1. For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services For internal use only / Copyright © Siemens AG 2012. All rights reserved. Green Financing Ten Take-aways Andy Swadlo Siemens Financial Services

2. Page 2 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services National Trends January 2007 European Commission proposes European Energy Policy:  Greenhouse gas reduction by at least 20% by 2020 (v1990)  Energy Efficiency increase by 20%  Renewable energy share at least 20%  Biofuels at least 10%

3. Page 3 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Take Away 1 Governments increasingly want action : they are setting tough targets

4. Page 4 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Target v Results Take Away 2: Targets are not being met OECD: “…if current trends continue unabated, global emission would by 2020 reach levels that are more than 30% above 2005 levels” OECD, May 2010

5. Page 5 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Energy costs May 2011: China increases electricity costs in 14 provinces and rations consumption March 2011: Russian electricity prices rise / hydro charge capped at 15% BRIC is substantially increasing consumption of energy causing rising world prices Take Away 3: energy prices increasing over the long term

6. Page 6 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services World Going Green OECD Member countries: (includes France, Spain, India, USA, Russia, Poland, UK, Germany) 96% of (large) businesses indicated they have started energy saving measures

7. Page 7 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services World Going Green Take Away 4: Reducing energy costs is the prime business driver to go ‘green’ Their motivations: “improve image” “expected legislation” Number 1 driver: “reduce energy costs”

8. Page 8 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Cost of not changing Take Away 5: Financial benefits to new equipment are more than energy efficiency Total Cost of Ownership The older the technology The greater the maintenance costs the higher the mean time between equipment failures All pushes up the cost of service and parts and increases unproductive downtime.

9. Page 9 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Access to Capital USA: “Cash, the lifeblood of business, has been scarce for middle market companies since the recession began in 2007” KPMG May 2011 Eurozone: “…the perception of risks worked in the direction of higher net tightening of credit standards” ECB, July 2011 TRIC: “…our problem is slowing down the pace of lending” CB Governor, Turkey 2011 “Beijing would look to curtail borrowing by local governments” Premier Wenn

10. Page 10 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Access to Capital Take Away 6: The world is awash with money yet money is increasingly scarce!

11. Page 11 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Affording energy efficient investment: Leasing Take Away 7: Leasing industry is well positioned to provide solutions that (many) banks don’t want to ‘Offset’ equipment financing: where payments flex to match energy savings Sometimes Government sponsored support E.g. Carbon Trust UK: Energy Efficiency Financing Scheme with SFS Carbon Trust assess energy savings SFS provides financing One package: energy efficiency assessment, equipment, installation, maintenance and service, all via a loan, lease or hire purchase. Payments equal to, or lower than, the energy savings

12. Page 12 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Affording energy efficient investment: Performance Contracting Take Away: Leasing industry is perfectly positioned to provide solutions Guarantee that energy savings will cover costs of equipment and service

13. Page 13 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Affording energy efficient investment: Performance Contracting Take Away 8: Captive Leasing industry is perfectly positioned to provide solutions Guarantee that energy savings will cover costs of equipment and service Phases: Preliminary energy analysis Investment Grade Audit Construction and Installation Regular measurement and verification of savings

14. Page 14 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Siemens ‘Top Ten’ energy savings opportunities Take Away 9: Energy saving covers a huge range of equipment

15. Page 15 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Fastest returns – outright purchase paybacks: Take Away 10: Financing can change the whole payback equation! 1.Monitoring and Targeting Systems1-3 months 2.Low Energy Lamps1-12 months 3.Variable Speed Drives3-12 months 4.High Efficiency Motors3-12 months 5.Building Controls 3 months – 4 years 6.Intelligent Lighting Controls1-4 years 7.Increased Factory or Process Automation1-4 years 8.Power Management Solutions1-4 years 9.Supply Voltage Optimisations2-5 years 10.Combined Heat & Power2-7 years

16. Page 16 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services More than theory Astrom Steel Works Loan of £400,000 for new compressors Annual cost savings £80,000 Annual CO 2 savings 600 tonnes “When we sat down with the loan figures I didn’t believe it,” “Effectively the replacement is cost neutral for the first four years, and after that we’ll be saving 50% on electricity costs.” Mike Hutchinson, Operations Director

17. Page 17 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services But…..

18. Page 18 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services But the proof of the pudding is in the eating……

19. Page 19 Feb 2012 Andy Swadlo For internal use only / Copyright © Siemens AG 2012. All rights reserved. Financial Services Andy Swadlo Siemens Financial Services Phone+44 (0)7929 207717 E-Mail andy.swadlo@siemens.com Web www.siemens.comwww.siemens.com Final Thought (take-away 11: OK, I lied, there are 11): In a world where the image of financing has never been worse, we can make the most positive difference to the world