Facts & Figures: The Present and Future of ICN. Thomas Ganswindt, Group President Michael Kutschenreuter, Chief Financial Officer

Transcription

1 Facts & Figures: The Present and Future of ICN Thomas Ganswindt, Group President Michael Kutschenreuter, Chief Financial Officer Financial Market Days, May 13, 2003

2 Cleaning house Clean up Rebuild Harvest Innovation Net profit Assets Information and Communication Networks 2

3 Delivering on our targets Achieved Sept. 30, 2002 Achieved March 31, 2003* Targets by end of FY03 * Reduce total costs by (in billions of euros) Reduce headcount by (in thousands) Reduce working capital by (in billions of euros) Reduce number of manufacturing sites by *Cumulative Information and Communication Networks 3

4 Rebuilding Clean up Rebuild Harvest Innovation Growth Customer orientation Market share Information and Communication Networks 4

5 IC Networks position and goals Carrier Enterprise Position! No. 1 in carrier switching! No. 2 in carrier-grade IP Convergence! No. 2 in Broadband Access! No. 2 in SDH transport segment! No. 1 in enterprise voice switching! No. 1 in Real Time Communications (IP Convergence) Goals for FY2005! Top 3 player in NGN Metro! Drive growth in service business and applications! Drive growth in service business and applications Investing into the future 90% of R&D in focus areas Information and Communication Networks 5

6 Focusing on growth areas! Next Generation Switching! Next Generation Access! Next Generation Optics! Real Time Communications! Services and applications for carriers and enterprises Information and Communication Networks 6

7 IC Networks structure Customers Local Companies Products, Services and Solutions Products, Services and Solutions Manufacturing and Logistics Information and Communication Networks 7

8 Building blocks of our carrier strategy Services Applications Services Complete portfolio of services Lifecycle services Professional services Managed services Open platforms Applications Billable services e.g. video-on-demand, fixed line SMS and MMS Open platforms SURPASS modular architecture for NG Switching NG Access NG Optics Information and Communication Networks 8

9 Open platforms reduce CAPEX and OPEX Services! SURPASS delivers cost-efficient bandwidth in backbone (Metro DWDM)! Win against tough competition in largest optical growth market Applications Open platforms! First true NGN platform for U.S. cable industry with voice-to-text and text-to-voice messaging over cable! Groundbreaking win in cable segment! Contract for comprehensive network upgrade with platform that enables later migration to packet-based networks! IC Networks displaced competitor! End-to-end NGN solution with Juniper equipment! Further penetration of Brazilian market Information and Communication Networks 9

10 Applications generate new revenues for carriers Services Applications Open platforms! Low-touch user administration users select and activate services themselves! Telenor able to generate new revenues in a saturated market! Roll-out of high-speed connectivity and attractive Internet and video services to consumer! New broadband customer in a strong growth market! Broadband access technology and network management solution! Global footprint and end-to-end portfolio were mandatory for customer! High-performance SDSL enables DT to target SME customers, e.g. video services! High customer satisfaction led to follow-up contract Information and Communication Networks 10

11 Reliable service pays off for our customers Services! System Care, an all-inclusive maintenance package (including software), secures high performance level of customer's network! Successful launch of System Care service Applications Open platforms! On-demand network expansion, featuring process reengineering, just-in-time production, delivery and implementation! Responsiveness to market manages risk and reduces OPEX! Remote and on-site maintenance of multi-vendor infrastructure with responsibility for operational performance! Largest out-tasking contract for carrier services in Latin America Information and Communication Networks 11

12 Building blocks of our enterprise strategy Services Applications Services Comprehensive Real Time Communications service portfolio! Lifecycle services! Professional services! Managed services Open platforms Applications Integration of Real Time Communications in business workflow Open platforms Real Time Communications Information and Communication Networks 12

13 Open platforms reduce CAPEX and OPEX Services Applications Open platforms! Standardizing worldwide communications (including the U.S.) with HiPath 3000 and 4000 platforms to deploy new applications! Migration of 18,000 users to IP secures future and reduces total cost of ownership! Hipath 4000 platform with 5,200 ports supports 1,600 rooms and rich set of hotel features! Groundbreaking high-profile project in the US hospitality segment! HiPath 4000 platform with TDM and IP telephones; Phon nodes deployed to accommodate additional users! Performance and features of platform were key differentiators against competitor's offering Information and Communication Networks 13

14 Applications boost productivity Services! HiPath MetaDirectory solution synchronizes digital identities of 355,000 GM employees! Reduced administration costs; directory data is always current Applications Open platforms! Consulting and design of a global call center, as well as workforce management! Global footprint and coordination of third parties and local partners were key! Migration of a traditional system to an IP-ready communications system; installation of a Customer Care Center! Integration of the existing system and fast ROI were key Information and Communication Networks 14

15 End-to-end services create attractive business models for our customers Services! Managed services contract enables Volvo to focus on core business! ROI within 1 year Applications Open platforms! Centralized system management requires fewer person hours! Excellent local support was key differentiator! Communications network with 30,000 users, 430 networked HiPath 4000 systems! Services and centralized applications! Investment protection was crucial Information and Communication Networks 15

