innovation, profit and growth: we deliver what we promise. · 2019-12-04 · innovation, profit and...
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Innovation, profit and growth:We deliver what we promise.
Wolfgang Dehen, Group PresidentJohann Löttner, CFO
Financial Market Days, May 12, 2003
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 2
Business Overview: Our organizational structure
Customers
Siemens VDO Automotive in 2002:Sales: EUR 8.5 billion, Employees: 43,000
Powertrain
Dr. Egger
� Gasoline Systems
� Diesel Systems
� Air Fuel Modules
� Engine Actuators & Emission Management
� Fuel Supply Systems
� Sensors
� Electronics & Drivetrain
Trading & Aftermarket
Löttner
� Trading & Aftermarket
Interior & InfotainmentHauptmann
� Information SystemsPassenger Cars
� Infotainment Solutions
� Commercial Vehicles
� Cockpit Modules & Systems
Chassis & Carbody
Dehen
� Body & Chassis Electronics
� Restraint Systems,Safety Electronics
� Electric Motor Drives
� Electronics Manufacturing Services Market Segment Units:
Independent Aftermarket, Special Original Equipment Manufacturers, Fleet, Original Equipment Services
Business Overview
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 3
The world’s leading OEM are our top ten customers
Top 3: 45% Top 5: 62% Top 10: 80%
VW GM DC PSA Ford BMW Renault Intern.* Hyundai Fiat
Sales 2002Business Overview
* International (Motor and Comm. Vehicle Manufacturer)
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 4
One face to the customer
� KAM ensures effective local customer support
� Sales and marketing staff are SV’s “corporate ambassadors” to the customer
� One member of staff coordinates all of a customer’s inquiries
� Quick reactions and handling processes are ensured
� Our innovative solutions help our customers to differentiate themselves from their competitors
Our Key Account Management with close contact to our global customers is a crucial success factor
Business Overview
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 5
Our performance and serviceare highly appreciated by our customers
SV compared to benchmark
Better than…
Equal to…
Worse than …
the best competitor
- 0.5
1
0.5
0
Sales
LogisticsProduction
R & D
In the survey, the informant was asked to evaluate the divisions on a scale of -5 to +5. The above results show the aggregated data for the Business Units and per criteria.
Relative Competitive Position
Quality
Business Overview
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 6
Worldwide presence for our customers
North andCentral America
Canada
Mexico
USA
South America
Argentina
Brazil
Europe
Austria
Belgium
Czech Republic
Denmark
France
Germany
Italy
Netherlands
Poland
Romania
RussianFederation
Slovakia
Spain
Sweden
Switzerland
Turkey
UK
Asia / RoW
China
India
Indonesia
Japan
Korea
Malaysia
Singapore
Australia
Business Overview
22% 70% 8%Sales proportionFY 2002
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 7
Information
Carbody
Powertrain
Safety & Chassis
Products
Ex-VDO ex-Siemens AT
Siemens VDO derives its strengthfrom being a perfect fit
30%
29%
35%
4%2%
37%
43%
2%
10%
8%
Asia other Europe NAFTARoWGermany
ex-VDO ex-Siemens AT
Regions
only 10% overlap
Business Overview
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 8
Joined forces to become number 1in automotive electronics
RobertBoschGmbH
6.0
Siemens VDO
4.0
DelphiAutomotiveSystems
5.0
Denso Corp.
3.5
VisteonCorp.
4.0
VDO
2.0
Siemens AT
2.0
TRW Int.
