A&D - Trendsetter in Innovation

Transcription

1 A&D - Trendsetter in Innovation Helmut Gierse, Group President Automation & Drives Financial Market Days, May 13, 2003

2 A&D business activities Products! PLC! Switchboards! Circuit Protection! Process Instruments and Analytics! HMI! Motors! MES Products! etc. Systems! Control Systems! PLC-, CNC-, DCS- Systems! Drive Systems! Bus Technologies! Software Systems! etc. Solutions! Complete Factory Automation for " Automotive " Chemicals " Pharmaceuticals " Food & Beverage! Motion Control Solutions The consistency of our products and systems allows industrial and electro-technical solutions with high economic benefit for our customers Automation and Drives 2

3 A&D strategic goals All business units in #1 or #2 position Increase EVA (economic value added) in all business units (cost of capital: 9%) Group profit margin target: 11% - 13% Working capital turnover: 6.5 Long term Sales growth: two times market growth (market growth ~2.5% p.a.) Automation and Drives 3

4 Performance drivers Build on clear global #1 position Leading company active in manufacturing and process automation Technology trendsetter in innovation Extend regional coverage: Asia; USA Optimize cost structure and processes A&D continuously uses all levers to improve profitability Automation and Drives 4

5 A&D business activities Low voltage control and installation technologies Market Characterization! Broad market fields in all industries, private and commercial construction! Low volatility in business cycles, moderate growth rates over a long time! National standards and short time to delivery need global presence and sales by local distributors Sales Highlights ! Solid #2 position! Continuous innovation of products! Extended use of software and bus technology in billions of euros! Optimizing and restructuring US operations Market slowdown due to weak economic environment in building markets Automation and Drives 5

6 A&D business activities Motion control Market Characterization! Customers in all industry segments! Strong cyclicity due to capital spending! Trend to substitute mechanical automation solution by mechatronics! Highly fragmented markets in motor business field Sales Highlights ! #1 position in the widespread field of motion control and drive systems! New motion control system Simotion! New drive platform Sinamics! Improvement of cost position for large motors in billions of euros A&D is a world leader for motion control components and systems Automation and Drives 6

7 A&D business activities Manufacturing automation Market Characterization! Widespread applications in all industry segments! Continuous trend to machinery automation! Further growth due to impact of sensor technology! Great importance of installed base! Long term system pre-definition by customers Sales Highlights in billions of euros! Strong #1 position! Simatic IT-framework for consistent MES-solutions! Component based automation! New system concept in fail safe technology A&D is the clear market leader in factory automation systems Automation and Drives 7

8 A&D business activities Process automation Market Characterization! Cyclicity in business growth due to capital expenditure in process industries! High importance of engineering know how! Highly concentrated market in DCS technology! Large variety in field of instrumentation products! Trend to hybrid automation Sales in billions of euros Highlights! Improved and scalable control system PCS7 for small to very large batch processes! Completion of portfolio for field devices and analytics! Concentration of engineering know how in a new business unit A&D is aiming at a solid No. 3 position in process automation Automation and Drives 8

9 Competition and market shares in A&D s business activities Low Voltage Control and Installation Technologies Motion Control Siemens A&D Schneider El. ABB GE Eaton 9% Siemens A&D 11% 17% Mitsubishi 6% 7% ABB 5% 6% Rockwell 5% 5% Fanuc/GEF 4% Manufacturing Automation Process Automation Siemens A&D Rockwell Mitsubishi Schneider El. Omron 14% Siemens A&D 6% 6% Emerson 14% 4% ABB 13% 3% Honeywell 11% 3% Yokogawa 6% Figures 2002 (estimated) Automation and Drives 9

10 A&D business figures Q2_02 Q2_03 Orders thereof international 9,065 5, % 8,728 5,373-4% 2,168 2,155-1% Sales thereof international 8,947 5, % 8,635 5,341-3% 2,133 2,034-5% Group profit in % of sales % % % % Net Cash from operating and investing activities 533 1, Capital Spending in % of sales % % % % Research & Development in % of sales % % Employees (in 1,000) in millions of euros Automation and Drives 10

