Good morning, ladies and gentlemen, and welcome to Siemens Energy’s Q1 Fiscal Year 2024 Analysts Call. As a reminder, this call is being recorded. The presentation will be followed by question-and-answer session. [Operator Instructions] Before we begin, I would 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 a company’s current expectations and certain assumptions and are, therefore, subject to certain risks and uncertainties. At this time, I would like to turn a 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 the Siemens Energy Q1 Analysts Call. As always, all documents were released at 7 o’clock on our website. Our President and CEO, Christian Bruch; and our CFO, Maria Ferraro are here with me. Christian and Maria will take you through the major developments of the last quarter. This will take approximately 30 minutes and, thereafter, Christian and Maria are available to answer your questions. For the entire conference call, we have allowed an hour. So Christian, with that over to you.

Thank you, Michael. And late good morning, everybody, also from my side. Thank you very much for once again joining Maria and myself for this conference call. We had a little bit more than 2 months ago passed our CMD, and you are familiar with our guidance and also the targets, as well as our key priorities for 2024. And just as a reminder, flagging up the three things which we want to focus on in 2024, which is delivering profitable growth based on the record order backlog, fix the wind business, and obviously maintain a solid financial foundation. We had explained, obviously, the different measures on the Capital Market Day in more detail. And I’m glad to say that we are progressing in line or slightly ahead of our plan in respect to the guidance and our objectives and the midterm targets. If you look on the key figures on this slide, order intake revenue profit before special item and cash flow you can see that we had a very solid start to the year and, in fact, the key figures were better than expected for the quarter and, hence, we pre-released our results on January 23. While I’m happy with the start to the year, I also want you to understand that we benefited to a degree from project shifts. You know the business is not a month-by-month business, it has its volatility in there that’s relatively normal. And, obviously, particular seeing the very high market dynamics across all the different businesses and this is also the reason why we still maintain our guidance for the full fiscal year. On the right hand side of the slide you can see the KPIs for the group. We had a strong growth in order intake, revenue and achieved also turnaround in our profit before special items. In context of our objective to drive profitable growth, I’m happy to share that order intake of the former gas and power business grew by more than 27% on a comparable basis. So that the order backlog for those businesses reached another record high of €78 billion within improving margin quality. Revenue of the former gas and power business grew by 15.7% on a comparable basis and profit before special items grew from €478 million to €634 million euro, which resulted in profit margin before special items of 11.3%, an increase of nearly 2 percentage points year-over-year. I will talk about Siemens Gamesa in more detail in a moment sorting the quality problems and managing the ramp up remain our key focus at Siemens Gamesa. And in this context, I’m happy to share that we have not suffered any further setbacks and onshore wind, and that the offshore ramp up is progressing in line with our plans and this means that no further provisions have been taken in addition to those communicated in quarter 3 fiscal year 2023. On the right hand side, you can also see that we ended the first quarter with a net cash balance, including pension obligations of €840 million. This is in line with our objective to maintain a solid financial foundation and reflects a better than expected underlying cash flow as well as good progress and the execution of our divestment program, including the sale of the 18% stake in Siemens Limited, India. We talked about the guarantees when we reported on the full year, I just want to report here that the €11 billion facility as the back guarantee is underwritten by 9 key relationship banks based on a back guarantee by the German government, and this additional €1 billion facility has been committed by a group of 3 relationship banks, and we, obviously, continue to work now the different matters and, obviously, try also to get out of this facility as fast as possible because, obviously, it also costs money for us. The operating environment remains really favorable across Gas Services, Grid Technologies and Transformation of Industries. It’s not only good volume demand, but also a healthy pricing environment. In wind, we do see obviously the positive actions in Europe, SA-EU [ph] and various other countries are addressing some of the problems that have haunted the industry over the past 2 years. In January, the energy ministers of the EU member states endorse the European Wind Charter, which is I think a step in the right direction to strengthen the European wind market. Let me briefly touch on our guidance. We are well on track to reach our targets, but as mentioned before, we are for the time being maintaining our guidance as it is. Let’s move to Siemens Gamesa. We have said on many occasions we believe in the role of wind for the energy transition and this together with a turnaround program that we have in place gives us the confidence and the value of our wind business and as presented in the Capital Market Day, they are key strategic decisions regarding product portfolio, market presence, manufacturing strategy and business setup that we’ll be sharing with you in the coming quarters with most major communication milestones stretching until the end of calendar year 2024. Operationally, the performance during the first quarter was slightly ahead of our expectations, nothing major. That will lead us to change our full year guidance, but certainly a result that shows an increased level of control and management and, in context, of our objective to stabilize and fix the wind business, this is a positive element. The quality task force is making progress and 6 months after our announcement, we have not received new data, which would point to major deviations compared to our original cost estimate and the offshore ramp up is ongoing. We highlighted at the Capital Market Day also that we will take our structural costs at Siemens Gamesa. The plan is under development and we expect that all businesses and the corporate functions will contribute to the cumulative cost savings of €400 million by 2026. And, additionally, we continue with the integration of the corporate functions between Siemens Energy and Siemens Gamesa in line with the synergy plan, which has been communicated during the announcement of the transaction. Let me now share some more details, first on onshore and afterwards on offshore. We have completed the review of our entire onshore backlog and have started to engage in the customer discussions. We have material completed the root cause analysis for the priority one quality issues and for 80% of these we have short-term measures in place. We have already defined long-term corrective actions for half of the quality issues, while we continue to implement remediation and mitigation actions. This means also that we progress in line with our plans. Maybe let me say a couple of words on how the process works that this is understood on how normally this works. Obviously, first comes the technical analysis of really having an engineering and technology solution available. It’s relatively normal that from time to time to you really look on the things by also talking then to your suppliers, what you need and planning the execution around this. So we’re now entering a situation where we do exactly this converting a technology solution into, okay, how do we execute it, which supplier do we need, what is the delivery times and so forth such that the implementation of the