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FEB-04
World Class is our Objective
Erich R. Reinhardt, Group President
Medical SolutionsFinancial Market Day, February 17, 2004
2JAN-04FEB-04
We continued our profitable growth in FY03
FY97 � 98 acc. to HGB; FY99 � 03 acc. to US GAAP 1) Net income before tax; 2) excl. Dental Systems (divested in 1998);3) incl. Shared Medical Systems in Q4; 4) incl. 11 months Acuson;5) Group Profit included EUR 63 mill. gain from portfolio transactions
Group Profitin millionsof euros
Salesin billionsof euros
in % of sales 3.8 % 8.1 % 9.4 %(2.4) %
(84)
145
332
463
FY971) FY98 FY99 FY003)
4.9
4.13.8
3.42)
808
7.2
FY014)
11.2 %
FY02
13.4 %
7.6
1018
FY035)
15.1 %
1118
8.2 *7.4
8.7*4.1 4.1 4.2 5.3 8.4 8.4 7.88.7 *
Orders in billionsof euros
* Comparablebasis
3JAN-04FEB-04
We have increased Return onNet Capital Employed (NCE)
Group Profit Margin
FY01:21.0 %
FY02:29.8 %
FY00:14.5 %
8 %
10 %
12 %
16 %
18 %
14 %
20 %
1.5 2 2.51
FY03:35.8 %*
0 %NCE Turnover
6 %
4 %
2 %
* 33.8 % excl. gain from portfolio transactions
4JAN-04FEB-04
We are on track
24513.4
1,958
1,831
31.3
Q1 FY03
Orders
Sales
Group Profit% of sales
Employees (in 1,000)
in millions of euros
1,891
1,648
32719.8*
31.0
YoY
Q1 FY04
(3 %)
(10 %)
33 %
� Q1 FY04 vs. the same period in FY03:(excl. currency translation and portfolio effects)
- Orders increased 12 %- Sales increased 5 %
� Strong book-to-bill ratio (1.15)� Challenges:
- Development of USD vs. EUR- Price erosion
* 12.8 % excl. gain from portfolio transactions
Q1 FY04Highlights
5JAN-04FEB-04
Global competitiveness:Increased activities in low cost countries
Research & Development Production
2002
~ 1,300
2003
~ 1,800
20052002
~ 700
2003
~ 1,300
2005
~ 30 % of all production
employees~ 400
~ 1,070
� Development of syngo and Soarian software in Bangalore, India � Design and production of MR systems in Shenzhen, China� Design and production of CT systems in Shanghai, China� Production of hearing aids in Suzhou, China and Batam, Indonesia� Design and production of x-ray components in Goa, India� Production of ultrasound transducers in Kyongju-si, Korea
Examples:
Global Competitive-
ness
Customer Focus
Innovation
~ 33 %of all SW
developers
6JAN-04FEB-04
Platform strategy: Productivity and speed for us and our customers
Global Competitive-
ness
Customer Focus
Innovation
7JAN-04FEB-04
P
P
eopleProcesses
roductsP3
3.010billion euroscost productivity from 09/1997 to 09/2003
On-going cost productivity
- ProgramGlobal
Competitive-ness
Customer Focus
Innovation
8JAN-04FEB-04
Our strategy
Quality Costs
of healthcare delivery
through� Innovation� Workflow
optimization
Workflow optimization throughout healthcare continuum is required
Prevention/Early
DiagnosisDiagnosis Therapy
RehabilitationNursing
Home Care
IT is the backbone for integrated and efficient clinical and administrative processes
Innovation
Global Competitive-
ness
Customer Focus
9JAN-04FEB-04
Innovation
Global Competitive-
ness
Customer Focus
Our focus, our strength, our message
Proven Outcomes
10JAN-04FEB-04
We see a way for 30 % higher CT patient throughput with 10 % reduced lifecycle cost
We see a way to reduce the time for an MR tumor evaluation from acquisition to diagnosis by 50 %
We see a way to reduce medication turnaround time by 52 % and decrease medication errors by 35 %
We see a way to reduce turnaround time for lab and radiology results from 48 to 3 hours
Proven outcomes
Innovation
Global Competitive-
ness
Customer Focus
11JAN-04FEB-04
We are the leader in healthcare IT
Source: Company reports *) without �devices�
Siemens
McKesson
Web MD
Misys
Meditech
Cerner
GE *)
IDX
Per-Se
Eclipsys
The ten largest healthcare IT companies
Innovation
Global Competitive-
ness
Customer Focus
USD 1 bn
12JAN-04FEB-04
� No flight plans
� Each pilot had complete control
� No coordination
� Analogous to cockpit
� Only provide clinician with information
� Do not manage coordination of processes
� Fail to orchestrate care
Soarian: The only healthcare IT solution with workflow engine
Modern Flight ControlEarly Aviation
Soarian
� Orchestrates simultaneous healthcare processes
� Improves quality, consistency, efficiency for patients
� Provides tangible and persistent financial value
ConventionalClinical Systems
� Controls complete system
� Flight plans; flights centrally directed
� Constant tracking and correction
� Manages air traffic
- Safety - Coordinates resources
- Efficiency - Timeliness
Workflow engine:A quantum leap for
