Presentations EUEW Sardinia Convention Part 3

Digitalization DeathoftheB2Bsalesman
ValentinDinkelbach
CorporateAccountManagerSiemensAG
Digitalization affects all business areas
Restricted Siemens AG 2016

How the internet changes the information flow
From passive consuming to proactive demanding
History Future
Customer Customer

Death of a (B2B) sales man
Forresters report by Andy Hoar and Peter ONeill
Level of complexity drives customers expectation towards supplier

complex
Show me Enlighten me
Solution type
Forrester defines four

different
Buyer Archetypes
Serve me Guide me
simple
simple Buying environment complex

Death of a (B2B) sales man
Forresters report by Andy Hoar and Peter ONeill
Different Buyer Archetypes require individual sales attitudes

complex
Show me Enlighten me
-25% +10%
Estimated
Solution type
sales head
count
developmen
t by 2020
-33% -15%
simple
Serve me Guide me
simple Buying environment complex
What does this mean for the sales setup?
Total Customer Experience
Integrated Marketing
Order Taker Navigator Explainer Consultant
State-of-the-art Information broker Integrated support Process knowledge
processes Internet Scout tools Solution risk taking
Standardized Transactional 24/7 availability New business model
product master data charges for services (Online) Training to finance the
Online visibility Application consultancy is
Price transparency knowledge required
Separate channels for information and purchase

Four mindset shifts marketers need to make now
From grabbing attention to holding attention From eyeballs to Interfaces
From Gaussian to Bayesian data analysis From crafting messages to designing experiences

Source: Greg Satell, Forbes 2016, March 3rd
Siemens supports the Digital Marketing within the distributor channel
Ready to use for

end customers
Ready to use for

distributor staff
Ready to use in your

own marketing tools

Persona: Digital Marketing Expert
Responsible for the production / selection of suitable marketing tools

Feeds from Suppliers
F&B
Energy
Application Web page
Efficiency
Brochure hosting
Brochure
Packaging
If you want to be preferred supplier, your marketing content must be easily accessible, pre-selected by end-
customer industries, and covering relevant focus topics (Safety, Energy Efficiency, Legislative Changes, ).
Integrated Marketing in B2B needs more than historical data
Cross-selling
PLC + Power supply; Control
Technical data
products + circuit protection .
Up-selling
Contactor -> Soft starter
-> Drive
Solution-selling Relevant
LOGO! + Drive + MCB
information
Sales data + Motor protection
for the user
Value-selling
x + y + z = energy savings
Strategic-selling e.g.
Market launch
Individual Stock clearance
targets Additional service offer
Thank you for your attention!
Valentin Dinkelbach
Corporate Account Manager
DF SDA
Gleiwitzer Strae 555
90475 Nrnberg
Phone: +49 (911) 895-2458
Cellular: +49 (172) 291 3377
E-Mail: valentin.dinkelbach@siemens.com
siemens.com/answers

Winningtogether
LEDVANCEandtheChangingMarket
OliverVogler
VPStrategy &Marketing
231 EUEW General Convention, Sardinia, June 3, 2016
Dr. Oliver Vogler, VP Strategy & Marketing
WINNING TOGETHER:
LEDVANCE AND THE
CHANGING MARKET
CHAPTER 1: INTRODUCTION
YOU AND
LIGHTING
In Electrical Wholesale, key players cover the majority of the market

150-170 230
95
22% Independents
93
t/o 57
135 47
IMARK
10
28% Buying Groups
IMELCO AD IDEE FEGIME GEWA
202
135
Large
50% 91
Corporates 69
52
Sonepar Rexel Grainger Wesco CED

Total Market
CY 2015; Numbers in bn EUR

Source: DISC (US); EMR (RoW); Company Websites; Industry expert estimates
Lighting is an important category that can be split into 3 main segments

