16 Siemens

For internal use only / Copyright © Siemens Industrial Turbomachinery AB 2007. All rights reserved.

SIEMENSOil & Gas and Industrial Applications Services

A successfull global aftermarket organisation

Claes UebelSiemens Industrial Turbomachinery AB

December 10For internal use only / Copyright © Siemens Industrial Turbomachinery AB 2007. All rights reserved.

Group / Region / DepartmentAuthor

Agenda

SIEMENS IN Brief

SIEMENS Oil & Gas and Industrial Applications ServicesOrganisation, business, heritageMission, Vision, Strategy

RegionalisationPrinciples, LevelsBusiness Charter End to End processes Certification of key functions

Long Term ProgramsStructure Remote support

Summary



SIEMENSIn brief

3 Sectors 15 Divisions

■ Industry Automation■ Drive Technologies■ Building Technologies

■ Oil & Gas ( EO )■ Fossil Power

Generation (EF)■ Renewable Energy (ER)

■ Imaging & IT■ Workflow & Solutions■ Diagnostics

Indu

stry

Ener

gyH

ealth

care

■ Osram■ Industry Solutions■ Mobility

■ Energy Service (ES)*■ Power Transmission (PT)■ Power Distribution (PD)

* Financial reporting through EO, EF & ER

Siemens is a truly global company with more than 400 000 employees in more than130 countries with a profitable turnover exceeding 50 Billion Euro ( FY2009/10 )



Oil & Gas and Industrial Applications ServicesSynergies are leveraged by regional cooperation and global support

Organizational Set-up

E S1)

E S SF2)

FossilE S TC3)

TurboCareE S SO4)

Industrial Applications

Compressor

TrentonDuisburgHengelo

MediumGas Turbine

Finspong

Steam Turbine

NurembergDuisburg

EssenFinspong

BrnoTrenton

SmallGas Turbine

Lincoln

4 Product Lines

5 Regions with geographical responsibility

RLA Latin America

RNA North America

RME Middle East / Central Africa

REU Europe / South Africa

RAS Asia Pacific

1) Energy Service Division 2) Business Unit: Fossil Power Generation3) Business Unit: TurboCare 4) Business Unit: Industrial Applications / Oil & Gas 5) Profit & Loss

RNA

RegionNorth America

RLA

RegionLatin America

REU

RegionEurope /

South Africa

RME

RegionMiddle East /Central Africa

RAS

RegionAsia Pacific

5 Regions provide geographical view of Siemens business>14 000 employees



Portfolio

OEM1) service market growth is 6.5%2)

Major growth is foreseen in the medium gas turbine market (15-60 MW) OEM1) market splits into 37% Oil & Gas, 17% Power Generation, 5% Petrochemical and 41% Industry.>75% market share on own fleet

Market

Key figures (fiscal 2009)

Oil & Gas and Industrial Applications ServicesService Business Unit at a Glance

Service for Siemens oil & gas and industrial applications (OEM)1)

Comprehensive service for gas turbines(< 60MW), steam turbines (< 200 MW), compressors, generatorsService categories: spare parts, long-term programs, overhauls and repairs, modernization and upgrades (Revamps), refurbishment, lifetime extension, remote monitoring, training & consulting

1) Original Equipment Manufacturer

4 000 employees37.900 machines installed in 172 countries 18 service shops

2) CAGR FY08 - FY16 (Compound Annual Growth Rate)



Oil & Gas and Industrial Applications ServicesDifferent main locations and heritage united into one organisation

20001990198019701960 2003

KWU AG

Industrial Turbines

DemagDelaval

AlstomABB

BBC ASEA

ABB AlstomPower

AlstomGEC Alsthom

GEC

AEG

Westinghouse

Mannesmann Demag

Delaval

Power Generation

Industrial Applications

2006

KK&K Turbogroup

KWU

2007

E S SOProduct

Lines

Steam TurbinesCompressors Gas Turbines

Nuremberg (D), Duisburg (D), Essen (D), Frankenthal (D), Finspong (SE), Brno (CRE), Hamilton (CA), Săo Paulo (BR), Trenton (US)