2.5
1) w/o pure tire and captive suppliers; only automotive sales
Sales of competitors compared to Siemens VDO (in billions of euros)
Business Overview
Source: Deutsche Bank (Figures as of CY 2000)
From 6th to 3rd position in automotive electronics
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 9
The market offers attractive opportunities for us
Software content
Hardware
Software
Value OE Market~ € 270bn
Electronics / Electricalscontent
Hardware
Software
Value OE Market~ € 125bn
2000
Market Situation
Siemens VDO will profit from increase in electronic content
2010
4%
22%
13%
35%
Source: Mercer
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 10
Siemens VDO is well-positioned in the most promising business fields of electronics
Driving & Braking
2003 2010
The main growth drivers in automotive electronics are:
� Infotainment & communication for improved mobility
� Increased safety for road users and environment
� Comfort & convenience
� Improved performance in driving and braking
Market Situation
Infotainment & Communication
26%
34%
Safety
30
46
Comfort & Convenience
24
68
38
62
Infotainment & Communication
33
92(in billionsof euros)
Source: Mercer
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 11
The increasing demand for automotiveelectronics compensates low market growth
Market Situation
2000 2001 2002 2003 2004 2005 2006 2007
~65.0
Source: Siemens
57.655.5 55.3
6.77.6
8.5
Total Market (in millions of vehicles)
SV Sales (in billions of euros)
-3.6%-0.4%
+13.4%+11.8%
55.0
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 12
Suppliers have good opportunitiesto gain new market shares
30%
50%
70%
50%
2000 2010
R&D Share
65%75%
35%25%
2000 2010
Total Share
OEM
Suppliers
Suppliers‘ value added per vehicle is rising
Market Situation
Source: VDA (Association of German Automotive Industry)
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 13
A strong product portfolioincites further growth
~ 60% in #1 or #2 positions
2002
~ 50%
~ 10%
~ 30%
~ 10%no. 1
no. 4 or below
no. 3
no. 2
> 85% in #1 or #2 positions
2007
no. 1
no. 4 or below
no. 3
no. 2
Market position
85% of our product portfolio will be in #1 or #2 positions by 2007
Market Situation
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 14
Taking the lead with first-to-marketinnovations
20001995 2005
Diesel CR with Piezo
3D-Camera (CMOS) for Occupant Detection
Valvetronic
Electrical Parking Brake
Active Noise Tailoring
Tire Guard
Keyless Go
Intelligent switching unit Cockpit
Module
P-sensor for side airbag
Mechatronicmodule for AT
Gasoline DI with Piezo
Advanced Weight Sensing
Integrated Driver Information System IDIS
Modular, scalable upgradable SW platform (TLA)
Digital Tachograph
Finger print sensor
IAFM Module
Integrated Multi Media System
1st Europe gasoline DI
Earlier “first to markets” :• Speedometer - 1901• Metal substrate catalyst - 1987• Immobilizer - 1993• In-car navigation (Philips) - 1994
HUD
Content onDemand
Growth with innovation
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 15
Innovation and systems integrationare drivers for profitable growth
We are highly innovative
Innovation
Diesel Piezo
Complete Projects
We have excellent capacity to manage complex projects
2
8 RadioRadio
Navi Audio/TV Phone Entertain
Java-based TLAIntegration
We have the capability of integrating advanced systems
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 16
Powertrain: Intelligence for improved performance
� GasolineSystems
� Diesel Systems
� Air FuelModules
� EngineActuators& Emission Management
� Fuel SupplySystems
� Sensors
� Electronics &Drivetrain
NOx Sensor
Actuator forE-Gas 5
Examples of our innovations
DieselPiezo CommonRail (PCR)
Actuator for VVT
� We integrate electronics, electrical equipment and mechatronics to create intelligent systems
� We reduce fuel consumption and minimize emissions
� We enhance engine performance and motoring comfort
� We are a partner for innovation in the field of fuel injection systems for gasoline and diesel engines
Key competence areas
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 17
With innovative technology Siemens VDO is profiting from theworldwide diesel boom
0
1
2
3
4
5
6
7
8
year
quantity [Mio.]
0%
10%
20%
30%
40%
50%
96 97 98 99 00 01 02 03 04 05
Diesel share in Europe grows to 50 %
direct diesel injection replaces indirect injection
Common Rail systems occupy 60 %
Diesel share in Europe 60%
70%
80%
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 18
Interior & Infotainment:Perfect information
� Information Systems Passenger Cars
� InfotainmentSolutions
� CommercialVehicles
� CockpitModules &Systems
Head-up display
BMW iDrive
Examples of our innovations
Graphics-capableinstrument cluster
Virtual Reality
� We are the leading partner in innovation for automobile information and communication
� We develop leading-edge technology for an optimum presentation of information
� We are a full-service partner for the integration of complete cockpits
� We support the driver by setting new standards in ergonomics and operation
� We integrate complex individual functions in easy-to-operate overall systems
� We network multimedia systems with telematics and Internet functions
� We leverage Siemens’ unique position in telematics
Key competence areas
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 19
Top Level Architecture (TLA) –The modular approach to more functionality
Hardware
Human Machine Interface
� Separated devices � Optimized Human Machine Interface (HMI)
� Best functionality
� Software butno hardware updates
� Infinite hardware and software updates
� Integration of 3rd parties‘ applications
Yesterday Today Tomorrow
Stand-alone solutions Integrated solutions Top Level Architecture(TLA)
Navi Audio/TV Phone Entertain
Java-based TLAProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 20
Chassis & Carbody:Where safety and comfort meet
� Body & ChassisElectronics
� RestraintSystems,SafetyElectronics
� Electric MotorDrives
� ElectronicsManufacturingServices
Camera-basedoccupant detection
Passive Start and Entry System (PASE)
Examples of our innovations
Tire Guard Pressuremonitoring system
Yaw rate sensor
� We are developing an intelligent safety network for people, vehicles and the environment
� We improve active and passive driving safety
� We optimize energy management and vehicle architecture
� We reduce space requirements, weight and system complexity
� We improve personalized comfort
Key competence areas
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 21
Trading & Aftermarket:Special services and solutions
� Independent Aftermarket
� Special Original Equipment Manufacturers
� Fleet
� Original Equipment Services
VDO CD tuner
Examples of our innovations
VDO Dayton navigation system
� We have a sales-channel-structured trading organization
� We offer attractive audio and navigation devices for retrofitting
� A broad product range increases efficiency for fleet management and commercial vehicles
� Customer-driven development of small series, e.g. for industry, commercial vehicles and leisure marine
� We sell genuine replacement parts for passenger cars plus services
� We develop advanced e-commerce applications
� We open up new business fields in the service area with “Intelligent Content on Demand” (C-IQ)
Key competence areas
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 22
Opening up new business fields: Intelligent content on demand
POS
PhoneFAX
Web
SMS
Customer pays for individual use only!
