Lisa Davis, Member of the Managing Board: Siemens Energy and Oil & Gas

9f1265fe-d80b-4bf8-84d5-22967a5b18cb.pdf Siemens Energy and Oil & Gas

Lisa Davis, Member of the Managing Board, Siemens AG

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

Unrestricted © Siemens AG 2016

siemens.com/investor

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.

Oil & Gas Power Generation Power Transmission & Distribution Consumption

#2 in Oil & Gas	#1 in Offshore Wind	#2 in Fossil Power	#1 in Power	#2 in Power	#1 in Automation
Power	Generation	Transmission	Distribution	and Drives

Market drivers

+90 million people every year

Growing population

More people living in cities

Increasing Urbanization

+2.5% electricity demand p.a.

Further electrification

Massive reduction in CO2

Climate change

Oil & Gas Power Generation Power Transmission & Distribution Consumption

Portfolio highlights

Refinery with largest IGCC1`

Innovation underpins success

Oil & Gas

• Compression and drives

• Power generation and distribution

• Process, automation and

  digital solutions

  Power Generation

• Gas turbines (4-400 MW)

• Steam turbines

  (45 kW-1,900 MW)

• Onshore/Offshore Wind

  turbines (2.3-7 MW)

  Power Transmission

• High voltage transmission systems (DC/AC)

• Grid access solutions

• Power transformer

  Records in combined heat and power gen.

  Integration

  of renewables

  Real-time grid control

  Digital oil & gas solution

• High voltage switchgear

  Power Distribution

• Low and medium voltage products

• Grid protection, automation

  and power quality

• Distribution transformer

Automation & Drives

• Electrical, automation and instrumentation packages

• Integrated engineering to

  remote operations

• Industrial security

  Jazan

  Fortuna Düsseldorf BORWIN3 Spectrum Power Platform Ivar Aasen

  Service

  Oil & Gas Power Generation Power Transmission & Distribution Consumption

  Portfolio highlights

  Refinery with largest IGCC1`

  Innovation underpins success

  Oil & Gas

  • Compression and drives

  • Power generation and distribution

  • Process, automation and

    digital solutions

    Power Generation

  • Gas turbines (4-400 MW)

  • Steam turbines

    (45 kW-1,900 MW)

  • Onshore/Offshore Wind

    turbines (2.3-7 MW)

    Power Transmission

    • High voltage transmission systems (DC/AC)

    • Grid access solutions

    • Power transformer

      Sinalytics - Siemens' technology platform for digital services, processing 550 gigabytes per day from more than 300,000 devices

      Records in combined heat and power gen.

      Integration

      of renewables

      Real-time grid control

      Digital oil & gas solution

    • High voltage switchgear

      Power Distribution

    • Low and medium voltage products

    • Grid protection, automation

      and power quality

    • Distribution transformer

    Automation & Drives

• Electrical, automation and instrumentation packages

• Integrated engineering to

  remote operations

• Industrial security

  Jazan

  Fortuna Düsseldorf BORWIN3 Spectrum Power Platform Ivar Aasen

  Service

  Installed Units

  Drivers for Future Growth

  > 2,800 units

  Large Gas Turbines Large Steam Turbines

  - Grow serviceable installed base through strong integration with new unit sales

  Small Steam Turbines Small/Medium Gas Turbines Aero-Derivative Gas Turbines

  > 78,000 units

  • Increase number of service contracts in existing installed base

    Compressors > 44,000 units

    Wind Turbines > 17,000units

  • Leverage innovation to create

    more service value

  • Drive new customer specific business models based on Sinalytics

  Note: Installed units as of March 31, 2016.

  Upstream Midstream Downstream

  Customer applications

  Exploration/Development/Production

  Pipeline/Storage/LNG/FLNG

  Refinery/Chemicals

  Drill-Rig Drive & Automation	Electrical Stimulation
  Water Management	Gas Analytics
  Subsea Power Grid	Thermal Recovery
  E-House & Modules

  Regasification	Pipeline Pumping
  Onshore Power Generation	E-Houses & Modules
  Tank Farm Compression & Management

  Air Separation	Large Mechanical Drives
  Large Power Generation	Process Automation
  Gas Analytics	Electrical Drive Solutions
  Expanders	Water Management
  Electrical Distribution

