siemens equity story · 2020-05-28 · page 2 siemens equity story notes and forward-looking...
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Siemens – Equity Story Siemens Investor Relations
siemens.comUnrestricted © Siemens 2020
Unrestricted © Siemens 2020
Page 2 Siemens Equity Story
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, prospectuses, 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 Report on expected
developments and associated material opportunities and risks of the Annual Report, and in the Half-year Financial Report, which should be
read in conjunction with the Annual Report. Should one or more of these risks or uncertainties materialize, events of force majeure, such as
pandemics, occur or should underlying expectations including future events occur at a later date or not at all 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 the applicable financial reporting framework not clearly defined – supplemental financial measures that are or
may be alternative performance measures (non-GAAP-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 the
applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe similarly titled
alternative performance 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.
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Our company
Strategy: Vision 2020+
Why to own Siemens shares?
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Page 4 Siemens Equity Story
Our Company –
Company structure (Status April 1, 2020)
Smart
InfrastructureDigital Industries
Service Companies (Financial Services, Global Business Services, Real Estate Services)
Corporate Development (e.g., IoT Services, CT, Next47, Portfolio Companies)
Governance units
** Siemens’ share in Strategic Companies
Siemens Mobility
85%**
* Partial spin-off of Siemens Energy planned; Siemens Energy holds about 67% of the voting rights at Siemens Gamesa Renewable Energy
72,400Employees
€15.2bn Revenue
9.9%Adjusted EBITA margin
76,200Employees
€16.1bn Revenue
17.9%Adjusted EBITA margin
Siemens Energy
part of
discontinued
operations since
Q2/20
36,800Employees
€8.9bn Revenue
11.0%Adjusted EBITA margin
Siemens Energy*
52,000Employees
€14.5bnRevenue
17.0%Adjusted EBITA margin
All figures based on FY19
Operating Companies Strategic Companies
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Siemens businesses in a nutshell –
Operating Companies
Digital IndustriesThe advancing digitalization, in tandem with the increasing flexibilization of production processes, provides new opportunities and
choices for industrial companies all across the globe. Digital Industries (DI) supports our customers in unlocking the full potential: as a
partner providing cutting-edge technologies for the automation and digitalization of the discrete and process industries.
The Digital Enterprise portfolio is at the core of our offer. It provides companies of all sizes with the right products, along with consistent
solutions and services for the integration and digitalization of the entire value chain. As an innovation leader, we think ahead to the next
level of digital transformation – and integrate cutting-edge technologies such as artificial intelligence, edge computing, industrial 5G,
autonomous handling systems, blockchain and additive manufacturing into our portfolio.
76,200Employees
€16.1bn Revenue
17.9%Adjusted EBITA margin
Smart InfrastructureSmart Infrastructure (SI) brings together energy systems – from the intelligent control across the grid to medium-voltage distribution
system, through a broad range of low-voltage and control products, to the point of consumption – with Siemens’ broad portfolio of
building technologies. We support utilities, building customers and industries with a wide range of applications.
At the point of connection between the grid and buildings – at the grid edge – there are exciting nascent markets including prosumption,
electric vehicle infrastructure, energy storage and microgrids. We will combine physical solutions and digitalization across the focus
areas of electrification and automation.
72,400Employees
€15.2bn Revenue
9.9%Adjusted EBITA margin
Siemens EnergySiemens Energy is the global energy business of the Siemens group. With planned stock listing, Siemens’ energy business will operate
independently as Siemens Energy in the future.
It offers broad expertise across the energy value chain, along with a comprehensive portfolio for utilities, independent power producers,
transmission system operators, the oil and gas industry, and other energy-intensive industries. With its products, solutions, systems, and
services, Siemens Energy addresses the extraction, processing, and transport of oil and gas as well as power and heat generation in
central and distributed thermal power plants, and power transmission and technologies for the energy transformation, including storage
and sector-coupling solutions. The majority stake in Siemens Gamesa Renewable Energy round out its future-oriented portfolio.
Siemens Energy
part of
discontinued
operations since
Q2/20
All figures based on FY 2019
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Siemens businesses in a nutshell –
Strategic Companies
Siemens MobilityThe efficient, safe and environmentally friendly transportation of people and goods by rail and road – Mobility (MO) bundles all of
Siemens' transportation-related products, solutions and services.
