Good morning, ladies and gentlemen, and welcome to Siemens Energy's 2023 Fourth Quarter Conference Call. As a reminder, this call is being recorded. After the presentation, there will be a Q&A session. [Operator Instructions] Before we begin, I would like to draw your attention to the Safe Harbor statement on Page two of the Siemens Energy presentation. This conference call may include forward-looking statements. The statements are based on the company's current expectations and certain assumptions and are therefore subject to certain risks and uncertainties. At this time, I would like to turn the call over to your host today. Mr. Michael Hagmann, Head of Investor Relations. Please go ahead, sir.

Thank you, Alice. Good morning, and a warm welcome to our conference call this morning. As always, all the documents were released at 7 o'clock on our website. I'm here with our President and CEO, Christian Bruch and our CFO Maria Ferraro. Chris and Maria will take you through the major developments of the last quarter. This will take close to 45 minutes. We've got a bit more than an hour for the entire call. As Alice just said there will be a Q&A. As always, I would like you to stick to one question at a time. And if there is more time, we will of course, keep the Q&A open. With that, over to you, Christian.

Thank you very much, Michael, and also good morning, everybody from my side. Thank you very much for joining Maria and myself for this conference call. I will briefly take you through our quarter four and the outlook for fiscal year 2024, as well as our discussions with the German government which have been covered by the media quite a bit. And obviously including the agreements with the banking partners and Siemens AG on Project guarantees. I will also walk you through the performance of the former gas and power business and give you an update in respect to the developments in Siemens Gamesa since the last quarter. Our results for fiscal year 2023 are fully in line with our recent guidance for the Siemens Energy Group and our business area targets. Seeing obviously also our quarter three update what they gave. All former gas and power businesses exceeded the fiscal year 2023 revenue growth target and achieved profit margins before a special item in line or above guidance. All of these businesses are well on track to reach their mid-term targets. As Siemens Gamesa growth was lower than expected by profitability was in line with what we communicated in our quarter three call. This also means no further provisions have been taken in addition to the 1.6 billion previously communicated. Siemens Energy Group generated €0.8 billion in free cash flow pre-tax and this was significantly better than originally expected. And you'll see that afterwards in Maria's numbers also in a better net financial debt as the outcome. After constructive and intensive calls the German government, Siemens AG and our banking partners agreed on a guarantee facility of €12 billion. At the same time Siemens Energy agreed that it will sell an 18% stake in Siemens India Limited to Siemens AG and beyond the execution of the existing divestment program, including for example, the trench portfolio, we intend to accelerate the portfolio transformation and to raise more proceeds out of these discussions. I will give a more elaborated count of the progress at Siemens Gamesa in a moment, but as a key message, I want to take away that the quality task force is now fully operational and that the ramp up of the offshore factories is continuing, and that we are stabilizing the operation and apply strict selectivity when it comes to orders. I have previously been saying that we need to review the scope of our activities and this review is ongoing. Let me briefly touch on our guidance going forward and driven by growth technologies and transformation of industry we expect comparable growth of 3% to 7% in fiscal year 2024. And despite the high losses at Siemens Gamesa, I have to say we expect a Group margin of negative 2% to positive 1%. Grid Technologies and Transformation of industry are expecting higher margin ranges in fiscal year 2024 compared to the targets for fiscal year 2023. On an underlying basis, we expect a net loss of €1 billion to €1.5 billion, but obviously you have to see also then the positive proceeds getting into this, and Maria will talk about this. And, obviously, then on the net income side the positive effect there. Obviously, because of this divestments exploration portfolio transformation, it will be a net income around a €1 billion positive then. I would jump over this slide, more or less than the details. As I said, we're also going to discuss the details result with Maria numbers. But let me comment briefly on this guarantee discussion, which to a certain extent, might have confused also a lot of people, and about the talks between Siemens Energy, banking partners, Siemens AG and the German government on establishing a guarantee facility, and there were a lot of misleading reports to understand what it's about. So allow me a bit to address the background. As you know, Siemens Energy is one of the leading players across the entire value chain of energy and therefore a key facilitator of the energy transition. And you see it obviously, in the rise of our order books €212 billion by the end of fiscal year 2023. The issuance of guarantees to customers isn't our business standard market practice. Banks or other financial institutions provide these guarantees against the fee what we pay and industry-wide, the default rate for these guarantees is very, very low. And Siemens Energy is even below the industry average. Still, the access to bank guarantees capacity is a core requirement in the energy business. And due to the increasing amount of projects, we will see an increasing demand for guarantees also on our side. We have now for a certain part of our required guarantee capacity reached an agreement with a German government as well as our banks to secure access to our growing guarantee volumes with back guarantee structure. So as part of this guarantee scheme, we also have agreed with Siemens AG, additional recourse scheme for loss protection of these guarantees, and this will allow us to continue to grow and to facilitate the energy transition. Just to avoid the misunderstanding. It is not a state aid or these type of things. It's a guarantee or insurance type of mechanism where we pay a fee to the banks as well as to the government. And because that is a commercial fee, this is also nothing under EU state aid or whatsoever. So I think this has to be clear, because there were a lot of reports in press that taxpayers money, so whatsoever. So I clearly would like to stress here that this is not the case. It's a different mechanism. However, it still leaves us obviously with a task to fix a win business as fast as possible. But these guarantees schemes are also meant to support the growth in the other businesses. And that is always what is I think, important to underline, because I think we've created a bit of a confusion with this discussion. Let me briefly talk about the performance of the former gas and power businesses. And I'm proud that we achieved the targets we set on the first capital markets day in September 2020, despite COVID-19 and despite the war in Ukraine. And you may recall that at Capital Market Day, we said we want to achieve a profit adjusted EBITDA margin before special items of 6% to 8% in fiscal year 2023, and gas and power. And we ended up right in the middle of this range at a margin of 7.1% which compares to a margin of just 1.4% in fiscal year 2020. And this marks an improvement of almost 6% percentage points compared to where we started in 2020. That is an excellent example how to turn around troubled businesses. And the key drivers for the improvement where our focus on selective bidding, cost out and operational excellence. Capitalizing on the quality of our products, our global reach and the opportunities created by the energy transition, we booked orders of €33.60 billion in this area last year. And revenue in the former gas and power businesses grew by 18% on a comparable basis to €22 billion, representing more than 70% of our total revenue. Gas Services, Grid Technologies and Transformation of industry are therefore well on track to reach the midterm profitability targets we have set at the Capital Market Day in May last year, and we expect them to continue to