matter will obviously then come thereafter, which – and this is why we also see the biggest cash outflow next year, which means, okay, start of these activities and then working through this over the next years to come. So this is what always has to be understood if you talk about technical analysis complete and then, obviously, short-term measures defined because this includes the supplies and then we go into execution. And this will take us some time, step after step. And this is just, I think, important to understand for you. Our analysis at the same time for the future onshore product portfolio goes hand in hand with our geographic market analysis, and we will communicate the restart of our commercial activity as soon as we have a clear date in place, which is not today. We are working through these elements and the priority is always first fixing the quality issues and really making sure that there is a very solid view on, okay, how is the availability of the units and going forward. We intend to be clear on this in 2024, but please stay with us on that one. Today, we have no clearer statement yet on that one. Let me move to offshore. The ramp up is ongoing. You recall that we highlighted the 4 factories which we are ramping up, Cuxhaven, Aalborg, Le Havre, and Hull. In Cuxhaven, Aalborg, Le Havre, we are progressing in line or slightly ahead of our plan. This is the intention to show this on this slide. Obviously with the reduction routing hours during the first quarter per unit to drive up the productivity. The ramp up in Hull remains work in progress. I clearly have to say, because also it’s a finalization of the facility, but also then getting the teams up to the right productivity level. We have experienced there a slight reduction in output. So that is something where the team is working on to improve this and, keep in mind, the main volume increase in offshore is planned for the second half of this year. Let me like always move to a couple of highlights. I’m always pleased I said it before that we never have a problem to identify these 4 examples for the different business areas alongside the energy transition, which shows that the market is good but also the portfolio is well positioned in the energy market. The first project I would like to highlight is a new power plant project in Kazakhstan, an example of how natural gas helps in the energy transition. We are delivering three gas turbines and three generators as well as spares for a combined heat and power project in Almaty, which is replacing very outdated coal-fired power plants. You may be aware that Kazakhstan committed to a reduction in greenhouse gas emissions by 15% to 25% by 2030 and this project is a cornerstone in that regard. The second project is once again a project in our field for wind, which is the first offshore wind farm in New York and the first utility scale offshore production in the U.S. as such. And we have shipped the first 12 SGT11-100 offshore wind turbines to the site, which is good 30 miles out of the coast of Montauk. Once completed, the 130-megawatt offshore wind farm will generate enough renewable energy to power roughly 70,000 households and will eliminate up to 6 million tons of carbon emissions over 25 years. The third project, just briefly to highlight, is an HVDC link from the UK to Denmark. I think what is very positive about this is the execution time of 3 years in terms of then starting and going into operation, which is key, obviously, to underline that it’s possible to build out the grid also at a higher speed. We are still convinced that the electrical grid will be the key determining factor and the speed of the energy transition more than the generation side. The last project is around the decarbonization of industrial processes. Together with BASF, we are building a water electrolysis plant at their facility in Ludwigshafen. It has an output of slightly above 50 megawatts and the capacity of 8,000 metric tons of hydrogen per year. This is really for demonstration and integration that into an industrial process. So, a first step to commercialization. And, obviously, also the intention is to use renewable energy sources to ensure that we power this project. Slide comment also to the environment and political environment, particularly seeing that we have COP28 behind us, which obviously flex up the transition away from fossil fuels. This also means that at the same time we have to drive really also low emission technologies and improve efficiency measures or double the efficiency measures by 2030. And this means that investment in deficient fossil power plants will continue alongside the buildup of renewables and investment into the grid as well as obviously in the hydrogen economy. And this is what we stand for. So I see these market momentum is very positive for Siemens Energy. We do see also the constraints we now see on the simply speed up in terms of doing things fast enough. We do see slight delay on the hydrogen side, which is not unexpected on the green hydrogen side, which I think is also getting to realism what it takes now to build a commercial market and make sure that money is really invested. But as I said, I’m pleased on how we are aligned around the different targets. With this, I briefly want to touch base on our ESG report. We, obviously, continue to drive our sustainability targets as core of our strategy. It has been overshadowed a bit in 2023 by all the other news in terms of attention. But I want to highlight that we issued our sustainability report on December 6, the same day as our annual report, and we outlined there in much more detail what we want to achieve and what we are doing to reach our targets. And on this slide, you can see how we are progressing towards our key targets when it comes to emissions, diversity and health and safety. Across our operations, we reduced emissions by 59%. This means we’re well on track to meet our climate, neutral target and our own operations by 2030. However, giving the strong growth trajectory, we need to double up and intensify our efforts here. And green electricity is a major lever to achieve our goal to become carbon neutral in our own operations. Our 100% targets are being 100% supplied by renewable energy and our own operations was achieved in 2023. And obviously, in this regard, I’m very grateful what the organization has implemented. Because of our portfolio Scope 3 emissions, so the emissions our products generate at our customers by far exceed our own emissions and provide the biggest challenge. And, here, we also made significant progress towards our science-based target of a 28% reduction by 2030 compared to the base year of 2019. And this reduction reflects the fact also that our products, solutions and services are designed to help really our customers to lower the carbon footprint, which was one of the key plans of our strategy. We offer low and zero emission power generation, we enable efficient transport of electricity and we decarbonize and electrify industrial processes. I’m pleased with the progress we made in women in leadership positions, which is a key KPI for us. I mean, we are strong believer that diversity improves the management of a company. We were able to achieve a 28% in the leadership position of female talents. That is something which is obviously a very positive, but it will continue to require big efforts to keep this number growing and, obviously, also to make sure that diversity is understood everywhere across a lot of different matters, let it be ethnicity or religion or whatever you can identify there. Over the last couple of years, our progress has been reflected in improved ESG ratings. And just yesterday, we received the updated CDP rating and I’m pleased that CDP has acknowledged our environmental transparency and performance on climate action change with an A rating. And being on the A list means a lot to us as an organization, because it recognizes really the effort which we’re doing, but also the leadership we want to take in the energy transition. And with this, Maria, I would hand over to you for more details on the numbers.

