Can we really change the future of energy? Absolutely, yes. Honestly, not at the flip of a switch. Of course, change has to start now, and waiting for a perfect solution is wasting time we don't have. If we can move faster towards net zero by using existing gas technologies combined with renewables, we'll do it. The transformation of energy is a big task, and honestly, we can't do it alone. We're putting our energy into collaborating with those who share the same vision: reliable, affordable, and sustainable energy for all. Honestly, when we all work together, global challenges can become global opportunities. Good morning, everybody, and welcome to the Siemens Energy Capital Markets Day 2022. As most of you know, it's our second Capital Markets Day, but it's really the first one since we started trading. The first one was virtual, so I'm really happy that so many of you actually made it to Berlin. Thank you all for coming. Welcome also everybody on the web. Just briefly on the agenda, we will have a couple of sessions through until about 11:30. Christian and Maria will talk about the outlook and the financials and also, of course, talk about the transaction that we announced on Saturday night. We will have a lunch break around 11:30 for a little bit more than an hour. In the afternoon, we have our respective board members here to present on the business areas. Jochen Eickholt has come to talk about SGRE, and then we will also have sessions on innovation and sustainability. We should then wrap up with a Q&A around 3:30 P.M. before we finish at around 4:00 P.M. With that, I welcome Christian Bruch, our Chief Executive Officer, to take you through our strategy. Christian. Thank you very much, Michael, and a very good morning to all of you. It's really a pleasure to see you at least partly in person. Thank you very much for taking the effort to come to Berlin. Or some of you had the opportunity already yesterday to visit one of our sites and also to see really from conventional technologies to the technologies to come, really what we are doing here. Berlin is a special place for our company. It has been the place where our founder, Werner von Siemens, founded the company in 1847. It's a lot of history also here, but it's also a lot of future. We want to talk to you today about what we are going to do, and it's obviously the next step in terms of developing the company. As Michael said, we had our last and first Capital Markets Day in 2020, when we listed the company, and obviously we have shown at that point in time a couple of elements what we in the future gonna do. The progress what we made over the really past months and close to two years, which we are now existing as a company here, have given us comfort to say, "Let's really now go the next steps and show you in the transparency," which you hopefully will appreciate, what is happening next in the company and how does this fit into the energy market. I will give you an overarching overview about Siemens Energy as a company and what we're going to do, as Michael pointed out. I will also talk thereafter about the cash tender offer, which we announced on Saturday and presented briefly in a call yesterday. Maria will walk us also then through the financial numbers, and we have the opportunity for a question and answer session thereafter. Let me start with a couple of key messages to set the scene really for today's presentation. Since the start of Siemens Energy in 2020, we have made substantial progress, and this gives us, as I said, the comfort really now to tackle the next level of activities to really make sure that we as a company shape the energy transition. Operational improvements were in the focus in the first 24 months of the company. Really get the thing working, getting really the efficiency programs implemented. I will talk about this a little later. You also have seen stepwise the portfolio changes which we introduced to make sure we drive it to a sustainable, profitable portfolio in the company. What has happened since 2020 is also that the electricity and energy market is under substantial change. From my perspective, the electricity and energy market today looks a lot more promising than we estimated two years ago. It's also coming with substantial changes and substantial investments into the market. I want to talk today also to you about the changes in the market and how this is linked to our business developments. We are excellently positioned to benefit from the investment into the energy market. Karim and Tim, and also Vinod later, will explain to you on how we tackle this in the different business areas which we're gonna show to you and also with our innovation activities. Along five levers, I would like to structure the way on how we want to generate value for our key stakeholders, giving you also the ability to have more transparency on the company. This has been a theme which we continuously have been discussing over the last quarterly calls. How can we make sure that you get the necessary transparency on our performance for you, that you can judge on the progress we are doing in the company. Obviously everything what we are doing is based on our strong commitment to sustainability. Let me look back to 2020 and until today on all what we have achieved. First of all, if you recall the main targets in 2020, what we flagged up was really improving the market position, driving operational excellence, and making sure that we start to shape the portfolio in a future-oriented way. The market position has substantially improved. If you look on the last gas turbine numbers which come out, we have achieved a market share increase from 34% - 44% market share, depending also on the different areas. We came back on the large gas turbine. I'm very happy with a very sound backlog, what we have achieved. This was a fantastic achievement since 2020. We have really manifested a number one market position in HVDC, and Tim will talk to us about the potential which sit in the HVDC market. By the way, obviously you're sitting here in one of our test facilities for the transmission equipment. It's today not live, but this is where we test it obviously to give you a feeling what we are talking about, if you're talking about equipment and you see how massive it sometimes is and how much complexity is in there, and you will have the chance today for those of you who are here at site also to see more examples for the products, what we are doing. We have a very, very healthy and strong backlog. I mean, the backlog has substantially been growing. We talk about EUR 57 billion in gas and power, EUR 33 billion in SGRE. This gives us a strong base really to continue to transform the company sitting on this backlog, which also reflects around EUR 52 billion of service backlog, which is obviously a recurring profitable business. We have started a lot of things in terms of driving operational improvement, and we have in the quarterly calls continuously updated you on the progress of the efficiency program. This meant consolidation of sites. This meant also amending capacities and good progress have been made, including also the annual productivity measures. Obviously, we all, like every company, are fighting headwinds from the supply chains and from the markets, but all the programs we implemented to really tackle the cost structure are on its way and very successfully executed. Step after step, we also shape the portfolio with a focus on sustainability and service and really drive also, on the one hand, new technologies, but also driving partnerships in terms of how do we do innovation. Vinod will talk to you in the afternoon about our way on how to organize innovation, talk about our four global innovation centers which sit in Abu Dhabi, in Shenzhen, in Berlin, and Orlando, and really on what is the next things to come and how do these fit into the market drivers which drive energy transition. I'm very proud, I have to say today, if I look on the discussions around our ESG ratings. When we started, nobody has seen us as a driver of the energy transition. If I talk today to the ESG rating agencies, show them our reports, show them our progress, they understand that we are a key driver of the energy transition, and I'm very proud of what the team at Siemens Energy has achieved since the start of the company. However, I think for those of you who have been with us yesterday evening and heard the speech of our former Vice Chancellor, we have to recognize we are acting in a continuously changing environment. Pandemic, war, climate change consequences, and an unprecedented request for energy transition, and that is here to stay. It is our assumption that we have to be able to run a profitable and successful company in a continuously changing environment. I will also explain to you today how we are reorganizing our organization to make sure we have the agility and focus and accountability in the organization to be able to drive successfully our business through a continuously changing environment. This change is opportunity. There's lots of opportunity around this when it comes to the energy and electricity market. Let me talk about the market itself, that we can put it into perspective, what is the field in which we are acting and what we are trying to benefit from as a company. If you look on the upper left side, you see the global electricity generation scenarios which are currently predicted. Nobody knows where the future is at the end will be between the scenario, between stated policy or net zero. So there's different scenarios, but if you look until 2030, one thing is very clear, electricity generation gonna grow, whether that's 2% or 4%, that's not 100% clear, but one thing is clear, it's gonna grow. After 2030, the only question is, does it continue to grow at the same pace or does it grow even faster? If you look on the upper left, lower left side, you see also how are the different sources of electricity generation distributed in the different scenarios. If you look on the stated policy scenario, you see that continuously the assumption is that renewables gonna grow. That's a very clear trend which we will see. You also see that for definite coal is gonna shrink, and in the stated policy scenario, gas is gonna be a stable backbone really of the electricity market. If you look to net zero, it could be that renewables gonna grow even faster, coal even faster gonna decline, and until 2030 gas gonna be stable and thereafter gonna shrink. We don't know where the scenario gonna be, but we know that we need to position in a market where we have to anticipate changes in our organization and be able to react on. This is what we are setting our company up for to make sure that we can move between these different scenarios and benefit either way, either by servicing more gas turbines or selling more wind or building more HVDC, and this is the things on how we would want to tap in. If you look on this big block of renewables, and if you break it down into solar and wind, and this is on the right upper inside what you do see, then you see that also once again in the different scenarios per IEA, the comparison what it means. As I said before, at the end it means for solar and for us, obviously particularly interesting for wind, does it grow or does it extremely fast grow? That is the major difference between the scenarios what we have to see. All in all, it's massive opportunities for us. We're looking in an electricity market where until 2030 we see an increase of either roughly up to 50% or up to 100%, and this is obviously where we want to shape the portfolio, but also the resources who can convert technology and solution and products for customers. What are the common trends along these different energy and electricity scenarios? First of all, electricity production will grow faster than GDP. The share of electricity and the energy balance will get