We deliver what we promise! Roland Fischer CEO Fossil Power Generation Division Capital Market Day Siemens Energy Charlotte, December 11, 2012 © Siemens AG 2012. All rights reserved. Safe Harbour Statement This document includes supplemental financial measures that are or may be non-GAAP financial measures. New orders and order backlog; adjusted or organic growth rates of revenue and new orders; book-to-bill ratio; Total Sectors profit; return on equity (after tax), or ROE (after tax); return on capital employed (adjusted), or ROCE (adjusted); Free cash flow, or FCF; cash conversion rate, or CCR; adjusted EBITDA; adjusted EBIT; adjusted EBITDA margins, earnings effects from purchase price allocation, or PPA effects; net debt and adjusted industrial net debt are or may be such non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation as alternatives to measures of Siemens’ financial condition, results of operations or cash flows 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. Definitions of these supplemental financial measures, a discussion of the most directly comparable IFRS financial measures, information regarding the usefulness of Siemens’ supplemental financial measures, the limitations associated with these measures and reconciliations to the most comparable IFRS financial measures are available on Siemens’ Investor Relations website at www.siemens.com/nonGAAP. For additional information, see supplemental financial measures and the related discussion in Siemens’ most recent annual report on Form 20-F, which can be found on our Investor Relations website or via the EDGAR system on the website of the United States Securities and Exchange Commission. This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forwardlooking statements. 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. We may also make forward-looking statements in other reports, in presentations, in material delivered to stockholders 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, 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 or anticipated on the basis of historical trends. These factors include in particular, but are not limited to, the matters described in Item 3: Risk factors of our most recent annual report on Form 20-F filed with the SEC, in the chapter “Risks” of our most recent annual report prepared in accordance with the German Commercial Code, and in the chapter “Report on risks and opportunities” of our most recent interim report. Further information about risks and uncertainties affecting Siemens is included throughout our most recent annual and interim reports, as well as our most recent earnings release, which are available on the Siemens website, www.siemens.com, and throughout our most recent annual report on Form 20-F and in our 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, performance or achievements of Siemens may vary materially from those described in the relevant forward-looking statement as being expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. 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. Page 1 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Siemens Fossil Power Generation Leading portfolio and market position Fossil Power Generation Products Energy Solutions Instrumentation and Electrical Roland Fischer Large-scale gas turbines, steam turbines, generators Power plant solutions Gas turbines All solutions through to Instrumentation and Controls Steam turbines complete power plants: Generators CCPP, GTPP Instrumentation and electrical control systems for all types of power plants Gasifiers STPP IT solutions Service No. 1 No. 1 in advanced GT frames (#) in GT solution business (GW) No. 1 Service Page 2 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Solid revenue and leading margin Orders Revenue €bn €bn Growth1) +26% -20% 12.5 12.1 Growth1) -17% 9.6 10.2 1.24 1.04 1.22 1.00 FY 2009 FY 2010 FY 2011 FY 2012 bookto-bill FY 2009 FY 2010 FY 2011 FY 2012 Profit Underlying Margin Free Cash Flow and Cash Conversion Rate CCR 20.7% €m 11.2 9.8 11.1 9.9 +5% +8% -3% 0.7 1.5 0.9 0.8 18.1% 15.6% 12.3% 1,206 2,196 2) 1,999 1,933 1,769 1,449 1,619 882 in % of Rev. 1) 2) 2) €m 12.3% 15.2% 19.6% 17.3% FY 2009 FY 2010 FY 2011 FY 2012 FY 2009 year-on-year on a comparable basis, i.e. excluding currency translation and portfolio effects Profit w/o Impact AREVA disposal gain and AREVA arbitration result Page 3 December 11, 2012 Capital Market Day Energy FY 2010 FY 2011 FY 2012 © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Excellent long term market perspective Over the next 20 years about today’s existing Large Fossil1) capacity will be added Installed Large Fossil1) power generation market capacity – World in GW 2,643 730 >70% >70% 2,803 760 492 144 929 43 13 21 312 238 302 >70% >70% 4,516 1,178 1,186 RoW 240 258 326 325 494 Europe 418 418 359 Middle East 672 672 784 785 USA USA, Europe Replacements - Gas power plants the ideal fit China, India Growth - Demand for cheap power 495 495 India 761 1,206 1,207 90 90 556 2011 More than 70% thereof will be added in USA, Europe, China, India and Middle East Retirements New capacity additions China Middle East Growth and Efficiency - Gas as backbone 2030 1) GT>60MW, ST>250MW Page 4 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Gas - The fuel of choice Reserves are substantially increasing due to new unconventional gas reserves World gas reserves Middle East 2) 2.7 Russia 2.0 China 1.4 China 1.1 United States potential net exporter Europe 0.7 Mexico 0.7 Australia 0.5 South Africa 0.5 Enough to supply more than 3500 SGT6-8000H in CCPP for 20 years [5000 h/a] 0.4 December 11, 2012 USA Potential net exporter of gas by more than tripling its reserves driven by shale gas proved reserves shale gas [quadrillion cubic feet 1)] Sources: IEA, HIS CERA, indexmundi 1) figures may vary depending on source; 2) still to be explored Page 5 Increasing the exploitation of shale gas via auctioning drilling licenses 0.8 Argentina Algeria Abundant resources lead to moderate price development within the next decades! Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Siemens positioned strongly in fastest growing gas market Core market gas is growing beginning 2014 onwards Gas Power Plant market development – World in GW 84 72 60 22 3 >60% >60% 62 27 65 90 35 RoW 10 9 15 17 Europe Middle East 22 22 USA 7 8 China 2020 2030 30 28 22 6 7 16 14 8 10 7 7 9 8 11 12 13 13 2012 2013 2014 2015 17 >60% >60% Ø 35% market share in units over 3 years (FY10-12) Page 6 December 11, 2012 Capital Market Day Energy More than 60% of future Gas market will be located in USA, Europe, China and Middle East USA Local manufacturing secures market position in home market North America Europe European home market (Full EPC) served via Fossil Solutions China Market served via JV partner Shanghai Electric (No. 1 in China) Middle East Local manufacturing and sales secure high market share © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Steam - Second pillar served indirectly via JV and licenses Steam – a robust market Steam Power Plant market development – World in GW ~70% ~70% 61 50 13 9 ~70% ~70% 53 17 10 52 15 59 47 18 RoW 17 India 11 14 20 18 Around 70% of Future Steam Power Plant market are located in India and China China, India Biggest SPP markets served indirectly via JV SEC and license partnership BHEL 13 28 26 26 25 25 China 16 2012 2013 2014 2015 2020 Rest of World Europe and Middle East - Selective direct business 2030 Ø 39% market share in MW over 3 years (FY 09-11, incl. JV and license partner) Page 7 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division The right footprint … Existing Footprint / Lead factories Major JV location / strategic partner Berlin Germany Mülheim Germany Charlotte USA Gas turbines Engineering Service Steam turbines Generators Engineering Service Gas turbines Steam turbines Generators Engineering Service + + Shanghai Electric China BHEL India Gas turbines Steam turbines Generators Gas turbine parts Steam turbines Generators Footprint Extension Page 8 Dammam Saudi Arabia St. Petersburg Russia Focus on gas Focus on Gas December 11, 2012 … to exploit the market potential Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Fossil is the only full scope supplier Markets are becoming more diversified due to different customer and regional requirements: Flexibility, Efficiency, CAPEX, Plant fit, OPEX, ROI, Reliability, Products & Solutions REQUIREMENT Regional example / Customer Siemens answer FLEXIBILITY Lodi Energy Center California (USA) Flex-Plant F-Class Full load in ~30 min EFFICIENCY CAPEX Changxing China Lausward Germany Full turnkey H-Class CCPP efficiency >60% CHP efficiency >84% Product business Localized F-Class low specific price request ~400 EUR/kW PLANT FIT Qurayyah Saudi Arabia Product business World largest CCPP F-Class (12 units) Fossil is the only full scope supplier to fulfill all changing market and customer requirements based on its unique business portfolio Page 9 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Innovation leadership secures our future competitiveness Return Service Business Introduction 5-2000E(8) Invest 5-4000F(8) 5-4000F(x) 6-5000F(5) 5-4000F(4) 6-5000F(3) 6-4000F(4) 5-2000E(1-3) 6-2000E(1-3) 6-5000F(4) 5-4000F(7) Further development ongoing >10 years 5-4000F(9) Invest 6-5000F(5ee) >30 years 6-8000H(1.4) 5-8000H(1.4) Base technology program Unique and sustainable business model Continuous and strong investment in R&D of €350 - 400m/p.a. Extend installed base through new products in all frames Provide additional service business (mods and upgrades) Page 10 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Technology leader in H-Class series Proven in commercial operation Up to 5% higher return on investment compared to F-class engine Customer Net efficiency Ramp-up time CCPP single shaft <30 min Operating hours >18,000 Turbines sold Turbines in operation incl. commissioning Page 11 December 11, 2012 60.75% Capital Market Day Energy 20 4 © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division les p am x E Cost Reduction Examples: Fossil Power Generation Division Design to Cost in Fossil Frames Cost Optimization of Steam Turbine for Combined Cycle Applications Stringent Modularization Approach Increased Efficiency at lower cost (Blade design) Standardization of 50 and 60Hz frames Acceleration of feeder plant concept (Hungary, Indonesia) €50m productivity improvement until 2014 €250m productivity improvement until 2014 Splitting and Bundling of Supply- and Erection Contracts Global Value Sourcing Market-screening for components and suppliers in focus countries Adaption of sourcing models on suppliers capabilities €75m cost reduction until 2014 Page 12 December 11, 2012 Capital Market Day Energy Enable Global Value Sourcing Bundling of erection packages Reduction of project costs €3m until 2014 © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division We deliver what we promise Grafik Jochen Page 13 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division Reconciliation and Definitions for Non-GAAP Measures This document includes supplemental financial measures that are or may be non-GAAP financial measures. New orders and order backlog; adjusted or organic growth rates of revenue and new orders; book-to-bill ratio; Total Sectors profit; return on equity (after tax), or ROE (after tax); return on capital employed (adjusted), or ROCE (adjusted); Free cash flow, or FCF; cash conversion rate, or CCR; adjusted EBITDA; adjusted EBIT; adjusted EBITDA margins, earnings effects from purchase price allocation, or PPA effects; net debt and adjusted industrial net debt are or may be such non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation as alternatives to measures of Siemens’ financial condition, results of operations or cash flows 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. Definitions of these supplemental financial measures, a discussion of the most directly comparable IFRS financial measures, information regarding the usefulness of Siemens’ supplemental financial measures, the limitations associated with these measures and reconciliations to the most comparable IFRS financial measures are available on Siemens’ Investor Relations website at www.siemens.com/nonGAAP. For additional information, see supplemental financial measures and the related discussion in Siemens’ most recent annual report on Form 20-F, which can be found on our Investor Relations website or via the EDGAR system on the website of the United States Securities and Exchange commission. Page 14 December 11, 2012 Capital Market Day Energy © Siemens AG 2012. All rights reserved. CEO Fossil Power Generation Division