#1Analyst Meet - FY 2016 Siemens Limited Sunil Mathur, Managing Director & CEO Christian Rummel, Executive Director & CFO December 6, 2016, Mumbai SIEMENS Ingenuity for life#2Disclaimer SIEMENS This presentation has been prepared solely for use at the investor/analyst presentation. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: (a) Siemens Ltd. ("Siemens" or "Company") cannot give assurance to the correctness of such information and statements. These forward-looking information and statements can generally be identified by the fact that they do not relate only to historical or current facts. 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This presentation does not constitute a recommendation regarding the securities of the Company. Page 2 FY 2016, Analyst Presentation#3Operational Highlights Financial Analysis SIEMENS Page 3 FY 2016, Analyst Presentation#4Economic growth and reforms agenda on track SIEMENS >7.5% GDP growth expected aided by a consumption boost. Demonetization impact could bring GDP down to 7% temporarily ◉ ☐ GST clearance is a positive step; proposed four slabs could create implementation complexities and classification disputes; however central and state government consensus positive Demonetization of currency notes (INR 500/1000) expected to have a positive economic impact in the medium-long term by choking off the parallel economy Business optimism indices on new orders consistently improving Nikkei India Manufacturing PMI rose to a 22-month peak of 54.4 in Oct 2016 Lead economic indicators point to a possible recovery new corporate borrowings increased as compared to the previous year; corporate investments (Jan-Sep'16) are higher than the full year 2015 Consumer price inflation continues to drop; expected to soften further GST not expected to stoke inflation as approx. 50% of CPI items out of tax net Capacity utilisation in the last few quarters has been 72-74% compared to 78-79% a few years ago; manufactured goods inflation is well below average Normal monsoon will positively impact growth in rest of the fiscal Manufacturing PMI Index Growth 54.4 50 → 50.3 no change on previous month 52.4 52.1 49.1 50.7 Contraction OND J F M A M J JASO • October data provides positive news for India's economy, as manufacturing output and new orders expanded at the fastest rates in 46 and 22 months, respectively," - IHS Markit GST Goods & Services Tax; PMI Purchasing Managers Index; CPI Consumer Price Index Page 4 FY 2016, Analyst Presentation#5Continued growth in Transmission and Mobility Industrial growth picking up slowly SIEMENS Siemens relevant sectors Projected timeline for CAPEX pickup Today A Future Current status and future outlook Transport • • Railways current focus on 'network decongestion' over 'network expansion'; and safety projects USD 37" bn of projects expected from FY17-20 (USD 8"5 for products e.g. Rolling stock, Signaling etc) Power T&D AC transmission capacity addition on track; HVDC, FACTS and 765 kV AC to be focus areas • 100% rural electrification expected by May 2017 - one year ahead of schedule Construction Power Gen. Manufacturing • 27 Smart Cities additional cities announced taking the total number to 60 (as per schedule) Four states (Gujarat, UP, MP, Odisha) relax land acq. laws to free up regulations for commercial use • State sector plans to retire 36 GW old inefficient capacity over six years; will trigger next capex cycle Additionally India needs c. 20 GW/pa coal capacity addition to meet 7% demand growth Revival expected to improve with good monsoon, lower rates and growth in corporate earnings Initial indicators show jump in passenger vehicle sales, consumer credit etc TBCB Tariff Based Competitive Bidding; HVDC High Voltage Direct Current; FACTS Flexible AC Transmission Systems; UP Uttar Pradesh; MP Madhya Pradesh Page 5 FY 2016, Analyst Presentation#6Digitalization - expansion of scope now reaching data business platforms Vertical Data Business Platforms MindSphere teamplay Digital Services Predictive maintenance Software WinCC Flex LTP SIEMENS Driving the B2B network-effect ⚫ Reducing life- • cycle mainte- nance cost Revenue and profit driver UGS EnergyIP The PLM Company 2007 Power System Simulator (PSSⓇ) CD-adapco LMS ENGINEERING INNOVATION Leading in vertical SW Differentiator Simulation Digitally enhanced E & A 1847: Telegraph ... ...1994: Simatic S7... 2009: World- record GT ... Page 6 1847- ...fully auto- mated metros Today→ • Leading in automation Managing com- moditization Future FY 2016, Analyst Presentation#7Merger Siemens wind power with Gamesa SIEMENS ☐ Siemens AG and Gamesa have agreed to merge their Wind Power businesses. ☐ Siemens AG will hold 59% and Gamesa will hold 41% in the post-merger entity. ☐ Merger of the entire Siemens Wind business with Gamesa to create a leading wind player. ☐ In India, Siemens Ltd. is not in the wind power business, only rendering engineering and designing services to Siemens AG. ☐ The board at its meeting on 5th December 2016 decided to sell the above business to a subsidiary of Siemens AG for Rs 75' effective January 1, 2017. Page 7 FY 2016, Analyst Presentation#8Operational Highlights Financial Analysis SIEMENS Page 8 FY 2016, Analyst Presentation#9Performance highlights Q4 and FY 2016 Financial performance highlights, INR figures in billions SIEMENS Orders -6.6% -21.7% +25.3% +19.4% 31"3 26"2 24"5 24"5 101"1 85"2 120"6106"8 Q4 15 Q4 16 FY 15 FY 16 Sales +10.2% -7.5% +2.5% +6.4% 105"4 92"9 102"8 87"3 29"9 29"9 32"3 27"1 Q4 15 Q4 16 FY 15 FY 16 Profit from Operations -5.4% -15.8% -0.1% -1.5% 7"6 7"5 7"0 7"0 2"3 2"1 2"0 2"0 All Divisions contributing to strong growth Book-to-bill: 1.15 Profitability stable at 7.1% Q4 15 Q4 16 FY 15 FY 16 Page 9 Total Operations Continuing Operations w/o MT & HC FY 2016, Analyst Presentation#10Sales Mix Industrial business w/o MT & HC (continued operations) Project & Product/System Page 10 87"3 92"9 39.5% 35.1% Export & Domestic 87"3 92"9 17.8% 16.2% 82.2% 83.8% 60.5% 64.9% FY 15 FY 16 FY 15 FY 16 Project Product/System Export Domestic SIEMENS (in Billion Rs.) FY 2016, Analyst Presentation#11Divisions Performance FY 2015 vs. FY 2016 Division Orders SEM SPG 18.0% SMO 19.0% SDF 12.3% SPD 9.6% SBT Page 11 42.9% 35.1% -11.8% SIEMENS Sales Profit from Operations (% to Sales) 2015 7.4% 8.9% 2016 7.2% 3.7% 2015 2016 2015 4.9% 13.1% 2016 6.1% 12.5% 9.3% 2015 8.2% 13.6% 2016 6.8% 2015 5.0% 2016 6.2% 2015 8.3% 31.8% 2016 6.5% FY 2016, Analyst Presentation#12Key Financials Exceptional item: Divestment of Healthcare in Billion Rs. SIEMENS Q4 Q4 FY 2015 FY 2016 FY 2015 FY 2016 New Orders 31"3 24"5 101"1 120"6 -21.7% 19.4% Sales 32"3 29"9 102"8 105"4 -7.5% 2.5% Order Backlog 95"9 99"5 95"9 99"5 3.7% 3.7% Profit from Operations 2"3 2"0 7"6 7"5 % to Sales 7.2% 6.5% 7.4% 7.1% Other income & Finance Costs 0"4 0"7 1"6 1"6 Exceptional items Profit before tax Profit after tax 0"7 29"9 7"8 29"9 3"4 32"5 17"0 39"0 2"2 24"7 11"8 28"9#13Exceptional items in Billion Rs. Profit on sale of MT business Profit on sale of Healthcare business Impairment for CP Factory (Test field) Halol impairment loss reversal SIEMENS FY 2015 FY 2016 7"1 0"0 0"0 30"3 g 0"0 -0"4 1"1 0"0 Impact on account of uncapping of gratuity limit -0"4 0"0 Total Exceptional Items Page 13 7"8 29"9 FY 2016, Analyst Presentation#14Balance Sheet in Billion Rs. SIEMENS FY 2015 +/- FY 2016 Net Capital Employed 51"3 28.4% 65"8 Trade Receivables Current (net) 30"2 -0.1% 30"2 Total inventories (net) 9"5 5.1% 10"0 Other Current Assets (mainly Project excess cost) and Long term trade receivables 10"9 -18.2% 8"9 Trade Payables -23"7 -7.3% -21"9 Advances from customers and Billing in excess -8"0 -16.7% -6"7 Provisions (excluding Employee provision and Dividend) -8"5 -4.2% -8"1 Cash and ICDs 23"7 62.1% 38"4 Fixed Assets 13"9 -8.5% 12"7 Advance Payment of Income Tax & Deferred tax 7"6 -45.4% 4"2 Proposed Dividend (including Tax) -4"3 -40.0% -2"6 Other NCE Items -0"1 0"8 Page 14 FY 2016, Analyst Presentation#15Major Capital Expenditure in Billion Rs. Capital Expenditure SIEMENS FY 2015 FY 2016 2"533' 2"962' Growth business 2"533' 2"730' therein: Capacity expansions 830' 1"046' Replacements 1"703' 1"684' EHS Page 15 232' FY 2016, Analyst Presentation#16Thank you IEMENS SIEMENS EMENS S Page 16 SIEMENS Ingenuity for life Naveen Mohan Siemens Ltd. Investor Relations 130, Pandurang Budhkar Marg, Worli 400018 Mumbai E-mail: [email protected] siemens.co.in FY 2016, Analyst Presentation