Further:
Industrial Material
Switch Gear
Lighting 13 11
Heating
3%
Lamps1)
Security 5%
7% 18% Over the Counter luminaires are
26 marketed directly via wholesaler
23 applicable for >50% of installations
13% easy-to-use w/o specification
"OTC" Luminaires2)
fast-turning, volume-driven market
20%
Project luminaires are
Cables and Wires 29 31 marketed via architects, light planners
15%
wholesaler serves as fulfillment partner
19% Project Luminaires2) includes customized luminaires
Installation Material technology-driven market
2014 2016
Lighting represents almost one fifth of revenue with highest growth in Over the Counter Luminaires
1) Global Lamps Replacement

2) Excl. LATAM and MEA
Source: EMR, Frost & Sullivan 2015, values in EUR
Expectations for the future of the lighting market

different depending on research group (here: Lamps)
F&S (2015) EUR bn BCG (2015) EUR bn IHS (2015) EUR bn
20 20 20 18.9
18.0
15.3
15 15 14.0 15
12.3
10 9.0 10 10
5 5 5
0 0 0
2015 2020 2015 2020 2015 2020
CAGR 2015-2020: CAGR 2015-2020: CAGR 2015-2020:
-6% -2% +1%

CFLi LPD GLS HAL LED Lamps
Sources: Frost & Sullivan 2015; IHS 2015; BCG 2015 (based on interpolation)
Comparable scope: Indoor only (therefore, e.g. HPD excluded)
To explore the market trends, we have invested in some research
Electrical
Market Installer
Wholesale
Frost & Sullivan 2015 Voltimum Survey (April 2016) US DISC DATABASE
McKinsey & Company Euro Marketing + Research (EMR)
Boston Consulting Group N = 402 N = 732 LEDVANCE Wholesaler Survey
HIS Germany Italy (May 2016)
DACH: 3/4th May
Gartner
N = 273 N = 357 EU-N: 12/13th May
EU-SW: 19/20th May
UK Turkey EU-E: 26/27th May
Whitepaper with external researchers (July16)

Website for registration: www.ews2016.com
CHAPTER 2:
CHANGING MARKET
INDUSTRY TRENDS
AROUND LIGHTING
There are big shifts that prompt your customers to demand more from you
A Market Shifts
LEDification
B Tech Shifts
New New
Smart Products Expectations / Demands
Behaviors
C Service Shifts Top portfolio

Whats your
Best in class product content
winning model???
More training & education
Multichannel
Top multichannel experience
Agility

LEDIFICATION
A LEDification rate Accelerating each year (wholesaler view)

MARKET EXPERTS increase the expected LED share in year 2020 yearly
EU-C 76%
EU-N 73%
EU-E 67%
EU-S 63%
Electrical
Wholesaler EU 68%
Survey May 2016
52%
40%
30%
29%
2012 2013 2014 2015 2016 2020
Source: McKinsey & Company, OSRAM Market Model, Frost & Sullivan, LEDVANCE Wholesaler Survey, May 2016 (Survey Respondents N=69)
A LEDification rate Accelerating each year (installer view)

Panel of electrical installers after l&b 2016
In 2016, LED will be "first choice" or "close to 100%" "only one among other technologies"
Italy
84% 16%
N = 732
Germany
75% 25%
N = 402
UK 25%
75%
N = 273
Turkey
74% 26%
N = 357
LED will be close to 100% of all lighting installations LED will often be the first choice for lighting installations LED will be only one among other technologies for lighting installations
Source: Voltimum Survey Among Electrical Installers, April 2016 (N=1764)

A while traditional technologies still make sense in several cases

CHEAP INSTALLATION/ TOTAL COST OF HIGH PERFORMANCE MAXIMUM ENERGY &
Need
SHORT OPERATING TIME OWNERSHIP LIGHTING CO2 SAVINGS
TCO Calculation
Shop
Outdoor
Sport
T5
T8
LED LUM
Industry
Solution Halogen / CFL as price Fluorescent still more cost High pressure discharge LED retrofit Standardized / OTC
sensitive entry technologies effective in many installations versatile and durable LED luminaires
Global Market Today, in 36 14 11 69 258
Global Market 2020, in 11 08 06 77 319
Lets manage this pro-actively!