thrive thereafter. Maria will share the new midterm targets in a couple of minutes such that you can better understand the improved outlook. Let me now talk about Siemens Gamesa and how we are progressing with a quality task force an onshore and the ramp up of production in the offshore business. In onshore the data patterns we receive from our installed fleet during the fourth quarter of fiscal year 2023 support the findings published with Siemens Energy quarter three results. And as you know, we have assembled a task force which brings together the expertise from Siemens Gamesa, Siemens Energy AlixPartners and [Turf North] [ph]. And this task force is working through the quality topics. The quality issues assessed as major based on their technical and financial impact, which we define as high impact has been identified and the review is completed the technical analysis of the failure modes in the onshore 4x and 5x is largely done, there are certain reports, which are really under close out we had lower or less impact matters, and the progress has been made also in the definition of the remediation measures. We have communicated also in parallel that we have halted to commercial activity for new projects based on the 5x spectrum during this review phase of the quality matters and based on the status of the reviews, we are now defining a timeline and approach how and when to resume commercial activities with the design incorporating the respective corrective measures. We're still defining the exact date because in certain areas, we also obviously have to make sure that we line up the suppliers that we can commit to higher delivery times. But I would say we know what we would want to do at this point in time. And I think this is important. So gradually, step wise, we will move this forward. But we also said, we will make sure that we have properly worked through the quality matters. In light of this also the review of the product portfolio and the focus on core markets in order to stabilize the business is ongoing. We will discuss this in more detail during our capital markets day next week. In offshore, Siemens Gamesa is focusing on the ramp up of its factories and the new product generation as well as the execution of the order backlog. And offshore has been making progress in the ramp up across the different factories, output has been significantly increased compared to fiscal year '22. I mean, this is really with a unit sales coming, tripling for the net sales, it's roughly 1/3rd for the blade, so the things are going in the right direction, not as fast as originally planned when we had the transaction business case. So still we have still homework to do, right. And this is also why you see for 2024, still numbers which are not there where we would like them to be in terms of improving this. But I would say a lot of good progress made in the different factories and in the execution for the SG11-200 direct drive output and [indiscernible], this now has more than doubled and weekly production [indiscernible] increase. So this is good moves. This was obviously also driven a lot by hiring new people training them and so forth. So the required hiring and training in major plants has progressed and we'll continue also throughout fiscal year 2024. And this refers to all our offshore production sites, Cuxhaven, Hull, Le Havre and Aalborg and these activities support also the ramp up of our next generation blade for the SG14 and with latest 222 and 236. Executing on the record all the backlog in offshore is taking a very selective approach for us now also on new orders with a focus on orders was an attractive risk and reward profiles. You have seen a good order intake in quarter four of fiscal year '23. This gives us obviously also the freedom of selectivity. We expect in light of this and potential delays in certain offshore projects, the order intake in offshore for fiscal year 2024 to be low. Obviously, combined with the fact that we are sitting on a large backlog also to execute. Despite the progress we are making we are expecting for Siemens Gamesa a loss of approximately €2 billion in fiscal year 2024. And this is a reflection of the low margin profile in the backlog as almost all of our onshore revenues will be onerous and go through the profit and loss at zero project margin. The revenue conversion in offshore will also have a low project margin of the backlog because of the product cost increases communicated in quarter three. And in addition, we expect a higher impact from under absorption our onshore and offshore factories due to lower revenue. Given the effectiveness of the stabilization measures and considering a higher revenue in the second half of fiscal year 2024. We expect a positive trend in profitability through the year. We now have a step plan in place to turnaround Siemens Gamesa target is to reach breakeven in fiscal year 2026 and to restore an adequate level of profitability thereafter. I have just mentioned that the turnaround at the former gas and power business was based on our focus on selective bidding cost out and operational excellence and these measures. Were also taking now for the wind business to make it successful and from the moment Jochen jointly applied already strong selectivity with a focus on price terms and conditions. And these measures will address the cost base and will improve operational excellence. Jochen will talk about more of these elements next week on the Capital Market Day. So I hope you can join. In onshore we will focus on key markets and serve those with a much smaller number of turbine variants and in offshore we will focus on our flagship, the SG14-2036. And we will optimize obviously also footprint and operations continuously, which allows us to increase also the offshore output significantly. The integration of Siemens Gamesa into Siemens Energy will help also to strengthen the processes and to realize synergies and we are on it while I speak. Let me like always give you a couple of examples out of the last quarter explaining the positioning along the value chain of energy transition. The first project is a great example that hydrogen can be used as an flexible energy storage medium combined with an gas fired turbine and to operate either on natural gas or with renewable hydrogen. And this is a project in France on the left-hand side where we produce through one of our electrolyzers hydrogen. We can operate gas turbine on 100% renewable hydrogen there and actually demonstrate on how a future energy system going to look like if completely decarbonized. While there has been a lot of discussions on cancellations on future offshore projects in the media lately, I'm proud to announce that the world's largest offshore wind power project has been inaugurated, which is using Siemens Gamesa wind turbines. This is Hollandse Kust Zuid project, which is really a pioneering achievement for industry on by Vattenfall, BASF, and Allianz. In total 139 of our 11 megawatt turbines with a total capacity of 1.5 gigawatts have been installed, and now it's fully operational and can supply around 1.5 million Dutch households with renewable energy. Another milestone for Siemens Energy will be the delivery of the first ever hybrid grid stabilization and large-scale battery storage at Shannonbridge in Ireland. And this is the first time that these two technologies have been combined into one single grid connection to stabilize the grid and make better use of renewable energy. So these concepts, which you're going to see more and more coming into the grid. And obviously also, in combination with elements like large scale battery, energy storage, we can really handle a very volatile power generation and stably supply the grid with energy. Last but not least, I'm proud to announce that we are making great progress with our hydrogen offerings. We have inaugurated our new factory in Berlin, together with our partner, Air Liquide last week. Siemens Energy is supplying 12 electrolyzers out of this factory to an Air Liquide project in the north of France, to produce around 28,000 ton of renewable hydrogen. And obviously, we are very proud that we are really continuing also the commercialization of this technology now together with them as partners, and we have a good pipeline [shared there] [ph]. These four examples show on how to be positioned along the value chain of energy also for the future. And with this, I hand over to Maria for the numbers.

