Siemens : Presentation: "Siemens in China" (JPM China Summit)

JP Morgan China Summit

Beijing, June 4, 2015

Confidential / © Siemens AG 2015. All Rights Reserved.

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," "anticip ate" "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' contr ol. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in th e chapter Risks in the Annual Report. Should one or more of these risks or uncertainties materialize, or should underlying expectations not occur or assumptions pr ove incorrect, actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or impl icitly 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 posi tions 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 pe rcentages may not precisely reflect the absolute figures.

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Siemens China Key Facts

• Sales of €6.6bn in FY14 (+14%)1)

• 76 Joint Ventures & wholly owned enterprises

• ~33,300 employees in total, including

• >4,500 R&D experts & engineers

China HQ, Beijing

Learning Campus China as a pillar of Siemens global learning

North Asia HQ for energy services

Every 2nd computed tomography

scanner (CT) sold

globally comes

• 20 R&D hubs

• Balanced business mix

BT WP PG PD
MO
EM HC DF

from Shanghai

Global HQ in Nanjing for industry automation products

• China is the 2nd largest Siemens overseas market

• Orders: tough comps H1 FY15 vs.

prior year. Pick up in H2 FY 15 expected

Digital factory Chengdu

in emerging markets

Every 3rd magnetic resonance tomography scanner (MR) sold globally comes from Shenzhen

1) vs. FY13, portfolio & FX comparable 2) Majority-owned factories, excl. 50:50 / minority-owned

Production

Sales branch office

R&D

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Reason for econo- mic slowdown

Structural changes in

GDP composition

Government focus:

manage "the new normal"

Difficulties ahead

Siemens relevant investment focus

GDP

2010
2014

may be more formidable than last years

2015 GDP growth target reduced

to ~7%

Adapt to "New

Normal" of

Growth 10.5%

7.4%

growth (weakest in

Agriculture Service

Industry

25 years)

Source: Siemens China, IHS Global Insight, National Bureau of Statistics
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Intelligent manufacturing

Intelligent Manufacturing is a focus topic in China

• Intelligent manufacturing equipment highlighted as Strategic Emerging

Industry in 12th FYP

Leverage global portfolio for China market

• Digital Enterprise Software Suite:

PLM (Teamcenter / NX), MES (Simatic IT), TIA (Simatic, Sinumerik)

• Project examples for intelligent manufacturing

JIER Machine-Tool Group CITIC Dicastal Chery Automotive

Local setup and SMART development Invest in sales

MIIT Action Plan for "Intelligent manufacturing pilot project" March 9, 2015

• Leading by example:

• Continuously leverage SMART products

SINUMERIK

• Enhance regional

coverage/ new office

SMART
Simatic PM207
IPC 3000 SMART
808D
LINE V2

1) Ministry of Industry and Information Technology
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Intelligent manufacturing

A Software / vertical

IT solution

B Data-driven services & business analytics

Smart Sensor

Monitoring Bus

Smart Sensor

Cloud

Agent

Controller

Project with key automotive production supplier

Move into local applications

C Digitally enhanced electrification & Automation portfolio

Smart
sensors
Connectivity
& ind. com.
Self-learning

Strong growth in Sensors & Communication business since 2010

Traffic Management System project

ITS: Intelligent Traffic Systems; BEMS: Building Energy Management System
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Clean Energy

China Power markets in

the "new normal"

• Wind market with growth momentum in off-shore

• Delays in O&G projects

• GT market still slow

• De-central power market develops, but slow

• Declining power demand

growth

YoY Growth (in%)

Siemens response

• Built closer cooperation with key customers, e.g. via MoUs

• Continue localization to enhance competitiveness

• Leverage Rolls-Royce portfolio for de-central power, compressor & pipeline

• Increase flexibility of local business and partnership

• Ramping up local competency on engineering and service

Key wins since H2 FY 14

20 15%

10

6%
12%
6% 7% 4%

Power demand Growth YoY (in %)1)

1) China Statistics Bureau
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Urbanization & Infrastructure

China infrastructure

markets in "new normal"

• Air pollution & increasing Environment protection as market driver

• Power T&D: lower growth

Siemens response

• Strengthened joint go-to-market and City 100 Roadshow

• Continuous enhancement of local portfolio

• Rolling stock: peak in FY14

HP SMART DS LP 5SN family SMART butterfly valve & actuator
M3 Humidity & Temp. Sensor

& further solid investment

• Real Estate Investment growth is slowing down

YoY Growth

• Built Center of Competence in BSCE 2), with >100 R&D experts

• Realize opportunities from environment protection / air-pollution

• Local solutions for e-Car drivetrain and e-bus

• Drive urban transportation potential (signaling, propulsion)

• Wuhan Innovation Center for intelligent traffic management

40%

20%

0%

Full Year
04/15
YTD

• Strengthen engineering, project mgmt & operational excellence

Key wins since H2 FY 14

10 11 12 13 14 15

Years

Real Estate Development

Investment Growth YoY (in %) 1)

Ningdong HVDC SGCC central bidding Signaling projects
Rolling Stock projects

1) China Statistics Bureau 2) Beijing Siemens Cerberus Electronics Ltd
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Affordable Healthcare

Market dynamics

 Market shift toward entry- level / county-level healthcare continues

 Clinical Products and

Diagnostics market with

Siemens response

 Leverage strong value chain in SSME & SSMR

 Local product development & innovation for global market:

Artis one SOMATOM

Scope

MAGNETOM

Essenza 800 +

Multix Select DR,

Multix Fusion

 Overall: price erosion

 Anti-corruption measures by government lead to delay in customer investment decisions

 Further develop tailored local portfolio

 Invest in Go-2-Market

Move sales closer to the customer:

>175 cities with sales residence -

shift towards non-provincial capital cities

Optimize business partner management & established dedicated channel setup for CP

 Tight cost control

Add. cities with Siemens HC sales since Nov. 2014

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Going global of CN companies

Key Actions

Dedicated Key

Account Mgt.

Continuous ramp-up of local competences

Focused China

EPC approach

Signed MoU with

key EPCs

China Power EPC Forum, Beijing, March 18 2015

Selected Key Wins FY14

Power China IGCC1) project Saudi Arabia

Rapid Metro Gurgaon projects India

+100% p.a.

FY 2012 FY 2014

Growth of order intake from China key accounts

Selected Key Wins FY15

Steam Turbines

Brazil

Gas Turbines

Bangladesh

1) Integrated Gasification Combined Cycle 2) State Nuclear Power Technology Corporation
3) China National Machinery Import & Export Corporation
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Siemens relevant investment focus

of China Key actions to drive profitable growth

Intelligent

manufacturing

Leveraging our leading portfolio and a strong local

Clean

energy

Compensating headwind from the market with increased localization and flexibility in power

Urbanization &

infrastructure

Participating in China infrastructure investments via

Affordable

Healthcare

Leveraging the full value-chain in China to turn market challenges into competitiveness in healthcare

International

expansion

Support the international expansion of our

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