higher, irrespective of the scenario. The capacity, the underlying production capacity will grow even faster because if you now obviously replace one megawatt of coal-fired power plant, you cannot replace it with one megawatt of renewables, you need multiple times because the runtime is lower. The production capacity addition is massive, and the intention would be today really to have the capacity expansion to be covered by renewables, and we strongly believe also that gas will continue to be a backbone of the electricity production. Also to ensure the grid stability in a grid which will see higher amounts of renewables and with this more volatility. Coal will be phased out, and as you know, in 2020 we decided to abandon the new build coal-fired power plants, which I believe was absolutely the right decision, and this is obviously a trend on how we continue also to shape our future portfolio. What you're gonna see also today in the afternoon, presented by Tim, is that grid investments will rise to an unprecedented level. I still believe that it's an element which is not recognized really in the market. The amount of money which is needed to get the infrastructure, the electrical grid fit for the future energy market. That is substantial, and we want to benefit from it. We have a super market position, and we will see unprecedented investments going into the grid infrastructure. All in all, we always have to be aware, and you will see it afterwards with the numbers. A big contributor to CO₂ reduction, emission reduction will be the industry. The requests are high, but now latest since the war also in Europe, we see there's another element. It's about energy security and affordability of energy and price differences between the region. Energy efficiency will be particular in all industrial applications, a competitive criteria across the industry because all of a sudden, take Europe as an example, you will have installations here with rising energy cost, which have to compete with peers who work out of an area with substantial differences in energy cost. The only way you have to make these assets still valuable is really getting the energy cost down, managing the volatility of supply if you talk about renewable structures, and it will be a key element to drive energy efficiency in industrial applications. These are the themes which we are designing our company to. At the end, what we want to achieve as a company, what we stand for as Siemens Energy is supporting our customers in this energy transition, helping them through this challenging but thrilling task to achieve a more sustainable future. Let us listen to one customer, and I would ask, please, the video. Hi, everyone. I'm Bernard Looney from BP. Thank you, Christian, and thank you, Siemens Energy for inviting me to do this. Sorry, of course, that I can't be with you there, in person. Christian asked me if I could say a few words about what BP looks for, in a supplier, in a partner, and I'm very happy to do that. Why? Because, well, because right now, Siemens Energy are doing a great job for us, and that's as good a reason as I can think of. To Christian's question specifically, I can think of three reasons. First, the company has to be committed to safe, reliable, efficient operations. That's fundamental to what we do. It's a boundary condition, so to speak. Siemens is helping us with that all over the world. I would add that digital plays an increasingly important role in this space. Second, we want to work with suppliers who can manage the scale and complexity of what we're trying to achieve. A good example is Brazil, where we're working together on an LNG power plant, a big LNG power plant, one big enough to supply Rio with 3 GW of electricity. Third, we wanna build relationships for the long term, mutually beneficial relationships where one and one doesn't just equal two, one and one equals eleven. We feel that we achieve so much more together when each of us wins. One last thought, and maybe the most important one for me, we want to work with people who are on the same page as us. Now, you may know this, at BP, we're transforming ourselves from an international oil company to an integrated energy company. It fits that you talk about becoming an integrated technology company. We have a strategy for BP that is embedded in sustainability, and we have targets and aims and an ambition, and our ambition is to be a net zero company by 2050 or sooner and to help the world get to net zero. We're aiming to do that across our operations, production, and sales. It's hugely important to us that you want to be a sustainability leader, and you have set ambitions and ESG targets. It fits that you are aiming to be carbon neutral across your own operations, and you have set an emissions target for your products. Christian, I hope that goes some way to answering your question, and I hope it explains something about the relationship between Siemens Energy and BP. Thank you for all that you do for us, and I wish you all a very successful gathering. Thank you. Thank you very much, Bernard. I think it's a great example on how this is interconnected and how this goes together because we as industries are really under a tremendous change program. It's really finding jointly new solutions to a problem where a standard solution is not available. In this regard, as you know, and we have shown this before, we are organizing ourself around three pillars in the company: low or zero emission power generation, transport and storage of electricity, and the reduction of energy consumption and CO₂ in industrial processes. We have established over the past a market leading position in all these different areas. There's a massive installed fleet out there from which we are building on, and which gives us the trust of our customers also to continue to work with them in the future and to define exactly these solutions what they require. These are all markets along these three pillars which offer substantial growth opportunities in which we as a company want to tap in. I will walk you obviously through some of these growth opportunities, but we will also have more detailed discussion then throughout the day in the different business areas that you see what we are doing and where the growth is coming from. Let me talk a little bit about the investment which goes now into the energy market. As I said, it's also talking about scenarios. I think it's helpful to sometimes put GW and change requests into euros to see the tremendous amount of money which has to flow into the energy sector to make it future-proof in terms of availability, affordability, and sustainability of energy supply. You see that more close to EUR 800 billion investment spending per year is up within this decade. Around 3,500-5,500 GW needs to be added in terms of generation capacity by 2030. Obviously depending on the scenario, it will be between renewables, and there are obviously we see still some additions into gas. Even so, it's our assumption it is a flat or modestly declining market in terms of the new installations. The element which I think is continuously underestimated, and I said it before, is the investment which need to go into the electrical infrastructure like transmission. In all scenarios, irrespective of what you look at, that's gonna grow. The question is more is do we have the execution capabilities? Do we have the regulations? Do we have the right boundary conditions to change the electrical infrastructure as fast as need be? The necessity to invest in this field is massive and is around more than EUR 400 billion investment into transmission and distribution annually this decade until 2030 and thereafter will continue to grow going forward with higher volatility in the electrical grid, which requires more investment really into grid stability. You also see how does Siemens Energy want to benefit from these investment buckets. Obviously offshore and onshore wind is a key criteria for us to benefit from the renewable increase. The maintenance and upgrade of gas power infrastructure is a key for us, and we are excellently positioned to really exploit also our decarbonization and service capabilities in the gas side, and Karim will talk about that to you today in the afternoon. Obviously the fuel shift coal to gas will be a key criteria globally. We gave you in the last quarterly calls continuously examples of success cases which we did. We continue obviously to do so. On the transmission side is obviously the HVDC element, an important element for us, but also generally grid connections and grid stability and grid automation will be key areas as well as storage elements. This can be batteries, and this could be molecules like hydrogen together with electrolyzers. As I said before, we not only have to look on the electricity generation, we also have to look on the industry itself. They are facing an increasingly difficult task. How can you convert the different industry sectors which are today highly dependent on hydrocarbons to a more sustainable but also more affordable setup for the future? You see the change which is anticipated in three segments here, which are shown like chemicals, steel, and cement. The turnaround they need to do in their existing infrastructure. It means every industry needs to touch their installed assets going forward over the next 20 - 30 years to come. This can mean a lot of things. This can mean electrification, automation, and digital. This can mean driving more efficiency. This could mean transforming heat from one temperature level to a higher temperature level that you can replace natural gas firing by heats which you generated by a heat pump. This could also be obviously usage of green molecules by producing hydrogen through electrolyzers from renewable energy. These are the areas where we want to benefit from. Just to give you one example, to give you a feeling, what does it mean in the industry? 'Cause I also sometimes believe the amount of energy which sits in the industry sector is vastly underestimated. That's much bigger than what we talk, the energy content in the electricity sector. If you take 1 million tons of green steel and you would like to produce it based on green hydrogen, then you need roughly 50,000 tons of green hydrogen for it, and with this 500 MW of offshore wind capacity. This is obviously how we want to benefit from this. We are there at the sites. We've supplied the compressors to the steel mills. We know the customers. Now the next thing is coming in terms of how do you actually feed them with green hydrogen, and there's a massive opportunity coming in terms of really turning the industries around, let it be refining, let it be chemicals, let it be steel, whatever, because the amount of investment which has to go and do this transition will be substantial. There is a benefit of being a bigger company. Bernard Looney was talking about the integrated energy company, and when Bernard Looney and I first met, I mean, it was interesting because we both were talking about an integrated company. He was talking about the integrated energy company, I was talking about the integrated energy technology company. Why is it good to be an integrated company? It only makes sense if you generate value of being integrated and not being a pure player. Being an integrated energy technology company also means how do we connect the dots? How do we connect offerings? Let me be crystal clear. It's not that there is a customer out there who will buy easily everything out of one hand, right? It's a benefit. If we built an offshore wind park, and we are the customer contact, and the customer has seen us successfully executing, that at a later point in time when the HVDC decision comes, we can also come to the table and saying, "This is what we have been doing and can do." It's also a benefit if the power and the electrons land on shore and somebody