SIEMENS AG Ralf Christian, CEO Energy Management
Capital Market Day - Energy and Oil & Gas | Houston, June 29, 2016
Unrestricted © Siemens AG 2016
siemens.com/investor
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.
Central power
TSOs DSOs/ Muni.
Distributed generation
Service
Transmission Solutions (#1)
Low and Medium Voltage Systems (#3)
Oil & Gas, heavy industries
Discrete Manufac- turing
Infrastruc- ture &
Data Center
Energy Management FY 2015
€13bn orders - €12bn revenues -
~52k employees
Exciting €110bn market - 2-3% CAGR (2015 - 2021)
2-3% CAGR Electrification
Refurbishment/upgrades of ageing infrastructure
Urbanization and electrification
4-5% CAGR Digitalization & Automation
Decentralized and renewable energy
Balancing generation and prosumers
EM target setting
Growth target: ~3 - 5% p.a.
Profitability in target range by 2017: 7-10%
Construction/ Buildings
Digitalization
& Automation
Digital Grid (#1)
Electrification
Transformer Products (#2)
High Voltage Products (#1)
Low and Medium Voltage Products (#3)
TSO = Transmission System Operator; DSO = Distribution System Operator; Muni = Municipalities; # = Market position
Revenue split
Business activities
Transmission Transformer
Products
Distribution
Business type
Geography
Europe1)
Americas
FY 2015
(% of total)
Asia, Australia
Africa/ME
System
HV Products and Systems
Transmission solutions
FY 2015
(% of total)
Digital Grid
LV/MV
Systems
LV/MV
Products
Product
FY 2015
(% of total)
Software and Service
Solution
DF
BT
EM
LV industrial
control
LV building
control
LV Protection
1) Europe/C.I.S.; HV: High Voltage; MV: Medium Voltage; LV: Low Voltage; EM: Energy Management; DF: Digital Factory; BT: Building Technologies
H1 FY16
H1 FY15
FY15
•
•
Target range: 7-61.50%%
3.7%
6.5%
4.8%
Strengthened Go-to-market
Dedicated vertical sales
Utilize all channels Comprehensive service offering Expand technological leadership
Profit
margin
Strengthen project execution
Improve profitability of product business
6.5
6.2
Financials (in €bn)
Key Priorities
+9%1)
11.2
13.0
+5%1)
Fix and
optimize
•
•
Orders
Growth target:
~3 - 5% p.a.
FY14
FY15
H1 FY15
H1 FY16
Broaden
the base
•
Develop new
businesses
-0.8%
FY14
Smart grid and Software and IT
Distribution automation and decentral electrification
Fixing Critical Projects
6 Grid Access/HVDC in commercial operation
1 in execution - on track for FY17
Learning: Solve root causes
Selective bidding
Risk optimized approach e.g. consortia
Focus on electrical core competence
Active partner management (e.g. civil)
Increased gross margin
+330bps in order backlog
(FY14 - H1 FY16)
Streamlining organization
Overhead cost reduction (HQ functions)
Improving business performance
-40%
Successful LV protection turnaround
Double digit | ||||||
FY12
FY14
FY15
FY14
FY15
Reduced complexity in Business Units/Segments
Increase profitability of underperforming businesses
~300bps1)(FY14 - H1 FY16)
-30%
FY14
FY15
1) w/o project charges
Global footprint optimization
13 plants closed, others
significantly downsized
New low cost plants e.g. Mexico, India
Low cost country sourcing: 42%
Central power
TSOs DSOs/
Muni.