Advanced networked and IT-based mobility solutions and comprehensive know-how are increasing infrastructure availability, optimizing
route use and raising travel quality to new levels – by rail, on the road, or across multiple modes of transportation.
Siemens HealthineersThe listed Siemens Healthineers (SHS) enables healthcare providers around the world to deliver high-quality patient care. As a leading
global healthcare company, we're continuously developing our portfolio, expanding our medical imaging and laboratory diagnostics
offerings and augmenting them with a growing range of healthcare management, consulting and IT services – such as advanced
therapeutic solutions and molecular in-vitro diagnostics.
Siemens Healthineers is proactively developing its digital healthcare services. We help customers succeed in today's dynamic healthcare
market by creating new business models that maximize opportunities and minimize risks for healthcare providers.
36,800Employees
€8.9bnRevenue
11.0%Adjusted EBITA margin
52,000Employees
€14.5bn Revenue
17.0%Adjusted EBITA margin
All figures based on FY 2019
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Siemens Key Figures in first half of Fiscal 2020
Key figures(Continuing operations; in € million
except where otherwise stated) Fiscal 2020 Fiscal 2019 Change in %
Volume
Orders 30,016 33,457 (12)%1
Revenue 28,336 27,870 0%1
Profitability and capital efficiency
Net income2 1,786 3,041 (41)%
Return on capital employed (ROCE)2 6.4% 12.2%
Liquidity
Free cash flow 740 1,128 Revenue by Region
Revenue by Industrial Business
1 Excluding currency translation and portfolio effects 2 Continuing and discontinued operations 3 Commonwealth of Independent States
Smart Infrastructure 27%
Digital Industries 28% Siemens Mobility 17%
Siemens Healthineers 28%
Asia, Australia 23%
Americas 27%
Europe, CIS3, Africa,Middle East
(excluding Germany) 33%
Germany 17%
First half
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Managing Board of Siemens AG
Klaus Helmrich Cedrik Neike Ralf P. Thomas
Chief Financial Officer
Siemens Energy
Corporate Countries USA, China
Governance & Markets
Communications
Legal and Compliance
Siemens Mobility
Global Business Services
Corporate Development
Human Resources
Digital Industries
Corporate Country Germany
Smart Infrastructure
Corporate Country India
Siemens Healthineers
Financial Services
Real Estate Services
Controlling and Finance
Joe Kaeser
President and Chief Executive
Officer
Roland Busch
Deputy Chief Executive Officer,
Chief HR Officer
and Labor Director,
Chief Technology Officer
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Page 9 Siemens Equity Story
Our company
Strategy: Vision 2020+
Why to own Siemens shares?
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Page 10 Siemens Equity Story
Vision 2020+
Execute on transformation
Key: Foster Ownership Culture and strengthen entrepreneurial focus
Value
2020 2021 20222019
Anticipate markets and trends
Leading in all businesses, shaping change
Transformation
Ultimate value creation
2023
Focus
Accountability
Adaptability
#RaisingTheBar
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Key principles to execute Vision 2020+ and achieve lasting
impact
Embrace entrepreneurial freedom - best in industry
Support functions part of Operating Companies
Transactional services bundled in Global Business ServicesFocus
Accountability
Adaptability
Dedicated responsibility and accountability
Clearly defined impact and ambitious financial targets
From a “one size fits all” to a purpose-driven and market-
focused approach
“Impact over policy” – lean governance
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Vision 2020+ structure as of April 1, 2019
+ 2 ppts.