Duisburg (D), Leipzig (D), Frankenthal (D), Hengelo (NL), Helsingør (DEN), Trenton (US), Springfield (US)

Finspong (SE), Lincoln (UK)

2009

Energy Service

Oil & Gas and Industrial

Applications Services(E S SO)

Service Fossil (E S SF)

TurboCare(E S TC)

Alsthom

Ruston

Fans Zweibrücken (D), Bad Hersfeld (D)

Energy Oil & GasPower Generation

Oil & Gas and Industrial

Applications

(New Unit Business)

(Aftermarket Business)

Gas Turbines (E O GT)

Steam Turbines (E O SU)

Process Compression (E O PC)

Oil & Gas Solutions (E O OS)



Oil & Gas and Industrial Applications Services> 50 different fleets from 15 different locations

Lincoln

Finspong

Trenton

Nuremberg

HengeloGas Turbines

Gas Turbines

Steam Turbines

Steam Turbines

Steam Turbines

SGT-100 (Typhoon)SGT-200 (Tornado)SGT-300 (Tempest)SGT-400 (Cyclone)HurricaneTD 4000TE 500TF 1200L21CL51CTA-ClassTA 1250TA 1500TA 1750TA 2500

TB-ClassTB 3000TB 4000TB 5000TB 5400

EM ClassEM 27EM 610BEM 85AEM 85B

RB211 PackagesERB 122ERB 124ERB 124C

Olympus PackagesEO 2

SGT-500 (GT35)SGT-600 (GT10B)SGT-700 (GT10C)SGT-800 (GTX100)GT 120GT 140GT35PPP3/4GT200CentaurMars

Delaval (T)

Delaval (H)

Compressors

Compressors

Delaval (T)Delaval (BFP)

Delaval (H)Delaval (BFP)

HamiltonSteam Turbines

WestinghouseFujiMHI Teaming Agreement

Steam TurbinesJundiai (Taubate)Steam Turbines

SST-50SST-100SST-200SST-300SST-400SST-600Brazil Single StageKRSTALBBC

SST-500SST-600SST-800BKTuW-0TuW-1TuW-2TuW-3TuW-4TuG-5TuW-7

Compressors

AX/ARCVKCHVKPVPVKVK/HVKSEZ/KGPRTSEEMHMVEWSC

SST-100SST-200SST-300SST-400ABMKSTUGTHVKRG&VAEGBBC

SST-700 (ST6)SST-900 (ST5)ST6VAXATPSTRadial Flow TurbineATM/TMTGMarine LavalHeat Pumps

BrnoSteam Turbines

Old PBS

BarodaSteam Turbines

SST-50 (Single stage)SST-50 (BRABB)SST-150 (Karlovak)SST-300 (ATP)

St. PetersburgGas TurbinesRecon GTK-10

Steam TurbinesAustrian Energy (AE)

Vienna

EssenSteam TurbinesGMBAEGTuG-6TuG-8

GeneratorsMotors

Avon PackagesEA 1EA 2EAS 1EAS 1-33EAS 1-34EAS 1-35AP 1AP 4DEA 2

AberdeenGas Turbines

Finspong

DuisburgSteam Turbines



Oil & Gas and Industrial Applications ServicesProduct Lines & Regions with entrepreneurial function

Optimizing / maximizing the order volume (incl. EBIT quality) of the respective Product Line, with particular focus on advanced salesProduct Line specific strategy, portfolio development, R&D, marketing, manufacturing footprint and technical fleet dataProviding Product Line related support (e.g. engineering, marketing, training of Field Service) to Service Regions ( Sub Regions, Countries, Home markets)

Key responsibilities

Optimizing / maximizing the wall to wall order volume (incl. EBIT Quality) of all 4 PLs within the assigned Service Region