Distributed generation
Oil & Gas, heavy industries
Discrete Manufacturing
Infrastructure and Data Center
Construction/ Buildings
Simplified customer oriented
sales
Dedicated Software/IT sales
Direct sales and Agents EPCs/Contractors
OEMs/Panelbuilders
Distributors
Dedicated Account Management (Examples)
Expansion through Indirect Channels
Utilities
Industrials
EPCs
OEM/Panelbuilder
Distributor and Partner Management
Distributors
Customers
Further momentum from three leading growth engines
Connecting Grids Totally Integrated Power
Efficient power transmission
Interconnection of national transmission grids and
integration of renewables
Agility in Energy
Critical power supply for industrial plants,
infrastructure and buildings
reliable, safe and efficient
Sinalytics
Maximize intelligence of energy networks to cope with increasing complexity
Global opportunities
Reinforcing national grids
Replace aging assets (~35% of market)
Increase capacity (~€20bn/a CN, IN, EU, US)
Connect large renewables
CN, IN, EU, US (~US$5bn/year)
Interconnect national grids
EU: €50bn until 2030 (ENTSO-E)
Global: US$20trn until 2050
("One Belt and One Road")
Example: UK Offshore Grid Access
Beatrice
Dudgeon
London Array
>50% tenders won London Array
(operational 2013)
€128m
Dudgeon
(operational 2016)
>€100m
Beatrice
(operational 2019)
>€200m
Innovative Grid 30% lower
Access with
OTM and DRUs cost of ownership
Example: Pan-European interconnection
>30% tenders won Inelfe
(operational 2015)
>€300m
Western Link
(operational 2017)
€350m
Ultranet
(operational 2019)
€900m
Innovative new "Full Bridge" technology
97% of temporary faults manageable
Consulting, planning
Engineering
Installation, commissioning
Operations
Services, modernization
Source: IEA, Siemens internal assessments; OTM: Offshore Transformer Module; DRU: Diode Rectifier Unit
Petrochemical
Large customer asset >US$0.8bn; 1h without electricity costs ~US$18k
Strong requirements for critical power
Entire electrical system: One supplier
CAPEX/OPEX optimization
Automotive
Ensure secure operations of a large customer production asset
Integrated Siemens approach (switchgear, transformer and local service) guarantees uninterrupted operations
Data Center
Data Center operating 24/7
Power reliability is key
1 minute downtime costs ~US$9k
Siemens systems ensures availability of 99.995% (tier 4 standard)
Consulting, planning support
Engineering support
Installation, commissioning
Operations Support
Services, modernization
Distribution
Automation
Grid monitoring and fault
management devices
Automatic restoration
system at a critical customer and service area
Leading in
grid automation and software applications
Operational Monitoring and Control Centers
(CN) 420.000 m²
to be powered
Monitoring of 11,000 km
MDM for 5.2m consumers
(electric and gas)
selects EnergyIP as the
MDM System for Utility ERP
Smart
Metering
Microgrids and Virtual Power Plants
Integration of 2,000 distributed PV sites
+ storage pilots
10-year frame contract and VPP pilot operations
MDM: Meter Data Management
Key takeaways
6 out of 7critical
Projects handed over, last project well on track for FY17
Root causes solved - learnings implemented
Backlog profitability increased by 330 bps
Fix and
Optimize
projects executed
730 bpsProfit increase FY14 - H1 FY16
Operating platform improved - continuous optimization
Performance of underperforming businesses on track
Reaching target margin range
Broaden
the base
Outgrown market:
>5%
growth since FY14
Three leading growth engines
Connecting Grids
Totally Integrated Power
Agility in Energy
FY 2015: €13bn Orders | €11.9bn Revenues | 4.8% Profit margin | 52,000 Employees | 7% to 10% Margin target
Transmission Distribution
#1 #1 #2 #3 #3 #1
Transmission Solutions
HVDC1) solutions
FACTS2)
Grid access
HV substations
High Voltage Pro- ducts and Systems
Air- and Gas- insulated HV switchgear
Non-switching HV products
Transformer Products
Power transformers
Distribution transformers
Special purpose transformer
Low and Medium Voltage Systems
Air- and Gas- insulated MV switchgear
LV switchgears and switchboards
Active Power Systems
Low and Medium Voltage Products
LV protection and switching
LV measuring
and monitoring
MV vacuum circuit breakers, contactors and interrupters
Digital Grid
Smart metering and communication
Grid protection, automation and power quality
Grid consulting
Service: Product and Operations related services - Value Added Services - Digital Services
HV: High Voltage; MV: Medium Voltage; LV: Low Voltage
1) High Voltage Direct Current 2) Flexible Alternating Current Transmission System
Financials (in €bn)
Orders
Revenue
Addressed market (FY 15 - 21e) (in €bn)
CAGR
110
FY 2015
+2-3%
FY 2018e
+9%1)
~125
FY 2021e
+5%1)
+5%1)
11.2
13.0
0%1)
6.2
6.5
10.7
11.9
5.5
5.5
Industries & Infrastructure
FY14 FY15
H1 15 H1 16
FY14 FY15
H1 15 H1 16
Power Generation
Profit and margin
Free Cash Flow
+76%
570
691
TSO
355
-30%
& DSO
-0.8%
-86
FY14
5.5%
4.8%
201
3.8%
3.7%
H1 15
6.7%
6.5%
H1 16
-105
FY14
-303
FY15
-393
H1 16
4 - 5% CAGR Digitalization & Automation
FY15
H1 15
2 - 3% CAGR Electrification
1) Comparable, i.e. adjusted for currency translation and portfolio effects
x.x% Profit margin as reported
x.x% Profit margin excl. severance
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