CAGR
Accelerated
comp. revenue
growth
+ 2 ppts.Margin lift at
Industrial Business
Mid-term target
> revenue
growthEPS growth1)
1) on constant minority shareholdings
Siemens structure –
entrepreneurial freedom for businesses
Corporate Development & Governance
SHSMO SGRESI GPDI
CT / Next47
POC
IoT
Global BusinessServices
FinancialServices
Real EstateServices
Service Companies
Operating Companies Strategic Companies
As shown at CMD in
May 2019
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Siemens Energy on track for listing end of September
April2020
May2020
June2020
July2020
September2020
Today
Spin-off-Report
Extraordinary General Meeting
(Jul 9)
Listing
Brand name announced
Carve-out effective March 31
Road-
show
Portfolio set-up defined
Leadership team in place
Acquisition +8% SGRE stake
Siemens Energy in D/O
March2020
Carve-out finalized
August2020
Prospectus
CapitalMarket Day
(Sep 1)
Note: In Q2-20 Siemens booked 3 LGT and 28 small turbines
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Resilient business portfolio –
Ability to weather the storm
Digital Industries – €16.1bn Smart Infrastructure – €14.6bn
Resilient business portfolioMobility – €8.9bn
63%7%
25%
SolutionsAutomation Products5%
Service
Software
Revenue
FY 2019
35%
26%
38%
Products
Systems & Software
Solutions &
Services
42%
44%
14%
Rolling Stock
Road & Rail
Infrastructure
Service
Revenue
FY 2019
Revenue
FY 2019
▪ Healthy short- and long-cycle business mix
▪ Balanced exposure to customer verticals
▪ Leading digital offerings
▪ Growing service and software share
▪ Strong order backlog
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Competitiveness programs accelerated
~ €320m
by FY 2023
~ €160mby FY 2021
~ €300m
by FY 2023
~ €150mby FY 2021
Cost
optimization
Operating
Companies
~ €500m by FY 2023
~ €300m by FY 2021
€90m by FY 2021
Digital Industries Smart Infrastructure
Global
Business
Services
Lean and
effective
governance
~ €320m
by FY 2023
~ €295mby FY 2021
~ €300 m
by FY 2023
~ €180mby FY 2021
€90m by FY 2021
Digital Industries Smart Infrastructure
CMD 2019 View Updated View Q2 FY 20
€50m to be delivered by Siemens Energy
~ €500m by FY 2023
~ €300m by FY 2021
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Digital Industries –
Cost optimization program accelerated
Internal digitalization
DI Internal Process improvements
Integration synergies from Vision 2020+
• Two Divisions into one Operating Company
• Corporate functions shifted to Digital Industries
• BU SW Synergies from integration
• Optimization of internal regional structure
• Optimization of order management, logistic and controlling processes
• Structural optimization cross Digital Industry
• Leveraging industrial software and automation methodologies to drive
additional efficiency by utilizing digital enterprise suite
• Increased and optimized degree of automation in factories
• Comprehensively digitalized end to end PLM processes
• Comprehensive and optimized use of MindSphere
1) FY19 until FY23
Main levers Cost-out accelerated
in €m
160
160
280
320
CMD May 2019
15
25
Q2 2020 view
320
Until FY 23
Until FY 21
FY 19
€40m
€130m
€150m
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Digital Industries –
Strategic Commitment
Our target is to grow 25% faster than the market.1
We deliver a CCR of 1 – growth rate over the cycle.
We commit to sustain Adj. EBITA margin of 17-23% over the cycle.2
3
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Smart Infrastructure –
Strategic Commitment and Competitiveness program acceleration
1 based on market growth of ~3% CAGR18-24
Top-line annual revenue
growth of 4-5%1)
Expand
• Energy & performance services
• Grid edge portfolio
Leverage
• Grow with focus on verticals
• Extend service scope
Secure
• Further grow product business
• Continue focus on Asia
Adj. EBITA margin 11-13% by
FY 2021, 13-15% by FY 2023
Cash conversion rate
1 - growth in FY 2019
200280
200160
CMD May 2019 Q2 2020 view
400440
Until FY 23
Until FY 21
Therein
business mix €100m €140m
in €m
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Page 19 Siemens Equity Story
Siemens Mobility – a leading vertically-integrated mobility
player and integral part of Siemens AG
Siemens Mobility
Key figures FY 2019: €12.9bn Orders | €8.9bn Revenue | 11% Adj. EBITA margin | 37k employees | €32bn Backlog (March 31, 2020)
Rail & Road Infrastructure Customer Services TurnkeyRolling Stock
▪ Vertical market with attractive secular growth trends and
profit pool, allowing superior capital efficiency
▪ Covering entire customer value chain with mutually-
reinforcing businesses
▪ Lead digital transformation, benefitting from Siemens IoT
ecosystem and platform
Leading integrated set-up + excellent strategic fit in Siemens
▪ Resilient performance supported by high order backlog