needs to produce hydrogen that we can say, "Wait a minute. We have the technology to help you to convert your renewable power to green molecules. And by the way, if you want to convert it in your existing gas-fired power plant into a more sustainable setup, we can provide you with a service package to turn around an existing gas turbine to hydrogen co-firing." There's also a benefit of really being early in markets in certain regions. We are a company which is present in 100 countries of the world. If I look on a market like HVDC today, that market is really going fast in Europe. We already see the next wave upcoming in the U.S. We're building the reference at the moment. We're building the experiences and also the facilities and the resources at the moment to benefit also from the next wave in the U.S. and then thereafter from the next wave upcoming in Asia-Pacific. There's a third element why it's really helpful to be an integrated company, is really transferring technology from one application to the others. It sounds so easy, but sometimes it's not an obvious one. You need to be present in the different segment. You need to understand the different customer markets to see the opportunities, what type of technologies you can transfer. Let me take this example of the heat pump. Here in Berlin, we have introduced, some time ago, district heating around the heat pump technology from Siemens Energy. Now the question is: How can we apply the same technology? It's not a new technology, but how can we amend this technology to be feasible even for chemical processes to higher temperature to replace the need for natural gas? That is a project we are doing with BASF together in terms of developing high-temperature heat pumps for industrial processes to allow them to reduce their need for fossil fuels. We also have to move in a market which offers significant challenges. We were discussing in the past, obviously the supply chain constraints what we're having, the COVID-19 constraints, the geopolitical tensions, and obviously a lot of focus in an integrated company will go on supply chain. It is a core competence of a company like ours to drive successfully supply chain and logistics. To be able to handle these changes which will continue to be there in the markets. What does it mean obviously? It means also, yes, high focus on the supply chain, but it also means how can we transfer that into a pricing mechanism? How can we transfer this into indexation of the bids? How can we have back-to-back agreements? How can we manage our inventory? This will be a key criteria to be successful commercially in the organization. You see also a couple of example what we are currently doing in this difficult environment. Thousands of suppliers which continuously get monitored and managed. Bundling really supplies. I will talk about this also when I talk about our cash tender offer for Siemens Gamesa, that this is a massive opportunity to drive. We can do certain things today jointly already, and we do it, but there's more things to be done and more things to benefit from if we integrate the two companies. Let me now talk about the five levers to develop value. I would like to walk you through, first of all, our new operating model, which comes also with a new way of reporting. Maria gonna talk to you about also our new reporting scheme, what you're gonna see from first of October onwards. You will see that this logic of GP and SGRE goes away, and you will get more transparency on the different businesses to be able to link it to the market drivers which really determine energy transition. I would like then to walk you through the four businesses very, very briefly. There will be a dedicated presentation on each of the businesses that you see also what is really in there. That you understand is how is this company driving energy transition forward, and how are we benefiting from the market trends. Let me talk about the new operating model and the new structure of the company, first of all. The company will get broader and flatter. That is roughly in one sentence the target, what we are doing. Why are we doing this? Because we have to be successful in a fast-changing and continuously changing environment. You're gonna see six board members. We will announce the two new ones before October first. It will be an organization which is effective October first, including the respective reporting. You know the four board members on it from today's board, but as I said, you will have three reporting segments in Siemens Energy with Gas Services, Grid Technologies, and Transformation of Industry. You have Siemens Gamesa Renewable Energy as an independent company today, run by Jochen Eickholt. You have one dedicated function, which is called Global Functions, which will drive the benefits of being together. Procurement, data structures, IT, logistics, innovation, to make sure that the business get the platform to be successful and to be really market leading in these things. To be able to transfer technology into real things and to do this as effective as possible. Only if we generate value of being an integrated company, it makes sense to be an integrated company, and we do it on a strong order book. We do it on a significant improvement since 2020 in the EBITA level. Yes, we have our homework to do in SGRE, and I'm confident that, first of all, the current team does all to do the right things, and the integration will also help us to accelerate that process and give all the support to the team at SGRE to turn around the company. This is now referring to the GT side because what we're gonna do with this step, we also significantly make the structures within the GT side of Siemens Energy easier. As I said to you, we make the company broader and flatter. From today's 11 hierarchy levels, which is quite substantial, the company will go down to six. Very clear accountabilities, very clear business orientation, which also comes with a reduction in management position of 30%. This has really taken all overlaps, redundancies out and really focus on driving business and very clear accountability. We also gonna reduce the total number of profit and loss units, which we report from around 80 to seven. These are the seven profit and loss units you gonna see in a regular reporting, and Maria will talk to you about that. That is obviously something which also makes the company a lot simpler and takes out of a lot of administration work. We harmonize our go-to-market, so we really make sure that the regional setups connect one-on-one to the businesses to make sure that the customers, like Bernard, are very clear whom do they have to go to to guide them through the company. You still have multiple people interfacing in a sales process with a customer. That's very clear. What you want to achieve is that there's people out there, pathfinders, who make sure that the full suite of products and services from Siemens Energy gets apparent to the customer. Obviously, operational excellence will be a key element. As I said, only if we can exploit the maximum value of operational excellence it makes sense to be as a big organization together. Innovation is something which is the glue in our company which keeps us together. We're a technology company. We are proud of our innovation, and we know we will talk to you about what we are doing around that. Let me talk very briefly about the different businesses, and as I said, you will get a dedicated presentation for each of the business that you understand where we're coming from. What we have done, and you know the reporting structures before was generation and industrial applications. We have bundled everything around gas turbines and large steam to make sure that's one unit. Also take out all redundancies in this and focus really on driving the gas and Gas Services business. The business drivers behind it. What we see in the market is the decarbonization of the power generation, the coal to gas shift, the decentralization of energy supply, but obviously also getting the existing infrastructure ready for serving in a more sustainable energy world. This is what you're gonna see as Gas Services. It represents roughly 30% of the total revenue of Siemens Energy. It's in 2021, a 7% EBITA margin before special items. Our target is to have this a stable, maybe with modest decline type of business to benefit our service position, and it's a double-digit margin business in the midterm. Obviously with that, we have a strong base also for Siemens Energy as a company to continue to drive also new businesses forward. The second business I want to talk about is Grid Technologies. This roughly represents 20% of our revenue. This is a combination of the former transmission, and we combined everything that we were doing or starting to do on the storage side, battery storage, hybrid plants, into the Grid Technologies because we strongly believe storage, grid automation, stabilizers in the grid belong really in this electrical infrastructure. This growing electricity demand, combined with an increasing share of renewables, will drive the substantial investment I've shown to you before. This will grow with mid-single-digit% numbers, and we are confident obviously in midterm to drive it to an 8%-10% margin. 2021, this was a 6.5% EBITA margin business before special items, and Tim will talk to you today in the afternoon with more details about that. Transformation of Industry. That's a combination of different businesses, and this is the area which is supposed to really help the process industries to reflect on the changes they need to do to change, first of all, their existing infrastructure, but also for future applications. This is combining what you have seen before as a hydrogen business under NEB, right? Compression industrial steam and our business around electrification, automation, and digital. You will see in the reporting, and Maria gonna show that to you, these four independent businesses being broken out to give you a feeling also what is a business which is small, but where we invest into like hydrogen, but has a substantial growth opportunity. Business like EAD, which has massive growth potential, which is also already today a EUR 1 billion business. Business like, for example, compression, which has massive opportunities, but it's a turnaround case. We want to give you the visibility, what we are doing and why we are doing it, that you can understand as how is this benefiting from the market and business drivers and how we are doing going forward. Depending on the different businesses, on average, this will be a mid-single digit growth area with a 6%-8% EBITA margin. The 6%-8% obviously has to be put into perspective because if I look on midterm outlook, one key question will be what does hydrogen do, right? How fast is it gonna come? Just to give you a feeling obviously on how we're looking on these different business areas. It's SGRE, and I'm very pleased that Jochen will give us a presentation and also Beatriz Puente is here, in terms of also answering the questions of you in terms of how do we drive the turnaround? How do we secure that we really can benefit from this fantastically growing market but also get it into positive bottom line? What are the necessary things to do? It's 36% of Siemens Energy's revenue, so it's a core pillar of our company, and I will talk about obviously the cash tender offer, what we want to benefit from also through the integration and really joint exploitation of the opportunity there. All this is based on our dedication to sustainability, and I'm very proud of what the Siemens Energy team has achieved in the past 24 months of paving the ground for an ESG-focused company, getting reporting in place, making ourselves transparent, and getting it recognized in ratings. That is a journey. We cannot do that alone. What we can do is provide the technologies and means to