Thank you, Christian. Hello, everybody. I think, yes, it’s still good morning here and thank you for joining us today. You have all seen our preliminary numbers which we published on January 23, but allow me to provide some more detail and to explain a little further our quarter 1 numbers for fiscal year 2024. So moving to the next slide you see here the Siemens Energy Group. As Christian already mentioned, we had a solid start to the year. The positive momentum across all former gas and power businesses continued and Siemens Gamesa performed within expectation. When it looks at orders, the order development was outstanding, better than expected, really reflecting this continuous favorable demand pattern as well as some pull forward effects in certain businesses such as grid technologies. We recorded comparable order growth of just shy of 24%. This is against quite a high basis of comparison and that resulted in orders for the quarter of €15.4 billion. This is the highest ever order intake slice in a quarter-to-date. While all segments contribute to the growth, the increase was particularly strong at Grid Technologies and Transformation of Industry. The book-to-bill ratio overall was a very strong to driving the order backlog once again to a new high of €118 billion. Revenue came in at €7.6 billion, 12.6% increase on a comparable basis with all segments contributing to this growth. The biggest contribution came from our Grid Technologies business which grew by 33% on a comparable basis. Across the board, service revenue improved significantly and grew somewhat stronger than the new units’ business. This resulted in an overall favorable business mix in our first quarter. It’s also very important to note from a seasonality perspective, we generally do have a strong service season in Q1 and that has held true across all segments. Looking at profit, this improved sharply to positive €208 million with the Grid Technologies and Transformation of Industry reporting sharp improvements year-over-year. Gas Services just shy of the strong level of profitability in the first quarter of previous year and as expected Siemens Gamesa’s losses were below prior year which, if you recall, was burdened by quality related charges, but in line with our overall full year planning. Special items included the pre-tax gain from the sale of the 18% stake in Siemens Limited, India. This has already been indicated of around €1.7 billion, which brings us to a pre-tax profit for the quarter of €1.9 billion and a net income of €1.6 billion. Free cash flow came in seasonally weak at minus €283 million. Of course, this is a mixed picture where we have positive contributions from the former GP businesses. This is supported by the higher profitability. Again, we showed that and presented that at the Capital Market Day in November. As well as, of course, our advanced payments from our customers, reflecting the very strong order development. This was offset by the negative free cash flow at Siemens Gamesa of negative 1.2 as expected. Again, the high cash flow at Siemens Gamesa was expected and budgeted for, and this is the result of the losses, and the seasonal buildup of operating net working capital. This is a bit of a swing back from a strong Q4 last year, and as Christian just mentioned, ramp up expenses in the offshore business. Now, let’s take a look at order backlog, please. As in prior quarters, we always like to highlight the order backlog. This is important for us. It provides very strong visibility and, of course, given the strong order growth and the order backlog continue to grow, as just mentioned, to a record high of €118 billion at the end of the quarter, close to 50% of the backlog is service. So, again, service being that recurring, resilient, high margin and cash generating business, and we’re also seeing strong growth in our new units’ business. This is important as new units help us to grow our install base and create additional service revenue in the future. Apart from Siemens Gamesa, all of our businesses had book-to-bill ratios above 1, and standout is good technologies with almost a book-to-bill of 4. Again, as just mentioned at the CMD or Capital Market Day in November, we provided you with a deep dive on the order backlog providing additional transparency in terms of reach, expected revenue generation and the backlog margin development by business area. Just to provide a high-level update, the positive trends indicated at the Capital Market Day continue with respect to our order backlog quality, because as you know it’s extremely important that our backlog grows, however, we have to ensure that we convert it into profitable revenue and keep an eye on operational excellence. Now, let’s go to liquidity status and cash bridge, please. But before we do or before I go into this further, let me provide an update on our divestment program. As you know, we decided to strengthen our balance sheet with significant near-term cash measures, targeting €2.5 billion to €3 billion of cash inflows by means of our accelerating, our existing divestment program, as well as the sale of the 18% stake in Siemens Limited, India to Siemens AG. As mentioned earlier, we closed the sale of that stake early December, which resulted in a cash inflow of roughly €2.1 billion, and a one-time P&L gain of approximately €1.7 billion. Now, let me give you just a brief overview of the other ongoing divestments. First is Trench, as you already know, we signed an agreement to sell Trench Group to Triton in October 2023. The closing of this deal is expected at the end of the second quarter, and this transaction should provide us with cash inflow of low- to mid-triple-digit-million amount. Looking at Windar, in May last year, we had signed an agreement for the sale of Windar. This was classified in our annual financial statements as assets and liabilities held for disposal. The closing is now expected in the second quarter. This will also result in a total cash inflow of a low-triple-digit-million amount, and a high-double-digit-million gain. There are other smaller transactions in progress, so all-in-all, we expect in the second quarter or, let’s say, is the second half of the calendar year, another cash inflow of €600 million to €700 million and more than €300 million in book gains from disposals. Therefore, we are very confident to reach the upper end of the €2.5 billion to €3 billion full year target for cash proceeds, as well as the assumed full year gains from divestments of around €2 billion. And we are also confident to reach our target of an adjusted net cash position at the end of fiscal year 2024. So a lot of progress there. Now, looking at the group’s cash bridge as at the end of Q1. Overall, €5.3 billion cash and cash equivalents and €3.9 billion of financial debt, of which €3.2 billion is long-term in nature. This brings us to a net cash position of €1.4 billion versus a net debt position of €193 million at the end of Q4. As mentioned at the CMD and as I just explained, when I updated with respect to our ongoing divestment program, it is our clear target to maintain this net cash position throughout the year. Again, the €2.1 billion proceeds related to the sale of our stake in Siemens Limited, India, constituted the main cash inflows, while we had operating cash outflow pre-tax