Good morning, ladies and gentlemen, and welcome to the Siemens Energy's 2021Fourth Quarter Conference Call. As a reminder, this call is being recorded. Before we begin, I would now like to draw your attention to the safe harbor statement on Page 2 of the Siemens Energy presentation. This conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions and therefore, are subject to certain risks and uncertainties. I would also like to remind you that questions can only be asked via the conference call. At this time, I would like to turn the call over to your host today, Mr. Michael Hagmann, Head of Investor Relations. Michael, over to you.

Thank you, Martin. A very warm welcome from my side to our full year conference call, Q4 and full year, conference call. As you know, all the documents were out at 7 'o' clock this morning, so I assume you all had plenty of time to look at them. With me today, I've got Christian Bruch, our CEO; and Maria Ferraro, our CFO. We scheduled about 90 minutes. It is the year end so we wanted to give you a little bit more time. If we don't need all of the 90 minutes, so be it. And after Christian and Maria will go through their presentations, we will have the Q&A. And with that I hand over to Christian.

Yeah, thank you very much Michael, and also a very warm welcome from my side. Thank you for joining us for our quarter four results. And we will also make use of the opportunity to look a little bit back on the full fiscal year, on how we are doing as a company. Like always, Maria will walk us afterwards through the numbers. And I would like to kick off with a general overview. First and foremost, I hope that all of you are safe and healthy, seeing still the ongoing pandemic and that hopefully, with the progressing year ends, you're looking some quiet days with your families and friends. So stay healthy, first and foremost. And let me highlight a couple of key developments which we had really over the year. We had a solid finish to the year with really strong orders and cash flow. You have seen it from the numbers. We did reach our Group guidance with a margin of 2.3% which is however below the target which we initially set out at the beginning of the year, mainly due obviously, to the challenging elements in the onshore business of SGRE. You may have listened into their results on Friday and even so, the market environment is challenging. We have seen some really great developments and really solid orders in Generation and Transmission. We also now see the buildup of the order momentum in Industrial Applications. SGRE is seeing solid orders. But the market environment, no question still is challenging, we definitely will discuss it. Also during our call in terms of what you also have been hearing from other sectors like supply chain, or limited freight capacity, which obviously is also an issue which keeps us at Siemens Energy, busy. However, so far, I really have to say I'm very proud on how the organization is able to manage the situation. COVID is also still with us, obviously. But I have to say the impact on our operations is moderate. So we have no really COVID constraints anymore of doing our business. Our factories are operating, our service people can travel but obviously we also watched the current aggravating situation in some parts of the world. During the quarter we reached a major milestone on our way to improve the profitability. As mentioned in the previous quarters, we have been progressing very well to execute our cost improvement programs in the non-co-determined countries. But we also achieved now an agreement in Germany to implement our cost reduction programs. They are well on the way and we are fully on track with our cost - our programs, which is an important matter really to build the company. You may recall on the Capital Market Day we always said we got the lines of stability, profitability growth, and we are obviously now driving stability beyond this in our profitability, to go back into growth. You already have heard from Andreas Nauen that he and his team are progressing with the implementation of the LEAP Program, that is the improvement program at Siemens Gamesa. And they have set up the appropriate actions to address the challenges, what they have been facing. They are on top of it and I'm confident with what the management has now implemented, and they're working through the matters. With our excellent order book, we are really confident of a further good development also in GP, which will also be based on a continued improved performance and cost out initiatives. And at the same time, as I said, we believe SGRE has addressed the right topics to further improve. In 2021, our net income and Maria will explain more details around it, was burned by special items at GP and SGRE. Given our strong cash flow in fiscal year 2021, the good operational improvements in GP combined with a strong order book, we are confident that we are on the right track. And based on this confidence, we will propose to the AGM a dividend payment of $0.10 per share to the shareholders. It is something which should underline also our confidence in our development is also obviously something where we are grateful for the trust of our investors and us as a stock. And we will continue and expect to continue to perform on the lines which we communicated before. Let me touch briefly on the guidance for fiscal year '22. At GP, we expect comparable revenue growth between 1% to 5%, as Transmission and Industrial Applications are, growing at healthy rates. However, we expect at Generation a moderate dip in revenue. This is expected and this is in line also was our strategic positioning of the business. And we expect further progress in cost improvement and hence in adjusted EBITDA margin before special items in the range of 4.5% to 6.5%. You know that Siemens Gamesa is expecting a higher level of profitability but a decline in revenue. This is influencing Siemens Energy as a whole. For Siemens Energy, overall, we expect growth have up to 3% but if GP only grows at the lower end and if SGRE sees a decline at the higher end of the expectations, we may see a decline on the overall revenue of up to 1%. We expect adjusted EBITDA margin before special items to increase a GP and SGRE, and hence expect a range for Siemens Energy between 3% to 5%. Let me look back really on one year of Siemens Energy. And I really have to say, time flew by, seeing all the different events which we were executing in 2021. It was an intense journey. We just more or less celebrated our first birthday as a listed company on the Frankfurt Stock Exchange. And I'm proud that we were able to so fast really to progress into the German DAX. At this time DAX 30 in March 2001, and then today, DAX 40 which underlines really the trust and also the achievements, what our people were putting in the development of our company. We took a variety of different businesses from Siemens and build Siemens Energy, stabilizing all the processes and continue to drive the profitability in the company. To get the financial strength to grow from here, we have a fantastic portfolio today in which we can contribute to the energy transformation. We will continue to build new portfolio elements by our investment into research and development. And you may have seen throughout the year, some examples like, for example, on our Hydrogen Day, we will continue to give deliberate deep dives on the different businesses what we have developed, because at the end, the energy world will very much depend also on having diverse solutions available. Unfortunately, I have to say, all of these events were virtually and we're really missing the direct contact with all of you and I'm looking forward, hopefully to '22 that we will find an event where this is possible. The virtual - the AGM from Siemens Energy will still be hold virtually. But I sincerely hope that we later in the year of '22, we can hold our Capital Market Day in May in Berlin, in-person with personal presence and have a direct exchange with you as our investors and analysts. Let me put this year also into the context of the six levers that we identify to create shareholder value. And this is really looking back what we committed to on the Capital Market Day in 2020 and what has been happening and 2021, really, in terms of achievement to build the most valued energy technology company in the world. And let me start on the left side with the position in the market. And I'm very proud and pleased that our all of our businesses across the different divisions maintain their leading market positions despite the fact that we were more selective in the projects we took onboard. I will talk more about orders and how we are faring in more detail on the next slide also. But I'm very pleased that particular in the large gas turbines business, we got back to where we wanted to be. You may recall that in quarter four 2020, I said, with 11% market share this is not good enough. We achieved this year 23% market share with the large gas turbines. We did very well on the medium gas turbines. So I think it's something very strong. We are doing very nicely on the Transmission side and building up market share there also with our new, what we call, Blue Portfolio. So there's a lot of elements which were really successfully driven forward in 2021. I'm also pleased that the important pillar of Service which is really a cornerstone of our offering in the market, has been doing extremely well in 2021. Service revenues returned to mid-to-high single-digit growth numbers in the second half of the year. At SGRE, service revenue even grow double digit in the second half and for the full year. We have been talking about margin resilience and profitability. And it really proved to be resilient in the service area. Indeed, service margins at GP are back at the 2019 levels. So it could recover really there fully from the corona impact and SGRE margins are at a very healthy 20% level, as was also reported by Siemens Gamesa on Friday. In order to make our service business continue the success story, we more and more invest also our R&D, the money in services. At the moment roughly 50% of our R&D spending goes into the improvement of service offerings and we will continue to drive service forward. At the CMD, we laid out also the additional measures at GP which we are targeting. One element, which we always communicated was, the so called. Accelerated Impact program at GP to improve the cost competitiveness in the GP segment and we are progressing with our initiatives in terms of savings, and are actually a bit ahead of our plan, which gives us also confidence for 2022. I already mentioned, I think last time that in 2021, we reduced the number of employees by around 2500 people; we're targeting roughly the same number in 2022. So we continue to make the organization more effective, and hopefully see also then, the impact on the profitability. In our quarterly calls, I did highlight always the importance of collaboration with customers and partners. And this is something which is really close to my heart because these collaborations is key to our relationships, not just in terms of customer relationship, but also to really develop jointly innovative solutions. This is something in the new energy world which will be instrumental and we have been pushing for this in 2021 really a lot. And I'm very pleased that I see a tripling of the share of projects, which we're doing together with the customers compared to the prior year. So it really pays off now that customers and partners and close engagement with us develop new solutions. At SGRE, the LEAP program is progressing well with product innovations, a strong focus on the supply chain and procurement. And management obviously strengthened also the project execution organization seeing the challenges what they had in onshore. We made significant progress in adjusted EBITDA before special items. And in cash and adjusted EBITDA before special items increased by €678 million largely driven by GP, which was up €595 million to €849 million. And SGRE reduced the losses also by €150 million to €99 million. At GP, the improvement reflects cost out as well as operational improvements. The progress nevertheless, at SGRE was throughout the year slower than we expected. You all know this, we have been discussing it here in the Analysts Call but there was progress. And important here is that the offshore market and the service were ahead of the plan, doing very well. And that the problem rests in onshore, as I said before, I see the management really addressing the points, working through it. It will take some time, as Andreas pointed out in his call on Friday. But we strongly believe that SGRE has a role to play in onshore and that the business model as such is viable. The outstanding element in 2021 has, once again, been our cash flow performance, which