Welcome to Siemens Ltd.’s Analyst Meet Mumbai, … · SBT Siemens Building Technologies Pvt. Ltd....
Transcript of Welcome to Siemens Ltd.’s Analyst Meet Mumbai, … · SBT Siemens Building Technologies Pvt. Ltd....
Nov 07 1
Welcome to Siemens Ltd.’s
Analyst Meet
Mumbai, November 23, 2007
Nov 07 2
Outline of the Presentations
• Introduction
• Review of Business Operations J Schubert
• Financial Presentation P de Royer
• Future Outlook J Schubert
Nov 07 3
Two basic characters of business
1. Products & Solutions business
Products produced locally or imported
Solutions – technical knowledge to create special industry applications
2. Mega Projects
Delivery cycle ranges from 4 weeks to 4 years
Impacts order intake from year to year
Nov 07 4
SITS Siemens Industrial Turbomachinery Services Pvt. Ltd. SPEL Siemens Power Engineering Pvt. Ltd. SCF Siemens Corporate Finance Pvt. Ltd.
SISL Siemens Information Systems Ltd. TPSL Torrent Power Services Pvt. Ltd. BIAL Bangalore International Airport Ltd.
SIPS Siemens Information Processing Services Pvt. Ltd. Osram Osram India Pvt. Ltd. WDSIL Winergy Drive Systems India Pvt. Ltd.
SBT Siemens Building Technologies Pvt. Ltd. SHIL Siemens Hearing Instruments Pvt. Ltd. SECPL Siemens Enterprise Communications Pvt. Ltd.
SVAI Siemens VAI Engineering & Automation Pvt. Ltd. SVDO Siemens VDO Automotive Components Pvt. Ltd. SMSDL Siemens Medical Solutions Diagnostics Ltd.
AIL Automotive Infotronics Pvt. Ltd. Under Liquidation (non-operational) UGS UGS India Pvt. Ltd.
Siemens Nixdorf Informations Systems Pvt. Ltd. & Power Plant Performance Improvement Ltd.
Siemens Ltd. (SL)
Siemens Ltd. (SL)
55.18%Siemens AG, Germany (SAG)
or its subsidiariesSiemens AG, Germany (SAG)
or its subsidiaries
100%
SISL
44.82%
51% 79.32%
SIPS49%
100%
SITS Flender Ltd.
50%
SBT
SVDO SHIL
100%
SPEL
100%
Osram
100%
SCF
100%
TPSL
50%
50%
BIAL
40%
60%
100% 100%
WDSIL
100%
SVAI
50%
Structure of Siemens Companies in India – as on 16th Nov 2007
Others
20.68%
SECPL
100%
SMSDL AIL
Public Shareholders
(~ 4,500)
31% 50%
69% 50%
UGS
100%
Siemens in India has 19 legal entities Siemens Ltd. is publicly listed
PublicShareholders
(~ 95,000)
OthersTorrent Power Ltd.
Ashok Leyland
Ltd.
Nov 07 5
New Orders 101,600 115,703 14%
Turnover 60,323 93,786 55%
Profit Before Tax 5,835 9,869 69%
Profit After Tax 3,917 6,929 77%
Consolidated - Siemens Ltd, SISL, SIPS ,SITS, SPCNL (6 months ended March 07) & SBT (4 months ended Sept 07)
Rs. In million
2006 2007
Highlights - Siemens Ltd. Group
Nov 07 6
Rs. In million
2006 2007
Highlights - Siemens Ltd.
New Orders 82,025 101,070 23%
Turnover 45,103 77,268 71%
Profit Before Tax 5,055 8,742 73%
Profit After Tax 3,601 5,965 66%
UOV 75,258 94,074 25%
Dividend 190% 240% 1:1 bonus recommended
Nov 07 7
Total SL-Orders
0200004000060000
80000100000120000
2004/05 2005/06 2006/07
99%
Total SL-Sales
0
20000
40000
60000
80000
100000
2004/05 2005/06 2006/07
23%
40%
37% 64%
71%
48%
38%
Rs. In million
Base businesses have grown by 37%
Base Business Mega Project effect
Nov 07 8
External environment
Robust economic growth of over 9%
Favorable growth in the target segments such as Power, Industry including Transportation & Healthcare
Currency fluctuations gains
Internal strategies
Growth in our Base Businesses
Participation in Mega Projects
Reasons for our success….