Source: Frost & Sullivan, own calculations
SMART
PRODUCTS
Digitization and connected products

B Introducing the Hype Cycle ...
Expectations
Peak of Inflated Expectations
Plateau of Productivity
Wireless Music Systems

Robotic for the Home ZigBee
Vacuum Slope of Enlightenment
Cleaner
Through of Disillusionment
Innovation trigger Time
Source: Gartner 2015

While Connected Home is still in the "Innovation Trigger" phase, installers

B see sales potential for smart lighting increasing after l+b
Gartner Hype Cycle for Connected Home, Electrical Installers about sales potential
2015 for smart lighting after l+b 2016
Expectations Decreased Increased

Peak of Inflated Expectations
3% 47%
Connected
Home Plateau of
Productivity
1% 44%
Intelligent
Lighting
6% 41%
Slope of Enlightenment
Through of Disillusionment
2% 40%
Innovation trigger Time
Source: Gartner 2015, Voltimum Survey Among Electrical Installers, April 2016 (N = 1.764)
... showing that lighting is good entry point to build smart solutions, with
B confirmed business potential by installers
ELECTRICAL INSTALLERS estimate lighting to be the most

SMART LIGHT is at the core of many applications important use case for Smart Home
Smart Governance
and Education
Lighting 27%
Smart Citizen Smart Energy
HVAC1 25%
Smart Healthcare Smart Building Security 22%
Shades/Blinds 10%
Smart Technology Smart Mobility
Smart Infrastructure Smart white goods 9%
Light is
in every room replaceable (still billions of sockets) Entertainment 7%
always on power both, functional and emotional
Source: Frost & Sullivan, Voltimum flash survey amongst electrical installers, April 2016 1 Heating, Ventilation and Air Conditioning
MULTICHANNEL
Wholesalers and installers with different expectations

C around purchasing online
Share of INSTALLERS Share of WHOLESALERS
who pick given aspects among the most who believe given aspects are the most important
important when purchasing online for electrical installers when purchasing online
Rank Rank
23% 1 Good product feature comparison 4 13%
22% 2 Delivery speed 1 19%
14% 3 Availability of auxiliary information 4 13%
14% 4 Better price than offline 6 12%
10% 5 Full range of portfolio 3 18%
9% 6 Ease of purchase process 2 19%
5% 7 Site / app optimized for mobile devices 7 5%
4% 8 Broad payment options 8 3%
Source: Voltimum Survey Among Electrical Installers April 2016 (N=1764), LEDVANCE Survey, May 2016 (N=68)
At the same time, multichannel becomes key

C now also for pure digital players
EU:
Large online fashion dealer goes offline with store concept
US:
Opening more and more offline shops with online customer rating as shelf concept
APAC:
USD 4 billion investment in a Chinese brick-and-mortar retailer
C Our challenge: Managing the customer journey online and offline!

Reach & Penetration Education Drive Trial
Social Aggre- Re- and Look-

Advertorials Media gators Mobile Alike Targeting
Prospective
Clients
customer
Online Video High Reach Content SEA GTIN / (e)POS

(all devices) Display Marketing ETIM
CHAPTER 3: WHOLESALE
KEY
DIFFERENTIATORS
Expected business challenges by electrical wholesalers in the year 2020

WHOLESALERS in Europe assess their most important business challenge in the year 2020
25%
21%
20%
17%
11%
6%
Offering the right Dealing with Dealing with Creating a Building an own Managing
product portfolio with price pressure competition from customer-centric digital platform complex logistics
the right innovations internet platforms multichannel
business
Source: LEDVANCE Electrical Wholesaler Surveys May 2016 (N=69)

Preliminary, we found five segments across countries

PRELIMINARY
Content and Relationship more important than Price
Analytically derived installer segments based on a survey of their needs in four countries
Need broad product portfolio
I want a broad and available

product portfolio
23%
I just want best price
Need I want it all

28% 7% Need trusted
lowest
price relationship
28%
I want business I want a trusted

convenience & 14% relationship and product
good payment terms innovation
Need business convenience

