Chris Rossi, CEO Dresser-Rand: Together we deliver

60579755-2860-401d-bc13-4530d905a82e.pdf Together we deliver

Chris Rossi, CEO Dresser-Rand

Capital Market Day - Energy and Oil & Gas | Houston, June 29, 2016

Unrestricted © Siemens AG 2016

siemens.com/investor

Notes and forward-looking statements

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Dresser-Rand, a Siemens Business - Well positioned to compete and preparing for profitable growth

Well positioned

to compete in the current challenging market conditions

Expanded technology and product portfolio

Dresser-Rand

Former

Rolls-Royce Energy

Solutions based on full complement of Siemens portfolio

Extensive service network/largest installed base Enhanced client relationships/agreements

Revenue 3.4-3.7

billion €

80

Locations worldwide

Taking advantage of low market activity to prepare

for profitable growth

Synergies from acquisition

Operational excellence

Employees

11,000

Technology/innovation

Dresser-Rand is the Siemens channel into the Oil & Gas market, leveraging the combined compression and power generation portfolio

Compression Power Generation & Mechanical Drives E-Houses

Single-shaft

Gear-type

Reciprocating

Gas Turbine packages

Steam turbines

Engines Power and process modules

Siemens

Dresser-Rand Dresser-Rand

Former

Rolls-Royce Energy

Dresser-Rand Dresser-Rand Dresser-Rand

Former

Rolls-Royce Energy

Services

• Parts, repairs, field service

• Long-term service plans

• Installation and commissioning

• Revamps/upgrades

• Digital Oil & Gas solutions

Go-to-market for broa-

der Siemens portfolio

• Motors and drives, gearboxes

• Automation systems

  • Switchgear, transformers

  • Water treatment/sulfate removal

Ready to deliver solutions based on the complete Siemens portfolio

Examples

FPSO

Service incl. Digital solutions

Compression

Siemens scope: US$300 - 400m1)

Thruster motors and drives

LNG

Siemens scope: US$400 - 500m2)

Power generation

(gas turbine, generator)

Automation, safety, control and telecom

Pipeline

Siemens scope:

US$100 - 120m3)

Water treatment

Sulfate removal

Power distribution

(E-house)

Client value proposition: Work with a single equipment and service supplier to lower CAPEX/OPEX

1. Based on FPSO with 200,000 boe/d capacity, fully modularized 2) Based on greenfield LNG plant with 5.5 MTPA 3) Based on 200 mile pipeline w/ 60 MW compression station, 600 MMSCFD

   Dependable high-margin service business annuity tied to the industry's largest installed base

   Leveraging the combined PS and D-R Service capability

   turbines

   Sales Service Execution

   • Industrial steam

   • Mechanical drives

   • Compressors

   • Combined structure organized by regions

   • One face to the customer approach

   • Complementary global coverage of service centers, product centers, and field service personnel

   • Rationalization plan in process

   • Managed regionally as shared resources between PS and D-R

   Strong services network and capabilities

   Largest installed fleet

   • Industry's largest installed base secures

     further profitable service growth opportunities

     Global presence

   • Client intimacy and faster response times through local presence and most extensive service network with over 80 facilities around the globe

     Recurring revenue stream

   • Resilient service market business keeping

     mission-critical equipment running

   • Service represents ~50% of revenue

Over 80 combined alliances with O&G clients showcase the strength of our value proposition

Validates the value of bringing Dresser-Rand, Siemens and Rolls-Royce together

Strategic partner to our client

• Offering single source solutions

• Generating pull-through

• Earning larger share of client

spend

Key synergy drivers

New Units

Gas turbines into Oil & Gas

Revenue

synergies

40% of

total

Product portfolio

Cross-selling

Service

Services

Expense &

product

R&D program consolidation

Cost

synergies

60% of total

SG&A rationalization

Supply chain/purchasing

Personnel

Footprint optimization

Integration is progressing well with projected synergies clearly above plan

Revenue and cost synergies 250 €250m in FY19 Increased guidance 200 (Dec 2014) Original guidance 150 (Sep 2014) 100 50 FY16e FY17e	170	250	New Unit growth
		15%
		25%	Services growth
	General expense
	30%	and product
	cost reduction
	30%	Personnel cost reduction
	FY18e		FY19e
Higher cost synergies and services synergies driving improvement

