Business Development in South Eastern Europe The strategies and learnings of Siemens in CEE

1. Business Development in South Eastern Europe The strategies and learnings of Siemens in CEE Maximilian MairhoferSiemens AG Austria

2. Siemens in Central and Eastern Europe 61 mio. Consumers 524 bill. EUR GDP (4,3% growth rate) 33 bill. EUR Siemens-market (5,6% growth rate) 8.996 mio. EUR order intake 7.516 mio. EUR sales (thereof 58% export) 30.254 employees Source: Central Bureau of Statistics, Year 2006

3. Vision and Strategy Critical Success Factors in Business Development 1 Attractive Markets and Favorable Business Environments to compete in 1 1 1 2 3 4 Innovative Products, Solutions and Services to succeed with Leaders and Employees to realize

4. Attractive Markets and Favorable Business EnvironmentInvestment and Growth need outside Stimulation 1 • Investment Climate • Stable political and legal conditions • Liberalized markets and privatization as drivers for investment • Openness towards Foreign Investment • Technology • Demand for modern technology • Secure Energy Supply and Resources • Legislation and Funding • Short project decisions and approval processes • Stable conditions for long-term investments(taxation, tariffs etc.)

5. Vision and Strategy Critical Success Factors in Business Development 1 Attractive Markets and Favorable Business Environments to compete in 1 1 1 2 3 4 Innovative Products, Solutions and Services to succeed with Leaders and Employees to realize

6. 6,5% Industry Energy Healthcare Innovative Products, Solutions and Services to succeed 2 Sector Divisions • Industry Automation • Motion Control • Building Technologies • Osram • Industry Solutions • Mobility • Fossil Power Generation • Renewable Energy • Oil & Gas • Service Rotating Equipment • Power Transmission • Power Distribution • Imaging & IT • Workflow & Solutions • Diagnostics

7. Critical Success Factors in Business Development 1 Attractive Markets and Favorable Business Environments to compete in 1 1 1 2 3 4 Innovative Products, Solutions and Services to succeed with Vision and Strategy Leaders and Employees to realize

8. Slovakia 1994 Croatia 2002 1994 1994 Slovenia 1996 1999 2004 Bosnia & Herzegovina Serbia(incl. Montenegro) Romania Bulgaria Region CEE The Vision: Development from Siemens AG Austriainto a crossnational network – Siemens CEE 3 Total Investment of Siemens AG Austria in CEE: > 73’ million € Total Business Volume booked since 1995: > 7”7 billion €

9. 230.480 First step: establish a local set-upAdded Value of a regional company 3 3 Cross-Group Projects Bundling of Group Portfolio & Sector Approach PROJ 1 PROJ 2 ...... ....... 2 Local Services and Solution Business Value Add in Cooperation with local Companies A&D I&S TS ...... SIS ....... A&D 1 Marketing and Sales Sales of Products and Solutions + Sales Channel Management I&S TS SIS

10. Development of the local market 3 • Step 1: Large infrastructure projects as entry point to local presence • Step 2: Build-up of sales, project management, technical and service resources • Step 3: Commitment to local presence via R&D- and production-facilities • Step 4: Investment in exogeneous growth Subotica Belgrad Nis Podgorica Pristina

11. Development of the Country-Organisation through further investments 3 • Step 1: Large infrastructure projects as entry point to local presence • Step 2: Build-up of sales, project management, technical and service resources • Step 3: Commitment to local presence via R&D- and production-facilities • Step 4: Investment in exogeneous growth • Regional Company • Branch Office • Software-Development • Production • 579 employees • 56 in SW-development • 334 in production • 189 in sales Subotica Belgrad Nis Podgorica Pristina

12. An Example: Public LightingA Success Story in Business Development 3 • Modernisation, Reconstruction, Maintenance, Operation and Energy Management • Combination of technical and financial engineering • Savings potentials of up to 60% - modernisation paid out of existing budgets • Contracts ranging from 8 to 20 years • Close cooperation with local companies • Digital monitoring in local dispatching centers • Bratislava • Brno • Most • Zlin • Teplice • Sliven • Sibiu • Neusiedl

13. Public investment priorities for the region CEE Transportation: transeuropean transport networks, airports and strategies for urban mass transit 3 Environment: waste management, water treatmentand air pollution control Healthcare: hospitals, medical technology, optimization of non-clinical processes Public Administration: border control, tax collection, land register, IT and telecommunication infrastructure Energy: transeuropean networks, power generation, (renewable energies) and energy efficiency

14. Siemens in Moldova Highlights • Rehabilitation of Moldavian Regional Public Hospitals and Establishing of the New Private Medical Centers • Complete Multi-Step Modernisation of the Lighting System for the International Aiport „CHISINAU“ Siemens s.r.l., Moldova Overview 2007 New Orders (in million EUR) 1,5 Sales (in million EUR) 0,6 Employees 5 Vladimir Voronin, President of Moldova and Professor Mirchea Sofroni, Head of Moldavian Ontological Institute in front of the Siemens CT delivered to Moldova via IAEA (International Atomic Energy Agency)

15. Critical Success Factors in Business Development 1 Attractive Markets and Favorable Business Environments to compete in 1 1 1 2 3 4 Innovative Products, Solutions and Services to succeed with Vision and Strategy Leaders and Employees to realize

16. THANK YOU FOR YOUR ATTENTION