(e.g. payment terms)
Source: Voltimum Survey Among Electrical Installers April 2016 (N=1.764); Countries covered: DE, IT, UK, TR; Analytical method: Correspondence analysis based on 3 survey questions
PRELIMINARY
In a nutshell: How to find the winning model?
A Market Shifts
The right product for every need lets not over pace with LED
LEDification
products
Lighting is ahead of the curve in smart products already tangible
opportunity for installers
B Tech Shifts
In online business good product information, delivery speed and
New New
auxiliary
Smart Products
information (e.g.,
Expectations / rich media) are most important
Demandsfor installers
Offering the right product portfolio with the right innovations is seen as
Behaviors
the key business challenge
Majority of installers is not (just) price driven but wants better content
C Service Shifts
Multichannel
Brand Positioning & More to follow:
Customer Centricity are key! www.ews2016.com
CHAPTER 4:
WINNING TOGETHER
YOU AND
LEDVANCE
The big old 3 in the lighting industry are adapting their business models to
a changing market environment
Trend1)
in traditional
business
Decision
As a standalone, listed company we will As an independent unit, LEVANCE will be Current combines GEs products and
be committed to [] driving the transition able to operate more freely on the market services in energy efficiency, solar,
to LED and connected lighting systems and and realize strategic options such as storage, and onsite power with our digital
services Eric Rondolat, CEO Philips Lighting partnerships more easily. and analytical capabilities to provide
Olaf Berlien, CEO OSRAM customers [] with more profitable energy
solutions Jeff Immelt, CEO GE
Consequences Separation of lighting and Separation of technology and volume Carve-out of lighting and combine
healthcare/electronics business business with other businesses around energy
Spin-off of lighting business for direct Higher flexibility for alliances and Introduction of new entrepreneurial
access to capital markets partnerships corporate culture
1) Decline in traditional (lamps) business in Q1 CY 2016

Sources: www.edisonreport.net; PHILIPS Prospectus; GE / PHILIPS / OSRAM Capital Market Days
Most of general lighting business will go with LEDVANCE moving forward

OSRAM before CARVE OUT LEDVANCE after CARVE OUT
Lamps (Traditional / LED) Traditional Lamps
Thermal / CFLi LPD HPD LED Lamps Thermal / CFLi LPD HPD
Digital Systems LED Lamps Electronics1
ECG / LED Modules

ECG LED Drivers LED Modules LMS LED Lamps LED Drivers LMS
Luminaires & Solutions OTC Luminaires Smart Products

Speciality Lighting NEW:
Opto Semiconductors
Production: 34 Sites Production: 17 Sites

Sales: 57 Offices Sales: 50 Offices
1) Cross-selling on behalf of OSRAM GmbH (not applicable for APAC)

Who we are
WE HAVE ESTABLISHED A TEAM-ORIENTED,

CUSTOMER-DRIVEN PERFORMANCE
CULTURE AT LEDVANCE.
Jes Munk Hansen Oliver Neubrand Erol Kirilmaz Peter Mannhart Bettina Kahr-Geleng
Chief Executive Chief Finance Chief Sales & Marketing Chief Operations Chief Human Relations
Officer Officer Officer Officer Officer
259 LEDVANCE KICKOFF CONFERENCE, May 2016
How we look like
95%
of products are Our new company Our trusted brand for lamps
sold in OSRAM brand
Association with quality
One global firm
brand Demonstrating our heritage
Re-start into more and expertise
entrepreneurship
Our new product brand

for luminaires
Leveraging both:
OSRAM quality and
advancing light
250
260 LEDVANCE KICKOFF CONFERENCE, May 2016
NEW OVER THE COUNTER