of €283 million as well as cash outflows related to financial interest of €33 million cash tax and minority dividends and some smaller items. Net cash adjusted for pension obligations amounted to roughly €0.8 billion at quarter end. This is an improvement of €1.6 billion versus the end of last financial fiscal year. So at the end of Q1, we have a total availability of liquidity of €10.3 billion, with around €5.3 billion in cash and cash equivalents and €5 billion undrawn credit lines. With this, we continue to have a very strong balance sheet as of the end of the first quarter fiscal year 2024, absolutely in line with our commitment of a conservative financial risk profile, as well as our commitment to an investment grade rating profile. So moving on please to our business areas. Let’s start here with Gas Services. The Gas Services had a strong, again, maybe to put into perspective, they have a strong prior year quarter as well, but for Q1 we booked €4.1 billion in orders. This exceeds, as just mentioned prior year, by a 13.1% comparable rate. The order growth was driven by a high volume of large orders, especially from Eastern Europe and Central Asia. Book-to-bill over €1.5 billion in order backlog rose to €42 billion. In Q1, we booked 22 gas turbines greater than 10 megawatts, thereof 11 large gas turbines and 11 industrial gas turbines. Q1 is characterized by a strong gas market for gas turbines greater than 10 megawatts, and in this regard Siemens Energy reached a market share of 29%. Revenue grew by just shy of 11% versus a high comparable basis and came in at €2.7 billion. Again, both service and new unit business, which resulted like in prior year’s first quarter, in an overall favorable business mix in Q1 for GS. Profit came in at €313 million, which is close to the very strong level of prior year’s quarter. This is about an 11.7% margin, and we continue to benefit from a high service contribution, as well as a keen eye on operational excellence and strong execution. Now, let’s take a look at Grid Technologies. A very successful start for Grid Technologies with significant improvements across all KPIs. Orders outstanding in our Grid Technologies business area with an overall positive market environment for them. Orders in the first quarter exceeded the prior year by almost 33% and rose to €8.2 billion. This development was driven by the product business and HVDC orders in Germany, also in part benefiting from some pull forward effects. The book-to-bill was just shy of 4, as I mentioned earlier, and backlog rose to €28 billion. Revenue grew substantially by 33.1% year-on-year and came in at €2.1 billion and, again, supported by the strong order intake in prior fiscal year. And that growth was driven by all businesses with main contributions from both product and solutions. Profit was €213 million or a margin of 10.2%. And this is quite an improvement of 310 bps versus last year. Again, this results from the higher revenue and a comparatively higher margin in the process order backlog, but also some timing effects were included therein. So on the next slide, we take a closer look at TI or Transformation of Industry. At the CMD, I think there was really highlighted on our plans forward and what we’ve done in the past years to really create that solid foundation for our TI business. I think really looking at maximizing service share selectivity really a keen focus on this and an improved price and risk profile. And, I think this is very nicely reflected in the Q1 results. Looking at orders, €1.6 billion. This exceeded prior year by almost 40% comparable. This sharp increase was driven by a large order in our compression business and a large order in steam, our Industrial Steam Turbines & Generator business. And the book-to-bill came in at just over 1.4 and a backlog rose to €7 billion. Revenue, 17.8% growth on a comparable basis, important across all four IMBs, really showing double digit growth. And EAD and compression businesses showing the highest growth rates. Revenue growth was also supported by a very strong customer service demand, particularly in our compression and in our Industrial Steam Turbines & Generator business. Profit nearly doubled, came in at a strong €105 million, and this is a margin of 9.2%. And, of course, this is an improvement of 350 basis points versus last year. This increase was driven in part by higher revenue, better pricing as I mentioned earlier, increased service revenue, and like I just mentioned in Grid Technology, some timing issues and project related issues. And this is influenced, for example, like timing, as I mentioned, and some currency impacts and a favorable mix. Now, let’s take a look at our wind business, Siemens Gamesa. Christian earlier provided you with an update on the situation. I mean, looking here at the main financial KPIs, orders slightly above the level we saw in prior year. Again, onshore orders as communicated due to the temporary suspension of sales, slightly halved due to the cessation of sales activities for 4.X and 5.X. However, we saw growth in service orders and in offshore orders. Order backlog for Siemens Gamesa decreased to €41 billion, just a slight decrease. Revenue grew moderately by just shy of 5%, increased service revenue more than offset a decline in onshore and offshore businesses. Of course, onshore remains and continues to be affected, as Christian mentioned, by the known quality issues and offshore by the ramp-up challenges. Looking at profit, it came in at negative €426 million in comparison to prior year’s quarter. If you remember in prior year quarter, it also included charges of €472 million related to quality issues. And, I think, the recent quarter’s underlying performance, of course, was driven by project margins, burdened by higher planned costs due to the quality issues that are quite well known, as well as increased product costs and ramp-up challenges in the offshore area. So how do we sum up our achievements in Q1? I think, overall, solid start to the year in the former gas and power businesses and Siemens Gamesa performing in large part as expected. We feel we’re on the right trajectory towards our full-year targets. Again, the first quarter is encouraging, but also benefited from some project shift and timing. The topics, again, very normal in our business, but certainly even in light of the market dynamics we are currently seeing. This is why we maintain our guidance. Again, a highlight was the progress, I think we made really strong progress on our ongoing divestment program, and we’re confident to reach the upper end of the €2.5 billion to €3 billion year-end target. Let’s take a look at the outlook for fiscal year 2024, which remains unchanged. So just as a reminder, we continue to expect for Siemens Energy Group a comparable revenue growth in the range of 3% to 7%, and profit margin before special items between negative 2 and positive 1. Furthermore, we continue to expect an income of up to €1 billion. This includes impacts from disposals, and we continue to assume a negative free cash flow pre-tax of around €1 billion. Overall, the assumptions that we gave per business area remain unchanged. This concludes my part of the presentation and, with this, I hand back to Christian to conclude with our key priorities. Over to you Christian.