was much better than expected. We generated cash before tax of close to €1.4 billion. Maria will talk in more detail about this €1.2 at GP and around €200 million or €1.2 billion at GP and €200 million at STRE. And I'm very pleased that Maria's efforts really to put the high focus on cash in our organization, is fully absorbed and you see definitely the results in the cash numbers. There have been some tailwinds in the cash number, which we always have to clearly flag up because some of it is also preponed cash. We will discuss it for the 2022 outlook but nevertheless, I think it's a great achievement. Besides that, we are spending more on R&D because obviously we want to continue to invest into growth despite the fact that we are building a more profitable company. We are investing into hydrogen. Across the Group we have been presenting our hydrogen activities in a dedicated Capital Market Day. We are further raising our hydrogen co-firing capabilities in the gas turbines. That is important really to allow for the bridge of natural gas and make sure that we do not have stranded assets down the road. This is something that every of our customers really ask for. We have around 50 units running globally on hydrogen co-injection. We will continue to develop also the technology. That technology will not be a limitation to introduce these things into the market and this is obviously also something which could impact the service business. We develop at the same time also storage solutions on hydrogen together Also with SGRE and are working obviously on combining wind and hydrogen production. And we are planning now to build up a new electrolyzer manufacturing capacity in Berlin, in a factory which will be about the module factor fabrication to really extend also our capabilities on this end. Furthermore, we have been investing into our SF6-free portfolio of Blue products that is Transmission area. We're building now in own vacuum tube manufacturing plant at our transmission plant in Berlin. And this is an extension really of the portfolio which already finds a home in the market. We have sold more than 1000 units. And I'm very proud that we can contribute to avoid this climate, hazardous gas SF6 to get it out of the products. And we are really the ones who are pushing this and this makes me very proud. These R&D efforts and cooperation and partnerships are the foundation really to maintain and to expand the leading portfolio in the industry. And with the progress we have made and the measures we did, I'm confident that we are in a good way to really become the most valued energy technology company in the world. The world is changing and if I see the discussions in Glasgow, the momentum, which I particular see now, between the different companies to drive forward more sustainable solutions, gives me confidence. Yes, you can always argue, is this good enough in terms of progress? But the takeaway for me is that there is a lot of companies collaborating on implementing new solutions, we want to lead this together with our customers, and really help them through their transition journey. And this is what we are up to, and this is why also we continue to build on the three pillars of the company. I've addressed that before, the low zero emission power generation, the transmission and storage and the third part is about the decarbonisation of industries. So how can we make sure that we shrink the energy consumption problem? This is the three pillars, what we're working on. And I would also like to highlight projects, which we're already securing in this regard later on, in these three pillars. Before I go there, allow me briefly to talk about the four businesses just to flag up exactly to say, hey, this is what was in there. It's a little bit of review for those of you who have been with us on the Capital Market Day. But let me - allow me to explain this on how the company is structured. Let me start with SGRE, to achieve our global climate targets, there's no way around clean energy, that's obvious, like wind and solar and SGRE is a clear leader in offshore and it has the most global footprint in the industry. And SGRE has a very innovative approach also to service and hybrid solutions. Wind and solar will not be able to do it alone, we always have to see this. And if you want to reach the targeted carbon emission reductions in 2030, we will need a gas bridge. And this is why you see on the right hand side the Generation piece. So these two upper boxes comprise the first pillar of our company structure. And these are important for us to drive our combined solutions with Gas, combined heat and power solutions based on gas turbines can save up to 75% carbon emissions if you replace the conventional coal fired power plant. As I said before, all our products are future proof so that we can inject green hydrogen for the combustion and also in the long term can operate them with green energy, reducing CO2 emissions at the end, hopefully to zero. Industry accounts for more than 20% of the carbon emissions and to cut emissions here, we need to electrify, automate and digitize the industry. And this is what Industrial Applications does for us. The process, industries are the biggest - one of the biggest CapEx spenders in the world. They have a massive asset base which needs to be tackled. And this is what we want to more and more tap into. And it's something where we already sit on an asset base of 90,000 unit installs, which we want to electrify, automate, and digitize and really make more efficient every day. In Transmission, it's really obviously about transporting electrons from A to B. But we have seen in 2021, a fantastic track record on the HVDC side, on the grid connections, we have seen the success of the SF6-free products, which has SF6 as in climate gas has 22,000 times higher critical potential than CO2. So it is absolutely critical to avoid this. And we will continue obviously to push on the infrastructure and on the grid, which we believe has a very good growth path in front of them. Let me give you three examples on projects in the last quarter what we secured and which goes to align these three pillars of Siemens Energy. The first one is on the left hand side, it shows the way on a coal-to-gas transition. It's a project in Greece, where we supply a state-of-the-art, highly efficient HL gas turbine as core of a new combined cycle power plant in Komotini with a capacity of close to 900 megawatts, and it will be the world's most powerful combined cycle in a one-on one-setup, and it will provide reliable and affordable electricity but it will also reduce the CO2 emissions by roughly 3.7 million tons per year compared to the currently operated lignite-based power generation. We're also, and this makes me very proud, one the first offshore grid connection project in the United States. It's a consortium with Aker Solutions. We will supply the HVDC transmission system that will bring green energy from Sunrise Wind, which is New York's first offshore utility scale wind project to the mainland and at the end it will supply around 600 homes - 600,000 homes in the New York State and really support the target of the New York State to be 100% clean electrical - clean electricity by 2040. Industrial Applications received the contract to decarbonize industries from Aker Solutions to supply the complete package for the electrical transmission, distribution and power management system in the Troll West electrification project in the North Sea. Key objective here is also to reduce NOx and CO2 emissions by replacing existing gas turbine driven generators and compressors. And the project will have consequences of reduction of 500,000 tons of CO2 and in addition, it will also reduce NOx emissions by roughly 1700 tons per year. So this shows that by really introducing electrification solutions, you can improve the current infrastructure. This is what we at Siemens Energy signed up to. Apart from the quarterly review, allow me to take you through the performance of the different businesses in the segment GP and some of the trends we do see in the market. SGRE, you have received the main messages on Friday, I would not further comment on these here. And I would focus really here on GP. You can see that we had very good orders across the board. Generation booked large orders in Asia and Australia. IA also booked decent service and solution orders and Transmission is very successful with the large HVDC orders. If you look for the markets, to the market for gas turbines, bigger than 10 megawatts, we strengthened really our strong number two position based really on our recovery in the large gas turbine share and very solid orders in medium-sized gas turbines. In large gas turbines, the investment in the HL units is now really bringing its benefit. This quarter, we booked nine large gas turbines and of these were five HL units. And this means for the four quarters that make up our fiscal year, as I said before, we achieved now 23% market share in the large gas turbines, which was above the target of 20% what we have set ourselves in 2020. In the industrial gas turbines we booked 40 units in fiscal year '21, which is also obviously a good order book and shows also the competitiveness of all products. In Transmission, we had a great year, I said before, with HVDC, SuedLink, SuedOstLink, Sunrise and this is something which we also will see in the next years to come that this will be a very strong market. Industrial Application, I think we can highlight also the very large order on the FPS which I reported on before which we took on. If you look on profitability, we are executing what we communicated on the Capital Market Day. In Generation and Industrial Applications cost out was a big factor. It's a self-help element which is good because we can influence it directly ourselves. Generation also benefited from a good service business. And in Industrial Applications, we saw operational improvements also now coming through. Transmission obviously benefited from a very good factory loading and rising headcount productivity and very strong execution. If you look at the markets, we continue to see stable markets in Generation overall for 2022. We expect revenue to be moderately down given low gas turbine orders in the prior year, right, in 2020, which obviously in terms of revenue affects us in 2022. Our exit from coal, which is obviously something which we knew it will have a consequence and the exit from the ADTs and our selectivity approach on the different project. As anticipated before, Industrial Applications, sees a greater recovery and in Transmission, we can see increased market demand. At Siemens Energy, we also put ESG in the focus of our strategy, and we are developing our company alongside these three elements. And we have made a lot of progress really in 2021. We had an ESG Roadshow also. We explained in more detail, what we are doing. And when it comes to the ease of the environmental part, I have already discussed and addressed the solutions for our customers. But we also have our own commitments. As you know, at Siemens Energy, we target to be climate neutral for our own operation. So scope 1 and scope 2 by 2030. And we have set ourselves also an ambitious target to reduce our scope 3 emissions by 28% in 2013. We have a strong focus on inclusion and diversity. Maria is our Chief Inclusion and Diversity Officer and she has brought various programs to life to push for the target of 25% of women in leadership position by 2025 and 30% by 2030. Health and Safety will continue to remain our core focus, starting really every meeting what we have internally on safety and really make sure that we improve the total recordable injury rates. It came down from 0.54 to 0.45, still has to get better day after day. But I'm pleased really with the focus what the organization brings on driving safety, home. As well as, obviously compliance in governance is an element which is of key importance for me. We do not tolerate trespassing the rules, we play by the rules. And obviously this is a top down engagement and we will continue to drive this going forward. In the target setting, you will also see Net Promoter Score and safety targets if you look on our compensation report, and you will also see that we benchmark us against changed indices setup. We will change the long term incentive plan from Oil Services to S&P Global Clean Energy. I think this underlines our transition as a company ourselves. And 50% of the benchmark will be the STOXX 1800 Global Industry. ESG is for us, the basis as we develop the company. So please make sure that you read our ESG Report, which is due to come out on January 25, 2022. And it will really in detail describe what we want to do and what we are doing. And it should help you to better understand our company. And with this, let me hand over to Maria for the financials.