11 Innovation: To raise our customer s benefit Speed up machining and accuracy Minimize downtime, service and maintenance Reduce time and cost for engineering and start-up phase Enhance quality of machining output Reduce life cycle costs of machinery and plant investment Improved competitiveness and profitability of our customers lead to increasing sales and new orders for A&D Automation and Drives 11

12 Our philosophy Totally Integrated Automation (TIA) and Totally Integrated Power (TIP)... ERP Enterprise Resource Planning >=110kV MES Manufacturing Execution System Medium Voltage Automation TIA A&D TIP PTD SBT Low Voltage Threefold Consistency! Data Management! Engineering! Communication Threefold Customer Benefit! Cost Reduction! Time Advantage! Efficiency Advantage... is consequently developed and extended since 1996 Automation and Drives 12

13 A&D: Technology trendsetter in innovation Sirius 1FK7 Mobic Simatic.Net PCS7 Sinamics Simatic S7 PC based HMI Pro Tool Component based Automation Sinumerik 840 Simodrive 611 Windows- Based HMI Simotion Nearly every year one major innovation besides numerous improvements and redesigns/updates for more competitive and cost reduced products and systems Automation and Drives 13

14 Continuation of setting trends in technology: A&D-MES products in a framework strategy MES-World (today) ERP (SAP etc.) Implementation within A&D ERP (SAP etc.) ERP-Interface Detailed Production Scheduling SIMATIC IT Framework Resource Management Product Definition Management Process Monitoring Production Dispatching Production Execution Manual Operations Production Tracking Historical Data Management Automated Control (QA) Product Analysis Process Analysis Production Analysis Resource Management Production Dispatching Production Tracking Production Dispatching Production Analysis Process Analysis Automated Control IT Components SIMATIC IT Components We shape the industrial standard with our products in the quickly growing MES-market Automation and Drives 14

15 Automation platform solutions vs. best of breed product solutions Enterprise Resource Planning (ERP) MES-System (SIMATIC IT Framework) Control Systems (SIMATIC S7, PCS 7) Inbound Logistics Primary Process Secondary Process Outbound Logistics PLC based DCS based Motion Control based PLC based Industrial Networks (PROFIBUS, Ethernet) Actuators (Motors, Drives) and Sensors (Simotion/Sinumerik) Auxiliary Processes: Electrical Power Distribution, HVAC, Building Automation... Within the TIA concept different kinds of processes can be handled with one automation philosophy Automation and Drives 15

16 High quality and cost effectiveness in large parts production Out of a 3,200 kg aluminum slab a 50 kg bathtub for the new Airbus A380 will be milled in 31.2 hours Bathtub! Stability and maximized weight reduction due to thin-walled structures! Improved surface quality! Time optimized machining! Eco friendly production processes Innovative parallel-cinematic machine concept with CNC-functionality of Sinumerik 840D Integrated engineering chain from Catia CAD/CAM system to CNC-Control by NURBS interface High speed cutting maximizes material removal rate Dry run saves about 80,000 l cooling lubricants Close collaboration between end-user, machine tool builder and automation technology provider reduces machining time and costs Automation and Drives 16

17 Oct. 01 Jan. 02 Apr. 02 Jul. 02 Oct. 02 Jan. 03 Apr. 03 Jul. 03 Oct. 03 Simotion: Starting a new story of success Simotion Start-up: faster than expected Controllers Project Mix Controllers Oct. 01 Jan. 02 Apr. 02 Jul. 02 Oct. 02 realized planned Jan. 03 Apr % replacement of competitor solutions 10% new machine design 10% improved Siemens solutions Customer Benefit Through Cost Reduction 15% 15% 20% 40% 10% -15% Logistics Assembly R&D Mechanics Electronics 12% 15% 18% 17% 38% Simotion successfully replaces competitor solutions in the field of mechatronic production machinery Automation and Drives 17

18 Sinamics drive platform: Economic values Reduction of complexity Reduction of R&D expenses parts -30% -40% -30% -15% old target achieved old target achieved Market entry Reduction on product costs Sinamics G150 large drive cabinets Sinamics S150 large drive cabinets -30% -33% Sinamics S120 modular drives Sinamics G110 compact standard drives old target achieved The platform concept leads to reduction of product costs and advantages in asset management Automation and Drives 18

