Building Efficiency as a Service

Transcription

1 Building Efficiency as a Service Based on a Managed Service Agreement Restricted Siemens Switzerland Ltd 2017 siemens.com

2 The building efficiency imperative 41% buildings share of global emissions. CO 2 31% industry 28% mobility 500 climate laws passed in 66 of the world s largest emitting countries. 50% of the energy consumed by buildings is wasted. Real estate is often the 2nd largest expense on organizations income statement. Up to 80% of building costs come from operations. 30% maintenance 40% energy Volatile energy prices drive new requirements in strategic energy procurement. Increasing environmental and non- financial reporting regulations demand new capabilities in energy efficiency and carbon management. Increasing cost pressures demand optimized energy procurement, energy efficiency and consumption control. Meeting the new types of competitive disruption demands new cost efficiencies and a greener market image. Page 2

3 Building Performance and Sustainability Which customer challenges do we solve? Cost reduction Asset value development OPEX reduction Efficiency increase CAPEX efficiency Sustainability Compliance Regulatory compliance Page 3

4 Building Efficiency as a Service Options for action Costs/CO 2 Improvement year 1 Improvement year 2 Option 1 Keep current situation Missed savings/opportunity Improvement year 3 Cost Value/ Reduced consumption Improvement year 4 Baseline Improvement year 5 Option 2 Step by step New consumption level Option 3 Holistic view with Building Efficiency as a Service Time Page 4

5 Building Efficiency as a Service Possible cash-flow development Costs/CO 2 Savings to pay for the service Savings Customer Savings Performance Assurance / Guarantee Phase Baseline Implementation Reduced of consumption Improvements Time Page 5

6 Building Efficiency as a Service Why? Greater savings through holistic view Minimized risk for project and execution Building Efficiency as a Service lowers OPEX, improves CAPEX Faster in achieving sustainability goals Minimized risk for finance or performance efficiency, and outsources risks to Siemens. No budget needed Cash flow neutral Page 6

7 What is our Value proposition Customers main obligation Meeting their organizational goals Energy Efficiency and Building Modernization is one lever The value: Building Efficiency as a Service Service model = no CAPEX required Ability to re-allocate investment funds Confidence that results will be met without focusing on individual actions Page 7

8 Delivery Model overview What does it mean in other industries? e.g. Automotive Buy/own a car Traditional financing Mobility as a Service Large upfront investment Upkeep is owners responsibility Monthly fees are paid No upfront costs pay per use No transfer of ownership Page 8

9 Delivery Model Overview Customer Financing Deferred Payment Agreement Performance Contract + Building Efficiency as a Service Milestone payment by customer during implementation period Guarantees of the savings possible Customer receives ownership of the installation, all Facility Improvement Measures possible Separate contract for performance advisory services Pre-defined payments Savings > payments Siemens guarantees the savings Customer receives ownership of the installation, all Facility Improvement Measures possible Performance advisory services and traditional services as agreed 1 Not all facility improvement measures (FIMs) might qualify for a BEaaS as the ownership is automatically transferred to the building owner 2 Siemens does do not consult or advise customers on the effect on the balance sheet. The determination of the contract is in sole responsibility of the customer. Pre-defined service payments Savings > Payments Siemens guarantees the savings and functionality of installed equipment Installation remains in ownership of Siemens 1 Off balance treatment possible 2, Siemens can bring in additional measures Multiple service-levels available, including full repair & replacement Page 9

10 Building Efficiency as a Service Free-up capital for our customers CAPEX budget priority is given to core business IFRS 16 all leases become on balance increased need for service delivery models BEaaS can minimize the need to allocate budget to building efficiency and modernization IFRS 16 (All leases on balance) Production R&D M&A Building efficiency and modernization CAPEX Budget available CAPEX Budget demanded Page 10

11 Building Efficiency as a Service Contractual setup Managed Service Agreement (Installation/Performance Assurance) Regular service payment (including Performance Assurance) Shared surplus savings Customer Logo Shortfalls Financing solution Financier Page 11

12 Building Efficiency as a Service Possible impact on customer s P&L 10 Maximum costs under the terms of the contract Planned OPEX optimization Baseline Year 1 Year 2 Year 3 Year x Year y* Consumption Free cash-flow for customer Siemens share of surplus saving * Possible scenario after initial service contract ends Siemens service fee Customer s share of surplus savings Shortfall paid by Siemens to customer Page 12

13 Existing references Automotive DE Dairy SE >4 millions /a energy savings Optimization of 253 air-handling units Customer pays based on savings after implementation Diary Energy savings pay for the service Release capital to focus on core business Reduction of footprint by 26% MOTEX, Hörsel DE NKC, Gothenburg SE Textile Logistics Continuous building optimization in combination with an upgrade of ventilation, building automation system - budget neutral Manufacturing Managed Services Agreement with shared savings leads to a direct positive cash flow contribution Page 13