Yeah, thank you very much, Maria. I mean I said it at the beginning, I’d just to repeat it. The three elements which we continue hammer on deliver on profitable growth, fix the wind business and maintain a solid financial foundation. This will always be our mantra throughout all the quarterly calls. And, with this, I would hand over to Michael to lead the question-and-answers. A - Michael Hagmann: Perfect. Thank you. Thank you, Christian. Thank you, Maria. [Operator Instructions] The first three questions go to Vivek Midha, Max Yates and Supriya Subramanian. So, Vivek, if you please go ahead.

Thanks very much, everyone, and good morning. My question is on the orders. So on the Capital Markets Day, you suggested that the group level. This would be down meaningfully since then we’ve had the announcement on Hornsea 3 and you’ve obviously had excellent orders in the quarter. So could you maybe quantify how large the pull forward effects in Grid Technologies were? And how much of a downturn at group level is likely an order intake this year if at all? Thank you.

Yeah, thank you very much, Vivek. Obviously, I have to say the current dynamic market environment, it’s, let’s say, a little bit challenge to be projected, definitely, I would continue to, let’s say – I would say we do see a stronger quarter one compared to all other quarters very clearly. So don’t project this going forward. We also believe that we are largely in line with our statements we made on the Capital Market Day with an uptake on Grid Technologies. I think this is where we are very confident that we will probably exceed our own projections coming from there on the rest of the business. It is largely in line. Wind, we also have to clearly see that we, obviously, had a good quarter and 2024 will be weak. So all-in-all, we will definitely not be short of orders, I would say, in 2024, but also don’t expect that momentum to continue. Some of this were particularly on grid also that now some of the call offs out of the frame contracts we communicated before and now everybody’s obviously pushing, pushing, pushing, because they see the grid really being a shortfall, but there is a limitation to that also in terms of execution capacities.

Understood. And one very quick clarification. Should we expect the Hornsea 3 firm order to come in Q2? Thank you.

The Hornsea order to come, no. No.

Okay. Thank you.

Thank you, Vivek. Next question now goes to Max Yates. So, Max, please go ahead.

Thank you and good morning. The question I had was just on a couple of the 2025 cash building blocks. And, I guess, the two things I’d love to understand. Firstly, just on the sort of wind repairs, you show that chart that shows kind of the max or the highest cash outflow being in 2025 for the onshore repairs. Could you give us a feel for roughly what you think that number will be? And then, I guess, the other parts of the cash question is, when I look at your grid business and the level of orders, and I think about sort of some of the other parts of the supply chain, say, the sort of cabling, they have relatively large kind of ongoing investment plans there. So, I guess, my question is a little bit around your kind of CapEx line in 2025. When you look at your backlog, do you see the requirement, particularly, in Grid Technologies have a sort of step-up and major investment plan there? Thank you.

Thanks, Max. I appreciate the question on cash and relating to the building blocks. If you recall at the Capital Market Day in line with the cash-out curve that we also showed today, it obviously clearly shows the cash-out in 2025. We did not provide a 2025 figure per se, but what we did say is between 2024 and 2025, this is where we see the majority of the cash-out. And then, of course, over the 2 years of 2025 and 2026, then we expect the cash-out of back in of the €1 billion to €2 billion. So that would be cumulative over 2025 and 2026. Just to be clear, €1 billion to €2 billion generated between 2024 and cumulative 2025 and 2026. We did not give a cash outlay target for 2025.

Yeah, Max, let me comment on your question with regard to the capacity. The answer is yes. I mean, there’s obviously we intend to extend the capacity, particularly on the Grid Technologies side. This particular tackles two locations, which we are intending to build out from existing sites. This allows us also to do it on a manageable CapEx level, I would call it. So important steps, but also in our current plans all considered. I think that is important but, obviously, we will continue to build out the capacity in Grid Technologies.

Understood. Thank you very much.

Thank you, Max. Next question goes to Supriya Subramanian. So Supriya, please go ahead.