Thank you, Christian. Good morning, everyone from my side. It's my pleasure to be here and to take you through the results for Siemens Energy for the quarter and also for the full year and certainly looking into Gas and Power. Time does fly. I can't believe this is our first full fiscal year. And I just want to take us back to the Capital Market Day where we outlined for ourselves, let's say, three areas of focus when it comes to sustainable shareholder value creation. First and foremost, it's about building a strong foundation. It's about ensuring that that foundation then clears the path to margin improvement. We talked a lot about our cost out programs. And then certainly last but not least, all about asset excellence and ensuring that we generate cash and doing that with a very keen eye on working capital management. And here we are a year later and I wanted to just reflect a little bit upon the achievements that we've made within Gas and Power. Here we see three checkmarks, I'm really happy to report this because, for example, the solid business foundation is about ensuring that our order backlog continues to grow. And in Gas and Power, we have a book-to-bill greater than one, again, in this fiscal year. Three years running at 1.14. This shows that we do have a solid foundation for our revenue and profit generation for the future. Speaking about profit, our adjusted EBITDA before special items, this was clearly a focus for us, looking at our cost out programs, and ensuring, as we have seen before that those cost outs don't only result in a one-time effect, but certainly that those are sustainable cost savings into the future. And this was certainly evident in our EBITDA, which sharply improved in Gas and Power this year. And of course, that - those restructuring measures, some of the very difficult tasks that we undertook last fiscal year, that we're on track, because it's not just this fiscal year, it's next fiscal year. And certainly in light of our fiscal year '23 targets. And then of course, looking at asset excellence, we had a very strong cash year, both in SGRE and in GP, so very strong for the Group overall. But with respect to GP, we had already put in place a reduction target. Of course, we see that as achieved but that doesn't mean we stop there. That means that we then refocus again and determine what needs to be done step-by-step. In business like ours, where it's large projects, we have a lot of fluctuation on the balance sheet. This is a continuous focus that we need to have all together as a Group. And certainly also in GP, you see that some of those fruits have already come to bear. So now if we can please go to the next slide, where we look at the Siemens Energy Group at a glance for the full fiscal year. This goes to what I was saying earlier, our order backlog reached €84 billion with strong top line development both in orders and in revenue. You see a slight, let's say, a solid development, in orders a slight dip. But this is on the back of SGRE having a record order intake year last year. So that was as expected. If we look a little bit further, we also see that GP is progressing well, as I just mentioned. Revenue, we see solid growth here, plus 4% overall, and what's important there is not only that we have an increase, but where we're increasing. You often ask about service versus new units. And I'm very happy to report that in both areas, we're seeing increases and growth year-over-year. And by the way, that's also related to service not only in GP, but in SGRE. And what's also important that is in GP, the service, we're seeing that growth on all areas, in Generation, in IA and Other, after of course, a quite difficult year in certain areas in fiscal year '20 due to the pandemic. Looking at EBITDA, here we see a very strong increase year-over-year from a loss to a nice profit. As I mentioned earlier, this is related to the ongoing programs predominantly in GP where, of course as I mentioned, things really came in to fruition, and we now see that from an operational excellence perspective, and our cost out programs, that this is coming to fruition and we see a nice development in our EBITDA before special items for the Group. Now, last but not least, we should talk about free cash flow, that's €1.4 billion in cash, even greater than our prior year, which was also a strong cash year. Again, driven by both segments here but certainly, looking at what Christian said earlier, we have to be mindful that there are some shifts and so on with respect to fiscal year '22, and fiscal year '21. But certainly, nonetheless, the team did a great job truly across the board and getting that cash in the door with an outstanding performance of €1.4 billion. Now, if I can, then please go to the next slide, thank you. Go to the next slide, where we're looking at the quarterly overview. Here we see the orders, revenue and EBITDA. And we also see, again, all three KPIs going positively in the right direction. The growth in orders was, again, in both segments GP and SGRE, we see sharp and significant year-on-year increases, as we continue to order - to fill the order book and to get that order backlog up to the €84 billion, as said, as a Group. And of course, as Christian mentioned, really important, in both segments, we see this also coming from our large orders, so very positive wins in GP, for example, across the board, Transmission, of course, but also in Generation and in IA. And in SGRE, for example, having some significant wins as well in key geographies like the US. Looking at revenue, revenue rose 7.4% on a reported basis. And this, let's say was a bit of a mixed picture on a quarterly basis. For GP, this was a very strong, significant growth of almost 12%. And SGRE was in line with the last year or the prior year figure. Service, again, as mentioned, and I do want to underline that service came in 5% above prior year quarter. If you recall, last year's quarter in Q4, we were still starting to see the effects of coming out of the pandemic. And we see that that has come to fruition and we see our services is performing very strongly for strong Q4 performance. Now, going to the next slide please, on net cash. Let me take you through the financial situation, as Christian mentioned, I think it's even stronger than before. Looking on the left hand side, we have €5.3 billion in cash and cash equivalents. This is higher than at the end of fiscal year '20. We have as you can see there on the - as we go to the middle of the slide, we do have €2.7 billion of financial debt, €2 billion of which is long term. This is slightly higher than last year and reflects a rise of just shy of €500 million of SGRE, which accounts for the majority of our long and short term debt. We have liabilities and receivables from Siemens, this hasn't changed. It's varied somewhat from prior year. But overall, we have a net cash position of €2.5 billion, which is just slightly below €150 million higher than at the end of fiscal year '20. During the financial year for fiscal year '21, the provision for pensions and similar obligations decreased, which is good. And this is mainly due to very strong asset performance. And that's a very good progression there. So at the end of it, we have a net cash of €1.6 billion. Certainly this is healthy, and gives us the confidence that we have the funds required to invest in the three pillars that Christian just mentioned, extremely important strategically for us and also to ensure that from a cash perspective, we're dealing with the legacy items and the cost out initiatives when it comes to restructuring, and so on. And last but not least, this is also something that we need to think about with respect to cash-out. We still have small, a number of carve out countries where of course there may be expected cash-out for next year also, as I've highlighted here on the slide. So now, if we can go to the next slide please, where we look at Gas and Power for the year. Overall, generally speaking, we had a very strong, solid year for our Gas and Power business. We see that orders are rising 8%, on a reported basis in the year. And if you reflect upon that, that was also a bit of a first six months versus the last six months. In the second half, we saw a tremendous growth. A traditional Canadian hockey stick, if you'd like, of 25% growth in the second half, which was expected, as again, we were coming out of the pandemic year so with a slower start. So essentially looking at the full year and understanding that we were able to grow the backlog from €48 billion to €51 billion, I think is a very strong indicator of our order progress and that the quality, by the way, also very important. We talked about selectivity at the Capital Market Day. And this is also where we see that not only is the order backlog increasing, that the margin quality is improving in that order backlog, which again puts us on the path and in line to meet our midterm targets. Revenue here, as you see for Gas and Power increased year-over-year, just and about 1.5%, as reported and 4%, comparable. Despite a very strong finish to the year, as I think I might have mentioned, Q4 was the strongest quarter for revenue for Gas and Power, we just