Global Megatrends : Societal, Political,

Urbanisation, Cities ⋯

will change our “social-economic European-

model” fundamentally.

Vilvoorde, May 20th, 2014

“We always overestimate the changes that will occur in the next two years

and underestimate the change that will occur in the next ten.” Bill Gates

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Inspiration Sources

§ HORIZONS 2020 : “A thought-provoking look at the future” TNS Infratest (Commissioned by Siemens AG)

§ FUNKY BUSINESS by Kjell Nordström and Jonas Ridderstrale § STOP de Amerikanen by Hans Versnel & Jaap Jan Brouwer § The Economist § Green City Index commissioned by Siemens AG § Mythos Motivation by Reinhard K. Sprenger § Strategic Intuition by William Duggan § VBO/FEB publications

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Agenda

§ Siemens in a nutshell § view on 12000 feet § view on 1000 feet § view on 0 feet § … and what about Innovation …

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Siemens Worldwide: Key figures

As reported in annual reports

In millions of € FY 2012 FY 2013

New orders 75,939 82,351

Revenue 77,395 75,882

Income 4,642 4,212

Free cash flow 4,727 5,257

Employees 366,000 362,000

Revenue by Sector Revenue by Region

Based on customer location

Continuing operations - comparison with previous year

Revenue and employees

Healthcare

18%

Energy 35%

Industry 24%

Infrastructure and Cities

23% 20%

Americas 28% 38%

Germany

14%

Asia, Australia

Employees in thousands

FY

100,000

80,000

60,000

40,000

20,000

2000 1986 1990 1995 0

Revenue in millions of €

2005 2013

500

400

300

200

100

Europe, C.I.S., Africa, Middle East

(excl. Germany)

0

27% 36%

34% thereof DX

26%

Industry 80%

15% & Cities

3%

Hea

lthca

re

Luc Van Overstraeten

Ener

gy

Peter Koninckx

Infr

astr

uctu

re

& C

ities

André Bouffioux

Indu

stry

Eddy Nelis

• Industry Automation • Drive Technologies • Customer Services • Metals Technologies

Siemens Group Belgium – Luxembourg Key figures FY 2013 (Oct. 1st – Sep. 30th)

Sector Leads

André Bouffioux Peter Geilen

CEO and CFO

Business Volume • New orders: 954’ • Revenue: 1”081’

• Rail Systems • Mobility and Logistics • Low and Medium Voltage • Smart Grid • Building Technologies

• Power Generation • Wind Power • Power Transmission • Energy Service

• Imaging & Therapy Systems • Clinical Products • Diagnostics • Customer Solutions Energy

Industry

Healthcare

Infrastructure & Cities

Revenue per sector

Figures according to IFRS Group-Reporting

12000 Feet : Where are we going ?

6

12000 Feet: Something going on – 70 years of peace

7

12000 Feet: Something is going on – Overpopulation, Environment, Food, Growing Cities

8

12000 Feet: Something going on – The rise of different types of Capitalism

9

12000 Feet: Something going on – Classical P&L challenged

10

12000 Feet: Something is going on – Century of Female

11

12000 Feet: Something is going on – Which jobs ? Which business model ?

12

Bild Tanker und Sturm 1000 Feet: How to change course… Create conditions for welfare

13

1000 Feet: Something is going on – “Urban Millenium” Urban Population is growing by 2 citizen per second

Page 14

Jakarta 1975—4.8 Mio Delhi 1972—4.4 Mio Jakarta 1975—4.8 Mio Delhi 1972—4.4 Mio Jakarta 1990—8.2 Mio Delhi 1988—9.7 Mio Jakarta 2000—8.4 Mio Delhi 2000—15.7 Mio Jakarta 2010—9.2 Mio Delhi 2010—22.2 Mio

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1000 Feet: Create conditions for welfare – Performant Enablers

15

75% of energy consumed in cities;

80% of CO2 emissions are produced in cities

Major energy and

climate factor

In 2007 ~50% of the world's population was living in cities, an

increase from 3.5B to 4.7B until 2030

Population

50% of world GDP is produced in cities with a population over 750K

Regional power- houses

"urban millennium"

Page 16

1000 Feet: Something is going on – “Urban Millenium”.

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0 Feet: How to get out.

For some, already too late…

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0 Feet: Dark side of the moon- What happened the last 10 years, as seen by an Indian consultant…

Ø“China Manufactures” for the world

Ø“India Services” the world

Ø“USA Cashes” for themselves

Ø“Europe Relaxes”

To be added: Ø“Belgium Discusses BHV”

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You

Me

0 Feet: Dark Side of the moon- Two scenarios for Europe / Belgium

19

Two scenarios for Europe / Belgium: Scenario 1

- Collective responsibility - Needed based society - Focus on fulfilling needs and enjoy life - We spend what we can - ~ Collectivism

Staat-Collectiviteit

20

Two scenarios for Europe / Belgium: Scenario 2

- Individual responsibility - Merit Based Society - Focus on performance and progress - We spend what we earn - Survival of the fittest

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… and what about Innovation … Innovation creates conditions for welfare –

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Innovation : It’s hard to believe that the way to growth is by being disruptive.

Innovation: Create the Spirit which changed the world’s perception. The idea who will bring us in front.

A company or a business firm basically consists of four different things: 1) capital, dollars, nickels and dimes; 2) machinery and buildings, the dirty and expensive hardware; 3) people, the problematic software; and a 4) basic idea, the most elusive element of all.

