130209 siemens ro

Siemens Transformers

Siemens Romania

CIPRIAN DUMITRASCU

Energy Sector

March 2013 – Siemens Transformers RomaniaSiemens s.r.l. 2013

Agenda

Market Overview

Performance of TR in Romania

Strategy and Outlook


Market Size

Population: 19,5 Mio GDP: 134‘‘787‘ EUR Currency: Romanian Lei (RON) Area: 237,500 km2

Capital: Bucharest (~2M people inmetropolitan area)

Country overview

Transformer Market

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

DTPT

Sources:

Own info

Market intelligence


Customer Overview

Transmission

Transelectrica

Production Hidroelectrica, Termoelectrica Nuclearelectrica

Grid Parameters Customers

HV: 400kV

HV: 220kV

HV: 110kV

MV: 20, 10, 6kV

LV: 0.4 kV

Various EPC and wind project companies, e.g.

Verbund

Enel Green Power

Energobit

ElcomexDistribution Enel , CEZ, E.ON , Electrica

Various Industry customers (coal, metals, chemical, paper, etc.)


Utilities – Purchasing Strategy

Company Acceptance for Siemens RC Factories Position of local

competitors Comments

EON ~ -

DT usually done by localsNo investment in PT

ENEL ~ ~Investments done & reduction expected; Tender frame contracts; Homologation mandatory, existing for DT. PT local and italian competitors

CEZ ~ - -

Change of strategy new vector group. Very tough commercial conditions.No investment so far in DTs. Tender frame contract for PT lost against local producer.

Electrica(state owned) ~ - -

Take cheapest option, no points on technical aspects or losses.

Transelectrica(state owned) ~

Tough technical requirements.Electronic tender as rule.

Production companies ~ - - Very limited investment due to lack of available funding.

Windcustomers

(direct or EPC based)

- -

Expandable businessInsist on having very good delivery : aprox. 6 months.Want cheaper solutionsSales force necessary


Agenda

Market Overview



Discussion


Order income + past years+ actual+ forecast

EPT013

ET TR

2011 2012 Forecast Q12013YTD

Forecast Q22013YTD

Forecast Q32013YTD

Forecast Q42013YTD

New Orders Direct Business with third parties 4,034 3,900 2,190 3,170 4,424 4,898Direct business with affiliated companies Intra Company Business 683 847 NEW ORDERS, DIRECT BUSINESS 4,717 4,747 2,190 3,170 4,424 4,898 Net revenue Direct Business with third parties 2,790 1,103 147 1,401 4,388Direct business with affiliated companies Intra Company Business 683 509 NET REVENUE, DIRECT BUSINESS 3,473 1,611 147 1,401 4,388 NEW ORDERS, International Business 17,984 6,319 1,803 7,200NET REVENUE, International business 17,428 11,248 2,452 9,200


Order Intake

Allocated Factories

Power Transformers Distribution Transformers

≤40MVA(class I)

≤200MVA(class II)

≥200MVA(class III, IV, VI)

Oil Filled(class XII)

GEAFOL(class IX)

STAL(STN)

STAL(KPT)

KPT DB(STAW)

DK(DB)

In 2010 and 2011, Siemens had more than 30% market share as IBV.

Every 2-3 years there is a low year, without significant market opportunities.

Currently, financing crisis means lots of delayed projects.

New government since end of 2012, uncertainty investment plan for the state owned companies.

Evaluation of renewable energy support scheme in progress, unknown result for business plan.

Uncertainty leads to delayed projects in renewable energy.


Competitor Landscape PT and DT

ElectroputereName

PT 110kV – 400kV

Scope Traditional RO transformer maker Always price agressive and on brink of bankrupcy,

but trying to gain back market share

Description

Retrasib PT 110-400kV

Better quality than Electroputere; Recently trying to bid for lots of export business in

CEE Won recent Tulcea Vest Project ( 3x250MVA )

Elerom DT & PT 110kV

Very herratic behaviour, active on some projects only

More active in one region of Romania (E.on)

DT& PT Poland and Germany factory for class 2 units, very aggressive Italy factory for class 1 Distributors strategy for DT

Schneider Market leader in DT, Competitive package combination with the MV

panels.

ETRA PT 110-400KV

Former supplier for Siemens industry projects Recently almost no activity in RO

ABB

DT


Current Projects

Transelectrica: 2x63 MVA, Bradu : 2x400MVA + 2x200 MVA + 2x16MVA; Wind business: 1x40MVA, 1x25MVA, 3x11MVA, 1x400MVA; Stejaru HPP: 7xPTs between 40 and 200 MVA Various small industrial customers for oil-filled and GEAFOL Distribution Transformers Directly from DB: panel builder B&K Electrosistem


Agenda

Market Overview




Business Outlook

Romanian economy stable within European Union area No political pressure against Nuclear or overall Energy plans

Unclarity regarding the support scheme by green certificates for Wind and Solar Power -> delayed projects;

Further growth expected (GDP + 1,5% p.a. in 2013-2017)

General market environment

Transelectrica: next frame agreement expected (5 pcs. 200MVA, 3 pcs. 400MVA, 2x100MVA shunt reactors)

Wind business 1000 MVA/year, for the next three years in case the legal frame remains unchanged;

Several CCHP projects in pipeline (Tulcea, Fagaras) – momentary on hold due to financial instability;

Upcoming projects


Support from factories

100 MVA Shunt reactor Mintia : a impressive collection of problems, delays at every possible stage.

Results: Customer penalty invoice in amount of 0’28 Mio Eur. Severe deterioration of Siemens image to the main transmission customer ( Transelectrica ) due to this project.

PN

Delivery time far greater then market expectations (4-6 weeks) Wrong factory allocation for dry types Technical documentation not in line with customer expectations

DK/DB

Proving that orders can be secured each fiscal year. Thanks for the constant help and support ! Main TS ( Tulcea Vest ) project in 2012 lost due to transformer prices promised before tender and not

confirmed during e-biding stage. Approximately 1 million euro difference for 3 pcs. 250MVA transformers, mainly due to transport costs.

KPT/STAL/STN


Feedback and wishes

Overall market PT and DT seems to be increasing , further „white elephants“ expected;

Public utilities tend to move to electronic auction, therefore strong price pressure;

Further investments of wind power plants are expected for the next 2-3 years – around 4x250MVA /year in case legal frame remains unchainged;

Demand side

No Chinese nor Koreean manufacturers active yet on the market ! Opportunity to be considered

Toshiba delivered 4x25MVA, SF6 MPT for Subway Project in Bucharest.

DT average delivery market requirement 4-6 weeks

Supply side

Currently high Siemens market share will be very difficult to defend; Market price adaptation is necessary;

We strongly insist not to reduce TR headcounts in the RC from 2 to 1 persons. We will see volumes dropping as a result.


Transformers

Thank you !Ciprian DumitrascuSiemens SRL

CEE RU-RO E TStr Preciziei, Nr 24, Corp H3,062204 BucurestiRomaniaPhone: +40-21-6296-628Fax: +40-21-6296-395Mobile: [email protected] www.siemens.ro


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