Slide: Siemens Getting Ready To Top The €100

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Siemens getting ready to top the €100-billion mark Peter Löscher, President and CEO Joe Kaeser, CFO Siemens AG Telephone conference for the press Munich, Germany, March 29, 2011 Notice and disclaimer This document constitutes neither an offer to sell nor a solicitation to buy or subscribe for securities. Any such offer would be made solely on the basis of the Securities Prospectus to be published and registered with the German Financial Supervisory Authority (BaFin). The information legally required to be provided to investors is contained only in the Securities Prospectus. The information contained herein is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions of any State of the United States of America or the District of Columbia) and must not be distributed to U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended ("Securities Act")) or publications with a general circulation in the United States of America. This document is not an offer of securities for sale in the United States of America. The securities have not been and will not be registered under the Securities Act and may not be offered or sold in the United States of America absent registration or an exemption from registration under the Securities Act. It is not intended to register any portion of the offering in the United States of America or to conduct a public offering of the securities in the United States of America. This document is not an offer of securities for sale in the United Kingdom, Canada, Japan or Australia. This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project” or words of similar meaning. Such statements are based on the current expectations and certain assumptions of Siemens’ management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect Siemens’ operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. In particular, Siemens is strongly affected by changes in general economic and business conditions as these directly impact its processes, customers and suppliers. This may negatively impact our revenue development and the realization of greater capacity utilization as a result of growth. Yet due to their diversity, not all of Siemens’ businesses are equally affected by changes in economic conditions; considerable differences exist in the timing and magnitude of the effects of such changes. This effect is amplified by the fact that, as a global company, Siemens is active in countries with economies that vary widely in terms of growth rate. Uncertainties arise from, among other things, the risk of customers delaying the conversion of recognized orders into revenue or cancelling recognized orders, of prices declining as a result of continued adverse market conditions by more than is currently anticipated by Siemens’ management or of functional costs increasing in anticipation of growth that is not realized as expected. Other factors that may cause Siemens’ results to deviate from expectations include developments in the financial markets, including fluctuations in interest and exchange rates (in particular in relation to the U.S. dollar), in commodity and equity prices, in debt prices (credit spreads) and in the value of financial assets generally. Any changes in interest rates or other assumptions used in calculating obligations for pension plans and similar commitments may impact Siemens’ defined benefit obligations and the anticipated performance of pension plan assets resulting in unexpected changes in the funded status of Siemens’ pension and other post-employment benefit plans. Any increase in market volatility, further deterioration in the capital markets, decline in the conditions for the credit business, continued uncertainty related to the subprime, financial market and liquidity crises, or fluctuations in the future financial performance of the major industries served by Siemens may have unexpected effects on Siemens’ results. Furthermore, Siemens faces risks and uncertainties in connection with: disposing of business activities, certain strategic reorientation measures; the performance of its equity interests and strategic alliances; the challenge of integrating major acquisitions, implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies or market entries by new competitors; changing competitive dynamics (particularly in developing markets); the risk that new products or services will not be accepted by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations, legal proceedings and actions resulting from the findings of, or related to the subject matter of, such investigations; the potential impact of such investigations and proceedings on Siemens’ business, including its relationships with governments and other customers; the potential impact of such matters on Siemens’ financial statements, and various other factors. More detailed information about certain of the risk factors affecting Siemens is contained throughout this report and in Siemens’ other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forwardlooking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens neither intends to, nor assumes any obligation to, update or revise these forward-looking statements in light of developments which differ from those anticipated. Page 2 Telephone conference for the press, March 29, 2011 Grow and create value Sustainable value creation Fit42010 Fit4More Operation 2003 ~1% Others Ten-Point Program Revenue1) 74.2 68.1 in €bn 72.5 ~11% ~45% Others ~50% Industry ~28% Energy Healthcare ~16% FY 1999 76.0 ~5% SIS ~44% ~48% ~32% ~27% ~14% ~6% ~33% ~10% ~14% ~16% FY 2003 FY 2007 FY 2010 One Siemens ƒ Outpace growth relative to competition and markets ƒ Maintain top profitability levels during cycles ƒ Improve capital efficiency 1) As reported. Sector reporting only as of FY07. In FY99 and FY03, Industry comprised the former Groups A&D, I&S, TS, SBT & Osram; Energy comprised the former Groups PG and PTD. 1999 and 2003 figures are based on US GAAP; 2007 and 2010 figures are based on IFRS. Decline of revenue share “Others” since 2003 due, in