Regional service strategy, the allocation of resources and the development of local capabilities in line with the PLs and the regionalization strategy

Strategic direction of its sub regions and direct interaction with Clusters

PL(Product Line)Energy Service RegionsStructural

element



Green technology focusNew unit deliveries / product quality

External ChallengesPolitical situation in key countriesCurrency exchange rate volatility

E S SO overall target is to achieve2x GDP growth and additional EBIT growth per annum

Divisional profit of above xx%OEM market share of above 75%95% on time delivery90% of all offers in less than 10 days2x GDP Growth

Regionalized service network to improve speed and customer intimacyCollaboration with EO to support new salesHigh profitability through OEM fleet focusProcess & tool optimizationUnrestricted access to documentationInnovation and Mergers & Acquisitions

E S SO Goals E S SO Top Strategies

Oil & Gas and Industrial Applications ServicesGoals, Strategy and External Challenges

* pp = percentage pointSource: E S SO M&S Day 2010



Fully empoweredregional service network

Regionalization is a systematic way of building local capabilities which improve our responsiveness to the unique needs of our regional customers. Market potential largely determines the appropriate level of investment in sales, field service, project management, service shop and engineering capabilities. By providing measurable additional value to our customers, the organization is rewarded with extra business, profit, and market share.

E S SO Top Strategy

E S SO Objective of

Regionalization

Speed

Customer Intimacy

Regionalization Our key strategy to provide speed and customer intimacy



Oil & Gas and Industrial Applications ServicesRegionalization focused on building infrastructure in top countries

Regionalization Assessment Model

Fully established serviceshop with eng. capability

Inspection facility andapplication engineering

Field Service with local value added

Dedicated and trained E S SO sales force

Local Energy Sales representative

54

32

1

Complete Regional Hub with local authority6

Business potential is the basis for selecting the level in each country and may differ between different Product Lines



Oil & Gas and Industrial Applications ServicesDocumentation quality & availability as prerequisite for regionalization

End to End Processes provide structure and required interfaces Data Flow

Master Data must be available to RC’s, but RC’s must maintain and

transfer data back to the PL’s.

Customers

Service product portfolio / Product Lead CentersService product portfolio / Product Lead CentersService product portfolio / Product Lines

Service product portfolio / Product Lead CentersService product portfolio / Product Lead CentersRegional Companies ( RC )

Speed Customer intimacy



Distribution of key responsibilities

Distribution of responsibilities along core topics: Segment, BU functions

1) Depending on the Regionalization level, responsibility for Advanced Sales can be (partly) shifted to Regions 2) Regions are supported by expert sales of PLs 3) Global Field Service 4) Global R&D

Management

Product Life Cycle

Sales

Field Service

Strategic planning

Financial planning

Service R&D

Product Portfolio Management

Service engineering

Service Marketing

Lead generation

Standard Sales

Advanced Sales

Strategic resource planning

Escalation mgmt.

Product Lines Regions BU Functions

Develop regional engineering capabilities

is part of PL's duty

Regional part in Advanced Sales is

determined by Reg. level and local capacities

Global FS function steers workload in PLs and

Regions

Joint approach btw. PLs & Regions

3)

1)

2)

2)

2)

1)

4)



Business Charter Defines Roles and Responsibilities between Product Line Departments

Overview

Defines:• Department responsibilities

and competencies• Key performance indicators • Reporting lines

Detail page

Defines:• Detailed responsibilities

for key processes• Interfaces and responsibilities

of interacting departments

+

October 10, 2005 Power Generation 1PG I1 Business Charter Š Rev 2.0 2005-10-10- For internal use only -

I1BD - Business Development (I)Summary

Responsibilities/Competencies

Department DOES:�Overall strategy�Market & competition�M&A and alliances�Central strategy projects�BTA planning process�Coordination of regional companies�Coordination of R&D activities�Information management�Manage TSN�Coordinate Internal & External Communication�Drive and control customer satisfaction survey (KPI)