▪ Stringent execution despite customer access restrictions
▪ Delays & shifts of project awards weigh on order growth
▪ Revenue CAGR > 5% | Adj. EBITA-margin mid-term > 11%
▪ ROCE accretive to Siemens target
Strong execution continues despite Covid-19 impact
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Page 20 Siemens Equity Story
Siemens Mobility –
a valid contributor to Siemens’ aspirations
Revenue
Growth ▪ Resilient market with >3% growth
supported by megatrends
▪ Enhancing growth momentum:
metro, digitalization, service, growth regions
Adj. EBITA
Margin
ROCE
4% CAGR
over last 5 years
> 5%
> 11%
11-15%
Accretive to Siemens target 15-20%
▪ Portfolio shift to higher margin &
recurring revenue business:
components, products, platforms, digital
services, signalling in the cloud
▪ Selective margin accretive portfolio
moves
▪ Digitalization in own operations
4 - 5%
~15%
<5%10-15%
5-10%
FY 2019FY 2009
~6% 11%
Mobility achievements Mobility mid-term ambition Siemens mid-term
Profitability of portfolio
Accretive to Siemens target
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Page 21 Siemens Equity Story
Mar-18 Oct-18 May-19 Dec-19
Siemens Healthineers –
Ideally positioned to shape the future of healthcare
• Significant next generation product and platform launches (e.g. Atellica)
• Structural cost savings
Strategic posture
Strategic priorities
2017-19
Mid-term
Mid-term and
beyond
Reinforcing
Upgrading
New growth
Drive profitable growthin core business
Tap into adjacentgrowth markets
"Market leadership 2025"
Digital, data and AI
Precision medicine
Therapy of tomorrow
Patient journey stewardship
Technology enabled services
… move into
Creating value for shareholders (Share Price) 2)
• Successful Atellica roll-out
• Expand lead in Imaging, Advanced Therapies and
Digital Data / AI
• Continue to create shareholder return
Adj. profit margin
Comp.Revenue growth
Mid-Term1)
>5%
Siemens expectation:
17 - 21%
Convincing "Strategy 2025"
Siemens holdings < 85%
Siemens expectations:
1
2
+55%
SHS
MDAX100%
Issue Price
€28.00
1 ) FY 2021 and FY 2022 2) as of May 18, 2020
May-20
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Portfolio Companies (POC)
Portfolio Companies – Stringent execution of strategy
Flender spin-off planned
Siemens Valeo (50%)
Eq
uity
inve
st.
Large Drives Applications
Siemens Logistics
Mechanical Systems &
Components (Sykatec)
Commercial Vehicles
Wind Energy Generation
Fu
lly
ow
ne
d
Mechanical Drives (Flender)
1) Siemens Energy Assets (SEA) transferred into POC during Q2 FY20, containing certain remaining regional business activities of Gas and Power,
which were not carved out to Siemens Energy due to country-specific regulatory restrictions or economic considerations
Exit
▪ Integration of Wind
Energy Generation into
Flender planned
▪ Spin-off and listing of
Flender: Decision by SAG
AGM on Feb 3, 2021 –
preparation started
Turnaround
▪ Execute full potential
plans FY19-FY22
▪ Master Covid-19
challenges
▪ Target FY22: >5% Adj.
EBITA
PE / Value creation approach
Turnaround
Exit
Not carved out
Siemens Energy Assets1)
Primetals (49%)
Ongoing transformation program
H1 FY 20: Revenue: €2.7bn
Adj. EBITA margin: 0.4%
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Further transformation on the path to ultimate value creation
Corporate Development & Governance
SHSMO SGRESI GPDI
CT / Next47
POC
IoT
Global BusinessServices
FinancialServices
Real EstateServices
Service Companies
Operating Companies Strategic Companies
Industrial Core
SI
Technology IoT, CT, Next 47
DI
Financial Services
Real Estate Services GBS
SHS
Healthcare
MO
1 ) Ø5 yr. (FY 2014 – 2018) 2) w/o gains FY 2015 Audiology, BSH; FY 2018 Osram, Atos
Performance Mid-term target 2021 Long-term target
Comp. Revenue Growth 1.6%1) 4 - 5%
Adj. IB EBITA Margin 10.6%1) 11 - 15% 14 - 18%
ROCE 13.3%1)2) 15 - 20%
EPS €6.41as reported FY 2019
∆EPS > Growth
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Page 24 Siemens Equity Story
Clear roadmap to ultimate value creation
Accountable – New structure, entrepreneurial freedom, growth acceleration and margin expansion
Adaptable – Optionality for Mobility; Healthineers well positioned to shape their markets
Stringent – Private Equity like operational improvement for Portfolio Companies
Focused –
Innovative – Continued invest to shape future technologies
Lean – Optimized governance and support functions
Ambitious – Transformation leads to higher performance level
I
II
III
IV
V
VI
VII
Carve-out and partial spin of GP, transfer of all SGRE shares:
Simplification of Siemens portfolio – strategic flexibility for GP
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Page 25 Siemens Equity Story
Our company
Strategy: Vision 2020+
Why to own Siemens shares?