HOW TO STIMULATE OUR PEOPLE TO GENERATE IDEAS / Innovation? HOW DO WE LISTEN TO THEM / Let them grow ?

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Siemens – Innovating the Electrical World

Global trends

Digital transformation

Globalization

Urbanization

Demographic change

Climate change Efficient Energy

Application

Power Transmission, Distribution & Smart Grid

Power Generation

Imaging & In-Vitro Diagnos-tics

Today Mid term-2020

Electrification Market growth: ~2-3%

Automation

Digitalization

Market growth: ~4-6%

Market growth: ~7-9%

Market development (illustrative)

Decentralized demand of a growing and aging population

Infrastructure invest-ment needs of urban agglomerations

Global competition driving productivity & localization

Networked world of complex and hetero-geneous systems

Higher resource efficiency in an all-electric world

Unrestricted / © Siemens AG 2014. All rights reserved.

Setting the pace for the next industrial „revolution“

From Industrie 1.0 to Industrie 4.0

1800 1900 2000 Time

Degree of complexity

First Industrial Revolution based on the introduction of mechanical production equipment driven by water and steam power

Second Industrial Revolution based on mass production achieved by division of labor concept and the use of electrical energy

Third Industrial Revolution based on the use of electronics and IT to further automate production

Fourth Industrial Revolution based on the use of cyber-physical systems

First mechanical loom, 1784 First conveyor belt, Cincinnati slaughterhouse, 1870

First programmable logic controller (PLC) Modicon 084, 1969

Unrestricted / © Siemens AG 2014. All rights reserved.

Vision of Industrie 4.0 – Increase efficiency, shorten time-to-market, enhance flexibility

Production Self-optimizing

Self-healing

Engineering Autonomous components

Commissioning Self-configuration

Market Dynamic

requirements Information Up-to-date

Design Integral modeling

Market Satisfied

customers

Unrestricted / © Siemens AG 2014. All rights reserved.

The Future of Manufacturing: Industrie 4.0 – three key elements

Production network Flexible value chains with information available in realtime across company boundaries

1

Fusion of virtual and real world Integration of product design and production engineering for shorter time to market

2

Cyber-physical systems Modular production units with complete and consistent virtual image

3

Unrestricted / © Siemens AG 2014. All rights reserved.

Lever 1: Merging of the real and the virtual worlds

The digital model is always up-to-date and is extended throughout the entire life cycle

• Software, informatics • Mechanics • Electrical, electronics • Automation, HMI • Safety, security • Maintenance

Cyber Physical System (CPS)

Physical manufacturing equipment

Digital model

• Site location, identity

• Status • SW version • Interfaces • …

Contains all the information relating to…

Services Production execution

Production planning

Product design

Production engineering

+

Unrestricted / © Siemens AG 2014. All rights reserved.

Levers 1 and 2: Merging together the virtual and real manufacturing worlds thanks to our Digital Enterprise Platform

TIA Totally Integrated Automation

PLM Product Lifecycle Management

Design and virtual production

Real production

Production planning

Production engineering

Production design

Product design

Unrestricted / © Siemens AG 2014. All rights reserved.

Design and virtual production

Real production

TIA Totally Integrated Automation

PLM Product Lifecycle Management

Production planning

Production engineering

Production execution

Product design

Real and virtual worlds are converging thanks to our Digital Enterprise Platform

Computer-aided motion software (2012)

CAD design software Production of composite materials (2011)

Product cost management (2012)

MES software Life science Industrys (2009)

Industrial quality and production management (2012)

Ethernet communication products and network solutions (2012)

Integrated plant management (2008)

CAE software for simulating and testing of mechatronic systems (2012)

(2007)

MES software Pharmaceutical and biotech Industrys (2011)

Software for production management (2001)

Software for production planning and scheduling (2013)

PLM software integration (2013)

Unrestricted / © Siemens AG 2014. All rights reserved.

"Virtual machine" – Increase in productivity through simulation of the manufacturing process

• Digital "twin" • Simulated manufacture of a workpart • Calculation of manufacturing times

10% increase in productivity during manufacturing and time savings of as much as 80% when installing and setting up the actual machine.

Unrestricted / © Siemens AG 2014. All rights reserved.

VW: Boosting productivity in existing production plant through simulation in machine retrofit project

Industrysoftware von Siemens ist auch für installierte Systeme ein Produktivitätshebel

• Control, drive and safety technology from Siemens

• Virtual model simulates all mechanical, electrical and software components for motion control

• Combined use of SIMOTION and PLM software

• Direct data link between PLS and press working line control units

• Performance enhancement and energy savings of up to 40%

Industry software from Siemens can also leverage productivity in legacy systems

Press Line Simulation (PLS) for retrofit of a 17-year-old press line

Unrestricted / © Siemens AG 2014. All rights reserved.

TRUMATCH: Engineer-to-process & data management platform

Value Benefits: Increased market share and accuracy through a “learning system”

Power Generation Services

Flat and market driven organization along the value chain will capture growth opportunities

Div

isio

ns (G

loba

l P&

L)

1) Commonwealth of Independent States

Managing Board

Market Americas Global

Healthcare Middle

East, CIS1) Asia,

Australia Europe, Africa

Financial Services

Power and Gas

Wind Power and

Renewables

Mobility

Energy Manage-

ment

Building Techno-logies

Digital Factory

Process Industries and Drives

Healthcare

Separately managed

Corporate Core Corporate Services

PG

MO PS

WP

EM BT DF PD HC SFS

Go-

to-m

arke

t

Restricted © Siemens AG 2013 All rights reserved.

Thank you for your attention

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