Department Does NOT:�VGP (BE)�Training ( PLCs, Learning Campus)�Event organization, fairs (IGS, PLCs for user conf.)�Processing of standard documents ( PLCs)�IT implementation (IT)�LOA and risk management (I1B, BC)�OTMS administration

Measured on/ Key Performance Indicators

�Order growth�EBIT growth�M&A success against business plan

Reporting

Globally reports to:�-

Globally directs:�Own department

Disciplinary reports to:�PG I1

Global function

October 10, 2005 Power Generation 2PG I1 Business Charter Š Rev 2.0 2005-10-10- For internal use only -

# Key processes Responsibility of own department Interaction Responsibility of interacting department

3.1 Overall strategy

- Define core strategy - Initiate implementation- Drive growth initiative- Prepare I1 input for M&S day and P&M day- Strategic controlling/strategy tracking

I1 & I1BIGS, RegionsCS5, PLCs

Regions

- Agreement- Targets- Allocate resources - Input

3.2 Market & competition - Maintain market model- Ensure quality of fleet databases- Collect competitor data

I1xM, I1x3, RCCS4/5, PG O

- Provide and update relevant data- Maintain central PG fleet database

3.3 M&A and alliances

- Analyze opportunities for external growth, market entry and workshop facilities - Drive process: business plan, due diligence, legal issues, board approvals- Initiate and drive integration

I1, I1B, I1x

CS4/5, CFT5LS, CF MAI1x

- Agreement, allocate resources

- Support with know how- Input for business case- Responsible for integration within their Region

3.4Central strategy projects

- Coordinate and ensure I1 interests- Liaise with central departments and other GG/GZ

I1, I1xGPM

- Agreement & targets, resources- Responsible for contents

3.5 BTA planning process - Promote I1 strategic targets and cost reduction- Coordinate I1 part of BTA process

IGS, I1x, I1x3

I1x3, IGS

- Ensure I1 targets with RC

- Provide input, negotiate with RC

I1BD - Business Development (II)Interactions and Interfaces

Global function

Business charter



Implementation of harmonized global E2E processes for all Product Lines:Repair and Overhauls Modernization & UpgradesParts BusinessLong Term ProgramsField service

Scope extends from development of the Maintenance Strategy, through Bid Opening & Bid Preparation, Order Execution, Reporting & Ticket Closure to Invoicing

Harmonized E2E processes provide the foundations for: Regionalization (who does what where – required data and competencies)Improvement Projects Best Practice Sharing across the Service organization Standardized Measurements (MS) and NCC Reduction Integrated Management SystemCustomer Satisfaction and Profitable Growth

E S SO global Approach

E S SO Benefits

Oil & Gas and Industrial Applications ServicesGlobal and common End To End (E2E) Processes



Certification processKey process for competency development

Each Regional Company defines a plan for development and requirement of key functions in the country or region over a period of time.

The plan is established between each Product Line and the Regional Company and is reviewed annually

The Product Lines are responsible to develop, implement and follow up a certification processes for all identified key functions

Certification process specifies pre-requisites for the individuals, scope of training program, work experiences and mandatory tests

Certification levels specify the degree of responsibility to be allocated to the individual and the Regional Company



Engineering degree on Bachelor level and at least two years relevant working experience is a minimum requirement

EvaluationClassroomtraining

Hands-ontraining

On the job training

Certification processField Service Personnel ( Example )

Finspong Finspong Site

Individual training plans

Certificate

Finspong

Certification is for a limited time only and need to be frequently updated

2-6 months 1-2 months 3-4 months Basic Certification

Three certification levels:

BasicAdvancedExpert



Regionalisation planExample

Thailand

RLA (Andina North)

Russia

Australia

Dubai

TOMEC

Germany

Egypt

Saudi Arabia

US (Gas Turbines)