part, to divestment of former Groups Com and VDO Page 3 Telephone conference for the press, March 29, 2011 Cities offer Siemens major market potential Worldwide infrastructure investments in cities (Public and private, in billions of euros) Public infrastructure investments in cities (Market addressable by Siemens, in billions of euros) 5% Market addressable by Siemens Page 4 8% 25 5% 45 5% 4% Healthcare Energy Water and waste 19 Transportation 36 Buildings, lighting, security 11 14 FY 2010 FY 2015 Telephone conference for the press, March 29, 2011 3% 12 81 6 8 300 1700 102 7 CAGR FY 10–15 Competencies bundled in new “Infrastructure & Cities” Sector Mobility ƒ High-speed trains and light rail ƒ Traffic management and networking ƒ Postal and airport logistics Smart Grid and Smart Consumption ƒ Modern energy management systems ƒ Automated power distribution systems ƒ Virtual power plants and micro-grids Building Technologies ƒ Energy-efficient building automation ƒ Fire protection and security systems Page 5 Telephone conference for the press, March 29, 2011 Siemens is the strong partner for cities Global Center of Competence Sales consulting in product business Customer management ƒ Consulting and sales support ƒ Energy-efficient building automation ƒ Cities and communities ƒ Supervision of the City Account Managers ƒ Transportation ƒ Traffic hubs (airports, ports) ƒ Financing solutions ƒ Water and waste management ƒ Urban and long-distance rail ƒ Urban Sustainability Center ƒ Healthcare Page 6 Telephone conference for the press, March 29, 2011 Industry Sector: Strengthening industry expertise and service business November 2007 2008 – 2010 Industry Sector founded A&D I&S SBT TS Develop strategic perspectives and improve competitive position OSR ƒ Sharpen business focus for the individual Divisions ƒ Strengthen competitiveness of each Division 2011 – Tackle new strategic challenges ƒ Better exploit market potential in industries ƒ Strengthen and substantially expand service business ƒ Lead change to "Industrial IT" Industry Sector IA Page 7 DT IS BT MO Æ Economic crisis successfully mastered OS Telephone conference for the press, March 29, 2011 Æ Utilize growth opportunities Four Sectors cover the global trends Industry Industry Automation Drive Technologies Service Infrastructure & Cities Mobility Power Distribution, Smart Grid Applications Building Technologies Osram1 Energy Fossil Power Generation Renewable Energy Oil & Gas Power Transmission Energy Service Healthcare Imaging & Therapy Clinical Products Diagnostics 1) IPO planned Page 8 Telephone conference for the press, March 29, 2011 Customer Solutions Osram – IPO will facilitate expansion of leading position in lighting market IPO provides high degree of flexibility Osram must maximize entrepreneurial freedom ƒ Secure leading market positions Accelerates strategic flexibility and capital allocation in a changing lighting market ƒ Expand leading position in LEDs in an increasingly competitive market ƒ Successful transformation from product to solutions business More flexible access to capital markets Siemens remains long-term anchor shareholder Advantages for Osram ƒ Fast and flexible implementation of strategic goals ƒ Greater entrepreneurial freedom for capital allocation ƒ More flexible access to capital markets Motives for Siemens 9 9 9 + ƒ Focus on core business with highest synergy potential in end markets and technology ƒ Siemens planning placement > 50 percent 9 9 IPO presumably in fall 2011 – Siemens remains long-term anchor shareholder Page 9 Telephone conference for the press, March 29, 2011 The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan or Australia. All in all, this means that Siemens is… … continuing its focus on the megatrends with its fourth Sector … bundling competencies in energy-efficiency solutions for private and public infrastructures … sharpening its orientation to industries and strengthening its technology-based services … expanding the scope of the Chief Technology Officer for company-wide technologies … planning an IPO for the majority stake in Osram and to remain an anchor shareholder … getting ready to top the €100-billion mark Page 10 Telephone conference for the press, March 29, 2011 Appendix: OSRAM is strongly positioned for an IPO Positioning of OSRAM Growth expectations Leading position in attractive markets Advantages in competition Balanced customer structure Attractive profitability 1 ƒ Strong growth for “green” products and LEDs ƒ The global lighting brand with leading market positions - #1 or #2 positions in all relevant technologies (Classic, Green & LED) - Strong position along the relevant LED value chain (#2 or #3) - The only ‘pure play’ lighting player and only pure global lighting brand ƒ Innovation excellence & technology leadership with focus on LED - One of only five key IP owners in LEDs - Early mover in OLEDs ƒ High quality & cost efficient manufacturing - Strong presence in low-cost countries (57% of total headcount) - Latest LED manufacturing in Regensburg & Penang ƒ Excellent customer access through global distribution platform - Largest global lighting sales force - Established partnerships with trade, OEM and retail customers - Global footprint (37% Europe, 36% Americas, 23% Asia Pacific) and leading positions in high growth emerging markets (33% sales share)1 - Competencies in solution business further expanded with Traxon JV (2008) and announced Siteco acquisition (2011) ƒ Attractive margins and ROCE 9 9 9 9 9 Market share relevant sales, excl Pre-Materials, Machinery and Traditional Luminaires Page 11 Telephone conference for the press, March 29, 2011 The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan or Australia. Siemens Business and Financial Press Team Page 12 Monika Brücklmeier +49 89 636-34782 Jörn Roggenbuck +49 89 636-33581 Alexander Becker +49 89 636-36558 Michael Friedrich +49 89 636-33039 Ivonne Junghänel +49 89 636-33929 Wolfram Trost +49 89 636-34794 Internet: www.siemens.com/press E-mail: [email protected] Phone: +49 89 636-33443 Fax: +49 89 636-35260 Telephone conference for the press, March 29, 2011