missed the lower end of our range of the guidance for Gas and Power of, as reported 2% to 6%, just slightly. But looking at just one level further, service revenue was very resilient, we see that on a reported basis, service revenue declined just slightly. But that's because it was affected by things like currency effects. And also, again, looking at last year in service, specifically in the IA business, we're seeing that that was a gradual ramp up throughout the year. And that obviously affected us year-on-year. Our order backlog rose by €3 billion to very healthy €51 billion, as I mentioned, and our book-to-bill continues to remain above one. If I haven't mentioned that already, it's three years running that we have a book-to-bill greater than one which in turn shows us that we have a very healthy order backlog. And looking at our EBITDA before special items, this is an area of real focus and highlight. We came in very strong, just shy of €850 million, 4.6% and slightly above our midpoint of our guidance of 3.5% to 5.5%. This implies an improvement of just shy of €600 million and up 320 basis points versus last year. And this is and was hard work, I have to say. And this was across the board. All of the businesses contributed to this outcome from Generation, Transmission, IA and also the functions and everyone else was in this keen eye to ensure that we have our cost-out initiatives not only initiated, but that we continue to execute on that in a very diligent way. Number one, also looking at operational excellence, we are a project business. So ensuring that we continue to execute as expected, on budget, and without any unexpected cost surprises. And again, those operational improvements were visible across all of our businesses. So now one comment I would like to make on special items. In fiscal year '21, we incurred special items of just over €470 million, of which the lion's share, so €360 million, are referring to restructuring. And this, as Christian alluded to, we embarked upon our various plans this year. We did that globally but certainly here also within Germany, in Q4, the restructuring costs are mainly relating to our agreement with the Works Council regarding workforce reductions here in Germany. But again, this also, I think, is a signal that we're continuing to progress on our cost-out programs. And this is what we planned. And we're on track now with these measures and those that are forthcoming, of course, to reach our cost-out measures for 2023. One highlight, again, is free cash flow. And I mean GP generated on its own €1.2 billion of the €1.4 billion in cash for the year. And this is a CCR of 3.2. I mean, this is exceptionally strong cash flow, and it was due to a number of factors. First and foremost, of course, it was due to our asset management initiatives. This was a bit of a mixed picture but certainly our focus, for example, on payables paid off. Also though we do have some tailwinds in Q4 specifically relating to restructuring cash-out. But this is just a timing issue, for example. It's lower than anticipated but of course, we'll also have impact in fiscal year '22, for example. And also one thing that impacted our cash was when we were spun off of Siemens AG, we actually spun ourselves out of the supply chain financing programs and relaunched that within the year and of course, this also had a positive impact on our cash. I'm very pleased with this performance. Certainly, I think overall, Gas and Power was on the right path, but we are not complacent. We do have cash-outs coming in fiscal year '22. We did have a significant, let's say, payments that came in. We unlocked cash, which was great because of course those were cash that of course we didn't have before. But also there was some payments that did come into this fiscal year that will impact next fiscal year. But altogether, I know this, between SGRE and GP, we have that focus on cash and we'll continue to ensure that we reach our targets with respect to cash. Next, very quickly on the quarterly development, looking at GP in Q4 and overall. If we look at Q4, orders in GP rose very sharply by 40%. 40%, compared to the prior year quarter. And this is translates to double digit growth across all businesses. And the increase was led, like I said, all businesses but also in different geographies, which was also great to see. It was here in Germany, it was in Europe, it was also in the US, for example. Revenue also following that trend increased by almost 12%, or 11.6%. Again, with all businesses making progress there, and lead by Generation and Industrial Applications. Also of note, as I mentioned earlier, it's good to see both new units and service revenue increasing. New units with 18% quarter-over-quarter, a very strong quarter indeed for our new units part of our business and services, again, with a healthy 5%. Adjusted EBITDA improved significantly year-over-year and came in at €165 million for the quarter, reflecting a margin of 3.1%. As indicated in Q3, if you remember, I even mentioned it a few times that we were looking to in terms of development of our EBITDA in Q4 and that this would be impacted. It was due to an unfavorable business mix, if you recall. And, of course, as we continue to execute on some of those low margin legacy projects, but for the full fiscal year, and in Q4, we do see improvement across all businesses, which is really great. I mean, to sum it up for GP in fiscal year '21, we see that we are progressing. And there's a lot of hard work already put into it, but certainly more work to be done. And this is in line with our expectations. We have strong orders, we're returning to growth, higher profits with strong cash flow and this puts us with that diligence on track to reach our 2023 targets. Very quickly on the slide with our focus on asset management, I think I covered this quite significantly already. But we see that it is bearing fruit. As I mentioned, we had and we did set a clear target of, at the CMD to reduce our net working operating capital. And we have set clear targets for all, for trade receivables, inventories and trade payables. And so far, we continue to work and reduce our operating networking capital from fiscal year '19 as you see to fiscal year '21. This is a nice marked improvement, of course. And obviously, we're now running a bit ahead of target. But we over achieved that and I said, certainly I want to make sure that we continue to focus there, that this becomes something that's not just an annual task, it's a monthly task. This is something we need to continue to do. And certainly there's more work that can be done with respect to receivables as we see an increase there in fiscal year '21. All for good reasons, I'm not concerned about it, but certainly it is increasing. And this is something that we should focus on into the next fiscal year, coupled with inventories. So now going to Page 19. Looking at the guidance, so first of all, I think looking at the guidance, I'll give you my priorities in just a second. But of course, the guidance for Siemens Energy in fiscal year '22, here we expect revenue development, excluding currency translation and portfolio effects to be in a range of negative 1% to 3% with adjusted EBITDA margin before special items of 3% to 5%. We also talk about net income and free cash flow. We see a sharp improvement towards our target of positive net income and free cash flow pretax in a positive to mid triple-digit million euro range. For GP, we see revenue growth of 1% to 5%, comparable and adjusted EBITDA margin before special items of 4.5% to 6.5%. Looking at SGRE, we see a revenue decline of minus 2% to minus 7% comparable and adjusted EBITDA margin before special item of 1% to 4%. Also something to consider here as we go into fiscal year '22, some of them I've already talked about, but certainly with respect to special items, we will continue on the path of our cost-out programs. So we do expect restructuring, and certainly also will continue to have standalone costs. But we see this as being significantly lower than fiscal year '21. With PPA, we see this generally and roughly stable, no changes. Effective tax rate continuing at the 25% to 30% range. We see our savings from restructuring measures, of course, that continues, as we mentioned, we met our target of the €200 million for fiscal year '21. We see that also going into '22 at the level of around €200 million. And we see tangible investments between €350 million to €400 million. So again, just to wrap it up to go to the next slide, please. When we look at the priorities for fiscal year '22, I think it just continue to deliver on our cost control to retain and ensure that our restructuring savings are sustainable; continue to look at our balance sheets and tight management across the Group in SGRE and GP when looking at our net working capital; and certainly last but not least, we're looking, we've heard, we know, we want to continue to provide more transparency in terms of our financial figures. And this is something that we will also make a priority for fiscal year '22. So with that, thank you very much. That concludes my part of the presentation. And I now give it back to you, Christian. Thank you.