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Page 26 Siemens Equity Story
Capital
allocation Cash
generation
Capital
efficiency/
structure
Sustainable
value
generation
Profitable
growth
€
Leverage innovation strength in
dedicated growth fields and
rigorous focus on productivity
Drive working capital improvement
and cash performance
Disciplined capital allocation
along our strategic imperatives
Improving capital efficiency
while maintaining strong
rating and strategic flexibility
Sustainable value generation
delivering attractive shareholder returns
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Page 27 Siemens Equity Story
Strategic
imperatives
1) Areas of growth?
2) Potential profit pool?
3) Why Siemens?
4) Synergetic value?
5) Paradigm shifts?
Capital allocation
balancing investments and shareholder returns
Share
buyback
Dividends
Acquisitions
Capex
R&D
€87bn
€15bn17%
€17bn19%
€31bn35%
€17bn20%
€8bn9%
Strong and sustainable
shareholder return
FY 2014 - 2019
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Page 28 Siemens Equity Story
Attractive and sustainable shareholder return
2010 20132011 20172012
€3.50
2014 2015 2016 2018
€2.70
2019
€3.60€3.00 €3.00
5.40
€3.30€3.70 €3.80 €3.90
3.8%
Dividend
Dividend yield1)
3.5% average dividend yield1)
3.0%2.9%3.9%3.3%
Dividend payout ratio
€3.00
3.0%3.7%4.0%3.0%
Up to
3.0
2018 - 2021 2012
2.4
4.0
2016 - 2018 2014 - 2015
2.9 3.0€bn
Share buyback3)
1) Dividend / XETRA closing price at day of AGM 2) Effect of OSRAM stock distribution to shareholders of €2.40 per share;
not reflected in dividend payout ratio 3) as of Mar 18, 2020
2)
FY
3.4%
38% 52% 49% 53% 61%50%57%51%42%46%Target:
40 – 60%
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Page 29 Siemens Equity Story
R&D investment with clear focus on software, digital services
and vertical applications
High level of R&D investment… … to stay ahead of the curve
2.1
0.6
FY 2014
0.4
1.3
0.4
0.2
0.7
FY 2019 FY 2020e
5.6%
6.5%
DI
MO
GP
SGRE
SHS
SI
CT/Other
in €bn
Core Technologies, e. g.
Applying data analytics & digital twin
Cyber Security concepts
Energy efficient power electronics
Smart Infrastructure
~50% of R&D Software related
Digital smart building offerings
Leverage capabilities of acquisitions
Digital Industries
Expand Digital Enterprise portfolio –
AI, Edge, 5G, cloudification of SW
Enhance Process Control System
PCS neoIndustrial Security
Collaboration platform
Virtualproduction
Virtualproduct
Realproduct
RealproductionAutomation
Digital TwinProduct
Digital TwinProduction
Digital TwinPerformance
Performance data
Realize and optimize
4.0
~5.8
>+40%5.7
x.x% In % of revenue
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Page 30 Siemens Equity Story
The five elements of our Ownership Culture
Ownership
Culture
Leadership• Be bold, decisive and courageous
• Exemplify "Siemens matters"
• Motivate and engage
Values – Our foundation• Responsible
• Excellent
• Innovative
People orientation• Empowerment and trust
• Honesty, openness and
collaboration
EquitySupport long-term, output
and profit orientation
Behaviors• Respect
• Focus
• Initiative and execution
>300,000 employees own Siemens shares
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Page 31 Siemens Equity Story
Investor Relations contacts
Investor Relations
Internet: www.siemens.com/investorrelations
E-Mail: [email protected]
Telefon: +49 89 636-32474
Fax: +49 89 636-1332474