  Siemens

  Upstream Midstream Downstream

  Customer applications

  Exploration/Development/Production

  Pipeline/Storage/LNG/FLNG

  Refinery/Chemicals

  Drill-Rig Drive & Automation	Electrical Stimulation
  Water Management	Gas Analytics
  Subsea Power Grid	Thermal Recovery
  E-House & Modules	Offshore Production (FPSO, FSU)

  Regasification	Pipeline Pumping
  Onshore Power Generation	E-Houses & Modules
  Tank Farm Compression & Management	Offshore Power Generation
  Liquefaction Trains

  Air Separation	Large Mechanical Drives
  Large Power Generation	Process Automation
  Gas Analytics	Electrical Drive Solutions
  Expanders	Water Management
  Electrical Distribution

  • Integration complete

  • Supply chain industrialization underway

  • Synergy delivery of €115m by FY 2019 (€65m greater than commitment)

  Former

  Rolls-Royce Energy

  Acquisitions

  Siemens Rolls-Royce

  Upstream Midstream Downstream

  Customer applications

  Exploration/Development/Production

  Pipeline/Storage/LNG/FLNG

  Refinery/Chemicals

  Drill-Rig Drive & Automation	Electrical Stimulation
  Water Management	Gas Analytics
  Subsea Power Grid	Thermal Recovery
  E-House & Modules	Offshore Production (FPSO, FSU)
  Gas Injection	Subsea Processing
  Gas Compression	Small Engines

  Regasification	Pipeline Pumping
  Onshore Power Generation	E-Houses & Modules
  Tank Farm Compression & Management	Offshore Power Generation
  Liquefaction Trains	Small Pipeline Compression
  Large Pipeline Compression	Micro LNG

  Air Separation	Large Mechanical Drives
  Large Power Generation	Process Automation
  Gas Analytics	Electrical Drive Solutions
  Expanders	Water Management
  Electrical Distribution	Small Mechanical Drives
  Process Compression	Small Engines

  • Integration complete

  • Supply chain industrialization underway

  • Synergy delivery of €115m by FY 2019 (€65m greater than commitment)

  • Integration on track with focus on cost-out

  • Synergy delivery of €250m by FY 2019 (€100m greater than original commitment)

  • More than €50m to be delivered in 2016

  Former

  Rolls-Royce Energy

  Acquisitions

  Siemens

  Rolls-Royce

  Dresser-Rand

  A tough Oil & Gas market requires clear strategy and new solutions

  Oil & Gas customer requirements

  Increased

  HSSE requirements

  (Health, Safety, Security, Environment)

  Increased productivity

  Siemens

  Oil & Gas Strategy

  Lead digital O&G

  to turn data into value

  Leverage automation experience to drive productivity

  Grow installed fleet via product,

  system and solution offerings

  Improved value for capital expenditure

  Leverage entire Siemens Electrification,

  Automation & Digitalization portfolio to serve Oil & Gas

  Onshore E-House

  Yamal LNG (Russia)

  Offshore E-House Power Generation

  Module

  Compression

  Module

  29 E-Houses

  Client: Yamgaz (Technip, Chiyoda, JGC JV)

  • HV (110KV) switchgear

  • MV/LV (33KV, 10KV, 400V) switchgear

  • MV/LV transformer

  • Power management system

  • Bus ducts, Fire and gas detection system

    P-76 FPSO (Brazil)

    Client: TT76 (Technip Techint JV)

    E-House

  • MV/LV switchgears, bus ducts, motor control center

  • MV/LV transformers

  • HVAC

  • Fire and gas detection system

  • Battery and chargers, lighting

  • Power distribution control system

Champion 7 Platform (Brunei)

Client: Shell Brunei

Power Generation Module

• 2 x 12MW GTGs

• Fuel Gas Conditioning Skids

• E-House with MV/LV switchgears

• Battery and charger, transformers

• Emergency diesel generator for black start

• Power management system

  P-54 FPSO (Brazil)

  Client: Petrobras

  2 Compression Modules

  • 3 motor driven compressors with 2 compressor casings

  • Variable frequency drives

  • Gas scrubbing system

  • Gas cooling system

  • Lube-oil system

  • GT auxiliary systems

    Successful execution of 50+ onshore and offshore projects totaling over 80 modules