Yeah, thank you. Good morning. And thanks for taking my question. I just wanted to check on Siemens Gamesa. And since you said that majority of the root cause analysis is now done. If you could share some key findings from that in terms of what are we confident that the issues are now limited to the identified fleet, what are needed to fix the issues, whether it’s design versus supplier quality. And when do you think you can reenter the 4.X and 5.X turbine market?

Yeah, thank you very much for the question. I mean, first of all, we have not seen any new root causes. So the question in terms of did we see it on the main causes that my answer is yes, I think this is what we’re from all the data, what we have available as of today that has been analyzed. Obviously, the key thing now is as I said to identify the planning going forward. In terms of what we have seen – sorry to be a little bit not as simple, but it’s a combination of matters, right? It is very often it is a certain design with certain suppliers. We definitely have seen an influence on the suppliers, which doesn’t mean it’s solely the supplier. And, I think, this is obviously also something, but we see this as an element of combination combined with the load on the turbine in terms of in conditions and so forth. So it means that it gives us multiple opportunities to fix the problem. One thing is a renewed design. One thing is some slight design changes with a new supplier. And these are the elements what we’re working through now. But what we definitely have seen is, let’s say, a variety of reasons coming together. This is why it’s unfortunately not so simple. And keep in mind, there’s also one thing which is not to be overlooked is also then how was the installation quality, right, in terms of the different regions and making sure that this is all aligned. So we are seeing a diversity and I think this is why we have our challenges to put it in simple words on how to do it. But in terms of the mechanisms coming together, I have not seen any new things over the last couple of weeks and months. So that is a positive.

Okay, great. Thank you. Maybe just a very quick mechanical question. So the guidance for financial results has changed from negative €150 million to negative €300 million last quarter to this quarter. So I just wanted to check what’s changed underlying there?

Hi. Thank you for the question on that. So, yes, there’s a few factors that have been included now that led to the increase of the €150 million. One is there were some changes in terms of rates on warranty that have been included. And secondly, we have properly included, of course, the additional costs for the back guarantee facility. So that is why we’ve updated accordingly there the amount.

Perfect. Yeah. Thank you. Thanks a lot. That’s it for me.

Thank you. The next three questions go to Alex Virgo, Sebastian Growe and Gael de-Bray. So Alex, if you go first, please.

Thanks, Michael. Good morning, Christian and Maria. Thanks for taking the questions. I wondered if you could just give us a sense of your response, I guess, from a big picture standpoint with respect to this root cause analysis. I asked the question, I think, at the CMD. So same source of question again, I’m just wondering, it’s all very well to establish and work out that we identify the symptoms and I appreciate you’ve done all of the work around the install base. I’m just making sure we’re trying to understand if you’ve changed anything in the way you design these turbines and the way you interact and operate with the suppliers. Because, I guess, ultimately that’s really what we want to hear or want to see with respect to what you then go forward and change even if we – it’s a bit too early to talk about what you’re actually doing to fix it. Does that make sense as a question?

Absolutely, Alex. And the answer is yes, right? I mean, if you wouldn’t do something different, obviously, we’re absolutely disappointed with the surprise we had to present last year. And one thing which has been introduced is obviously different design methods, largely also leveraging our offshore capabilities, very clearly to say, plus externals. And one key thing which comes really out for me is really with the introduction, in particular of new designs, the how shall I call it, combination of manufacturing readiness level together with supply chain readiness level. And the diversity you see on certain suppliers, for example, for a specific item, like a bearing, right, is stunning, right? And then it’s about, okay, how do you ensure the quality control? How do you make sure that you really understand it? And this does require extra rigor. This is also why, to be honest, we push out the date for the announcement when to reintroduce the new sales on 4.X and 5.X, because these processes we want to have implemented as well as leveraging our processes and supply chain management from the Siemens Energy side and bringing these groups together. That is a key underlying factor. Fundamentally, I would say – there’s nothing where you would say you cannot do it right to the expectation to the market so that is all would work out, but definitely there are things where we have to say this cannot continue as is and this has to change and this is what we’re doing at the moment.

Okay. Thank you. And there’s a follow-up question can I ask if you could comment please on the pricing environment in specifically in gas turbines and in grid, clearly a tight market is generally helpful from a supplier perspective. And given the history in both businesses with respect to pricing discipline, I wondered if you might just or any comments you might be able to make on those two businesses would be helpful?

Yeah, I’m so happy to do so. Yeah, let me come to grid and guess for a second, I’ve seen there were some I’d say question marks all around the pricing environment in wind and just also to put that one in perspective, because it wasn’t, let’s say, a lowest ASP price shown an onshore wind in the first quarter which is driven by the fact that we’re not selling 4.X and 5.X, but repowering solutions, and India at the moment, which is a very limited scope and then has a different price. Just to put that into perspective, so also I would see in wind the pricing environment, okay, right, I mean that is something just as on the sidelines. Grid remains pricing wise a favorable environment. Clearly to say it’s a very tight market. At the same time, we have to get ready for making sure that we do not get take this as granted, right? Because at the moment is a very good environment. Maria indicated that the order backlog margin goes up, right, despite the fact that if you get more and more new units, right? I mean, so this is a mixed effect even over compensated and also gas services show still good behavior in the industry. I really have to say I feel comfortable with that. It’s not as strong as in grid technologies logically, but it’s a good pricing environment.

Great. Thanks very much.

Next question goes to Sebastian Growe. So Sebastian, please go ahead.