Thank you, Christian, and hello, and good morning, everyone from my side. It's my pleasure to go through the quarterly and annual results with you today. So let's jump right in please to the next page where we see overall the Siemens Energy Group for fiscal year '23. Here you see orders exceeded really an exceptional order intake this year. It exceeded the high level of the prior year by close to 34% and rose to €50.4 billion for the year, again, driven by large orders across the business, but particularly in Siemens Gamesa, and Grid Technology. Book to bill strong at just over 1.6 and the order book grew to a new high of €112 billion. Revenue was up just shy of 10% on a comparable basis. This was driven by growth in all segments except for Siemens Gamesa, but this brings us comfortably to the midpoint of our revenue growth guidance of 9% to 11%. What's also very important is the growth in service, which was at 10% and higher than in the new units. This resulted, as you know, we always have a favorable mix when this happens. And this is true also for fiscal year '23. Profit decreased to negative 2.8 billion. This is due to the loss at Siemens Gamesa in Siemens Energy without Siemens Gamesa, the profit before special items increased from 842 in fiscal year '22 to 1.6 billion. That goes from a 4.4% margin to just over 7% margin in fiscal year '23. And what's also important is that is due to improvements across all of the business areas. Free cash flow pre-tax decreased to 784 million, but much better than the Q3 adjusted outlook across all businesses. This also included Siemens Gamesa. You might remember that in Q3, we expected the free cash flow pre-tax for Q4 to be breakeven or roundabout, but we ended up with a positive 1.1 billion for the fourth quarter. Looking at the full fiscal year, we had a very strong cash flow in GS, which was just shy of 950 million. GT came in at 1.225 and TI came in at just shy, just over 190 million. This was offset by the net cash outflow at Siemens Gamesa for 1.6 for the overall result. Now going to the next page, please, where we're looking at our order backlog. As per the other quarters, it's really important for us to highlight the order backlog, because of course, as you know, it provides strong visibility on revenue, well beyond a 12-month timeframe. But also, this is what underpins our guidance for '24 and our targets for '26. In the fourth quarter, the order backlog grew as you know, and out of the 112 SE overall backlog, 42 billion refers to Siemens Gamesa. This part of our backlog continues to be impacted by low gross project margin quality in onshore/offshore and less so in service business, but this is what Christian mentioned earlier. However, the margin profile of the order backlog representing about 70 billion or two-thirds of GS, GT and TI continued to improve and supports our short and mid-term target levels. Now, going to the next slide, please. Let's take a look at the cash bridge at the end of Q4, as you can see in the bridge, despite headwinds in Siemens Gamesa, our liquidity position remains strong in Q4 with an overall 4.6 billion in cash and cash equivalents, 4.8 billion in financial debt, of which 3.2 is long term. This results in a slight net debt position of 192 million, which is around 150 million lower than that at the end of Q3. And overall, this is materially lower than expected. And this is again due to the much better free cash flow performance at the year end. So net debt, of course, if you include pensions obligations is just shy of 0.8 billion at year end. Now, very importantly, looking at our liquidity position. As at the end of Q4, our Group had a total available liquidity of 9.6 billion, as we had just mentioned, 4.6 billion in cash and cash equivalent, plus the 5 billion in undrawn credit lines. So therefore, we have a very strong balance sheet as of fiscal year end 2023. And our goal is to continue in this regard for the years to come. And important, as always, we're committed to maintaining a conservative financial risk profile, commensurate with an investment grade rating. And this provides the strong foundation for our business and for our continued growth. So moving on, please to the next slide. This is here we're outlining a few of the measures that we're taking to strengthen our balance sheet, and also to accelerate our transformation. So we've been very proactive and working hard on multiple levers to strengthen our balance sheet. And this was because we proactively knew, of course to manage the SG cash outflows as expected. And I think we've been successful so far in doing so. As you can see on this slide, we have decided on significant near term cash measures to materially strengthen our balance sheet. The most significant is that the sale of 18% of our stake in the listed Siemens India to Siemens AG as announced. I'll talk about that in a moment. In addition, you may have seen that we announced last month to divest Trench to Triton. This is also expected to close early next year. We're also in the final stages of a few other non-core disposals, which will finalize as time progresses and soon. All of these measures will result in near term cash inflows of approximately €2.5 billion to €3 billion. And we expect all of that to come in in fiscal year '24. So, needless to say this is quite a material and with these measures, we will then target a net cash balance at the end of fiscal '24. So, therefore, like I said, we've done a lot, and we've achieved a lot so far, we're going to continue in this regard. And we've already initiated measures to strengthen our balance sheet, and this is very important for us. And again, it's important that we have all levers available to us as we display here, should we wish to further strengthen our balance sheet and to ensure that we continue to look for opportunities for our business to further accelerate our strategic program. Moving on please to the next slide. Here you see the agreement. A few more details on the agreement of the sale of the 18% stake in Siemens Limited India to Siemens AG. Siemens Limited which we will now call SIL from now on, is a publicly listed company in India. When Siemens Energy was spun off from Siemens in 2020, SIL had not yet been separated for administrative reasons. Since the spin Siemens Energy owns, holds 24% of the company, while Siemens AG holds 51%. So now you see we've reached an agreement with Siemens AG to sell a stake of 18% in SIL to Siemens AG. This partial sale is the first step of the planned unbundling of the gas and power business. So this was always anticipated from SIL. The proceeds from the sale amount to about 2.1 billion with the cash coming in as early as December 2023. Again, this is upon the transaction closing. From a P&L perspective, the transaction results in a positive one-time effect of 1.7 billion in fiscal year 24. While there is only a limited impact on the recurring Siemens Energy profit, and the negligible impact on cash flow going forward. Following the completion of the sale, Siemens Energy and Siemens AG will commence the SIL demerger process i.e., as planned splitting into the GP and non-GP business. This is a complex process and will take approximately two years. Once concluded Siemens Energy will own 6% in both entities. And then in about five years from now, Siemens energy then plans to acquire sufficient shares to gain a majority in SIL GP. This will take place via a swap where we will swap or increase our stake in the spun-off SIL GP business in return for the 6% in the non-GP business, and two, buy acquisition of shares against cash at the then prevailing market price. The partial sale has no impact on Siemens Energy operations in India. This will continue at the same extent as before, under a supplementary agreement and India remains a strategically important growth market for Siemens Energy in which the company continues to invest. So moving on, please now going to very quickly an overview of the business areas. So starting with Gas Services. Here again a very solid quarter for gas services against really a strong prior year quarter. Overall, gas services had an exceptionally strong fiscal year 2023. In orders in the fourth quarter, we booked orders worth about 2.5 billion. This reflects 2% increase on a comparable basis and was driven by large gas turbine order, together with a strong development that I showed you early overall in the Group in the service business. In the fourth quarter, we booked 15 gas turbines greater than 10 megawatts there in 13 large gas turbines and two industrial gas turbines in the range between 10 and 100 megawatts. In Q4, we reached for the gas turbines greater than 10 megawatt the number two position with a market share of 38% for the entirety of fiscal year '23. SE also confirmed a very strong number two with 32%. Looking at revenue in Q4, revenue grew moderately by 4.3% to 2.8 billion versus a very strong prior quarter. For the full year, this is quite remarkable. This implies a comparable growth in gas services of just shy or just over rather 17%. This overshoots the target for gas services in comparable revenue growth of 10% to 12%. Looking at profit this came in at 121 million, reflecting a margin of 4.3 and as indicated in the Q3 call the revenue mix, as always for gas services in the fourth quarter does have a lower portion of service business, which therefore has a correspondingly lower margin. This is well known and has been also in prior years. However, for the full year, the profit margin came in at 9.3%, well within our guidance. Let's take a look at the Grid Technologies business now. Moving on. For Grid Technologies here in orders in the fourth quarter, we booked orders worth 2.3 billion, which is about the quarterly run rate from previous year but 38% below the very strong prior quarter. Again, nothing to worry about but just comps here. In the past fourth quarter prior year, we booked three large orders to offshore wind farm connections and a high voltage direct current transmission system. Revenue grew at 6.4% on a comparable basis, again driven by the product business following its order development. For the full year, this implies a comparable growth of 16.6%. Also overshooting our guidance bandwidth of 12% to 16% for GT again, well done. Profit before special items came in strong at 158 million, reflecting a margin of 7.9%. This implies an improvement in Grid Technologies of 440 bps versus Q4 of prior year, driven by higher volume and project cost improvements. As you may recall, the prior quarter was burdened by strong headwinds from supply chain constraints. For the full year, the profit margin came in at 7.5%, close to the upper end of the guidance of 6.8%. So again, the really great performance of the entire GT team in fiscal year '23. Now moving on to transformation of industries, in the fourth quarter for orders, we booked orders worth of 1.7 billion. This reflects a 10.8% increase on a comparable basis. The biggest contributors to this development was our electrification, automation and digitalization, EAD, and sustainable energy system businesses. Revenue grew by 5% on a comparable basis with growth in sustainable energy systems of plus 28.2% in EAD of 12%, and industrial steams and generators just shy of 16%. For the full year, this implies a comparable growth of 12% for TI well above the 8% to 10% guidance range, a very strong fiscal year '23. Book to bill was 1.3 for the quarter and 1.25 for the full year, really paving the way for future growth. Profit came in at 29 million for the quarter this reflects a margin of 2.4%. Like GS, the fourth quarter is seasonally the weakest for TI in terms of profitability. And this, as you can see, has reflected the margin for the quarter. So looking at the full year, the profit margin came at 5.1%, which compares to margin guidance of 3 to 5. So again, a very strong showing from TI in their turnaround plan. So moving on to Siemens Gamesa. Christian provided you with the situation at our wind business and the progress that we're making. I think in the orders you see in the fourth quarter, we see moderate comparable order growth driven by offshore and the service business. Here we had a large order in Taiwan worth more than 2 billion of booked. Onshore orders decreased; I think this reflects the fact that we're pausing the commercial activity of the 5x until all quality issues are resolved. And of course, this as we've already announced. Prior year again, it is important to note the prior year's quarter benefited from the sale of the wind farm development portfolio also in southern Europe. Order backlog for SG, at the end of the fourth quarter amounted to 42 billion. Revenue declined by just shy of 20% due to the known, let's say quality issues in the onshore business and the factory load plane changes and the offshore business. Again, revenue was also impacted by the sale of the wind farm development assets last year for 0.6 billion. Profit was negative 664 million, but in line with our indication that we gave at the Q3 results, and this can be broken down into two parts. Lower profit, of course from the execution of legacy mainly driven by the quality issue at onshore and continued ramp up challenges in offshore. So overall, to sum it up looking at fiscal year '23, which I cannot believe another fiscal year has passed by so quickly a real excellent performance of the former GP businesses well on track to reach the midterm targets. The performance, of course, of Siemens Gamesa was a setback and is disappointing, as mentioned by Christian comprehensive measures are taken and to stabilize the operations there. And now let's move on to our guidance for fiscal year '24. And as you know, we've also decided to do a sneak peek of the fiscal year '26 targets which of course, you'll get the details of the CMD. Going to the next slide here you see our financial outlook for fiscal year '24. We expect for Siemens Energy a comparable revenue growth in a range of 3% to 7%. Profit margin before special items between negative 2 and positive 1. Furthermore, we expect a net income of up to 1 billion. This includes impacts from disposals and the acceleration of the portfolio transformation. We assume a negative free cash flow pre-tax of around 1 billion. And in addition, we expect proceeds in the range of positive 2.5 billion to 3 billion from disposals and of course, the acceleration of our portfolio transformation. Looking at the business areas, GS assumes a comparable revenue growth of negative four to zero, and a profit margin before special items of 9 to 11. GT comparable revenue growth of 18 to 22, and a profit margin before special items between 7% and 9%. TI expects a comparable revenue growth of 8 to 12, and profit margin before special items of 5% to 7%. Siemens Gamesa assumes a comparable revenue growth of zero to positive four, and a negative profit before special items of around 2 billion. On the right-hand side of the slide, you see our new fiscal year '26 targets which we will then present, like I said in more detail at our CMD next week, with the business area heads. When it comes to revenue, see, we're more positive on the growth outlook for Grid Technology, and for Transformation of industries. Now with that, that concludes my part of the presentation. I hand it back to you, Christian. Thank you.