Nov 07 9
Forayed into newer market segments & penetrated into B&C cities
Strengthened the portfolio though strategic acquisitions – like iMetrex Technologies & SITS
Focused on increasing the local value added structure & factory capacities to support growth
Growth in our Base Businesses
Investments of around Rs. 4 bn made last year
Nov 07 10
Participation in Mega Projects
Participated in select mega projects, both domestic & export - to feed the pipeline
Increased the export business to more than 30% of the total business
Mega projects generated higher volume of profits to finance investment plans
Mega orders on the export side reduce currency fluctuations on imports
Overall we have grown faster than the market & increased our market share
Nov 07 11
Energy
Industry
Healthcare
Information & CommunicationTransportation
Lighting
Business Segments
Business Segments
Nov 07 12
Healthcare
Transportation
Industry
Energy
Profits Sales TurnoverNew OrdersBusiness Segments
All business segments on track
* W/o Mega = + 24%
117%
48%
40%
27%
11%*
43%
246%
35%
216%
31%
10%
13%
Nov 07 13
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Nov 07 14
Comprises of Power Generation and PowerTransmission & Distribution
Power is crucial for GDP growth and high on Govt’s priority list
Only 54% addition of capacity in 10th plan
T&D sector grew well (12%)
Siemens Power segment posted a good result
Orders went up by 11% (by 24% without the mega order effect), Turnover increased by over 117%, Profits went up by 216%
Sales
19782
43008
0
10000
20000
30000
40000
50000
05-06 06-07
117%
Highlights:Power Segment
In Rs. million
Nov 07 15
Total Power-Orders
0
10000
20000
30000
40000
50000
60000
70000
2004/05 2005/06 2006/07
24%
Total Power-Sales
0
10000
20000
30000
40000
50000
2004/05 2005/06 2006/07
386%
11%
109%
117%
97%68%
37%
In Rs. million
Power business break upMega Orders+ Base Businesses
Base Business Mega Orders
Nov 07 16
Offers complete solutions & services for powerplants
Baroda Turbine factory commenced production in Jan’07
Completed 100% acquisition of SITS
Key Orders include
o Bhushan Steel & Strips order - Rs 290 mn
o First industrial GT order in India from MarutiSuzuki
o Biggest order in the Pulp & Paper industry from BILT Power - Rs 178 mn
Highlights:Power Generation (PG)
Nov 07 17
Offers solutions for all transmission anddistribution requirements
Bagged the largest contract in PTD worldwide for Rs. 40 bn in Qatar (Rs. 36 bn for India)
First transformer rolled out from the new transformer factory at Kalwa
o Initial investment of $50 mn for setting up factory
Key orders include
o PGCIL - Rs. 1,800 mn
o Electrification order for Andaman & Nicobarisland – Rs. 1,300 mn
o Reliance Industries Ltd. – Rs. 659 mn
Highlights:Power Transmission & Distribution (PTD)
Nov 07 18
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Nov 07 19
Comprises of Automation & Drives, IndustrialSolutions & Services and Building Technologies
Market Growth 11%
Growth in Retail, IT, ITES, Infrastructure, Hospitality, Manufacturing & residential buildings
High investments in Cement, Chemicals & Pharma, F&B, Automotive & Textile
Posted a good result with Orders up 43%, Sales increased by 48% & Profits up by 31%
Highlights:Industry Segment
Sales
18285
27102
0
6000
12000
18000
24000
30000
05-06 06-07
48%
In Rs. million
Nov 07 20
Offers a complete product and systems portfolio for automation in all industrial sectors
Orders up 15%, Sales up 36%, Profits up 9%
Retained leader position in most market segments
Forayed into new market segments
Key orders include:
o Rs 240 mn order from Dresser Rand
o Rs 215 mn order from Jaiprakash Assocaites
o Repeat order from Suzlon and Vestas worth Rs 1018 mn
Highlights:Automation & Drives (A&D)
Sales
12209
16555
0
5000
10000
15000
20000
05-06 06-07
36%
In Rs. million
Nov 07 21
Offers solutions and turnkey projects in the industrial and infrastructure sectors
Outstanding performance with Orders up by 96%,
Turnover up by 79%, Profits up by 63%
Leadership position in Metal & Power solutions
Breakthrough orders in oil & gas
Key orders include:
o Mcnally Bharat - Rs. 870 mn
o Morgan Construction Company - Rs. 750 mn
o Vedanta Alumina Ltd. - Rs. 813 mn
Highlights:Industrial Solutions & Services (I&S)
Sales
5320
9528
0
3000
6000
9000
12000
05-06 06-07
79%
In Rs. million
Nov 07 22
Offers solutions for Building Automation, Heating & Ventilation, Fire Detection, Security systems & Access Control
Orders grew 20%, Sales up by 35% and Profits increased 128%
Acquired 77% stake of iMetrex Technologies with complimenting portfolio
From Oct 1st, the business moved out into a separate legal entity – Siemens Building Technologies Pvt. Ltd.
Key Orders include:
o Rs 400 mn order from Reliance Retail
o Rs 300 mn order from IBM
o Rs 38 mn order from HPCL
Highlights:Building Technologies (SBT)
Sales
756
1019
0
300
600
900
1200
05-06 06-07
35%
In Rs. million
Nov 07 23
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Nov 07 24
Comprises of the Transportation Systems for Rail & Automotive for the 2 and 4 wheeler segments.
Indian Railways has emerged as one of the most profitable organizations during last 3 years
Emphasis on new technologies such as 3-phase traction was the main growth driver
Highlights:Transport Segment
Nov 07 25
Broad portfolio of solutions for the railway sector in the area of rail automation, traction equipment and electrification
Orders jumped by 246%; revenues increased by 40% & Profits up by 10%
First prototype of the Mumbai suburban rake was handed over to MRVC; now running on the tracks
Traction motor and invertor factory went on stream
Key orders
o 2,000 mn Prototype for IGBT based diesel locomotives
o Repeat order from Delhi Metro - Rs 1,663 mn
Highlights:Transportation System Division (TS)
Sales
2483
3467
0
1000
2000
3000
4000
05-06 06-07
40%
In Rs. million
Nov 07 26
Develops and builds intelligent products and systems for 2 wheelers, cars and commercial vehicles
Globally sold to Continental AG
Focus now on electronic components for cars and commercial vehicles
Setting up a new state-of-the-art electronic factory at Bangalore
Sales were flat due to a drop in 2 wheeler business
Successful in bagging good contracts in the commercial vehicle segment
Highlights:Siemens VDO Automotive (SV)
Sales
1240 1203
0
400
800
1200
1600
05-06 06-07
-3%
In Rs. million
Nov 07 27
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Nov 07 28
Sales
4138
5247
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2000
4000
6000
05-06 06-07
Portfolio offers a wide range of diagnostic and therapeutic equipment & complete hospital solutions
Orders increased by 35% & Sales rose by 27%; profits up by 13%
Captured higher market share by introducing new products and technologies
Key highlights include:
o Installed India’s first Dual Source CT at Breach Candy Hospital
o Commissioned a single largest MRI order for Government of Tamil Nadu
Highlights:Medical Solutions
27%
In Rs. million
Nov 07 29
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Nov 07 30
Offers a comprehensive range of communication systems, solutions, services & products for offices and enterprises.