Yeah, good morning, all, and thanks for taking my questions. The first one would be a follow-up on the free cash flow bridge for 2024. Maria, you had pointed earlier to a free cash flow of positive €1 billion or around that level [for XGP] [ph] was around €2 billion negative for SGRE behind about €1 billion negative at group level. In wake of the stronger than earlier fleet [ph] order pipeline at XGP. Can you help us understand what would drive really zero free cash flow for the remaining three quarters as per that guidance framework?

Hi, Sebastian. Thank you for the question on a free cash flow. Look, clearly, it is a strong start to the year. And as you know this is driven by a multitude of factors things like seasonality volatility. But, of course, with stronger demand and higher order intake than of course it has an impact on our cash. Q1 was strong and we indicated that momentum at the Capital Market Day and we saw that still happening. And, of course, this is only Q1. We have other forces, there’s puts and takes as I always say, in each and every quarter. And, I think now we are committed to a net cash position, I think you saw some of the progress that we’ve made there. We make cash generation a key priority. However, you may have noticed that of course as we execute through this backlog, we do need things like inventories and so on in terms of operating working capital to kind of progress accordingly. We see that all in hand and so, of course, we’re monitoring that very closely. However, we will not – at this point in time, we confirm our cash flow guidance for the year, because of some of these puts and takes. Again, I think it’s important to note that we’re still just in Q1. Yeah. Thank you.

Okay. Fair enough. And the second one is just on the order pipeline at SGRE. So Christian, one large offshore customer has lowered its CapEx plan for the period through 2030 just today. And against the backdrop, can you comment on how you see the offshore volumes over time?

Yeah, I mean, we always said offshore is going to be delayed and then you can debate whether it’s 2 to 3 years or how long it is. But we said it’s after, let’s say, it starts with 2025 to pick up again. And then it is starting from there. Keep in mind, we always have, let’s say, looked on the volume we assume for our business case, whether the announcement with a kind of lower level. So we always expected, we never calculated with the full market, which was announced, let me put it this way. And, obviously, then from 2025 onwards, we expected to recover, but it will take some time now to get the things in place, to get the auction mechanisms refurbished. But in that regard, we do believe that, for example, 2025 and offshore is for us stronger than in 2024, just to keep that in mind. And also, obviously, we’re doing, we’re sitting at the moment also on a backlog for the next years to come, which we also have to work off first. So the current situation is not unexpected. Let me put it this way.

Helpful. Thank you so much.

Thanks. Next question goes to Gael de-Bray. Gael, please. Gael de-Bray: Yes. Thanks very much. Good morning, everyone. So I have two questions, please. The first one relates to Gamesa. Since the root cause analysis of the quality issues is essentially completed now, and with Q1 looking a bit better than expected, I mean, would you agree that there now appears to be some upside risk to the €2 billion loss expected for the full year. That’s question number one. Question number two is, well, look, GE Vernova will shortly become an independent company out of GE. And I was curious to see if you had any commentary, any thoughts on that, either positive or negative. Thanks very much.

Thanks, Gael. On the performance with Siemens Gamesa throughout the year would stay off what we have set in the Capital Market Day. And, obviously, also keep in mind that because also of not going into a sale, we also have to manage the structural cost. And that is something where I would stay with what we have set, if you look on the numbers, back in Capital Market Day in November. On Vernova, no, I mean I would never comment on a competitor, but I wish really Scott and the whole team all the best really to make it happen. I think he knows and we know how challenging it is to set up a separate company. I’m very glad at the end to have a relatively comparable peer in the market, also for ourselves. And, I think, we are looking forward to a healthy competition in that regard, but I really wish the team around him really all the best for getting it done now. Gael de-Bray: All right. Thank you very much.

Thanks. So a couple of people have just recently registered, the list has been growing again. So if you could now stick to one question, please. Next three questions go to Sean McLoughlin, Phil Buller and Ajay Patel. Sean, if you start, please.

Good morning. Thanks for taking my question. Just digging back into Gamesa, will you need to redesign the 4.X and the 5.X before re-releasing to the market? I note comments that you’d let the original design team for these turbines go. I mean, if you’re to fix all the quality issues first, what’s the risk that you’re actually out of the market for another year or more before you step back in? Thank you.

First of all, what we are looking at is, how should I say, refurbished version or improved version of the 4.X and 5.X, which because fundamentally also there’s a lot of good things about the turbines, but there’s obviously fixing on the current-based design, that is the assumption. And, obviously, this is what we’re working through, if there would be anything else, we would communicate it throughout 2024. But at this point in time, we are really working in a refurbishment, or how we’re retrofit, you would say, type of program. This is where we are at the moment. What we had done in terms of the design teams, we obviously wanted to have people on it with a fresh pair of eyes. But, obviously, they are identifying the things which need improvement and others which have worked. But that is still my planning in terms of the retrofit solutions. I cannot really tell you now, what the exact timing is, but the base is 4.X and 5.X.

Thank you. Next question goes to Phil Buller. Phil, please.

Hi. Thanks. Yeah, sorry, can I follow-up on that same question, please? I guess, if I’m reading the slides right, we’re going to have a portfolio decision by the end of 2024 that we’re going to be doubling the number of 5.X installations in 2025. So do we not need to start bidding almost immediately, i.e. before a technical solution is fully in place? And if so, is that because we’ll be in a position where we’re fully comfortable with the scale of corrective costs that we’ll need to absorb down the line, which you can maybe price in, so to speak? Thanks.

I’m not sure for what I understood the full connections between the different statements what you made. Yes, please.