Yes. Before close, let me come to the key priorities for this fiscal year. Obviously, it's a key priority to stabilize Siemens Gamesa, and to turn it into a profitable business. Since 70% of our business is performing in line with our expectations and generates profits, the outflow of cash at Siemens Gamesa is obviously not acceptable. At the same time, despite the high focus on Siemens Gamesa, we have to ensure that we leverage the opportunities with the strong energy market offers for other business areas. And this means converting an excellent backlog into profits, and also continue to optimize portfolio and production capacities. And during the transformation of our company, we stay committed to strengthen our balance sheet and Maria already has addressed obviously, a couple of these measures before and we will continue to look on this. Before we continue with Q&A, I would like to invite you to follow our Capital Market Day on November 21. I hope I will see a lot of you in Hamburg, when my colleagues from the Executive Board and I, including also Jochen Eickholt, for Siemens Gamesa will provide you with a strategic update for Siemens Energy and all our businesses. And I'm really looking forward to seeing many of you in person in Hamburg. And also a lot of you have the opportunity to see some of the production facilities where we produce equipment. That's very, very interesting. Everybody can join us there, can follow the event live at our Investor Relations website. So looking forward to see you next week. And with this over to Michael. A - Michael Hagmann: Yes. Thank you both. Thank you, Christian. Thank you, Maria. We are a bit faster in the timeline. So that's good for the Q&A. We now, as I said before, please stick to one question at the beginning, if we have more time at the end, we will of course, take you down again. The first three questions go to Ben Uglow, Akash Gupta and Vivek Midha. And with that, operator, please open line for Ben. Ben, please go ahead.