LUMINAIRES TO BE LAUNCHED
58%
GLOBALLY STARTING FROM
JULY
OF CONSUMERS CLAIM
THEY WILL PURCHASE A
SMART HOME PRODUCT IN
THE NEXT TWO YEARS
Our commitment to you
YOU AND 1. We are proud of our heritage and worldwide

presence illuminating peoples lives and advancing
lighting technology for almost 100 years
LEDVANCE 2. We will continue to be your one-stop shop for almost

all OSRAM branded products in general lighting
3. We continue to provide you with latest technology,
e.g., in LED lamps, and are expanding our portfolio in
luminaires and smart lighting products
4. We strive for continuous improvements in our
knowledge of markets and end-user needs through
local and application-oriented expert teams (e.g., for
verticals)
5. You are the focus of our daily business we are
committed to the 3-level distribution approach!
LETS REDEFINE
THE ROLE OF LIGHT
TOGETHER
MSSI MarketSurveillanceSupportInitiative
WorkingtogetherforsafeandcompliantelectricalproductsinEurope
FernandoCeccarelli
SeniorVPandGeneralManager,Power DistributionDivision
Eaton EMEA
What is MSSI?
A proactive industry lead scheme to

monitor the market and support
authorities to prevent non-compliant
electrical products from entering the
European market.
Joint initiative from CECAPI and

CAPIEL, supported by
ORGALIME.
2016 Eaton, All Rights Reserved.

Why MSSI?
Non-compliant products are a

risk to
People
Property
Goods
Can damage the reputation of
individuals and companies
within the electrical industry.
The real cost of non-compliant products
Every day in Europe

Approximately 12
people die in house
fires.
10 20% of fires are
Non-compliant products
put people, goods and due to electrical faults.*
property at risk.
* Statistics from the EU Fire Safety Network and Forum for European Electrical
Domestic Safety (FEEDS)
MSSI Overview
Working together for 100% compliant products and fair
Objective
competition on the European market.
Proactive sampling and testing to support local

Approach
authorities to take action.
Focus on MCBs, RCDs, MCCBs, SPDs, contactors,

Scope
wiring accessories, and power distribution.

MSSI Charter
Published charter of
the MSSI objectives,
obligations and
commitments.
Signed by MSSI
members, industry
associations and
CABs.
MSSI Members

MSSI Country industry associations
France -
Germany -
Italy -
Poland -
Spain -
UK -
MSSI Conformity Assessment Bodies (CABs)

MSSI Countries
- Established local MSSI
Our objective is to cover the
- Local MSSI in development
European Market
- Local MSSI 2016 expansion
MSSI Electrical wants to
reach out to sister
organisations horizontally
and to reach out across the
distribution chain.

MSSI Process
Local MSSI working Identify potentially non-compliant
products
groups identify products
and manage the process Third party CABs sample and test
within each country. suspect products
Common approach
If non-compliant - market surveillance
across all regions. authorities alerted and informed
Can be slight differences
due to local laws. Authorities take enforcement measures
against non-compliant product

MSSI Reaching out to the industry
Officially launched at Light &
Building 2016 - Frankfurt
MSSI Electrical website live
with Q&As, information etc.
www.mssi-electrical.org
Knowledge and information
sharing throughout the
industry manufacturers,
industry associations, CABs.

Industry wide responsibility
The whole industry has a collective
responsibility to ensure only compliant
products are supplied, sold and used.
The revised Low Voltage Directive
places greater responsibility on
operators within the supply chain.
Importers, distributors and
wholesalers assume greater
responsibility for product imported
into the EU.

Responsibilities of wholesalers
The European Commission Blue Guide makes specific
reference to the obligations of distributors within the renewed
Low Voltage Directive.
The distributor is a natural or a legal person in the supply chain, other than
the manufacturer or the importer, who makes a product available on the
market.
Distributors are subject to specific obligations and have a key role to play
in the context of market surveillance.
If the distributor also imports product then the distributor

also assumes the further responsibilities of an importer.
Risks and consequences for wholesalers
Without proper due diligence product
which appears to be good could be
Product could appear to be highly dangerous.
good from the outside May cause fire, injury and loss of
life.
Loss of business reputation and
confidence in products sold.
Fines by enforcement agencies.
Non-compliant - internally Even possibility of imprisonment.
the reality is very different

Wholesalers play a key role
Wholesalers are a key link between
manufacturers and installers.
All products on offer MUST be compliant.
Greater legal responsibility when
importing products into the EU.
Own brands and third party brands.
Influence buying behaviour of installers.

Help to spread the benefits of buying and
using proven safe products.

How can MSSI help?
MSSI can support through local country working groups:
Point of contact for wholesaler associations to report
suspect product found within the market.
Coordinate testing and work with CABs and local
enforcement agencies to remove non-compliant
product from the market.
Collaborate with wider industry groups such as in
the UK EMS lighting, cables, installers.
Provide education, training and guidance tools.

Example guidance document
MSSI working to produce
guidance tools to help
installers, wholesalers,
customs authorities to
identify potentially non-
compliant products.

Benefits for wholesalers
Maintain their reputation within the supply chain.
Ability to demonstrate they have taken
reasonable steps to place compliant product on
the market.
Conformity to directives as a market operator.

As wholesalers, they will be compliant with new
LVD requirements
Confidence in product sold to installers

Reduced cost of guarantees and risks of liabilities
Increase the whole value of market

Afew words
JoaoBencatel Chairmanof
Conclusions
Working towards thewinning model
GuidoBarcella Chairmanof
100
83
10
5
Digitization
Logistics
Comunication
Technology
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Digitalization DeathoftheB2Bsalesman

Restricted Siemens AG 2016

Restricted Siemens AG 2016

Level of complexity drives customers expectation towards supplier

Forrester defines four

simple Buying environment complex

Different Buyer Archetypes require individual sales attitudes

Total Customer Experience

Separate channels for information and purchase

From grabbing attention to holding attention From eyeballs to Interfaces

Restricted Siemens AG 2016

Ready to use for

Ready to use for

Ready to use in your

Restricted Siemens AG 2016

Responsible for the production / selection of suitable marketing tools

Restricted Siemens AG 2016

Dr. Oliver Vogler, VP Strategy & Marketing

In Electrical Wholesale, key players cover the majority of the market

Sonepar Rexel Grainger Wesco CED

CY 2015; Numbers in bn EUR

Lighting is an important category that can be split into 3 main segments

1) Global Lamps Replacement

Expectations for the future of the lighting market

CAGR 2015-2020: CAGR 2015-2020: CAGR 2015-2020:

-6% -2% +1%

To explore the market trends, we have invested in some research

Whitepaper with external researchers (July16)

C Service Shifts Top portfolio

A LEDification rate Accelerating each year (wholesaler view)

2012 2013 2014 2015 2016 2020

A LEDification rate Accelerating each year (installer view)

Source: Voltimum Survey Among Electrical Installers, April 2016 (N=1764)

A while traditional technologies still make sense in several cases

Global Market Today, in 36 14 11 69 258

Global Market 2020, in 11 08 06 77 319

Lets manage this pro-actively!

Digitization and connected products

Wireless Music Systems

Source: Gartner 2015

While Connected Home is still in the "Innovation Trigger" phase, installers

Expectations Decreased Increased

ELECTRICAL INSTALLERS estimate lighting to be the most

Smart Healthcare Smart Building Security 22%

Smart Infrastructure Smart white goods 9%

Wholesalers and installers with different expectations

At the same time, multichannel becomes key

C Our challenge: Managing the customer journey online and offline!

Social Aggre- Re- and Look-

Online Video High Reach Content SEA GTIN / (e)POS

Expected business challenges by electrical wholesalers in the year 2020

Source: LEDVANCE Electrical Wholesaler Surveys May 2016 (N=69)

Preliminary, we found five segments across countries

Need broad product portfolio

I want a broad and available

Need I want it all

I want business I want a trusted

Need business convenience

1) Decline in traditional (lamps) business in Q1 CY 2016

Most of general lighting business will go with LEDVANCE moving forward

Lamps (Traditional / LED) Traditional Lamps

Digital Systems LED Lamps Electronics1

ECG / LED Modules

Luminaires & Solutions OTC Luminaires Smart Products