Thank you very much, Maria. And I want to wrap up only briefly talking about the four management priorities for 2022. First of all, as Maria has explained, we're sitting on a strong order book. It's about working off the backlog and making sure that we deliver on the fundamentals to also bring it to a profitable business at GP as well as at SGRE. The second piece is definitely and you heard it from all of our peers, is a close focus on the supply chain. That is something which we have been rigorously done in 2021. And we're very good actually, I have to say, able to manage it. On the GP side, we have seen an impact on the SGRE side. But it will continue to remain a major focus of us. This is definitely all across the board, materials, logistics, in some part, energy. We do see some constraints there. And we believe it will keep us busy, a good way into 2022 of carefully managing the supply chains and making sure that we can minimize impacts. The third element is really refining also the operating model. How can we get more effective? How can we get faster alongside these three pillars? What I mentioned before, we took out multiple companies out of Siemens, stabilized the company and now make it more profitable. Now it's really to also look forward and build the company around it and make the most effective organizational model around it. And this will be something which we are going to tackle in 2022. And obviously, the continuous focus on sustainability and driving sustainable growth elements will be the fourth element, what we're driving. With that, I really would like to extend my invitation to all of you, hopefully in-person in Berlin on May 23rd and 24th 2022 for our next Capital Market Day. You might recall that on the first Capital Market Day, we said, okay, within '23, we say was the next phase. We want to pull it forward. There's a lot of momentum in the company and we would be very happy to meet you there in-person. Thanks very much. And with this, I would hand over back to Michael for questions.