    Turning Data Into Value

    Project: Nord Stream Landing Station - Wingas pipeline transportation

    • Fully integrated 3D design and manufacturing based on Siemens PLM Software NX and Teamcenter

    • Virtual engineering and training in safe environment using COMOS Walkinside

    • Predictive maintenance - online monitoring of critical rotating parts via embedded infrared cameras

    • Remote monitoring - enables proactive customer support to increase operational availability

      up to 99%

      Availability

      Trends

      Growing investment in renewables Shift to decentralized energy systems Natural gas is the favored fossil fuel Unconventional Oil & Gas here to stay Emerging markets dominate Digitalization as a game changer Customer expectations increasing

      Siemens' strengths

    • Leadership position in Wind

    • Complete decentralized portfolio

    • World records in gas fired technology

    • Innovative solutions combining E-A-D

    • New financial and funding models

    • Remote monitoring and diagnostics

    • Integrated teamwork to leverage strengths

A promising opportunity pipeline across the globe

Cumulative power generation market

Middle East China

Orders (in GW) in FY16-18 vs. FY13-15

North America

Europe

-8%

+29%

110 GW

85 GW

-27%

244 GW

621 GW

613 GW

+2%

75 GW

68 GW

179 GW

24%

35%

+20%

+13%

29%

40%

Wind

Gas

62 GW

FY13-15

63 GW

FY16-18

FY13-15 FY16-18

FY13-15

FY16-18

FY13-15 FY16-18

Latin America Africa

+15%

41%

-26%

31%

Steam

+33%

+116%

111 GW

127 GW

FY13-15

FY16-18

36 GW

48 GW

8 GW

18 GW

Asia/Pacific

excl. China

WORLD

FY13-15

FY16-18

FY13-15

FY16-18

FY13-15

FY16-18

Source: Siemens Internal. Does not include all energy sources. Selected regional growth areas

Project excellence is a must for delivering value in today's markets -

Lessons learned built into our largest, current project

Example: Egypt megaproject

Total deal Volume:

~ €8bn

• 14.4 GW from CCPP

• 2 GW in Wind

• Localization of blade manufacturing

• Training for 600 engineers/technicians

• Long term service agreement

Egypt Megaproject Lead

T. Toupin

PG

Project structure

What we are doing

• Senior sponsorships

• Tight approvals for extended scope

• Strong local partners

  Managing Board

• In-country stakeholder management

• Proactive supplier development

• Stringent risk assessment

  EM

• Experienced and empowered PMs

• Use of experts to ensure learning

• Clear accountabilities

Financing

Training Communication

3 fossil

fuel power plants

WP

12 wind parks & 1 blade factory

PS

Service for 24 GT's &

~600 WT's

9 sub-

stations

Megaproject reporting line

Our Siemens team is delivering

Drive Competitiveness Deliver Profitable Growth

My priorities

• Focus on customer-first by being closer to the market and ensuring one Siemens

• Strong focus on technology leadership and cost -out

• Deliver with excellence on all promises

• Deliver integrated value fast

• Realize our full potential of digitalization

• Leverage the strength of the entire Siemens portfolio and

  global capability in all verticals

  PG

  WP

  EM

  PD

  11.8%

  11.6%

  7.1%

  1.3%

  H1 FY15

  3.7%

  6.5%

  5.8%

  4.9%

  Profit margin

  H1 FY15

  H1 FY16

  H1 FY16

  H1 FY15

  H1 FY16

  H1 FY15

  H1 FY16

  11-15% 5-8% 7-10% 8-12%

  Target

  margin

  Siemens Energy and Oil & Gas Business -

  Value chain strength focused on profitable growth

  Key takeaways

  End-to-End

  Strength

  Service

  Oil & Gas

  #1 / #2

  >140,000

  €365m

  leading market

  positions

  total installed units

  synergy delivery

  from our acquisitions

  • Leadership across the entire energy value chain

  • Broad presence - enhanced ability to capture margin

  • Diversified and growing installed base

  • Increasing revenue and steady margin

  • Tough market, no surprise

  • Focus on driving integration value

    Digitalization

    >300,000

    connected devices via Sinalytics

    • Digitalization is a game changer

    • We are turning data into value for our customers

      Margin Delivery

      %

      driven by ongoing

      cost out

      • Accelerated productivity

      • Relentless focus on competitiveness