I guess what I'm so interested in is the building blocks and the visibility on the cash guide. So we're now looking at roughly 1 billion of negative free cash in 2024, pre-tax. Within that, how do I think about Siemens Gamesa versus the former grid, gas and power? Is it as simple as the 2 billion operating loss in Siemens Gamesa is basically 2 billion of cash. And I guess the related question then, is within the former kind of gas and power divisions, you're implying then quite a big slowdown in the free cash. So if I look at the last couple of years, pre-tax you've gone over 2 billion and the implied level here is 1 billion. What is driving that apparent conservatism on the former gas and power side? Is it something to do with prepayments? Is it something to do with book to bill being below one times in the second half of the year? Or are you actually just giving yourself more leeway around Siemens Gamesa? How do we break it down?

Hi, Ben. Good morning. I think that question is directly at me here. Hope you're doing well, Ben. Look, I mean, as always, I think your assumptions are bang on in some respects. Look, we had a very strong cash generation at GP over the last three years, I think just over 6 billion, right? If you look at it right back from 21, onward. And this was driven by the strong order intake. And I think that's what we've talked about a lot with respect to the contract assets and liabilities and how that's working with us or for us right now. And I think that also goes to say that we need to now look at how does the top line or the order intake develop with that view, because at some point, we need to execute on that backlog. And this is what I said earlier in the press call, where of course, at this point in time, you're actually meeting inventories and other things to ensure that we have what we all need to execute and deliver on what we promised. So I think that's important. So the order intake is normalizing, you see that kind of within 24. But we also think that the cash flow from the former GP businesses will also normalize this year.

So just to clarify what the 2 billion is, in your mind, roughly the right number for Siemens Gamesa, and then basically, we're expecting the rest of the business to come down. Exactly, half. Okay. Understood. All right. Thank you. I'll pass it on.

Thank you both. And next question goes to Akash Gupta. Akash, please do go ahead.

I have a question on your CapEx guidance. So you're guiding 1.8 billion in 24, which is significantly above what you spent last year. Can you provide a split between how does it split between gas and power and SGRE? And what is driving this big increase? And also how much of this CapEx is committed? And what sort of flexibility do you have to defer some of this in FY '24? Thank you.

Thank you. Hopefully, you can hear me now. I didn't have my microphone on. Thank you, Akash, for the question regarding CapEx. You're right, of course, the CapEx is increasing, it kind of goes in line with what I just mentioned to Ben Uglow. Of course, we do need investment to, let's say, capacity, both. And it's not only in SG. It's also on the GP side, where we need to invest in CapEx for our committed backlog. So a lot of that has been, like you said committed. And some of that, of course, we continue to watch each and every CapEx and we did that very intensively, by the way, during our budget process, but the increases are actually on both sides. Some of it, for example, in GT, we require expansion. I mean, we have a record order backlog, I think I needless to say it's over 50%, in one year increase. And so therefore, there is some requirement there. But what's nice about that is that it doesn't necessarily need to be so much CapEx, as we've always mentioned, small investments in certain areas can actually help tremendously to execute the backlog. On the other side, we do have investments required in Siemens Gamesa. This is exactly what was envisioned, predominantly for the offshore business. And this is why you see, let's say the inclining CapEx for next year. And of course, that has the corresponding impact on our cash flow.

Thank you both. And the next question goes to Vivek Midha. Vivek, if you please go ahead.

So my question is on the Siemens India transaction, what it's the mechanism for deciding the valuation of the Indian gas and power assets when you do the transaction in five years time. So you're receiving 2.1 billion for the Siemens India state today? What is the future cost going to be somewhere in that region? Could it be higher if Siemens India continues to go up in value? Is that some sort of formula? Thank you.