19 China: Attractive market for A&D Bn. USD Bn. USD Bn. USD Industrial Production Export Volume Industry Import Volume Industry Industrial Growth Rates China! Production 16% p.a. 4%! Imports 12% p.a. 6%! Exports 14% p.a. 6% Development of A&D in China! Sales 2002 approx. 300 millions of EUR! Growth : 34% p.a. Germany For comparison: German Industrial Production 2000: 1,200 billions of USD! Increase share of local value added from 25% (1998) to 50% (2002) The development in the Chinese industry especially in production requires A&D s global presence with an increasing local value added Automation and Drives 19

20 Toolbox Business driver scorecards Benchmarking Leadership and collaboration ebusiness Quality Innovation Asset Management Cost effectiveness Implementation of the Best practice sharing Sales stimulation tools ensures our success Automation and Drives 20

21 A&D Optimization of cost structures and processes in A&D divisions cross-divisional activities! Benchmarks! Productivity! Time to market! Logistics! Quality management! ebusiness! A&D automation platform! Asset management! Headquarters II! Increase of effectiveness/ efficiency in sales (incl. sales stimulation program)! Internationalization/optimization of value creation structure! Process standards rollout Leverage of vertical synergies Leverage of horizontal synergies With the program we find all hideouts for unnecessary expenses and activities and fix well defined process standards Automation and Drives 21

22 Levers in profitablity Continuous improvement in structure and processes... Asset Management! Reduce capital expenditure! Enhance outsourcing! Optimize logistics Debtor / Creditor Management! Enhance factoring! Tough cash management Procurement! No Maverick buying! Pooling purchases! Sourcing in low cost countries! eprocurement approx. 1/3 of total... are main levers for A&D s net cash generation of more than 1 billion EUR in 2002 Automation and Drives 22

23 Europa Ame ricas Asia /Pa cif ic Africa, CME, CIS Customers: Account management Number of Account Teams ~ 470 Africa, CME, CIS Asia/Australia Americas Europa Cross-Group Order-Growth through APP +*) in different Segments Growth of orders year to year with AM-customers Automotive 8% Chemical & Pharma 4% 100 Food & Beverage 20% Oil & Gas 57% Segment Boards Food & Beverage Automotive Chemical & Pharmaceutical Industry Oil & Gas Metal & Mining Pulp & Paper Airports *) Account Plan Process + In segments served by Account Management orders grow faster than the market Automation and Drives 23

24 Account management: Complete solutions for the automotive industry PTD Systems, complete solutions and services for power supply and energy management A&D! Press shop! Logistics! Body shop! Production management! Assembly shop! Quality management! End of line testing! Maintenance management! Powertrain! General contracting! Conveyer solutions I&S Maintenance, auxiliary process management and auxiliary industry facility management Complete cross-group industry solutions through our sector development boards Automation and Drives 24

25 Summary and outlook Automation and Drives... The Power of Integrated Automation! Trendsetter in Innovation! Growth! Increase EVA! Optimize cost structure and processes... to enhance outstanding customer value Automation and Drives 25

26 Glossary A&D Automation and Drives I&S Industrial Services & Solutions APP+ Account Plan Process+ IQ-Sense Intelligent Sensors CAD Computer Aided Design IT Information Technology CAM Computer Aided Manufacturing MES Manufacturing Execution System CE Consumer Electronics MV Medium Voltage CIS Commonwealth of Independent States NURBS Non-Uniform Rational B-Splines CME Central and Middle East OEM Original Equipment Manufacturer CNC Computerized Numerical Control PG Power Generation DCS Distributed Control Systems PLC Programmable Logic Controller (SPS) ECOFAST EMC ERP EVA HMI HV HVAC Energy and Communication Field Installation System Electro Magnetic Compatibility Enterprise Resource Planning Economic Value Added Human Machine Interface High Voltage Heating, Ventilating and Air Conditioning PTD R&D SBT SD TIA TIP TS Power Transmission and Distribution Research and Development Siemens Building Technology Siemens Dematic Totally Integrated Automation Totally Integrated Power Transportation Systems Automation and Drives 26

27 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. Automation and Drives 27