siemens equity story · 2020-05-28 · page 2 siemens equity story notes and forward-looking...

Siemens – Equity Story Siemens Investor Relations

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Unrestricted © Siemens 2020

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.



Our company

Strategy: Vision 2020+

Why to own Siemens shares?



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


Siemens Energy

part of

discontinued

operations since

Q2/20

36,800Employees

€8.9bn Revenue


Siemens Energy*

52,000Employees

€14.5bnRevenue


All figures based on FY19

Operating Companies Strategic Companies



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


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


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



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


52,000Employees

€14.5bn Revenue


All figures based on FY 2019



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



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



Our company





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



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



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


As shown at CMD in

May 2019



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



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



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



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



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



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



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



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



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



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%



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


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



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



Our company





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



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



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%



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



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



Investor Relations contacts

Investor Relations

Internet: www.siemens.com/investorrelations

E-Mail: [email protected]

Telefon: +49 89 636-32474

Fax: +49 89 636-1332474

http://www.siemens.com/investorrelations

mailto:[email protected]

siemens equity story · 2020-05-28 · page 2 siemens equity story notes and forward-looking...

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