16 Second Generation IP delivers value Our technology agreements with leading IT companies drive 2gIP innovation Value created 2gIP* 1gIP* IP communications applications IP communications infrastructure Future IP value creation will be based on business process productivity and -differentiation Current focus of IP value creation is on operating cost reductions and improvement of asset efficiency *=First/Second generation IP Time Information and Communication Networks 16

17 Acquisitions, alliances and divestitures (I) Offer to acquire Cycos to integrate complementary skills and strengthen our portfolio of real-time communications applications Teaming in various go-to-market initiatives leverages our joint offerings in the areas mobility ( Anywhere Concept ), IP Convergence and CRM and promotes customer adoption of our ROI-oriented Real Time Communications strategy Joint CRM solutions; complementary services with business process and IT consulting; integration of front office applications, communication process consulting and integration services for Real Time Communications solutions Information and Communication Networks 17

18 Acquisitions, alliances and divestitures (II) Divestiture of Siemens Network Systems Limited, with activities covering entire lifecycle of data networks, to Kohlberg Kravis Roberts & Co. L.P. Sale of Unisphere's carrier IP routing activities to Juniper Networks is basis for strategic partnership with Juniper Networks that enables us to provide end-to-end solutions to our customers Information and Communication Networks 18

19 Leveraging the synergies of our enterprise and carrier businesses Carrier End-to-end solutions and applications for large enterprises, cable operators and carriers Providers generate new revenues Enterprises gain productivity Enterprise Open platforms Standards Information and Communication Networks 19

20 Global organization, local action " Sales and Service in more than 160 countries " 17,000 ShareNet* users in more than 70 countries " 9 networked Regional Network Care Centers " Regional R&D centers *ShareNet = Knowledge Management tool Information and Communication Networks 20

21 Some of our enterprise customers who want us right there with them Information and Communication Networks 21

22 Some of our carrier customers who want us right there with them Information and Communication Networks 22

23 Key figures Q2 FY03 Change in % in millions of euros YoY QoQ New orders 1,689 (22) (13) Sales 1,679 (37) (7) Group profit (147) 6 2 New orders HY03 Change YoY in millions of euros in % 3,629 (24) Sales Group profit 3,483 (298) (33) (6) Information and Communication Networks 23

24 Carrier and enterprise split Carrier New orders Sales Group profit Q2 FY03 Change in % in millions of euros YoY QoQ 837 (27) (20) 797 (48) (13) (180) (1) (14) Enterprise New orders Sales Group profit Q2 FY03 in millions of euros Change in % YoY QoQ 871 (10) (2) 887 (16) (0.2) Information and Communication Networks 24

25 Gross profit margin Operational gross profit margin (excluding one-offs) total and by customer segment, index 100 = Q IC Networks Carrier Enterprise Price decline IC Networks 0 Q102 Q202 Q302 Q402 Q103 Q203 Despite price decline, operational gross profit margin remains at Q102 level Information and Communication Networks 25

26 Reduction of functional costs Operational functional costs (excluding one-offs), index 100 = Q Operational functional costs Sales Q102 Q202 Q302 Q402 Q103 Q203 PACT measures show traction Information and Communication Networks 26

27 Vendor financing exposure in millions of euros % reduction Q301 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Information and Communication Networks 27

28 Net working capital and turnover ratio 1000 in millions of euros % reduction Net Working Capital Turnover Ratio *TR *TR (29.1) Q102 Q202 Q302 Q402 Q103 Q203 *TR = turnover ratio Information and Communication Networks 28

29 Steady improvement in accounts receivable Accounts receivable net in millions of euros % reduction *TR 8.0 *TR 6.7 Q102 Q202 Q302 Q402 Q103 Q203 *TR = turnover ratio Information and Communication Networks 29

30 Six consecutive quarters of inventory reduction Net inventory without advance payments in millions of euros 2,500 2, % reduction 1,500 1, *TR 8.6 *TR 6.0 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 *TR = turnover ratio Information and Communication Networks 30

31 Summary of financial results Group profit Working capital Q2 FY 03 in millions of euros (147) (273) Net cash from operating and investment activities Net capital Depreciation/CAPEX 38% Information and Communication Networks 31

32 Harvesting the fruits of our efforts Clean-up Rebuild Harvest Innovation Customer relationships Streamlined processes Balanced portfolio 09/ / / / /2005 Information and Communication Networks 32

33 Siemens Investor Relations Team Marcus Desimoni Eckhard von Münchow Christina Schmöe Andreas Schwab Claudia Wagner Webpage: Investor Relations Fax: Group profit definition: Group profit is defined as earnings before financing interest, certain pensions costs, income taxes and certain onetime items, which do not relate to the business performance of the Groups. See "Financial Reports/Fiscal 2003, Quarter 2/Financial Statements" at our Investor Relations website under Disclaimer: This presentation contains forward-looking statements based on beliefs of Siemens' management. Such statements reflect the company's current views with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results to be materially different, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products, lack of acceptance of new products or services and changes in business strategy.actual results may vary materially from those projected here. Siemens does not intend or assume any obligation to update these forward-looking statements. Information and Communication Networks 33