Siemens Financial Services Singing in the Rain or…How to Win in Tough Times

1. Siemens Financial ServicesSinging in the Rain or…How to Win in Tough Times

2. First the adverts….. • About Siemens and Siemens Financial Services (SFS)

3. SFS is an integral part of Siemens Sectors Industry Energy Healthcare • Drive technologies • Industry automation • Building technologies • Mobility • Lighting (OSRAM) • Industry solutions • Fossil power generation • Renewable energy • Oil & gas • Energy service • Power transmission • Power distribution • Imaging & IT • Workflow & solutions • Diagnostics Cross-Sector business Siemens IT Solutions and Services Siemens Financial Services

4. SFS divisions at a glance Status: September 30, 2009

5. Business performance Return on Equity (ROE) pretax 2005 2006 2007 2008 2009 Income before Income taxes (IBIT) in EUR mn Income before Income taxes (IBIT) in EUR mn 2005 2006 2007 2008 2009

6. How to Win in Tough Times Status: Sept. 30, 2009 • How does SFS achieve this? • Its not about leverage but about basic business truths: • The biggest truth is: • Either you are exploiting change, or.. • change is exploiting you

7. 12 Winning Tips Status: Sept. 30, 2009

8. Tip 1: Communicate with your teams! Status: Sept. 30, 2009 • Communicate! • Spread the Good….the Bad……. • Cheerleading is not enough • Trust your staff with information • you will be amazed at the ideas • they will generate if they • understand the issues

9. Tip 2: Increase Vision….Narrow Focus! Status: Sept. 30, 2009 • Broaden your vision……narrow your focus. • Tough times command that you stop living in the past • What resources do you have? • Use them wisely.Stop wandering about in areas you entered in the good times but didn’t really understand • (and still don’t). • Exit. Fast. • Develop a focussed passion.

10. Tip 3: Nurture Customers…and fire customers! Status: Sept. 30, 2009 • The customer is NOT always right…sometimes you do know better. • Love the right customers not the wrong ones • Who really provides you with the profit? Who is actually just an expense? • Remember Lifetime return concept • Help the ones you love through • the meltdown…they will remember • Once your customer base is rationalised • concentrate on winning good ones from • your struggling / wrong footed competitors • (as we do)

11. Tip 4: Increase freedoms…and clarify boundaries! Status: Sept. 30, 2009 • Don’t batten down the hatches • by trying to take over all the control. • People need to feel they are responsible too. • But don’t duplicate. • Tell people where the boundaries are. • Tell them their responsibilities. • Then step aside and let them get on with it!

12. Tip 5: Expand creativity….and kill ideas! Status: Sept. 30, 2009 • Everyone should have passion • and want to change things. • But how? • Forums, • ‘Skunk Groups’, • ‘Barrier Boards’, • Gatekeepers with passion • that can kill bad ideas • but encourage new ones. • Remember: NOTHING is • Achieved without CREATIVITY

13. Tip 6: Take more Risk…and eliminate Risk! Status: Sept. 30, 2009 • Less money means less chances to try…so we need to focus our risks. • Poor managers do across • the board cuts….. • the best managers do • radical cuts in some areas • in order to increase spending • in others

14. Tip 7: Treat people properly – it’s a people business! Status: Sept. 30, 2009 • What does that mean? • Do you know the name of the cleaner? • Do you listen to people or talk (at) them? • Do you do MBWA or MBEM? • Are you focussed on ‘soft’ issues or ‘hard’ numbers? • Do you want to see your people do better than you? • Are you tolerant of big (genuine) mistakes and intolerant of mediocre successes? • Are you prepared to give when it counts?

15. Tip 7: Treat people properly – it’s a people business! Status: Sept. 30, 2009 Above all: Do you give people the credit they deserve? "I praise loudly. I blame softly." (Catherine the Great, 1729-1796.) "The world is divided into people who do things, and people who get the credit. Try, if you can, to belong to the first class. There's far less competition." (Dwight Morrow, 1935.)

16. Tip 8: Treat the business as if it is your own Status: Sept. 30, 2009 • (even if it isn’t) • Fact of life: employees act differently to owners • Therefore: • Corporate management acts • differently from an entrepreneur • It’s all about incentives • Key issue: separation of ownership from • management • (where is the entrepreneurial spirit?)

17. Tip 9: Manage for the Long Term Status: Sept. 30, 2009 • Its about being proactive v reactive • SFS consistent strategy for years • “Success usually comes to • those who are too busy to be • looking for it” • Henry David Thoreau Henry David Thoreau

18. Tip 10: Plan for the worst…lead for the best Status: Sept. 30, 2009 • Disaster planning is more than IT systems • cash / credit lines • employee exodus • Environment • Economic • Legislation • Short term / • Long term

19. Tip 10: Plan for the worst…lead for the best Status: Sept. 30, 2009 • Warren Buffett: • “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

20. Tip 11: Crisis is a positive opportunity Status: Sept. 30, 2009 • (if you are prepared for it) • those who had cash during credit crunch (and were prepared to use it) are much much richer • (Warren Buffett net worth up $47 billion over last 12 months)* Forbes 03.10.10 • Important message: ACT CONTERCYCLICAL • Buy in a crises: • Business, customers , property, hire great people in crisis • Crisis is the time to prepare for growth!

21. Tip 12: Start Early! Status: Sept. 30, 2009 • The most important tip of all: • winning in a crisis can’t be done in a crisis • – it starts in the good times not in the bad

22. Crises are nothing new – not even the recent credit crunch June 2010

23. Appeared in Life Magazine 1929 June 2010

24. Published 1931 June 2010

25. Market conditions are NOT new….our grandparents experienced credit crunch before…… Invest in the lows….sell in the highs…..or…if you admire Warren Buffett….just do the former! June 2010

26. “The time to repair the roof is when the sun is shining” John F Kennedy June 2010

27. “There cannot be a crisis next week. My schedule is already full” Henry Kissinger June 2010

28. Andy Swadlo CEO Central & Eastern Europe Siemens Financial Services Tel: +44 (0)1753 434030 Mobile: +44 (0)7929 207717 Thank you for listening Siemens Financial Services June 2010