Yes. So I think maybe just to talk about that because, of course, there's, like I mentioned, there's actually two steps to the demerger, and then the period thereafter. There's a number of steps that need to be taken to get there eventually, at the end of the five years, which, by the way, have not even commenced. It also, as you rightly said, does depend on the market valuation at the time. And remember, it's the relative valuation of GP versus the non-GP business. And of course, the acquisition of those shares would be in the GP business or new co. With all of these unknowns it's difficult to actually to estimate this at this time today.

Right. Thank you, both. So the next three questions go to Govinda Rajpal at AlphaValue, Sean McLoughlin at HSBC and then Gael de-Bray at Deutsche Bank. So Govinda, if you please go ahead.

So my question is, basically around the capital increase. With the expected proceeds are about 2.5 billion to 3 billion and your cumulative free cash flow guidance of about 1 billion to 1.5 billion. I knew capital increase is less likely, but what scenario or scenarios have you considered where you might need to do that capital increase? Thank you.

No, thank you for the question. Look, I like I said, I think we've achieved a lot. We proactively put in place these measures that you see today, in order to strengthen our balance sheet, and hence why we have this 2.5 billion to 3 billion coming in. And of course, that more than compensates, as I mentioned earlier for our anticipated cash outflows. So as a result, we will be in a net cash position. Of course, we want to maintain all optionality it's not just about doing something just to do it. It's really about how do we ensure that we capture opportunities we mentioned before that, our market opportunities continue to grow. It's also about ensuring that if we do need to strengthen our balance sheet we have all optionality around. So that's why that is there, just as an option at this point.

Thank you. And next question goes to Sean McLoughlin. Sean, please go ahead.

Building on that just a question around the portfolio transformation. You've talked about an acceleration of disposals, I guess, where can we expect to see you generating most value? You've already sold down one small grid business? I mean, are there more within the grid portfolio that you are targeting? And I guess what is the risk of you selling the crown jewels whilst you stabilize the wind business?

Yes. Thank you for the question. And it's not about that. It's really about, let's say, forward looking picture on driving a company which can address the energy transition. And obviously with this, let's say the average is growth potential. And the average margin expectation will be the key metrics in terms of how to decide on these businesses. This was also obviously the logic with the previous disposals. And then the other question, obviously, in light of this, are we the right owner, right on this slide of that, and would we allocate our capital there, if it needs that to grow it, which was obviously also something behind the trench discussion where we said, hey, there might be others better, we don't see the margin profile, if we do it, good enough. And that was obviously one of the logics also to drive that we will continue to do so. And this is across the different businesses, always a question is, what is the margin expectation mid-term? And what is the role it plays in the energy transition? And I think these are the two questions which we need to answer. And this depending on the time going forward, it will always cut across the whole portfolio elements. Obviously, the other thing, what we're also going to discuss, going forward is the question on how do we focus the wind business, right, and it's also about regions in which you play? What is the amount of products you want to have in the market? Also, there the same logic is, are we tapping in the right profit pools, where I have to say from the past, no, that would not something needs to change right on the wind business. But it's more about there. It's not always about businesses as such, it can also sometimes in that area, about regions where we play. Thank you.

Thank you. Gael, if you please go ahead. Gael de-Bray: So if I stick to one question, I would choose a question around the working capital for which the development was once again, clearly quite positive on the cash flow this quarter. But then if I look at the negative working capital you have these days, especially as a percentage of revenue So, it looks significantly inflated versus usual standouts. So what sort of working capital normalization, would you expect to see cumulatively maybe by 2026, over the next, three, four years, so that we better understand what could be the potential cumulative cash outflow for the group over that same period?

Hello, Gael. Thank you for the question. Yeah, I think, look, we know that of course, the contract assets versus contract liabilities, and the degree of pre-financing is very high. And of course, this also helped us with respect to cash flow, et cetera in the quarter in terms of the development. And as you know, Gael, one of the main drivers of this is, of course, if the book to bill remains above one. And clearly, we do see the book to bill remaining above one for the majority of our businesses and let's say, the months or quarters and years to come, where we do see, and that's what I mentioned also earlier, we do see a slight unwinding is this year, because of course, we are now looking to execute on some of this, let's say above, I mean, book to bills above two is not normal, right? So this is quite high. And hence, that's why you see this development on the balance sheet that should normalize down to a regular book to bill of above one. But of course, now this year, you see a slight impact there will be some unwinding as we continue to execute. Do we foresee a severe unwinding within the next 12 to 24 months? No, we do not, of course, under the premise that our book to bill remains above that around that one or greater.

Thank you. And the next three questions go to Alex Virgo at Bank of America, Will Mackie at Kepler Cheuvreux and Supriya Subramanian at UBS. Alex, please.

I wondered if you could just talk a little bit about the order in taking in Siemens Gamesa, I think that was incredibly strong, surprisingly strong, given the broader commentary in the market and your own communications intra quarter. So I wonder if you could just give us a little bit of a complexion of that and talk about the dynamics as you look at 2024 in the context of that last comment Maria on normalization. Thank you.

Yes. Thanks, Alex. First of all, this was heavily impacted by a large order, as Maria pointed out in Taiwan, which is an offshore order, and includes obviously, new units and service in this line of that that was substantial. So obviously, there were some other orders in offshore. So it's a lot of offshore driven. But also on the onshore side, we had, let's say, smaller orders, where it's about repowering, and let's say classical old platforms, which is more like a day-to-day business. That said, and also, I mean, it shows and this is what I meant was also selectivity going forward, there are some pull forward effects from what we expected also in 2024, this is why 2024 will look exceptionally low, I think, in the order intake in wind. That is, for me, now a balance in terms of why we ramp up the factories, why we work off a backlog, why we trying to put the things at the right place, never desired but can be allowed. But for me, it's important to keep always the right risk and reward profile. In terms of the general market development, I would say '24 is something where, yes, I think people are repositioning in terms of getting also on our customer side, the right risk and reward profile. You have seen our customers going out with announcement. And I think this is a reshuffling in terms of what are the auction conditions, which I do not find entirely bad, right? I mean, it's something where the industry needs to find the right way between risk and reward on the supplier side of the turbines as well as on our customer side. On onshore that is mainly driven really by our decision when to restart more or less a full commercial activity with a 5x platform. And this will impact the order intake in '24 and keep it low. In general, the order intake or the interests of the customers as they are we get continuously asked, “Hey, when are you back? We want you to be present in the markets.” So that would not be my point but offshore I expect to be, let's a relatively slow market and the definitely in the next year and then obviously recovering from there. This is how our planning is.