From Aug 1, 07, Com EN is a separate legal entity, known as Siemens Enterprise Communications Pvt. Ltd., a 100% subsidiary of Siemens AG
Only 10 months nos. included in our books; However comparing 12 months nos, Orders grew by 29%; Turnover up 17%
Business retained its no.1 market position
Key Orders
o ASCON order worth Rs 118 million
o Rs 28 million order in Defense sector
Highlights:Communication Enterprise Networks
Sales1570
1841
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500
1000
1500
2000
05-06 06-07
17%
In Rs. million
Nov 07 31
Group Companies
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Nov 07 32
Software development across verticals likeIndustry,Telecom, Healthcare, Automotive etc.
SISL reached the Rs 1000 Cr milestone this year
Turnover was up 19%, Orders went down 26% & Profits were down by 5%
Set back in orders & profits mainly due to COM business
Worldwide, Software business re-structured under SIS - Siemens IT Solutions and Services
Development partner for all Siemens AG groups
Key Orders include:
o Delhi airport, Sun TV, BBC and MCGM
Highlights:Siemens Information System Ltd. (SISL)
Sales
860510236
0
3000
6000
9000
12000
05-06 06-07
19%
In Rs. million
Nov 07 33
Countries
Focus-sectors
Business
Siemens IT Solutions and Services: 43.000 Employees, ~ € 5" Sales
Customers
Focus
BICBusiness
Innovation Center
DIPDevelopment
Innovation and Projects
SBSSiemens BusinessServices
SISLSiemens
Information Systems Ltd.
PSEProgram and
System Engineering
IT Infrastructure-Mgmt Services and IT-Solutions
Healthcare, Airports, Media
Software andIT-Solutions, IT Services
Software andIT-Solutions, Consulting, SystemintegrationUtilities
UnitSoftware andIT-Solutions
30% internal
Switzerland
Public, Telco
Software, Consulting, Systemintegration, IT-Infrastruckture, IT Services
85% internal
IND, USA, GB, D
Public, Manufacturing
30% internal
40 Countries, e.g. D, OES, GB, ITA, USA
Telco, HealthcareUtilities
90% internal
OES, South-East-Europe, CHN, D, USA
Telco, Public
100% internal
Griechenland
SISL is one of the Five Pillars of SIS
Nov 07 34
Offers Back office customer contact services to Siemens companies globally and also third parties
Service areas include travel management, back-office accounting services
SIPS has over 2,600 employees
Orders increased by 21%, Turnover increased by 21%; profits up by 73%
Key Orders include:
o Siemens Energy Services PLC, UK for Utility services
o Siemens Canada for providing Accounts Payable and Cash Management services
Sales
8321010
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21%
Highlights:Siemens Information Processing Services Pvt. Ltd. (SIPS)
In Rs. million
Nov 07 35
Group Companies
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Nov 07 36
Engaged in the business of Service, repair and overhaul of Small Gas Turbines and rotating equipment
Now a 100% subsidiary of Siemens Ltd
New Orders up by 33%; Sales jumped by 272%; profits rose by 438%
Key Orders include:
o ONGC continued to be a key customer
o Received orders from L&T and Maruti
Sales
137
509
0
200
400
600
800
05-06 06-07
272%
Highlights:Siemens Industrial Turbomachinery Pvt Ltd (SITS)
In Rs. million
Nov 07 37
Provides telecom network equipment including supply, design and installation, and software development
Following the global decision, the business sold to Nokia Siemens Networks
Results for the 6 months from October to March are included in the consolidated results of Siemens Ltd. Group
Sales
3095
3095
4741
0
2000
4000
6000
05-06 06-07
53%
Highlights:Siemens Public Communication Networks Ltd.