I guess it’s to do with the fact that if we are needing to bid near-term, if you’re assuming that we’re going to double the number of 5.X installations in 2025. It feels like we might need to start that bidding process imminently. Maybe that’s wrong. But if we are – and we’ve got a retrofit type solution near-term. I wonder if we’ll be bidding with pricing in mind to support the bridge, so to speak, [which is favorable?] [ph]

Yeah, just to be clear. I mean the installations which are shown on the slides are backlog work off, right? This is what we are, let’s say, having the books what we are doing and that is the rotor update, right? And just showing on how we continue to do it and, obviously, we are at the moment deciding, okay, do we do the certain fixes in the factory? Do we do it in the field and how we do it and balance it also there with the customers that has nothing to do with new orders? I hope that’s clear. New orders, obviously, has to do something then, “Hey, how do we look on more or less 2026 and beyond, right? And how is then the load in the factories and how do we balance this?” And this answer comes later, right? But if you refer to the slide that’s really existing orders in hand, which is still going to execute.

Thank you. Yeah, I assume that’s part of the 2025 bridge on Slide 6 would be predicated on orders that might need to go sooner, but 2022 [ph] backlog.

It’s all backlog.

Okay. Perfect. Thank you.

Right. So we’ve got three more people in the queue as I previously mentioned Ajay Patel next, and Akash Gupta, and then Will Mackie. So Ajay, if you go ahead, please.

Thank you very much. Just wanted to carry on the train of thought that we’ve just been discussing. So what I want to understand is that has the range of costs, the €1.6 billion provisions that you’ve highlighted, has that narrowed in terms of the potential possibility of the range of it given the assessments you’re making and would you able to make a full once the assessments are finished? Would you able be more definitive about that €1.6 billion of incremental cost? And does any of this plan have any cost for a new blade or any developments that need to happen on turbines if you would need to go back out in the market? Or is that all additional? Just wanted to differentiate the cash flows here for Siemens Gamesa.

Yeah, I mean, first of all, to the cost level, I mean we reconfirm it, because we reconfirm it. It is obviously a very detailed picture now on what allocated were, what you have to keep in mind that the biggest chunk of the cost is really either related to installation or cost things which occur at a later point in time, which is very much also on how we organize execution. And this is, obviously, will be only later judged on this because you need a crane, you need a team at site and so forth. And the other thing is customer negotiations, and these type of payment, which is also influenced a bit by the mitigation plan and the negotiation with the customers, which is still to come. And this is why at this point in time it’s too early. The smallest part of the cost which we put is the part itself. That is actually not my major concern. And it’s really about all the installation related cost and customer elements. And this is why you’re going to see that number not changing fast, right, in terms of because this is where we will see once we execute through the backlog.

Got it. Okay.

Thank you. Next question goes to Akash Gupta. Akash, please.

Yes, hi. And my question is on Siemens Energy, as not Siemens Energy with Siemens India. So we saw in last quarter Siemens India announced their plan to consider separation of energy business. And the question is that at what stage do you need to recognize a liability in your balance sheet to execute the plan to buy back majorities stake in energy business of Siemens India from Siemens again? Thank you.

Hi, Akash. Maybe I’ll take that one. So you’re absolutely right. That’s absolutely in line with our plan that that announcement was made. So, essentially, now we’re doing the de-merger and carve out process, I mentioned this at the CMD. This is something that will take a number of years and a number of milestones. We anticipate at least 2 years’ time for this part of the process. And then there’s a number of steps after that that will at that point in time determine how we do swaps and so on for the new Siemens Energy India Limited setup. So, again, I think it’s too early at this point in time, but we’re on track. I’m happy that announcement was made, because it shows that we’re progressing and this was always the plan.

Thank you.

Right. Will, last question goes to you.

Thank you. Good morning to you all. My question is can you help me understand again the dynamics within the onshore business at SGRE? Specifically, you’re booking solid revenues better than expected. What’s in there and what are you selling with regard to the orders that you’re taking at the moment? And then when we look at the predictions you’ve given us for production rates for 4.X and 5.X in 2024, when will those, the 4.X and 5.X be contributing to the revenues within the onshore business or are they already? Thank you.

Yeah, thanks. First of all, what are we, let’s say, selling and executing it. And this is, I mean, for example, as I mentioned before, one thing was repowering solutions, which is U.S. market. And the other thing was, for example, India, which is the smaller onshore units. And keep in mind, there’s also service business continuously running and executed. We serve 85 gigawatts, right? I mean, in terms of onshore wind installations still, and this is ongoing. On the execution – no, I have to – the question was? Revenue recognition. Well, this is getting now in details. I mean, we recognize the revenue while executing. It’s a percentage of completion approach. And in this regard, it’s already considered now, right? It is in the numbers and we’ll continue to do so in line with the outlook for the next years to come. That was the intention actually to show this slide. The intention was to show we continue to execute the project around the 4.X and 5.X. Yes, we are shifting this a bit depending on do we want to do things in the factory or on the field, but we’ll continuously generate revenue out of the backlog.

Thank you.

Right. I think in interest of time, and as we had other companies report as well, we now close the Q&A. Christian, if you want to have a final remark before we close the call.

Yeah, I mean, as I said, I think we’ll probably see a relatively similar picture hopefully over the next quarters to come, which is a very dynamic energy environment, which is a positive and let’s say working through the matters at SGRE. I can understand that you would love to have much more specific and detailed answers. Unfortunately, the world is that complex for me is important that is really go step after step. I mean, we have to rebuild trust into that business is what we’re trying to do. In that regard, many thanks for the discussions and the questions also. And I hope we step after step can give you more comfort around what the organization is doing. Thank you.

Thanks, everyone.

Bye-bye.

Bye-bye. Take care.

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/investorrelations.