Right. Over to Will. Will, please go ahead.

So let me just stick with wind then again, could you perhaps please provide a little more insight not obviously, giving us all everything away from the capital markets day on the 21st. But more insight in how you see the shape of '24 developing with respect to the process of rectifying the challenges that you've identified and completing the large technical retrofits or replacements. And then, at what point do you envisage being back into the market with a commercial offer? You've only talked about the 5x, but what about the 4x on the onshore as well? Thank you.

Yes. Thank you very much. And obviously, I mean, first of all, on the role of asset quality, how you're sending rectification or so. Keep in mind, that is a really multi-year exercise, right. And Maria has indicated, I think was a cash that we expect a certain outflow in '24, but it will go on over multiple years, because we now plan between our suppliers, which we need for that our customers, which do want to continue to operate, and obviously, where the project is at the moment in terms of either still in the workshop at site or already operating on what is the best sequence. But that is something which will take us way beyond '24, right? It will be really years until we stretch this provisions. And we will also try to push it cash wise out, right? If it's possible and reasonably to do, then we do that. This is happening at the moment in terms of prioritization of working. So we have in parallel a task force set up for this definition of the retrofitted let's say new products on the 5x base. Let's say obviously start similarly now on the 4x side. On the 5x, as I said in the press call, over the next weeks and months, I expect us to be more definitive in terms of exact restart of timing. The thing that we need to clarify is really, how does this apply our structure line up, particularly in the areas where we needed to change suppliers. And this is obviously something some of the quality issues are related to suppliers. 4x will come later as a statement but we are on it. In this regard, obviously, we're working through the different matters. The European market, which is very interesting for us is driven by the 5x.

Thank you. Supriya, if you please go ahead.

Quite a few have been answered already. But just sticking on to Siemens Gamesa, just wanted to get your thoughts on; one, is in terms of your sort of profit on -- operating profit guidance for next year, does that into line majority of the onerous contracts being done with at least on the onshore side, in 2024? And on the quality issues, do we now know affect any sort of confidence that is now restricted to that 30% of the fleet that we've already identified and it's not a more widespread issue? Yes, I'll leave it at that. Thank you.

Thank you. I mean, I start, maybe then Maria goes on the numbers. Let me start with the latter part of your question in terms of the quality issues, and the question is how much we have seen. First of all, I have to say, we have seen no new failure mechanism in the last quarter. And that is a good sign, right, because it has been a thorough investigation, we have obviously, also, always keep in mind there is high focus areas or high impact areas, I was calling in the presentation. And there's a lot of smaller things which are not vital for the operation, right? And it's more like about other elements. So I think we have done a good job in getting our arms around it. I'm always careful in an operational business to say, can I predict the future? But I would say in terms of the rigor and extend what we have done combined with that there has been no additional failure mode in quarter four gives me comfort that we are on a good track.

Thank you. Hi, Supriya. I think I understood it was difficult to understand at one point, but I think you wanted an update on when the onerous backlog and how that would develop in the next couple of years. Is that right?

Yes. Perfect.

Okay, excellent. So I mean, like we said, of the 112 billion backlog, 42 billion is related to Siemens Gamesa. And, of course, as you know, in Q3, we indicated at that time, that a larger portion of the onshore backlog, the onshore backlog is about 5 billion a larger portion of that is now onerous. We had originally pre-Q3, we had originally anticipated the onerous backlog, let's say continuing off in '24, and maybe a smaller portion in '25. It's now clear with the additional quality issues that the onerous backlog will continue into '24 and '25. And therefore, that's why you see the target in '26, where we say that we expect Siemens Gamesa to be breakeven. Well, absolutely, that's because the majority of the onerous backlog had, will be worked off by them.

Thank you. So we still got a couple of questions. So the next three questions go to Philip Buller at Berenberg; Ajay Patel at Goldman Sachs; and Sebastian Growe at BNP Paribas. Phil, please.

It's a Gamesa question. Obviously, nice that we've not had incremental provisioning, that that's obviously a positive thing to interpret. But we still have a reference in the slides to a strategic review at Gamesa still being underway, which is a bit unnerving. I guess, given what happened in the past year at Q3, I think we've got a bit of a surprise. So what else is there left to review? And what risk is remaining in that process? And is that how we should think about it that there's a review going underway about the pricing of the backlog? Or is it more of a reference to the plan or the strategy for onshore being finalized? Thanks.

Yes. Thanks for that. I definitely do not want to confuse it. No, it's about the latter, right. It's not about seeing addition coming. But obviously, the current situation has a consequence on the regions in which we play and the products we would want to do. And as I said, in the quarter three call, it is about more focus, tapping into the right profit pools, nothing to do with anything compared to the quarter three. Definitely, but it's rather in terms of how do we get this rigor and focus to execute on the different things, as I said before, nothing else is meant by that.

Very good. And just as a follow up though on that, we have clarity on that at the Capital Market Day, do you think or is this something –

I say partly, right, I think we will try to explain you the structure, not everything going to be decided by then. So I also don't want to over promise because certain things, we will also have decision points staggered in the future, to make sure that we take the right decisions at the right time. But we will obviously share a view on what we're doing. And we definitely, I would say going to update you also, say the beginning of next year in terms of next steps to come. So we keep it staggered. But what we -- what I've tried to do or me often tries to do to help you to understand the structure in which we want to drive the business going forward. First priority at the moment is really stopping the bleeding and fixing the quality issues. I mean, this must be for task no matter what. And then the rest step wise and the part of it next week.

Right. Ajay, please.

So I just wanted to ask one. Is there any approvals of regulatory hurdles for Siemens Energy? Do you have all the root causes now for the onshore platform issues, that you've experienced? And are you effectively saying you're going to be net cash for '24, '25 and '26, given what you've stated today?

