial Business (IB)

   Net Income

   in €bn

   22.3

   +1%

   (+2%)

   22.6

   Comp.

   (nom.)

   19.0

   +5%

   (+6%)

   20.2

   in €bn

   2.1

   +18%

   2.5

   in €bn

   0%

   1.5 1.5

2. 1.17

   1.12

   Margin

   11.4% 12.4%

   10.9% 12.1%

   Q2 FY 16 Q2 FY 17

   Q2 FY 16 Q2 FY 17

   Q2 FY 16

   Q2 FY 17

   Q2 FY 16

   Q2 FY 17

   EPS ("all-in")

   in €

   0%

   1.78

   1.79

   ROCE ("all-in")

   14.9%

   13.3%

   15 - 20%

   Capital structure

   S1

   1.2x

   1.2x

   Q2 FY 16

   Q2 FY 17

   Q2 FY 16

   Q2 FY 17

   Q2 FY 16

   Q2 FY 17

   x.x% Margin as reported

   x.x% Margin excl. severance

   Significant operational free cash flow improvement - Overall more balanced development

   Free cash flow Industrial Business free cash flow

   €m +1.4bn

   738

   1,452

   €m +32%

   1,951

   1,477

   714

   812 84

   Q2 FY 16 Q2 FY 17

   -728

   Q1 FY 16

   Q2 FY 16

   H1 FY 16

   Q1 FY 17 Q2 FY 17 H1 FY 17

   • Strong free cash flow improvement driven by PG, BT, DF

   • Net operating working capital increase mainly due to Mentor integration

August

August 3, 2017

Q3 Earnings Release

September

September 8, 2017

Morgan Stanley Industrials & Natural Resources conference (London)

November

November 9, 2017

Q4 Earnings Release

Investor Relations

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