implement that technologies finally into products to turn around the energy market. We will continue to make ourselves very visible and measurable. I'm not a big fan of these fluffy target settings, I have to say. I'm a big fan of numbers. I'm a big fan of continuously, obviously, trying to report to you on how do we step after step get it down. We do not yet have a solution for how we get to net zero. There will be additional technologies required. Certain trends in the market will be required. We cannot do it alone. It will depend on our customers. Across portfolio adjustment, across energy efficiency capabilities, across increasing renewables, across fuel shift and further reducing greenhouse gases and emission removal technologies, we will continuously drive our scope one, scope two, and scope three down. This is obviously what we are doing jointly with our customer, which are all embarking on the vision, and we will continue to work through this. What I want to make sure that we get tangible for you, also measurable in terms of step after step after step. I'm extremely proud what I have seen in the past 24 months from the people in our company. This is the base for our success, the Siemens Energy people. The diversity we have in the team, the people who are here in the room, you get to know a couple of our colleagues. The passion and commitment which is in our organization, the diversity across the world, the way on how we work together. I mean, you see obviously one of our sites here. It will also be a continuous effort to make sure that we can give our people the opportunities to continuously qualify for new things to come because we are in a changing environment, and we want to do this with our people. That is something obviously which is for us a key element. At the end, we are a people business. As much as I love technology, we always have to be aware, we want to implement real things, and we will need people for that, and this is what we are obviously committed to. My priorities, and this is no surprise, and you have seen it before, it's a repetition. It's performance, portfolio, process, and people, people. To make sure the right people sit at the right spot in the company, we do everything that in a decision-making process we are as effective as possible and really make sure that we can successfully drive through a changing environment. To close here, just getting back to page one, we want to become the most valued energy technology company, and we are superb set up in the portfolio what we're having today. We will focus to drive our levers and also to give you the transparency because we are company in transformation as well. We are strong believers also that the focus on sustainability gives us also the means of profitable, sustainable growth. In this regard, I'm looking forward to give you more detailed presentations throughout the day that you can see on how we are doing now exactly the next steps. Thank you very much for your attention. That will be the overarching view on Siemens Energy. Normally, the intention would be that I leave and Maria's coming. Maria will come, don't worry, in terms of the numbers. Obviously we had on Saturday evening the announcement on the cash tender offer to bring together Siemens Energy and Siemens Gamesa Renewable Energy. I will very briefly also want to flag this up. In a dedicated presentation, I will share this with Maria on the numbers on how we intend to bring the company forward to shape this integrated energy technology leader. For those of you who have participated in the call yesterday, these are the same slides. However, it's our intention obviously to make sure that everybody who is in the capital markets call today or here who has not seen this gets all the information required. Obviously, as already addressed in my previous presentation, wind is a key pillar for our strategy to bring the things together. However, the SGRE's current financial and operational performance created the need now for far-reaching action. We better tackle the challenges right away jointly together with the SGRE management to really make sure they get all the support and all the means to drive the company forward. This is really what we are trying to do with this cash tender offer because we are very convinced that we can help to stabilize SGRE's business in a more effective way than just as a majority owner. There are a lot of things what you can do also as a majority owner. That's not a question. But for me, it's also is about speed, it's about effectiveness, it's really driving operational excellence in a market which is continuously changing and unprecedented difficult in terms of supply chain. We have already yesterday explained obviously the logic of the deal in terms of the mid and long-term outlook, but there's also a substantial amount of synergies what we do see on the cost side. Seeing obviously the relatively high level of cost of goods sold which we bring together and the opportunities really to combine the two different businesses. Obviously Maria will explain it in her slides. We are fully committed to a solid investment-grade rating, and we expect the transaction to close in the second half of 2022. As I said before, SGRE current operational and financial performance created now the need to act. We had the second profit warning this year and obviously multiples in 2020, and we also are fully aware that obviously that is in an environment where the whole industry is struggling. For me it's now what can we do to give the maximum support to the operational management as SGRE to manage this challenging condition also. Really on the financial side in terms of supporting this, and this is what Maria will talk about, and I'm 100% convinced it's now the right time to act and to get this together. This is a slide you might recall from Capital Market Day 2020, right? This was the logic which we explained at that point in time. I referred to that already in my prior presentation in terms of having a phase I, which we called Accelerate Impact. Actually, the intention was to come back to the financial market in 2023. We are one and a half years earlier because the market is changing faster, but also because a lot of the progresses we did in the overall structure was a lot faster than we expected. It gives us now really the opportunity to enter the next phase, and the integration of Siemens Gamesa is a vital part of this for us as a company. Through the integration, we generate value for a lot of different stakeholders. Obviously we can support Siemens Gamesa in a lot of different areas because irrespective whether you build a wind turbine or build a gas turbine or build a transmission or transformer equipment, a lot of the challenges are the same. Supply chain, logistics, project management, financial reporting. How do you see a risk which comes up in projects fast enough? How can you diligently manage this and continuously qualify your people to be ready for all the challenges which are in this business? By bringing the two organizations together, there's a lot of things which we can improve and do faster. As I said before, it's not that you couldn't do it as two separate companies. You can have bilateral agreements and everything. For me it's now speed is of the essence and really make it as effective and fast as possible. There's also a big benefit from my perception on the growth side, on the customer-facing side. How can we leverage the bigger global sales footprint what Siemens Energy has for the benefit of Siemens Gamesa? We are present in a lot of countries around the world, in much more countries than Siemens Gamesa. We have different customer contacts, and very often this is very complementary of really getting together and creating new opportunities for Siemens Gamesa. Maria will talk about how important is also on the financial side, and I have to say, I mean, this was one learning what Maria and I had. It's very, very challenging also in the financial reporting, also in talking to all of you to having these two separate companies, and also if you look then to rating agencies of, banks or funding to act continuously in these two companies. We can take out this inefficiency and will create a better company. It was always, and it is really the target to bring together this integration energy technology company. As I said before, along the three pillars, I would skip this slide because this is obviously the logic I've explained you the overarching presentation before. We talked also already about the wind market growth. We value the company from a midterm growth perspective. I believe it will be a profitable, fast-growing market going forward. This is the base also on how we evaluate the company. Wind will be needed. There's no way around it, and in this regard, I also strongly convinced that wind will be a profitable business. Siemens Gamesa is excellent position. They're number one in offshore. They're number two in service. They have an excellent fleet. Onshore, I think there's a clear plan on how to come back and really continue to drive it, and onshore is a key base for drive to service business. It's around a EUR 10 billion business, as you know, and obviously sitting on a substantial service backlog. What we want to achieve with this is an improved profitability but also an improved predictability of the company because I am not happy, we were all not happy, I think including the management at SGRE. Our challenge is to predict really the results what we achieving, and this has to go better, and this will get better really with a more integrated company and achieve at the end growth with higher earning stability and obviously converting this also into dividends afterwards for our shareholders. We flagged up in the announcement two levels of cost synergies, around EUR 300 million cost synergies resulting from supply chain and logistics synergies, project execution synergies, but also joint R&D efforts and obviously cost reduction through an optimized administrative setup. As I said, there's also growth synergies in there in terms of go to market, in terms of combined offerings with regard to wind and transmission, wind and hydrogen. That is something which I rather would foresee for the end of the decade, right? In terms of really until you see that in the revenue, but no question that also on the growth side we see substantial opportunities. If you look across the different stakeholders, this transaction will be beneficial for all the different stakeholder groups. Customers like Bernhard will get a company which is very aligned to offer complex or multiple solutions to them. They have the same speaking partners. It's improved support. They understand on how we do things. The suppliers get access to a company with an even bigger procurement volume and deeper relationships with them. Our shareholders obviously shall benefit from the improved cost structure and obviously a robust and solid cash management. At the end, for the employees, it's an opportunity to move from one area to the other. It's additional career opportunities really for Siemens Energy slash Siemens Gamesa colleagues really, to prosper and to develop themselves in our organization. Obviously at the end, we are a company which want to energize society, and wind belongs as a vital part to that. This unlocking of significant value, obviously, as I said, through the synergies and a lot of things around our simplification and a joint strategy, cost reduction, and we both have, Maria and I, lived through the current governance model, which is feasible but complex and not as effective as I would like it to be. There's a lot of elements, as I said, on how we can drive and unlock significant value. Let's come to the key terms, and I would ask Maria to walk us through the pricing and the financing. Yep. Thank you. Christian, should I drive now? Thank you. Yes, as you all know, we described the transaction already, but let me take you through it again. The key terms is that this is a voluntary tender offer that covers all shares outstanding of SGRE, of course, with the intention to delist. This of course takes into account that we already own 67.1%. As part of the transaction structure, you also need to engage an independent valuator, so the audit firm PwC was engaged to do this in order to comply with the Spanish rules on delisting. Purchase price, as Christian alluded to, is EUR 18.05 per share. This is just shy of 28% over the SGRE's last unaffected closing price on May 17, 2022. This offer price also exceeds the six-month volume-weighted average price, or the VWAP, of the SGRE share price to the date of the announcement. Also, a note on this price also takes into account the mid- and long-term attractiveness that Christian just talked about with respect to the wind market. We also provided a tentative timeline. I think it's important I went through this a few times, but certainly it is quite a process, that here we are today in May, and of course, then there goes into a period of time where the regulator needs to look at the offer. About mid-September, that's when the public offer is actually launched. There's a four to five week acceptance period, and then in October, that's when we have some visibility in terms of the tender results. Hopefully all this will be completed in terms of the entirety of the transaction by the end of the calendar year. Funding. Funding requirements. Of course, the funding requirement ultimately will be driven by the acceptance rate of the tender. The numbers that you see here are assuming 100% acceptance of all offers of all of the SGRE minority shareholders. If that occurs, then the transaction value amounts to EUR 4 billion. That's at the offer price that I just mentioned at 18.05 EUR. As also is very important, this is something I talk about each and every quarter, the balance sheet strength is a core part and a fundamental part of our financial policy at Siemens Energy. Siemens Energy is, and we remain committed to a solid investment-grade credit rating. This also goes to what Christian mentioned earlier. What happens at SGRE obviously has impact on the group rating. In terms of all of the difficulties that you've seen in the previous quarters, that has impacted our group rating. The financing package extremely important, and this is something that we will not concede on. The financing package is designed to support this very key objective of ours to have that solid investment-grade rating. In terms of the funding structure, the acquisition is fully underwritten by Bank of America and JPMorgan. Again, assuming a full acceptance of the offer, again 100%, Siemens Energy then intends to finance up to 2.5 billion of the transaction value with equity or equity-like instruments. The remainder of the transaction would be funded with a combination of debt and cash on hand. Again, thinking about the fact that we must maintain our solid investment-grade rating. As a first step, equity may be offered without subscription rights, of course, according to market conditions. This encapsulates the entirety of the transaction in terms of price, in terms of the funding requirements, the rating commitment that we have as a company, and of course of the structure. I'm going to conclude this time. For us, as Christian mentioned, and as we've mentioned since the inception of Siemens Energy, wind is and continues to be a core part of our strategy. It is obvious that the SGRE's financial performance is a call to action and creates the need for action. Integration will absolutely look at and address some of those challenges that we have, and it's all about generating value, and we fully believe that this will generate value for all shareholder groups. We can go through the stability, of course, of the team of which they've already started in terms of stabilizing the business. Looking at that day-to-day operations, I think it goes back to the speed element and the ease at which to ensure that there's focus on those day-to-day elements that absolutely require attention. Of course, wind is extremely attractive. You saw the market figures, and we believe, as Bernard Looney said, that we're truly better and stronger together. Up to EUR 300 million cost synergies, of course, within three years after the full integration. Again, it goes, I must repeat it, that we remain committed to a solid investment grade rating, and I believe that sums it up. Thanks, Maria. With that, I would say, Michael, the floor is yours on- Yeah. Well, first Q&A, so we've gotta rearrange a little bit, so that gives me the time to. Do you take this real estate? tell you. Okay. I'll take this. This gives me the time to tell you that there are three ways to ask questions. Obviously, for the people on the web, you can post them on the web, and then I will read them out. The people on the telephone, you have to press star one. To remove yourself from the Q&A, it's actually a hash for whatever reason. Then, of course, big invitation to all of you in the room to ask questions. This will be about 20 minutes and really should pertain to Christian's presentation and the transaction. There will be a separate Q&A after Maria presents, before we go into the break sometime around 11:30 A.M. Who wants to ask the first question? Andre, over to you. Microphone will be coming. Yes. Thanks very much for the opportunity to ask questions. I've got a couple. Please. Use microphone as well. The kit. Yeah. It's hard to hear you, Andre. Is this better? Much better. Thank you. Yeah. Okay, great. So the first question I have is on portfolio. You've clearly set up the new divisional structure, and I wonder how the Transformation of Industry is going to be run with the divisional head versus the four P&Ls within that. And also on portfolio, whether that kind of review of the structure triggered maybe some thought processes around what should not be in the portfolio, or is it the new structure that will kind of under this new structure that will be more lenient towards that kind of thinking? And the follow-up I had was just on the SGRE deal, tender offer announcement. What's the reason for the gap between kind of now and the mid-September timeline for the actual tender offer? Thank you. Maybe on the new division or let's say new business structure. I mean, first of all, I think it's important that the business leaders sit in the executive board. That was one key change, which also applies to Gas Services and Grid Technologies. On Transformation of Industry, you're absolutely right. That is a business area where the key focus of the respective executive board member will be to set this portfolio up future-proof, which could also mean portfolio management in terms of M&A, in terms of finding new partners, shaping this. You will have the operational running of these separate businesses on the level below, really as independent businesses. This is how we also reported them, that you do see what are the numbers behind that. It might be very different needs. We are fully aware that it is a very diverse setup, which we also now need to continuously to shape going forward to say what is needed in the market. Because you have a business like hydrogen, where it's just about investing over the next years money into and building up reference cases, and then you have a very classical business as compression, where it's about how do I tackle the fact that 50% of the energy consumption in industries is compression and how do I do that, right? These businesses, this was the intention, need to get enough freedom to shape their setup and their cost structures according to their market. The leader on the executive board is supposed then to make sure that all in all together, it benefits from the trends in the energy market or identify the opportunities, what else is needed. Do we want to have a stronger position in Power-to-X? Do we want to extend our position on the digital side differently? That is something where I was in the past two years because of all the things we had on our hands, seeing that we were not fast enough to anticipate this shifting around and shaping. This is the intention of this setup to make sure there's enough focus on that because we are very well aware nobody knows today the solution, what you're gonna need to make this the most successful business area. This is exactly the task of the person who's running that business area. On the timeline and, Maria- Yeah. Do you want to take it? You can go ahead. Yeah. I can support. On the timeline of the transaction, obviously we have now announced the deal. Now it will be up to the Spanish regulator also. Right. To do the approval of the pricing for the listing. That is one step to take. Obviously depending on this, we will thereafter continue forward and launch then the acceptance period. We have an interest to do this as fast as possible. Correct. A longer time doesn't help anybody, particular not SGRE, right? I think what we need to achieve as fast as possible, all hands on deck, focus on solving the operational issues. That is also our interest. It could get faster, right? We are obviously not alone in control of the timescale, and we have to see on how this moves forward and the discussion with the Spanish regulator will be a key one. Correct. Thank you both. Ben, first one to you. Thank you. Morning and thank you for the interesting presentation. I promise this will be my one and only question on SGRE for the remainder of the day. The funding requirement, can you just talk us through the kind of qualitative thinking- Mm-hmm. How did you settle on that number? The reason why I say it is that we've gone from a very healthy EUR 1.7 billion of net cash. Mm-hmm. We buy out the minorities, which doesn't recapitalize SGRE, and we swing to EUR 2.3 of net debt. Right. Basically, that EUR 2.5 just gets us back to a sort of cash-neutral position at the Siemens Energy level. Mm-hmm. In the past, you know, Siemens Energy has said, we want, you know. When Siemens capitalized Siemens Energy at the beginning, the idea was we would have a good cash buffer. Correct. which for a EUR 29 billion large long-cycle business is important. Yeah. Why is the sort of the break-even position, if you like, on your balance sheet about right? Why don't, why shouldn't you be raising a lot more? And also, are you implicitly assuming the underlying cash generation is actually gonna turn the corner and get better in the next sort of 12 months? Is your sort of working assumption this is as bad as it gets from a cash generation standpoint and/or have you got, you know, things behind the sofa, aces up your sleeve in terms of disposals that we could get in there as well? How are you just thinking about that zero-ish position? Because what we wouldn't wanna see is a slowdown in the market. Sure. We're in a very nasty position. Maria, would you want to take it? Yeah. No, I'm gonna address the ace up our sleeves comment. There is no ace up our sleeve, Ben. Maybe take it right back to basics of what I said about having the solid investment grade rating. You're fully correct. When Siemens Energy was created, it was created with a capitalization for a balance sheet that is meant to be in a net cash position. This continues to be our target. We do, and we have, and I'll show you, by the way, in my presentation, in terms of the cash generated, generation that we've been able to achieve in the last years. We feel very, I feel very confident with the composition that you said, 'cause you said, "Should I do more of one part of the funding structure or another?" I feel very confident with the cash element. Don't forget, there will be a cash element of the funding structure, let's say debt and with the equity value that we have for the entirety of the transaction, that we will get over a, let's say a reasonable period of time, that we will get back to that net cash position. Because the full intention of our business is to be cash generating from operations. I really wanna make sure that that's stressed, right? Right now we're in a net cash position. We're going to do the transaction, and we will get back to a net cash position. That's the intention. Just to clarify. We're not assuming further significant cash drawdown from SGRE because if heaven forbid that we have a EUR 500 million-EUR 1 billion exit over the remainder of the year, then we're not net cash. We're back in the hole. Right. Do you feel that we're not going to see another significant cash exit from SGRE or could there be? That's it, I promise. No more, ever. That was an easy question to end with. Thanks, Ben. In terms of, you know, could you rule out. I always say, I mean, that question is a difficult one. You can never rule out. What I can say is we feel confident, again, with what we know that this is appropriate in terms of the funding structure, that the composition is correct, and that, of course, like I said, notwithstanding, I mean, no one could tell some of the headwinds that we had today, Ben. No one would have thought of that, just a mere few months ago. We feel confident with what we know that this is the right structure for the transaction. Thanks, Ben. Thank you all. Gael de-Bray, go ahead, please. All right. Thank you. Gael de-Bray from Deutsche Bank. Good morning. I have two questions, please. The first one is on the decision to reduce the P&L units from 80 to 7. Why seven? I mean- Mm-hmm. I get that it will, you know, simplify the structure and you're gonna have, you know, some administrative cost, you know, being taken out. But how do you find the balance between reducing complexity and actually decentralizing operations and increasing accountability for the various businesses? That's question number one. Question number two is on the new business structure and in particular, the decision to separate the compressor business from the industrial gas turbine business. Why is that? Because I've always, you know, thought of these two businesses as being rather complementary, you know. Mm-hmm. With gas turbines driving compressors and the like. Does it actually mean that you no longer consider the compressor business as a core business to you, or is it not the case? Thank you, Gael. I would say a little bit to the business background on the P&Ls, and Maria happy to jump- Yep, for sure. Chip in. For me, it was from a business perspective important that the accountable people and managers to get all the sets of numbers they do need to steer the business they can influence. What obviously happens to be if you define everything a P&L and you have back and forth calculating methods and I would say cross-charging type of mechanisms in the organization, you create a lot of administrative work which does not generate value for the customer. The question and the logic was from a business perspective for me, what do I have to give the people in the hand in terms of driving performance? What is really the amount of administration efforts I do need to report to the outside that you get the visibility also on how the different businesses are doing. Yeah. What do you mean? No, absolutely, Gael. I think the 80 was our internal number, of course, because then there wouldn't be an issue with transparency externally. The 80 was our internal number of P&Ls, and now the seven refers exactly to what I'll go through in a moment, where you see how on a quarterly basis we're gonna look at the new businesses and what type of information will be required. That KPI for us is exactly what Christian said. It's trying to drive simplicity and accountability within the organization. You don't necessarily need a P&L which has costs allocated all the way down in order to ensure that you know how to drive your particular part of the business. What we say, and we will continue to say to our people, it's not about diluting accountability. Actually, it's the opposite. It's about ensuring there's focus where it needs to be and that you have then strong KPIs and operational drivers to drive your business forward. I think that's what we try to do and really take the complexity out of the business. I mean, just also, Gael, to underline, then I think, actually as a similar element, I said it before, right? I mean, we started 2020, we should never forget in a structure which we were given, right? There were a lot of elements in there which you would by design not set up like this, which were simply historic developments, and nothing is bad about that, right? I think it's time now to make sure that we shape the company in a way that is future-proof going forward with the most effective setups. This is what we're trying to put into the design. Thank you for the question on the compression. I tell you, this was a long and really very active discussion also when we designed the setup, because you can have this view. Gas turbines will be an important driver for the compression as well as electrical drives are, right? A couple of comments to this. First of all, is this the setup for the intention to sell the business? The answer is no. I do believe it is an interesting business to have, and I believe it's a good base as an industrial footprint also of all what we would want to do. I want to see also that business delivering the returns on the core units on the compression side, which I believe with the products we're doing is possible. It is requiring obviously this turnaround, what we talked about also in 2020. If I see the progress of the compression business itself from 2020 to today, it has been substantial. They are really on a good track to develop this. They are not at the finish line yet. They will need to continue to work through this. I wanted to make that very, very visible because once you overlay this, it's also sometimes challenging to see that. That is really about transparency. The other comment to that is absolutely the industrial gas turbines and the compressors need to continue to work together. Like the whole organization is set up to collaborate. If these say, think in little silos, it will not work, then we're setting up the company wrongly, right? You will see projects where you have a compressor and an industrial gas turbine driving it and putting that jointly together. By the way, also the way on how you service it, and Karim will talk about this a little bit, we will make sure that this Gas Services part stays intact. The way on where you put the P&L is obviously then put differently, but Karim will talk you through that. You can honestly do it either way. What I have seen happening by having it together now over the past two years, it allowed us certain elements to improve. Now the important move is, and I think this is always to underline, we really put new unit and service together. That is, let's say the big opportunity for us. It's really making sure that also the service logic clicks and then the rest is really, yes, we need to manage very actively the collaboration across the organization. No, it's not with the intention to sell. This is because we sell it off going forward. That is not the driver behind the setup. Super. Nick, over to you. Good morning. Thank you. Nicholas Green here from Bernstein. On the cash offer, please, are you concerned at all that your offer is too generous for Siemens Gamesa? Their prospects are far from clear over the next couple of years in the medium term. They still have significant challenges ahead. Opportunistically, if you'd made this offer in a year's time, would you have been putting in a bid maybe 30% cheaper? What are your thoughts on that, please? Yeah, I think it's an excellent question. I mean, obviously, as Maria pointed out, our offer price is based on, really believing in the mid- and long-term potential of the business, which means it has to get profitable. It means it is a continuously growing market. I wouldn't disagree to say if you would have waited six months, could you potentially have had a lower price? For me, it's the point is SGRE for me as Siemens Energy is the biggest opportunity and the biggest risk at the same time, and I need to make sure that they are successful by any means as fast as possible. That is my key driver. I, yes, I absolutely believe we have put a very generous price for the SGRE shareholders on the table with the intention to also make this a fast transaction. Speed is of the essence. I think it's also important to underline it because I've yesterday seen all different comments in the market in terms of whether it's a good or bad price or whatever. This is the price which assumes that this is a mid- and long-term, nicely profitable and growing business where all the market elements get fixed. That is my assumption. Why do I believe this? There is no way in energy or in electricity generation without wind. It's not possible. The market participants, not only ourselves, the market participants need to have a position to generate a profitable business if this is a market which is supposed to stay. This gives me the comfort or gives us the comfort that we could put out these offers. I tell you, we had a hard time in our board also discussing and explaining this because I mean the undisturbed price it was at EUR 14.13. As Ulrich said, if interest rates will go up and let's see what's coming rest of the year and so forth, it could have been even at a lower price. It's not about being opportunistic here. It's really building a company with mid and long-term focus. I believe really in the opportunity in the wind market. We have to underline and hope the minority shareholders recognize that it's a very interesting offer for them at this point in time. Thank you. We're coming to the end of this Q&A session, but there will be more Q&A sessions. There will be one for Maria, and then also in the afternoon, one, you know, to ask all the questions that we haven't answered. In the meantime, one more question I would take, and that's coming from the telephone, as it's the only telephone question. Ajay Patel. Ajay, if you would like to ask your question. Good morning, and thanks for the presentation. Mine's more centered around the gas and the Gas Services business. Flat revenues, improving profitability. I wonder if you could unpack this a little bit in that is the expectation that the manufacturing margin sizably improves over this timeframe and the service business stays flat? What would be the driver for that manufacturing margin to improve? Would it be more rationalization of capacity as a whole for the industry or cost-cutting driving that performance? Because there wasn't much change on the cost-cutting side. I was trying to just get a bit of an idea of the building block there. Yeah. Thanks, Ajay, for the question. I would heavily invite you to listen to the presentation of Karim later because he goes in more detail to the Gas Services business. Maybe let me pick up on a couple of points what you just said. First of all, yes, it is also supported by an excellent track record on the new unit side, which has been happening over the past one and a half years. You may recall when we were discussing in 2020, we were substantially below 20% market share in large gas turbines. We had a reasonable position in the mid-size gas turbines, but we had underabsorption in some of the factories. Today, we are back with, let's say, really nice market share, presence really across the different portfolio elements, which also means the factories are loaded. We have in the meantime amended capacity. We did the measures as we announced them to shift certain things from higher cost countries to lower cost countries, change the setup on how we do things, which improved the cost position particular. The improvement going forward in Gas Services, and also this is what you're obviously gonna see in the afternoon, is also coming from a service share, which we is continuously obviously developing and getting this balance. It would not work without the significant improvement we have achieved in the new units area to bring it together, the very nicely profitable service business and a decent new units business. I, as I said, Karim will share more details later today. That concludes the first Q&A. Thanks everyone for the questions. Thank you very much. Thanks, Christian. Thanks, Christian. Thanks, Maria. Thanks. Now over to Maria. Coffee break, I think, no? Oh, yeah, sorry. We're gonna have a coffee break. Oh, Michael. Sorry. 10 minutes coffee break. I mean, I can start, but. Sorry. I think they want a coffee, maybe stretch their legs. See you in a minute. Okay. See you in 10 minutes. Yeah. Okay, Michael. Hi, everybody. I suggest that we are gradually going back to the desks as Maria should be with us any second. Right. Thank you everybody for waiting. I can see Maria now coming back onto the stage. Welcome back after the break. Maria will now come on stage and talk until about 11:15 AM, and then we will have a 15-minute Q&A session, which will then pertain hopefully a little bit more towards Maria's part. With that, over to Maria. Wow, just in time. Hello, everybody. Hi. It's a real pleasure to be here with all of you. It's great to finally be here in person. I think we had a lovely evening last night, and it's really important to have these discussions in person. I'm pleased to go through the key messages from my point of view in terms of how we have fared as Siemens Energy in the last two and a half years. What's really important is that gas and power, and just so you know, my presentation will be focused on gas and power today. Gas and power has been and continues to deliver on its targets. As Christian mentioned, there's improving market trends. Really, our focus on customers is clear. Couple that with our technology and our rising order backlog, which I'm really proud to talk about in a moment, of better quality. As always, I talk about not only quantity, but certainly the quality of our order backlog. You'll see in a moment that's absolutely going in the right direction. Higher margins. We talked at the last CMD in 2020 about EBIT and cash, EBIT and cash. Those continue to be top priorities for us, of course, as we now inflect for sustainable growth going forward. Also extremely happy to announce to all of you on the back of what Christian already showed you is our new reporting structure and how that's going to provide a lot more transparency. This is where we heard your feedback, and we're hopefully delivering. Also we committed in September of 2020 that gas and power will, in the midterm, have a greater or equal to 8% EBITDA target. What was important about that EBITDA target is that it was as reported. That means all in. That means including restructuring and so on, what we deem to be special items today. I'm pleased to report that with our new business areas, we are committed to that target. I'm gonna take you through three parts of my presentation. Number one is what I call the report card or the progress report. Number two is really looking through that increased transparency that we'll be providing in our reporting going forward. Last but not least, how are we doing that going forward? Our sustainable value creation continues to be also key to what we do at Siemens Energy. Order backlog. What you see here is a number of things. One is order backlog is important to us because it provides visibility. It provides visibility into the revenue that will be forthcoming as a result of that order backlog. What's also great is about 25% of our order backlog converts into revenue in one year. What does that mean? That means that we have about 70% certainty and visibility of our revenue for the following fiscal year. What's really great about our backlog is you see that it's grown 17% since fiscal year 2020. What's also important is that you see the book-to-bill, that is across each and every business. The book-to-bill remains greater than one, and for the entirety of GP is just shy of 1.2. I think it's not only about quantity. I love the fact that the order backlog has grown by 17%, but what's really important is the bullet point there. The average margin for a backlog has gone up by 150 bps or basis points in both. I think this alludes to what Christian just mentioned in terms of what you'll see in the Gas Services and Grid Technologies in the afternoon, in the other business areas. It's across both new units and services, and this is extremely important for that sustainable business foundation that we wanna build on in Siemens Energy. What's also important is, and I get a question about this essentially each quarter, is the legacy projects. As you know, we're counting on a bump up of our margin in our order backlog that underpins our ability to make our targets going forward. What I'm very happy to report is we're at the tail end of those legacy projects. There is a small portion that's left, but to a large extent, this has also been executed, hence the increase in the margin or backlog. Always important indicator for us is what is the percentage of the backlog in service? You see here that 60% of the gas and power backlog is the recurring, resilient, and profitable service business. We delivered, hopefully, with respect to building that solid business foundation. Next is we also talked a lot about costs at the last CMD, and we launched our Accelerate Impact program, which was our cost program for Siemens Energy. What we indicate quarter-over-quarter is how are we faring? How are we doing with respect to that EUR 800 million? What was important about that EUR 800 million is that, one, not only do we achieve the cost savings, but two, that hits our bottom line. I think here you see EUR 350 million of that target has been realized as of the half year of this fiscal year, and we've done what we said we were going to do. We've reduced headcount, painful in some areas, but we did it. We've consolidated footprint, and we've launched new initiatives to continue to see how we can better leverage best cost country approaches. I think a really great example of that is that we have now established Romania as a hub in those in that regard. Of course, you expect us, and we do, we look at our portfolio, and we continue to optimize and align that portfolio. Things like divestments of the engine business and Voith Hydro, for example, contribute as well. The message here is difficult, hard work, but on track, and we're seeing that this will be achieved as well for fiscal year 2023 as promised. Another area that we talked about at the time was how are we going to ensure that there's a significant margin improvement in our businesses? That had to be across the board in order to achieve the guidance that we have annually, but also again, that midterm target of that greater than 8% as reported. Here you see each of the businesses and year-over-year how they have fared with respect to their margin improvement. Across the board, we have seen improvement in all divisions except for transmission, but I'll talk about that in a moment. Underpinning that is exactly what I just mentioned in terms of our cost savings. We have been extremely diligent, and please rest assured, with a new organization, those cost savings measures are being mapped accordingly. We won't lose sight of those. Cost savings has been obviously clear, a clear objective. Looking at our execution and how do we ensure that we execute with excellence? I think we've proven that across all businesses. NCC reduction. NCCs are non-conformity costs. We've seen a marked improvement across the businesses in that regard. Improved order quality. Again, to underpin what I talked about with respect to our orders, but it is important. It goes to the old statement, if you fail to plan, then you plan to fail. At the onset, how do we ensure the right terms and conditions are in our orders? Lest we forget strong execution, of course, the market conditions are ripe in certain areas. We see this, we do have growth, and we expect growth and hence productivity to continue into the future. Now, one remark just here with respect to transmission. I want to say we have indicated that Christian and I in the last few quarters that with respect to those headwinds, whether it's supply chain, whether it's COVID, for example, closures of facilities, we've indicated that our transmission business is the one that is hit by this. Please ensure that when I talk about numbers in terms of the P&L impact, that is what is hitting our transmission business today. We feel very confident on the back of a very ripe order book of greater than 40%, by the way, since 2020 in transmission, that we are able to achieve those goals that we have for that business area. On the right-hand side, you see gas and power. How have we done overall as a segment? You also see that we denote and we continue to commit to making our guidance for this year. We also commit to the guidance for GP in those businesses, 'cause of course GP won't exist going forward, but for GP, those businesses going forward for 2023 as well. We're on track. Going back to the headwinds, I won't repeat. This is essentially a repeat of what we talked about in Q2, Christian and I, regarding the war in Ukraine, the impacts that we see there, of course, supply chain and COVID-19 and rising inflation. Of course, this is impacting us and gross costs, and I think we've done a really good job. What we've tried to portray here on the right-hand side is what are we doing to ensure that we're at least addressing those headwinds wherever possible. One of the things that we are very, very proud of is our service business. Within our business, it's resilient because we have very effective cost indexation in those contracts. Of course, with over a 40% share in our revenue of service, this comes in as one of our main levers to defend our margins. It goes again to risk and project management expertise and excellence. Hedging, we hedge wherever possible. This also goes forward to protecting our backlog. Supply chain management and the team has been outstanding in this period because it's not just about cost increases. It's also about how do we ensure that we don't have critical shortages. For our business, that's extremely important because if you have a shortage, then you can't progress your projects, you can't progress your production, and that's when you have, unfortunately, non-conformity costs. Of course our favorable market momentum, we see this. This is boosting our orders and of course allowing in certain areas for price increases, and we're trying to exploit that wherever possible. Without saying it, I've said it over and over, base productivity, this is something that we also ensure that we focus on within the organization. This is how we continue to mitigate in certain areas and contributes to the mitigation of those headwinds on the left-hand side as well. Next of course was cash. We talked a lot about cash, and we talked a lot about the optimization of our balance sheet at the last Capital Market Day. At the time, we made a very bold target for fiscal year 2023 in terms of where do we see our operating working capital and what would the target be for in terms of a reduction. Lo and behold, that was achieved already. That's great progress. If you look at our free cash flow, this is what I said earlier as well. Gas and Power has contributed cash flow above expectations in each and every year. The EUR 900 million, as you know, that's a half year figure for this year. On the operating net working capital, you can say, "Okay, Maria, yes, it's gone down, but we also see that of course your net contract assets and your contract liabilities have also contributed to that." That's true. However, that's not just also by mistake. That's by design. That's driven on the back of a very strong order intake, which I just displayed, and looking at each and every contract to ensure that we have favorable cash curves and cash terms. This is again looking at the order from the onset. One thing that I want to highlight and I highlight as well in Q2 is that we do see increases in our inventory in certain cases. This is on the back of the supply chain issues that we've seen, shortage of components and products, and materials in certain areas, and we're doing this on a very exceptional basis. This is being reviewed but necessary. Why? Because at the beginning, what we said and stays true is we do what we need to to ensure that we meet our customer commitments. Of course, payables, I mentioned this, a while ago actually, that when we launched Siemens Energy, we also launched supply chain finance initiatives. Also looked at the time, and we continue to do so at extended payment terms, and this is also bearing fruit with respect to our net working capital. How did we do? I think we've kept our promises in all areas. I think we have improved our business foundation, You see this with the backlog not only increasing in quantity, but again also in margin quality. Our cost savings programs, I must say here, this is hard work, especially with the headwinds that we're facing. This continues to be hard work, but it remains on track and the team is committed to delivering those cost savings. Profitability continues to be improved, really base profitability across all businesses, and we see this as a step-by-step towards our midterm target. It underpins our ability to confirm our midterm targets. Of course, it goes without saying, we continue to have a keen eye on the balance sheet and make sure that there's rigorous working capital management as we go through and convert, of course, this very large order book. Next, increasing transparency. You, if you haven't noticed already, you will be given a data book with all the figures, all the figures that you wish, but certainly this is the part of today's presentation that goes to our new organization and the transparency that will be given starting October first. Our reporting structure today, you see it on the left-hand side. For Siemens Energy, we have two reporting segments. The big one, essentially two-thirds, one-third rule of thumb, Gas and Power, and then SGRE. Tomorrow, or October first to be exact, you're going to see that there's three business areas. Gas Services, Grid Technologies, Transformation of Industry, and of course SGRE. Therein, in Transformation of Industry, there are four, what we call independently managed businesses. That's why when you look at the how many P&Ls we have, going from that internal number of 80 to 7, it's the three plus the fpur. Additional disclosure will be within a Transformation of Industry that will be volume and profitability, is what we will display on a quarterly basis. The other three will have all financial KPIs quarterly starting October 1. This is a busy slide, but I think it's a necessary slide because it shows you business area by business area what's now included. It also has, from a transparency perspective, revenue, illustrative revenue and EBITDA from fiscal year 2021 for those businesses. If you look at, for example, Gas Services, you see that the business activities included is it's all our gas and large steam turbines and related service business from the former generation and industrial applications business. The indicative revenue is around EUR 9 billion, and the EBITDA is around 7% in fiscal year 2021. Similarly for Grid Technologies, this is a little easier. It's all of the former transmission business, but, and here's where we're clubbing and making sure that we have focus and we have one owner, all future storage activities will now be included in Grid Technologies going forward. The revenue here is just shy of EUR 6 billion, EUR 5.8 billion, and 6.5%. Herein lies Transformation of Industry. You see the four boxes underneath are those four independently managed businesses. As I mentioned, you have Sustainable Energy Systems. This is our electrolyzer, the former new energy business, Power-to-X. Hybrid Solutions is there. And of course, you see EUR 27 million. This is a growth area for us, and we also indicated that it's an investment area for us, so you see that the negative EBIT margin today. In terms of EAD, Christian alluded to that about the industrial applications business. This comprises what we do from an industrial processes perspective, from integrated solutions, value-added services, and consultancy. About EUR 1 billion and about 4%. We have IST, so industrial steam turbines and generators. This is a combination, previously part of generation and our industrial applications businesses and industrial steam turbines up to 250 MW, including the services for over 60,000 units in there and industrial generators. EUR 1.3 billion and 2% EBITDA margin. Compression. I think Christian talked about compression, and we'll talk a little bit further about that in the presentation this afternoon for TI. This also was previously part of our industrial applications business. Here you have the reciprocating and the turbo compressors, including the accompanying service and for a fleet of 25,000 units, compression trains and systems, revenue of EUR 1.6 billion or -7%. Here we wanted to put in a one chart quick reference. We also have another chart in the backup that will be provided where you see how the various parts of the business and where they move into under the new structure, again, as of October 1, 2022. A lot to digest there, but we have, like I said, some additional information and materials in the backup for you. Now it's about looking forward. Now it's about our sustainable value creation into the future. Here I mentioned earlier, and at the last CMD actually, we are asked a lot about revenue growth and what our thoughts were on revenue growth. If you remember at the time, we actually didn't really provide a target for our midterm revenue growth because we talked a lot about selectivity. We talked a lot about ensuring that what we do creates sustainable value, if you remember. Therefore, we did what we call delivered on the fundamentals at this point in time for the last two and a half years. We stabilized the company. We reshaped. We restructured in certain areas. We optimized. We changed processes. As a result, gas and power more or less was flat with respect to revenue or growth between fiscal year 2019 and fiscal year 2022. Now it's about looking forward, and we do believe that we're at an inflection point for sustainable and profitable growth. Here you see our three business areas. One is Gas Services, and you see a stable or modest decline because part of the portfolio, again, this is in the mid-term for fiscal year 2025, we absolutely want to have stability in part of the Gas Services business, and we also see maybe in the new units in that there might be a modest decline. With respect to Grid Technologies and Transformation of Industry, we see sustainable growth in those areas at the mid-single-digit level, again, for the mid-term target of fiscal year 2025. Again, why can we say this? Because we do believe we're excellently positioned. We see the market momentum around us. As Christian said, I love that. I'm gonna totally steal it. It's not how far. It is changing. It's just how fast will it change in terms of the necessity for energy transition. We here with our portfolio feel very, very confident that we're able to capitalize on that. In terms of our operating model, we see now we're very, very closely aligned to what the market looks like in terms of our business areas, and we see our future growth fields. Of course, as Bernard said, I have to admit, I mean, it was perfect in the sense of what our customers want from us. They want a unified solution. They want us to help them get through their energy transition needs and a unified go-to-market approach. Again, how are we going to get there? I think the new business area, of course, supports the original gas and power target. I really wanna underline and stress that we do not renege on our promises from before. We continue to say that the gas and power businesses will have a margin target of 8% as reported in the midterm for fiscal year 2025. What you can also see is the progress that we've made holistically again as gas and power. The bars above, although very simplified, because behind that was a lot of work, a lot of measures in terms of execution on our existing cost plans, execution on the Accelerate Impact plans, doing wherever possible portfolio optimization, and I think that continues. That's why we said that bar should go right through the entirety right to fiscal year 2023 and beyond. In terms of operational NCC reduction, I think there was a crystal clear focus on that within the organization, and I actually say that doesn't stop. That will continue also into the future years, that we continue to look at ensuring we execute as planned and reducing costs wherever possible, and ensuring that we don't have non-conformity costs. We do see efficiencies from our new operating model. We do see efficiencies. Of course, this is much more targeted to our market. Like I said, in terms of levels within the organization, we've reduced that. We've talked a little bit about the P&L structure and the reporting structure. This will continue to drive efficiencies and all the while growing. I think this is the difference now. What we see is we are in a position to grow, and we will see efficiency improvements as a result of that growth. Therefore, on the right-hand side, you see overall 8% as reported. This continues to be our midterm target for fiscal year 2025, 10%-12% for Gas Services, 8%-10% for Grid Technologies, and 6%-8% for Transformation of Industry. It would be also, again, remiss of me. This is a repeat slide. This is from Q2. No additional information there, but I wanted to make sure that I continue to stress the cash position and the strong balance sheet and liquidity status of the group. Again, nothing more to report, but just to ensure that everybody remembers, as a group level, we have over EUR 10 billion in liquidity, which includes cash and of course undrawn facilities, and we continue to be in an adjusted net cash position. With that goes our commitment to our prudent financial policy, and that needs to and must be consistent with a BB B credit rating. This has. I'm very proud. I think it's just literally on the wire, that that has just been confirmed from S&P in light of the cash tender offer. They have affirmed our triple B, solid investment grade rating, and of course, that's extremely important to us. It's important because we need reliable access to debt and equity markets if required. It is pivotal and important for our business model that we have this solid investment-grade rating. Of course, this leads to favorable credit terms and other things, but it's extremely important on how we conduct business. These are present in our terms and conditions of our contracts. This again is no area that we will concede upon with respect to our investment-grade rating. In terms of capital allocation, here is where I have to say we have no change, which is good. It means we continue to have that discipline in our capital allocation. We continue to shift. If you recall, at our last Capital Market Day, we talked about where we spent R&D and Capex and how much and how committed we are to that. It's EUR 1 billion at group level, by the way, rule of thumb. What's important is where we're shifting that capital allocation to the future, into the five growth fields, the fields of action that Christian talked about. This is where we're gonna take those resources and capital and ensure that we're driving growth, as I mentioned, growth through the organization. