© Siemens AG 2011. All rights reserved

MIT Manufacturing Summit

US Manufacturing impressions from a Global conglomerate

Cambridge, October 2011

Page 2 © Siemens AG 2011. All rights reserved

Innovation has been making Siemens strong for over 160 years

Outstanding innovation and sales development of Siemens AG, since 1847

First pointertelegraph

World's first pacemaker

from Siemens

Digital EWSDtelephoneexchange

W. v. Siemens develops Dynamo

Magnetom

"Synapse 1"

"Eurosprinter"

First Simatic

ICE3

Sensor "Fingertip"

Electrictrain

First Siemensradio

receiver

First trafficlight

ISDN"HICOM"

First GSMmobile phone with color display

First 256Mbit chip

18471847 18791879 '801924 19261926 19581958 19591959 19741974 '03'0318661866 19731973 '81 '82 '84 …'92

Start of productionof highly integrated

LSI circuits

64 kbitstorage

A company like Siemens can only be lastingly successful with technologically superior products. We must constantly produce innovations that give us an advantage over the competition.

Heinrich von Pierer,shareholders' meeting Jan 23, 2003

«

»

Sales, in logarithmicscale

Overview of Siemens origin

& growth

Page 3 © Siemens AG 2011. All rights reserved

Siemens has 4 Sectors, with 60,000 employees and $25 Billion in revenue in the US during FY10

Siemens Sector & Division setup, with employees & revenue (USD) for FY!0

Industry

Osram

Medium & Low Voltage

Industry Automation

Drive Technologies

Customer Services

Energy

Power Transmission

Fossil Power Generation

Renewable Energy

Oil & Gas

Infrastructure & Cities

Building TechnologiesImaging & IT

Workflow & Solutions

Diagnostics

Healthcare

Smart Grid

Mobility

Key FY10 informationGlobal Employees: 405,000US Employees: 60,000

Global Revenue: $104 BillionUS Revenue: $25 Billion

Overview of Siemens businesses

& size

Page 4 © Siemens AG 2011. All rights reserved

Current challenges for Siemens in the US

Identifying candidates & hiring for open positions

Remaining cost competitive

Ensuring continued innovations in both products & mfg processes

A review of Siemens Mfg landscape, shows opportunities & challenges exist in the US

US manufacturing overview

~3,000 open positions in US Majority are manufacturing related

Average potential salary ~$89,000

Refocus on US manufacturing

Exchange rates helping to maintain competitive US costs / investments

Perception that intellectual property needs to be preserved in US & EU

United States

Nearly 100 manufacturing sites across US All four Sectors & all of the divisions have US

manufacturing facilities

Locations in all 50 states

Sites originate from both investment & acquisition Limited return to US once off-shoring occurs

Germany

Majority of manufacturing capacity with continually heavy investments in automation

Off-shoring generally for non-critical components

Rest of World, mainly emerging markets

Traditional focus on low-cost, low-value mfg

Recent shift to local-for-local & local-for-global

Current opportunities for Siemens in the USSiemens Manufacturing Overview

US mfg overview& comparison

Page 5 © Siemens AG 2011. All rights reserved

Examples of global mfg strategies, resulting in an expansion of US-based mfg value-add

Global manufacturing strategies followed a process to obtain results

Identify required core competencies Generally based on market

differentiators

Can include considerations for IP & trade secrets

Evaluate existing capabilities & future demand

Determine location & workforce to deliver core competencies

Develop a detailed business case: Rationale for changes

Financial analysis (NPV, cashflow, P&L impact)

Project timeline

Risk assessment & mitigations

Energy Sector

Workshop footprint strategy

Energy Impacts

Opened a new site in the US Based on a manufacturing

innovation

Enhanced product portfolio, while reducing costs

Industry Sector

EBIT improvement & manufacturing best practices

Industry Impacts

Shifted high value-add work to US for customized products Increased focus on high margin

customized solutions

Low skill & high-run-rate work remained in Mexico facility

ResultsProcess & evaluationManufacturing strategies

Mfg project examples

that I led

Page 6 © Siemens AG 2011. All rights reserved

Diagnosis of a disorder (e.g. infection, cancer, …)

Localization of disease (e.g. stenosis, tumor, …)

Reveal multi-morbidities

Genetic pre-disposition Patient metabolism / immune

reactions Molecular specificities of

the disease Stratification for treatment

Assessment of similar cases Structured outcome analysis Decision support systems Standards of Care

Imaging, Diagnostics Molecular applications Healthcare IT

Siemens’ Healthcare portfolio designed to enhance patient outcomes from diagnosis to treatment

Understand the patient‘s disease

Understand the patient‘s biology

Leverage state-of-the-art databases

Siemens Healthcare portfolio overview

Current area ofresponsibility

Page 7 © Siemens AG 2011. All rights reserved

Increasing demand for healthcare services Diverse & scattered customer base

Growing & aging population Emerging rural healthcare High growth in emerging markets

Market trends Need for improved healthcare

Trends in Healthcare require improvements in innovation & manufacturing

Cost pressure (e.g. Deficit Reduction Act)

Financing problems New structure of competitors

Disease orientation Healthcare IT

Innovations needed to drive customer & Siemens cost reductions

Improved processes & workflows

New applications & clinical pathways Flexible and customer-specific

IT solutions

Healthcare market trends with needed responses and statement from Eric Spiegel

Trends in my area focus on innovation

& manufacturing

Page 8 © Siemens AG 2011. All rights reserved

Closing statement – invest in education & training

“The old jobs are not coming back. We need to invest in education and training to get people prepared

to fill these high-skilled, high-wage jobs of the future”

– Eric Spiegel, president & CEO of Siemens Corp (NAFTA)

Closing statement as said

by CEO of NA