In Rs. million
Nov 07 38
1. Quality of results is important & not volume
2. Continuing on the investment path with 3 factories in the ramp up phase; payback yet to begin
o Setting up new R&D centre at Kalwa, which is under construction
o Building additional software centre in Maharashtra
o Modernizing offices, ramping up manpower; upgrading technologies in factories
all these investments in the pipeline to gear up for the growth targets
Growth led investments ………
Nov 07 39
Over to Mr. de Royer
Nov 07 40
Positive year with growth faster than the market and increased market share
Market capitalization crossed the Euro 5.6 billion mark
Siemens completed 50 years of incorporation in India
Siemens has 18 factories + 3 under construction & 18,000 employees in India
In last 4 years, employee base in India increased from 10,000 in 03/04 to 18,000 in 06/07-a rise of 80%
To sum up ………
Nov 07 41
Manpower growth
10,00012,000
15,00018,000
0
4,000
8,000
12,000
16,000
20,000
2003/04 2004/05 2005/06 2006/07
No. of Employees
80%
Manpower growth by 80% in 4 years
Nov 07 42
GDP estimated to grow at around 9% & electrical market at 10%
Infrastructure to remain focus area for the Government
Trends in industry and healthcare will continue
Power scenario is a concern; calls for faster decisions & implementation
Another limiting factor - availability of skilled resources
Indian Economy – Our prognosis
Nov 07 43
Siemens’ outlook looks optimistic
“Siemens in India is a key part of the company’s global growth strategy, on par with China”- Peter Loescher, President & CEO, Siemens AG
1. Triple growth strategy for future
o Growth in the domestic market by penetrating into newer sectors & geographies
o Explore additional avenue of growth in the export market
o Siemens AG to source products & services from India for regional and global markets
Outlook for Siemens
Target - Double Sales in the next 3 years
Nov 07 44
2. Strategy to sustain a healthy bottom line
Enhance the local value added structure by developing a product strategy for low-cost products
Retain our core competencies and align with multiple partners – for higher output and lower costs
3. People strategy
Employees are the most critical resource that determines our success
Outline a multi-layered employee development program
Outlook for Siemens…contd..
Age 40-60 yrs
34%
Age <30 yrs
36%
Age 30-4030%
Employee Age Profile
Nov 07 45
Corporate Responsibility
Nov 07 46
Corporate Governance
Commitment to set the highest standard of
governance
Strengthened our processes to ensure full
compliance
Being a listed company, Siemens already follows
stringent processes
Business with ethics is the most important
Nov 07 47
Compliance is the top priority
Prevent… Detect… Act…… through clear rules, training programs, communication and clear responsibilities
… compliance violations through audits, reviews and monitoring
… with rigorous and appropriate measures in cases of compliance violations
Uniform, seamless and mutually complementary legal, compliance and audit processes worldwideCompliance must be part of our company culture and firmly anchored in all business processesUnlimited commitment to integrity and responsible action
A business based on the highest ethical principles –at all times and everywhere in the world
Nov 07 48
Giving back to society
CSR-Integral part of our business philosophy
Involve employees for active volunteering
Current Projects
o Tsunami relief
o St. Catherine’s Home, Mumbai – orphanage
o St. Mary’s Orphanage in Bangalore
o Seva Chakkara Ashrama
o Akshar Trust – school for deaf and dumb children
Further plan to extend initiatives to other cities including Kolkata.
Also employed 35 differently abled people in the main stream
Nov 07 49
Re-grouping of businesses
Globally, the businesses have been re-grouped into 3 key sectors
o Industry (A&D, I&S, SBT & TS businesses)
o Energy (PG and PTD businesses)
o Healthcare (Med business)
In India, operating divisions were separately reported and in future, it would be continued
Nov 07 50
Integrated technology company focused on three Sectors
Improved focusSectors Customer centric
Growth markets
Reduced complexity
Leveraged synergies
Cross-sectorbusinesses
IndustryBusinesses from
Automation and DrivesIndustrial Services and SolutionsTransportation SystemsSiemens Building TechnologiesOsram
EnergyBusinesses from
Power GenerationPower Transmission and Distribution
HealthcareBusinesses from
Medical Solutions Sie
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s IT
Sol
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nd S
ervi
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Sie
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s Fi
nanc
ial S
ervi
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Three Sectors
Nov 07 51
Thank You