clinical systems
13JAN-04FEB-04
Straton Tube64 slice CT
Tim Artis dTA
We are the innovation leader.We continue to invest heavily in R&D
(> EUR 650 mill. in 2003)
14JAN-04FEB-04
Continuous Trendsetting
Innovations in MR
Innovation makes us stronger in MR
+69 %
Revenue(1998 - 2003)
+95 %
BusinessAsset
Turnover(1999 - 2003)
+6% points
MarketShare
(1998 - 2003)
Tim(Total Imaging Matrix)Innovation
Customer Focus
Global Competitive-
ness
15JAN-04FEB-04
� Imaging of systemic diseasese.g. metastases evaluation, whole body angiography
� �Zoom in, zoom out�flexible selection of field of view
Tim: Opening up an entire new range of clinical applications
Brilliantimagequality
16JAN-04FEB-04
Innovation makes us stronger in CT
Continuous Trendsetting
Innovations in CT
StratonTM TubeSpeed4DSensation16
First 16 slice CT
Sensation64 First 64 slice CT
Innovation
Customer Focus
Global Competitive-
ness
+122 %
Revenue(1998 - 2003)
+92 %
BusinessAsset
Turnover(1999 - 2003)
+10% points
MarketShare
(1998 - 2003)
17JAN-04FEB-04
We are the trendsetter in CT technology
� First 16 slice � Market leader: 800+ units sold� First 64 slice � Even higher resolution
� Even shorter scans
Speed4D
SOMATOM Sensation
� New benchmarks in �- X-ray-tube technology: Virtually eliminating cooling delays- Imaging speed: Fastest gantry rotation (0.37s) - Dose efficiency: Up to 66 % less dose via automated adjustment- Workflow efficiency: Elimination of manual reconstruction
� Pioneering new non-invasive examinations for early disease detection
Leader in Applications
Innovation
Customer Focus
Global Competitive-
ness
Heart Colon Lung
18JAN-04FEB-04
IT is the backbone for integrated and efficientclinical and administrative processes
Molecular Medicine
� Molecular markersfor pre-disposition
� Gene therapy
� In vitro-molecular diagnostics with- new technologies
(e. g. biochips)- new specificmarkers
� In vivo-molecular imaging with- new / combinedmodalities
- new contrastagents
- new applications
� Molecular designof new drugs
� Individualizedtherapy basedon geneticprofiles
� Molecular in vivo- and in vitro-controlof therapy progress
� Near patient-monitoring of health status
Healthcare IT enablesknowledge-based applications
Prevention Diagnosis TherapyRehabilitation
NursingHome Care
Innovation
Customer Focus
Global Competitive-
ness
19JAN-04FEB-04
In Vitro Diagnosis
� Co-development of a gene-chip system for integrated
- sample preparation
- amplification and- label free detection of
DNA on one platform
� Equity investment in a start-up company for point-of-care immunodiagnostics
� Development of a novel technology platform for integrated gene- and protein-based diagnostics on one system
Knowledge-Driven IT
� Integration of genomics data in PACS environment
� Development of a novel IT platform to- integrate all qualities of
medical data in one database system
- enable new database-driven computer-aided pattern recognition applications
- build a Clinical Decision Support System
Molecular Imaging
� Long-term partnership with Center for Molecular Imaging Research (CMIR) of Harvard Medical School
� Equity investment in a start-up to develop an optical tomographicsystem and novel molecular imaging agents
� Introduction of a fluorescent non-tomographic optical imaging system (bonSAI)
� Partnership on a small-animal, combined SPECT-CT system
Siemens Medical:Innovations in Molecular Medicine
We are on the forefront of new developments
Innovation
Customer Focus
Global Competitive-
ness
20JAN-04FEB-04
8.814.2 16.20.4
1.41.8
1.9
2.93.4
0.9
1.82.1
5.1
8.0
10.0
12.7
20.5
FY96 FY03 FY08e
6 % CAGR (2003-2008)
10 % Health Services
5 % Product Related Service
3 % Audiology3 % Electromedical Systems5 % Oncology Care Systems
2.5 % Imaging Systems(X-Ray, CT, MR, NM, US)
Global Market in billions of euros 54.0
41.0
17.1
Our market continues to grow
21JAN-04FEB-04
Wrap-up
On track
On-going cost productivity
Platforms
Proven outcomes
Leader in healthcare IT
Trendsetter (technology, applications)
Continued market growth
22JAN-04FEB-04
Siemens Investor Relations Team
Webpage: http://www.siemens.com Investor Relations
e-mail: [email protected]
Fax: +49-89-636-32830
Marcus Desimoni +49-89-636-32445
Constantin Birnstiel +49-89-636-36165
Christina Schmöe +49-89-636-32677
Claudia Wagner +49-89-636-33693
Disclaimer:This presentation contains forward-looking statements based on beliefs of Siemens' management. Suchstatements 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.