Yeah, thank you very much, Christian. Thank you very much, Maria. . I do see some questions. But I thought it's worthwhile, just to remind you. So over to the Q&A now, we've got about half an hour. A - Michael Hagmann: And I would start with Ben Uglow from Morgan Stanley. So Ben, please, if you have a question, go ahead.

Good morning, everyone. Hope all are well. Thank you for taking the question. Two kinds of things to think about, one is just on the Generation business question. Can you give us just a bit more sense, a bit more color in terms of what's going on with the order pipeline in the large GT business? So how do we think about large GT's awards next year and separate that from what we're seeing on the industrial GT side? So basically just calibrate in Generation, how orders look across the different segments? Second question, Industrial Applications, is it real? Is this business actually inflecting, joking aside, if I look at the year, orders are flattish but the fourth quarter seems to be showing a lot of momentum. Is this - are we going to be looking at top line growth in Industrial Applications in '22?

Yeah, thank you very much, Ben. Good to hear you. First of all, on Generation on the order pipeline expectation for 2022, on the last gas turbine as much as we can see today, I would expect, let's say, lower order intake pipeline in 2022. So I would expect the book-to-bill on the large gas turbines slightly below one. Alongside the projects, what we're seeing today, industrial gas turbines, I would see stronger. So we expect the book-to-bill there above one. And this is how, obviously, we see the projects currently distributed in the market. But all-in-all, I would still call it overarching a relatively stable market, which is good, right? On IA, I would say, yes, I think it's real. I think there's what we're seeing, we see really the good recovery in a lot of industries and it's not only oil and gas, it's also other process industries. With regards to the growth, one thing which we always will have to look into in IA is, we will continue to look on portfolio elements and what are we continuing to do? This might be, might be here and there, smaller impacts but the businesses we're driving, we want to continue. I absolutely see them getting back on track and getting back on a book-to-bill above one and also on and on slightly improving growth path going forward. You know, this is one area where we said, we expect decent growth coming from that area. And I believe we see it.

And thank you. Just one quick follow up. Just the way, I actually understand it, on the large GT side, is your view based on sort of underlying decline in the market, overall? Or is it due to specific kind of project awards?

No, it's, I think, from the market overall, in terms of how many large gas turbine project are around, how many has been awarded in '21, you have seen from our side, there was a strong quarter four on the large gas turbines. And if I all sum up and how long it takes to develop certain projects, I believe '22, as I said, will be rather a little bit lower. At least that is our expectation at the moment. But this is our general view on the market.

That's great, thank you very much.

Thanks, Ben.

Thank you to both of you. And the next question comes from Vivek Midha at Citi. Vivek, if you please go ahead.

Thanks very much, Michael and good morning, everyone. Two questions from me, please. So, firstly, on the ownership structure, would you mind just clarifying some of the commentary in the press call earlier this morning? And secondly a question around free cash flow and thank you very much for the color on the guidance there. But in terms of your assumptions around Gas and Power and Siemens Gamesa or we heard some of the commentary on Siemens Gamesa, in the call last week. So that could potentially be negative. So I mean, how should we think about that for your overall Siemens Energy cash flow, given your guidance of a mid triple-digit free cash flow number? Thank you.

Thanks and just to clarify whether I heard you correctly, you refer to the ownership structure, I would assume with SGRE, right, from the morning call on the press? Is that what you're -

SGRE, correct, thanks.

Yeah, so I hope I didn't say anything different, what I have been saying before. I said two things. The one thing is I said the fixing the problems at SGRE is - should be irrespective of our ownership structure, and I believe it is addressed and also then controlled through the Board. The other piece was, is there any update from our view on the ownership side? And there I said, no, there is no update on this. And we can really not comment on this more than this. I believe wind is an important part of our business but there is at this point in time, no update from my side on the ownership structure.

Hi, good morning, Vivek. I'm happy to take your question on cash flow and the assumptions looking specifically into next year. So as we mentioned, for us, we see the guidance of free cash flow pretax in a positive mid triple-digit million euro range. And you're right, maybe it's best to look at this from a GP and SGRE perspective. As management of SGRE, and Beatriz mentioned last Friday, they see that, of course, looking at things like localization requirements, expansion that's necessary based on customer commitment. That from a CapEx perspective, of course, that will be needed in terms of cash use within fiscal year '22. When we look at GP, I see this a little more stable, if you'd like. Also, from a CapEx perspective, looking at year-over-year, this year due to various good reasons, some of the CapEx was delayed. So that will slip into next year. But certainly from a cash conversion, we see that GP continues on the path that we've set for ourselves in this fiscal year.

Thank you very much.

Thank you.

Thank you, all. And the next question comes from Gael de-Bray at Deutsche Bank. Gael, if you please go ahead. Gael de-Bray: Thanks very much. Good morning, everybody. You obviously have longer lead times and there is clauses in the contracts. But I guess there can still be some supply chain challenges given the volatility here from one week to the other. So could you talk a little bit about that and how it looks like so far maybe this quarter? So that's question number one.

Good morning, Gael. I will try to do it as good as I can. Yeah, I mean, the supply chain has been really throughout '21 really a core activity on our side here. Every week there is a, say more or less, focus team working on it, reviewing the different contracts and the supply chain in total. Yes, we do have indexations, more indexations, and potentially we had at SGRE in the GP contracts, despite that, I agree with you. There were obviously headwinds from the supply chain, which could be mitigated also in 2021. We are - keep tight control on it in 2022. As I said, I believe it will be with us throughout 2022. And I think one was, once we look on the supply chain, we really have to differentiate the different elements. If I look on core element like steel, which is our biggest material related supply chain element, also on the GP side, it is something where I do expect recovery. Or let's say, how you say? A leveling off, thank you, I was missing the English word. A leveling off in the second half of '22. It's more than the question is, okay, can you get certain material or not. Logistics, I expect, to remain constrained. We are not so exposed to sea freight, but we have to manage it carefully in terms of the timing. And the third element is something around energy, we have to be aware that we also were affected by the power cuts in China. Because obviously, we have factories in China which are depending on supply of electricity to operate, this could also easily impact the supply chain if this continues. It's a little bit difficult to predict there. We believe we have a good process in place to manage this. But supply chain is, let's say a major concern for me for 2022. But I'm pleased also to see the processes, the rigor of the processes we have. And so far, I think I have to say, we manage it. But it will be a key focus area for 2022. Gael de-Bray: Okay, understood. And the second question I have is on the 24% stake in at Siemens India. So could you just remind us what the strategic rationale here of keeping such a stake and how long do you intend to stick to it rather than monetizing it?

You know, maybe I said earlier, maybe, Maria, since you're doing the shareholdings there. I mean, first of all, there is no deliberate logic in the 24% as it is the logic way, the split of the company on how to allocate the different businesses to Siemens Energy and to Siemens AG, why we have not yet two separate companies in India. So it is something which is due to the structure of the carve out. And it's something which at one point in time, we need to resolve structurally, because obviously, now Siemens India is doing both businesses, the Siemens Energy business, as well as the Siemens AG business, which is possible but not optimum. So we need to address it, but this is a listed company, and obviously in this regard, has certain elements to look at. Maybe Maria, you want to comment?

Absolutely. Thank you, Michael. I keep forgetting to put the microphone on and off. That's, of course, this is the setup that was constructed at the carve out and it will take a little longer. It's as envisioned, nothing will really happen in '22. This is something that will happen perhaps in '23. And it's also because of some, let's say, complications and intricacies regarding tax. So that's the - what we see from Siemens India. This is not a fiscal year '22 topic. Gael de-Bray: Okay, thanks very much.

Thank you, all. Next question goes to Alex Virgo at Bank of America Merrill Lynch. Alex, please? It looks as if we lost Alex. So the next question goes to Supriya - Alex, if you could try again?

Hi, good morning. Am I audible?

Yes, you're on. Hello.