Aggressively focused on taking cost out of the business

~% of cost synergies

Expense & product

Cost

R&D program consolidation

SG&A rationalization

• Consolidate duplicate programs between D-R and Siemens

• Completed sales integration and eliminating redundancies

  10%

  25%

  synergies

  60% of

  • Eliminated D-R publicly traded company expenses

• Leveraging Siemens purchasing spend of ~20 times D-R spend

  total

  Personnel

  Supply chain/purchasing

  Footprint optimization

• Consolidating spend with best performing suppliers

• Consolidating work into fewer facilities (closure/consolidation of 8 sites)

• Leveraging low cost manufacturing capability in India and China

  30%

  35%

  Objective

  Ongoing cost out measures

  Operational excellence focus

  • General resizing of all functions and facilities for lower volume

  • Implementing D-R flexible manufacturing model

    • Lower cost structure

    • Improved profitability

      Technology/ innovation focus

• Deploying D-R value engineering/value analysis program

• Developing next generation compressor with best of best technology

• Digitalizing gas turbine package design and build process

• Lower product cost

• Best cycle times

• Increase value to earn higher price

  Headcount reduced since closing >1,100 FTE (~30% from integration/70% from ongoing cost out measures)

  Leveraging Siemens combined strength to win additional business and deliver on the synergies

  Gas turbines into O&G

  Product portfolio

  Cross-selling

  Services

  Replaced 3rd party gas turbine with Siemens technology

  • New facility

  • 2 gas turbine driven

    compression trains

    Replaced 3rd party motor with Siemens technology

• Latest motor technology bundled with DATUM compression

• reciprocating compressor package

• 3 reciprocating fuel-gas compressors

• Electric motor

• Auxiliary equipment

  Revamp Siemens com- pressor modules with D-R technology

• Latest technology bundles

• Turnkey installation and

  commissioning

• Control room retrofit

  Midstream application Gas transmission Powergeneration

  with compression

  Offshore

  Well positioned to compete in the current challenging market conditions

  Current situation

  Strength of the combined business

  Upstream

  • Hardest hit due to drop in oil prices

  • Customer focused on taking cost out, driving standardization and modularization, highest utilization of equipment

    Midstream

  • LNG supply capacity expected to increase by almost 50% over the next 5 years1)

  • Gas transmission still relatively strong activity

    Downstream

  • Less impacted by low oil prices

  • High utilization of installed equipment

  • Growth expected in emerging markets/China

    Offshore

• Legacy D-R strong market position,

  enhanced with full range of gas turbines and modules

  Onshore

• Legacy Siemens strong market position,

  enhanced with high pressure compression technology

  LNG

• Solution offering

  (modularization leveraging full complement of Siemens products)

  Gas Transmission

• Improved compressor offering, full range of gas turbine power blocks

• Broader regional market coverage

• Improved compressor offering

• Expanded low cost manufacturing capability

• Enhanced application coverage

• Source: IHS Global Liquefaction Buildup Tool May 2016

The strategy to bring Dresser-Rand, Siemens, and Rolls-Royce together to serve the O&G industry is working Key takeaways

Installed fleet and resilient service business

$ Increased synergies and cost out

Performance

improving

50%

Service share of total revenue

€250m

Synergies in FY19

€3.4 - 3.7bn

expected

Revenue in FY16

• Fleet continues to grow organically

• Significant installed base added from acquisitions

• Leveraging the combined PS and D-R capability

• Integration is progressing well with projected synergies well above plan

• Aggressive focus on cost out measures

• Poised for profitable growth and increasing share

  Reaffirming Outlook FY16

• Orders stabilizing, but book-to-bill

• Margin in high single digits, excluding transformation cost

• Integration and transformation cost ~€120m in FY16, PPA ~€200m in FY16