Customer names NaviID, desired option(s) and required period
Siemens VDO Backbone delivers individual Access Key(s) against payment
Customer receives DVD or CD bundle every 6-12 months free of charge
ProductPortfolio
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 23
Financial overview
Group profit(in millions of euros)
Sales (in billions of euros)
Financial Overview
1) Including VDO May to Sept. 01
Group profitmargin
FY 01 1) HY 03FY 02
5.7 4.38.5
(261) 19265
(4.6)% 4.4% 0.8%
Employees 44,000 44,00043,000
R&D (in millions of euros) 533 355778
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 24
top+WIP - The key to success
WIP ensures profitable growth
Management
Communication
Manufacturing
Benchmarking
Portfolio
R & D
SG & A
Asset Management
Material
Quality Targets
Programs
Strategy
Structure
Financial Overview
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 25
A solid basis for profitable future growth with the top+ WIP program
5%
-6' -60'
-158'
+18'
-36'
+68'
-6'
(4.6) %
Group profit
+ 0.5 %
Challenges in merger year� Decline in
automotive market� Price erosion� Cost increase� One time costs
for disinvestments
Successful enactment of top+WIP program� Restructuring production
network� Portfolio optimization� Additional improvement
by four initiatives
-14'
+73'
Financial Overview
2001 2002 2003Year
Improvement in Return on Sales
target Operation 2003: 5-6%
+119'
Group profitmargin
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 26
With clearly defined measures and rigorous implementation, we achieved a massive cost reduction
top+ WIP cost reduction measures
TCR 7.8 % 8.9 %
2002 2003Year
Total costreduction(in millions of euros)
Of whichmaterial (%)
52 %
700(actual)
46 %
~ 700(target)
Financial Overview
TCR = Total Cost Reduction Rate (net)
~ 8 %
2004
~ 700(target)
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 27
Material cost reduction is the main driver of top+ WIP
Total costproductivity
Material
> € 2.0bn
Financial Overview
� Bundling significant volumese.g. electronic components
� Using purchasing power of Siemens AG
� Improved supplier management
� New sources in low-cost countriese.g. China
� E-bidding
� Flexible purchasing volumes
Major improvement levers in purchasing
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 28
Optimization business portfolio
Stop unprofitable developments
� Concentrate R&D on projects with fast pay-back
Sell non-core businesses
� Focus on core competencies: Electronics and mechatronics
� Examples: Sale of wiring harness production, Hydraulik-
Ring, Air outlets, etc.
Exit businesses
� Examples: Complete tank systems, JIT/JIS assemblies
(brought into joint venture with Faurecia)
Financial Overview
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 29
Initiatives to gain new momentum for further improvement
Quality Initiative
Total quality approach: zero tolerance for defects
PM@SV (Project Management Initiative)
Improvement of project management
SWI@SV (Software Initiative)
Reach CMMI* 3 level in systems integration and software development
Design-to-Cost Initiative
Target costing to improve margins
Financial Overview
* CMMI (Capability Maturity Model Integration)
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 30
We deliver what we promise.
Summary
� Reach the goals of operation 2003Short term focus
� Achieve best-in-class quality� Reach profitable growth� Secure Number 1 and 2 positions in all competence areas� Expand business in NAFTA and Asia
Strategic focus
� Become customer’s first choice for automotive electronics and mechatronics by innovations with high-end customer benefit
Customers
� Structured, transparent and efficient innovation process� Strengthen advanced and base engineering� Secure improvement of efficiency and increase in Group profit
margin by rigorous enactment of top+WIP program
Operational Excellence
Employees� Involvement of personnel is our main driver to achieve a
quantum leap in innovation throughout the whole company
Strategic Outlook
Business Overview
Market Situation
ProductPortfolio
Financial Overview
StrategicOutlook
May 2003 31
Webpage: http://www.siemens.com Investor Relations e-mail: [email protected]: +49-89-636-32830
Marcus Desimoni +49-89-636-32445
Eckhard von Münchow +49-89-636-33173
Christina Schmöe +49-89-636-32677
Andreas Schwab +49-89-636-36165
Claudia Wagner +49-89-636-33693
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.
Group profit definition:
Group profit is defined as earnings before financing interest, certain pensions costs, income taxes and certain one-time 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 www.siemens.com
Siemens Investor Relations Team