Yeah. All right. Great, thank you, good morning. And thank you for giving me the chance to ask the question. Two questions, one is on the revenue outlook for '22. And thanks for all the color on the divisional level. Just wanted to get your thoughts on how do you see between equipment and service as well? How do you see revenues progressing? And do you expect revenues to, sorry, service to continue to outpace equipment even for the next fiscal? And my second question was on the margin outlook, the medium term margin outlook, which you've maintained for 2023 at a Group level. Given that Siemens Gamesa, last Friday, of course, talked about pushing out their 8% to 10% guidance to potentially in 2024 or '25. How do you see that impacting Siemens Energy's Group margin? Thank you.

Well, let me press the button again. So now I'll take this from a revenue outlook perspective. Specifically, I think Christian mentioned, the equipment trends that we see, of course, very pleased with the new unit and service performance in both Q4 but also for the fiscal year for the Group and for GP. We see that this is progressing positively across all of the businesses. And looking at next year, I think with respect to services, it's two things. One is, of course, service follows certainly in the Generation space, it follows the new orders or the new unit booking. This goes back to what Christian said, where we see like a stabilization, if you'd like, next year. And then on IA, this is where we see that continued momentum and growth or return back, if you'd like, to the pre-COVID levels, which we have not yet experienced. So this will continue into fiscal year '22. With respect to the margin at the Group level, yes, of course, SGRE indicated that on, and again, looking at SGRE, we always have to differentiate when it comes to their onshore turn around. They see that this is prolonged, this is impacting the fiscal year '23. When we've looked at this holistically as a Group, and of course, we'll continue to look at this in light of the information that SGRE provided, we see that still we're continuing to progress towards our fiscal year '23 targets. Of course, we will continue to look at this should this change materially, but this is where we stand at this point in time.

Okay, great. Thank you very much.

Thank you.

Thank you, all. Next question goes to Simon Toennessen at Jefferies. Simon, please?

Yeah, good morning, everybody. Thanks for taking the question. My first question is on I guess the EBIT bridge and the various drivers within. If I take the midpoint of your growth and margin guidance, I get to around €193 million incrementally today that you're guiding for next year. You're targeting €200 million of savings. You expect growth in GP, it sounds like mix should be positive given service probably in Generation growing quicker than your EBIT. What am I missing here? Is it the inflationary side not the offset by productivity? Just a bit more color on the on the drivers of which would be helpful on the certainly versus the side. And then the second question on hydrogen, please. You obviously mentioned Christian that CMD, earlier in the year. Can you quantify the level of revenues you generated from hydrogen this year versus last year? And then as a follow up on that, you mentioned 50 turbines running on hydrogen mix already. I guess the question is what has developed, I guess better or worse in your hydrogen business since your Capital Market Day? Is there a quicker adoption in any particular fields? Maybe some color on the offshore research project would be also quite helpful. Thank you.

I'll take the hydrogen, you take the first one.

Yes, exactly. So let me take the first one regarding the EBIT bridge. And just maybe to take it back a step, of course, looking at next year, there's a few things that in order for us to make that incremental based on our guidance, there are things that need to happen. For sure, as we mentioned earlier, we have to continue to drive our cost-out programs and get to that savings that we've committed to for next year. There's also dynamics underneath if you'd like with respect to OpEx, with respect to R&D, and SG&A. These are areas that of course are also fluctuating year-over-year where we see some reductions, but also some necessary increases. And this is something that is playing into our EBIT bridge next year. And certainly, this is one where we have to make sure that we continue to watch SG&A, for example, with respect to headcount increases necessary in certain parts of the business like SGRE, where we're ramping up, where we're looking at new facilities and localizing and ensuring that we're meeting our customer commitments. So those are also factors that we need to look at. With respect to inflation and certainly, let's say anything that's encompassing inflation, this is where we look to our base productivity. And it's important to note that we have a range of 3% to 5% in base productivity. And certainly this year, the team at Gas and Power did a really great job and we ended up towards the top end of the range. Certainly next year, we're looking to have that come in at the midpoint of the range.

Yeah, now, the hydrogen. First of all, in terms of level of revenue, and I said always, we're not chasing revenue at the moment, we are in the lower double-digit million range of revenue. In the hydrogen business related to electrolyzers, we're doing a significantly higher share if I calculate all the hydrogen compressors, hydrogen injection to gas turbines, but I believe your question more routed back to the electrolyzer side. What has developed since Capital Market Day? Honestly, I think we're very much in line with what we discussed then. I always said it will take until 2025 to really start to build up this business. It's a business for the second half of the decade. And I still believe that is the situation in which we're looking in. We have enough confidence that we are now obviously preparing the investment into a larger factory to produce, what I would call, electrolyzers modules in a more automated way. So things are progressing. But it is step after step after step. What has to happen now? The one thing is, supply chain has to be built up in terms of really getting the cost out and really professionalize it. And the second element is the big projects, which have been announced also have to come to reality. And despite all subsidy programs, we see that is obviously taking some time, not unexpected. In this regard, I'm satisfied with the progress. But it's also not something as I always said, which will come in '22 or '23. So it will take a couple of years. It's executing our plan. Nothing, no big surprises, I would say.

Thank you, both.

Thank you. And the next question comes from Andreas Willi at JPMorgan. Andreas, please?

Yeah, good morning to everybody and thanks for the time. My first question is on the guidance for the Gas and Power profitability in '22. It's a relatively large range, given I guess, you had a lot of faith in the backlog already. Maybe you could indicate some of the drivers that will get you to the lower end and higher end within that range. And in '21, we have obviously a very strong start helped by some one-offs and then a weaker finish also maybe depressed by some one-offs. How do you see it develop as we go through '22? And the second question is a follow up on cash flow. When you look at the Q4 cash performance at Siemens Gamesa, what was your impression in terms of the sustainability of this? I think working capital went to like minus 24% of sales. Inventories are about 1/3 of the level they are at Gamesa, that if you compare it relative to revenues, how sustainable is that kind of September miracle there?

You want to take on?

Yes.

Being it related to numbers.

Yes, exactly. So maybe I take the first, in terms of the Gas and Power profitability. In terms of the range there, I think Andreas, you're right, if you look at Gas and Power, but this depends on business. But looking at Gas and Power, we range around 70%, 75% of our revenue in the backlog already. However, what's important to note is that what's missing there, so that component that is missing is generally the very high margin service transactional business that's necessary for us, of course, too and then we apply that into the range. Also, I think it's important to note that some of the slips that we have seen and we did see slips into fiscal year '22. But we continue to see, let's say, some stagnated progress in certain areas. And this is also reflected in our range. So I think if you take those two things into consideration, that's where we discuss the range as such and determine that a larger range or the range as such, is appropriate. With respect to one-offs, I mean, Andreas, we had quite a few one-offs. As you know, this year, specifically in the beginning of the year, when it comes to our business and you know this perhaps better than a lot of people, that we are going to continue to have one-offs. This is part of our business. Generally speaking, we did have a positive tailwind in terms of one-offs, like I said, predominantly in the first half of the year. But this is something that, of course, the puts and takes, if you like, have leveled off, and here's, that's our assumption, going into fiscal year '22. With respect to free cash flow in Q4 performance and the sustainability of this, yes, the September wonder, as you mentioned, is something that we have traditionally had. This is our nice hockey stick that we have towards the end of the year. But certainly the level of pre-financing and this was also indicated by SGRE, there was a very high level of pre-financing, and they don't see that to continue to fiscal year '22. But they keep, and they will continue to monitor the networking capital with, let's say, a critical eye in all and every expenditure and everything that they're looking towards in terms of working capital, is scrutinized very, very closely by the team.