I think that was more than one question, but we'll try anyway.

Maybe let me take the last one first, please. Because I think today, we've provided a guidance for '24 and we provided targets for '26. So for '24, of course, we've indicated that with the proceeds of the various initiatives that we're taking the 2.5 billion to 3 billion that will, if all goes as planned will generate a net cash position for us. In 2026, what we've indicated is that we would be cumulative 1 billion to 1.5 billion in terms of net income, and cumulative, 1 billion to 2 billion in free cash flow. Again, it's important to note that '24 and '25 are those critical years with respect to the cash outflows envisioned for Siemens Gamesa.

Yes. Maybe to the first part, although I understood it correctly with regard to the regulatory hurdles restrictions. I wouldn't see any on that if it's about the new, say, turbine design or whatever. But I hope I understood your question correctly.

I just wondered if you had any approvals of any sorts to get through or is it pretty much a done deal and you just expect the proceeds at the end of the year?

Sorry, I think we misunderstood. We understood that was in relation to Siemens Gamesa. But I think you're saying with Siemens India.

I just wondered if there's any approvals or regulatory hurdles you have to get through to sell that stake? Or is it pretty slam dunk? And then there was the other question. That's all.

I'll use your term it's pretty slam dunk. I think I got that. I've never heard that one. But let's go with it. However, there are steps that need to be taken, the transaction itself, of course, there will be various procedural steps. We don't see any regulatory hurdles at this point in time. However, the transaction will close technically in December, as we communicate it.

Cool. Seb, over to you.

It's on the product offering and on the strategic review that you refer to and so I would be interested in when this decision is going to be made. And if you could comment on any potential write down risks, I'm asking that question in wake of the more than 3 billion of intangible assets sitting on the balance sheet. So the backdrop, the question of is very much that 2 billion loss guidance for Siemens Gamesa is kind of [indiscernible]. So the least not intuitively easily understandable how to get to a 2 billion loss when the onerous contracts would eventually rather think of zero percent gross profit margin. So whatever you can add to that discussion, I would be very much interested in hearing those thoughts. Thank you.

Yes. I would ask Maria to chip in there as well. But also on the 2 billion loss. Also, what you have seen in this. Maria, touched it before. You at the same time, have in a difficult situation for Siemens Gamesa, the relatively high CapEx, also in terms of outflow and you have R&D costs, which I expensed in, to keep it balanced for the future growth. If I heard you correctly, you are asking also about potential impairments based on strategic reviews? This is all not I mean, not considered at the moment, right? As I said, we're working through the matters. That is not the point I'm seeing at the moment. Maria?

No. Nothing to add.

Nothing to add.

No. We don't have any [indiscernible] planned. This is reviewed regularly and properly.

And could you comment, just very quickly a follow up for me, just quickly comment simply on how much of the Siemens Gamesa portfolio as part of your frequent 2 billion of intangible assets? The back of the questions, obviously, with the arrow [indiscernible].

Yes. I will tend to Michael to follow up with that. I cannot answer that from the top of my head.

Okay. We will take two very short follow up questions, but please, please keep them short. So one goes to Ben, and one goes to Akash. Ben, please go ahead.

And please forgive me for asking an inevitable, slightly miserable question. But this is I want to say the second or third time that even this year that we've been looking at a Siemens Gamesa loss of whatever it is 2 billion going to breakeven by 2026. I guess what I want to know is, what is the new conviction around that number? What databases have you seen, or what kind of communication have you had to give greater conviction that that is the right number? Is it a sort of broader sample of data or is it the diagnostic testing? Is it I don't know, percentage of the backlog? But why -- without wanting to sound impolite, why should we believe in now, when we've been so wrong in the past?

Yes. First of all, I think it's about the setup also on the team, what we have assembled there was people really from Siemens Energy from external parties and the roughness of the review. And really the full transparency disclosed. I mean, I have to say, this is probably the most rough analysis what I have seen. And in that regard, as I said, I do believe there is a good approach to it. And a good measure has never been done on this debt before. And obviously, the other thing is, as I pointed out in my speech, the fact that the failure mechanisms, all LSA follow the same pattern, and then you can really then get into the logic, okay, yes, now I can better understand it and don't keep on forgetting. It's also more and more operational data come in, and they still, let's say, fit to the old explanations, and that helps to understand. So also with the operational time, it helps to get the arms around the issues.

Very last one to Akash. Akash, please go ahead.

My last one is also in Gamesa. So you I've been very precise in giving the losses for Gamesa, while in the past, it has been quite unpredictable and difficult to forecast. And therefore shall we see this 2 billion as the ceiling. And that could mean that if things don't go that bad, there could be a better outcome than 2 billion. Thank you.

So we left the easiest one for last, right, Akash. So no, in terms of the guidance being a feeling, no, that's not a feeling number. Of course, sorry –

Ceiling.

A ceiling, oh, excuse me. So that's why I thought. Well, I think the precise terminology that we use is around, right, I think. And so therefore, I think it's important to note that. What I think and Christian has mentioned it very clearly, there's a lot of rigor and robustness in the reviews that are ongoing within Siemens Gamesa, that has never been to that extent before. I also think that Jochen and the team have put together an extremely experienced team that is now able to, let's say, address those issues. Has it been easy? No. Are we there yet? No. But we feel confident with the guidance that we've put out to say that this is the number that we're able to achieve. Sorry, I thought you said feeling that gave me a different start to the response for the question.

Right. Thank you, everyone. For last words, I would hand over to Christian and as always, you know, I always happy to answer your questions if you have more. Thanks.

First of all, thanks very much for the participation and getting with us through difficult '23, I would say. Obviously, we all, let's say not happy with the results, but the team has lined up and works on it. I do look forward hopefully to welcome a lot of you on next week's Capital Market Day and also hope you use the opportunity to see the factory in [indiscernible] where we assemble the large [indiscernible] which is an interesting element. So with this looking forward to see you. Stay tuned. See you next week and many thanks for your participation.

Thank you, everybody. Bye-bye.

Thanks, everyone.

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. The website address is www.siemens-energy.com/investor relations.