Poland

510 104

4 4

2 2

2012

18

2 2

2010

12

1 2

Actual

8

1 23

2

2014

18

2 4 4 42

2 22

2014

8

11

2012

8

11

2010

8

11

Actual

7

21

0

4330

2014

6

0 1

1

2012

5

0 1

1

2010

5

0 1

1

Actual

1

0 1

11

2116

6

2014

36

47

4

2012

28

36

3

2010

11

1 22

Actual

7

3 2

7 4 4

3

33

4

1

2014

11

1 2

2012

9

1 1

2010

7

1 2

Actual

11

0 1

221

222

2014

5

02

2012

5

02

2010

4

02

1

Actual

3

0 1

1

5 5 5 5

2014

8

1 1

1

2012

8

1 1

1

2010

7

0 1

1

Actual

7

0 1

1

1514

65

2014

29

28

4

2012

27

27

4

2010

12

1 3

2

Actual

10

0 3

2

1

2 21

1 1

1

2014

5

11

2012

5

11

2010

3

0 1

Actual

3

0 1

1

33 4

3 33

02

2014

9

11

2012

8

11

2010

7

0 1

Actual

4

1 1

4

6

0000

2014

8

0 1

1

2012

4

0 0

0

2010

00 0

Actual

00 0

Eng

SCM

FS

M&S



Long-Term Programs

Siemens Long-Term Programs (LTP’s) provide solutions for total coverage of the long-term maintenance needs of rotating equipment which will give our customers important advantages in terms of:

Long-term relationship Top priorityUnique services and commitments Predictable budget



\

Long Term Programs ( LTP )Flexible scope and commitments

Result Peace of Mind - Increased Reliability - Increased Availability-Reduced Cost

Agreed pricing structure for Spares, Field Service, Overhauls and Service Exchanges

50% of active fleet covered

Siemens – OEM…. years of experience, Technical back-up, Original spare parts, dedicated

Customer Support Manager

Parts and work management for preventive maintenance

Unscheduled maintenance coverage.

Turn-key services

Resident Engineer

AvailabilityGuarantee

DegradationGuarantee

PerformanceGuarantee

Discount on spares / Lease engine Guaranteed mobilisation time, project manager , regular analysis.

24 Hour Global Helpdesk Service including remote connection

Contract for 24 Hour Global helpdesk service

Term warranty



Remote Diagnostic Service

LocalDatabase

CentralDatabase

Customer benefits:• High quality direct support, early warning & analysis

Siemens benefits:• Feedback to R&D and long term resource planning

Periodical Monitoring• Long term storage• Event and trending • Trouble shooting• Operational Statistics

Remote Connection (Siemens, Internet based)

Remote Support• On-line connection• Trouble shooting• Software updates



Summary

Collaboration between new sales and service is required for the success of both businesses and starts often already at project identification stage

Service products need to be standardised globally, while marketing and concepts may need to be adopted to local conditions or specific segments

Harmonisation of processes and functions between Product Lines is essential to take full benefit of the global organisation and to avoid duplications

Regionalisation is necessary to meet customer requirements, but the degree of regionalisation is based on market potential

Regionalisation can only succeed in co-operation and if there are no main conflicts of interest between the Product Lines and the Regional Companies. ”Wall to Wall” accounting principle supports.



Thank you for your attention!

This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified either orally or in writing by words as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “will” or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect its operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens worldwide to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products or technologies by other companies, lack of acceptance of new products or services by customers targeted by Siemens worldwide, changes in business strategy and various other factors. More detailed information about certain of these factors is contained in Siemens’ filings with the SEC, which are available on the Siemens website, www.siemens.com and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as anticipated, believed, estimated, expected, intended, planned or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

Trademarks mentioned in this document are the property of Siemens AG, it's affiliates or their respective owners.

http://www.siemens.com/

http://www.sec.gov/

16 Siemens

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