Thank you.

Thank you very much.

Thank you, Andreas.

The next question goes to Jonathan Mounsey at Exane. Jonathan, please?

Hi, thank you for taking my questions. Maybe I wonder and obviously, it's only just happened yesterday. But the GE separation, I'd be interested to hear your thoughts on that and how it may change the market dynamics? I guess, just looking from the outside, it looks probably good to have a significant peer, no longer able to lean on other highly cash generative assets such as healthcare. So it's interesting to see how you see that playing out. And then on the hydrogen opportunity, as you said, it's maybe a 2025 story onwards. But I wonder if you could comment maybe on, are you signing any framework agreements, which point towards a lot of revenue to come in the second half of the decade? You mentioned there are projects out there that are talked about, obviously, there are going to be owners and builders of the infrastructure, and I would have thought that already, you should be in close discussion with them. And I'm almost surprised that we're not seeing more announcements that suggest that you're starting to get some visibility on why you'd be building that extra factory capacity. So if you could just talk about who you're planning to work closely with and if there are any formal relationships already forming?

Thank you, Jonathan. On GE, I mean, obviously, I would refrain from commenting on competitors, as I said earlier in the morning. But I would always hint to also the three pillars, what we are building in terms of electricity generation, transmission and storage, and really improving the industrial assets. And in this regard, I would agree it's good to have a peer, and I'm happy to look into the competition. We feel very confident with this. And in this regard, I think it's for me, something which underlines necessity, which I always wanted - which I always try to make clear. I believe we need a diverse portfolio for a complex question, which is the energy transformation. There's not one silver bullet. And this is why I believe our broad portfolio and really, our ability to execute is a value. And if I now have a peer who goes in the same direction, that's always good to have somebody to compare to. And I'm looking forward to that. On hydrogen, yes, we are in discussions and yes, we have committed to certain joint project developments. There is some industry partnerships which we announced around offshore wind production, around producing renewable fuels. There's green steel activity ongoing, there's nothing where you could immediately reconcile in our revenues, say in '23, this is what it means. One thing I always have to underline, today, there is no commercial business model for green hydrogen. So if this is to fly then we have to have cheaper electricity, higher CO2 prices, and at the beginning probably, a market which is clearly identified and saying in this market, we pay a value for the green hydrogen molecule. And this is not there in all boundary conditions. And this is where I think all projects are currently a little bit slowed down by that we do need a commercial model for the green hydrogen setup. We are well set up in these partnerships to pull then the trigger. But I still believe it will take a couple of years until you can really get to this revenue recognition, what you're looking for the big steps forward. And this is why I always continue to hint into 2025. This is when I believe it really, the things are getting together and taking off.

Thank you.

Thank you. And we're coming to the end of the session. So if someone has a last minute question, please post it now. Otherwise, the last question would go to Sean McLoughlin at HSBC. So Sean, please over to you.

Sean, we cannot hear you.

Can you hear me now?

Yes.

Hello.

We can hear you now.

Good, thank you. Thanks for taking my questions. Understanding the low margin legacy project comments as well as the improving margin quality in the backlog, is this a mix effect, i.e. there is more service or are you seeing better profitability on the equipment orders? And at what point are you delivering your backlog at normalized margin?

Yeah, hi, Sean. I'll take that question and thank you for that question. It's a really great question because we've talked about this before. And certainly I alluded to that with respect to the second half of the revenue for last year. These are generally the large new unit, first time introduction projects, legacy in nature were, of course, they're not at the margin range that we have aspired to in terms of our targets, going forward, I've also indicated that there's going to be a bit of time necessary for us to get through that backlog. And time is flying. So I'm just trying to do quick math, but it looks like another 12 to eight months, let's say, to get through the rest of that legacy backlog. With respect to the new backlog, and what I see in terms of my margin, in that new backlog, I see that that is improving, specifically in the new unit area. And this is absolutely in line with our selectivity processes that we're seeing specifically at Generation. Of course, we want to monetize our investments that we've made in the past but certainly that's not at all cost. This is something that Christian and I put in place immediately when we started here at Siemens Energy. And we're also starting to see that that's coming to fruition in the margin that we see in the backlog.

Right. So I understand from that, then that the mix is not the driver, it's actually better equipment margins?

Yeah, again, so again, the legacy low margin projects are the new unit ones, that's for sure what we have in our backlog. And that certainly is at the margin levels that we don't, let's say, that are not in line with our targets. With respect to service, again, we look at that from the two perspectives we have from generation we have the long term service programs, that's something that generates that consistent if you'd like reliable service year-over-year that goes with generally our large gas turbine contracts. Here's where we're seeing that steady, that stable, but certainly, as we go into next fiscal year and years to come, we're seeing that that's also becoming, let's say, more difficult to have in terms of their duration. At one point, we had one contract that was 35 years in duration, I think we still have that contract but that's not something that we're seeing going forward. So that's number one. And on the other hand, when it comes to Industrial Applications, this is what I talked about in terms of our order backlog. And how do we ensure, even in terms of our range for revenue and EBIT, Industrial Applications is transactional business, so certainly something that we have to go and get. And that's why that was quite impacted by COVID. And something that we continue to see much more as a book and bill service into the future. Hopefully that clarifies.

Thank you. Can I ask you, well, how much is R&D going up by in '22?

Actually, so two things, R&D is not - I mean, we have as you know, we always say we want to be around the billion mark, both with CapEx and both with R&D. For the Group, this is what we indicated at the Capital Market Day. With respect to R&D, it's not increasing as such. We're just coming off quite a high spent in the prior year and the years prior to that. This is what we talk about when we say we want to monetize on that investment that we made, for example, in our large frame, large gas turbine, but certainly then going forward, we want to reduce that to the level, we have our own goal within GP of around €750 million, and then that will then not only stay at that level, and that's our commitment to ensure that we continue to invest in technology, but that we shift that investment to those growth fields, what Christian took us through earlier in the presentation. Thank you.

Thank you. A - Michael Hagmann: Thank you, everyone. That was the last and final question. So thank you, everybody, for bearing with us, as always, call on us in IR if you have further questions that haven't been answered, or if you need further guidance, but before the last word as always goes to our CEO. Christian, please?

Thank you very much, Michael. And thanks very much to all of you, first of all, for calling in but really being with us in our first year as a listed company. It is something where we are very, let's say, proud on the one hand, but also very glad to have all of you, following us, capturing us, hopefully investing into us. We always said at the beginning, it's a multi-year journey which we are on. It is an important journey to also to drive the energy transformation. So once again, many thanks to all your time, what you devoted to us. Highly appreciated, and I can only repeat, I hope to see you in-person next year during the Capital Market Day. Until then, stay healthy, and all the best. Thank you very much.

That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, a recording of this conference call will be available on the investor relations section of the Siemens energy website. So the website address is www.siemens-energy.com/investor-relations.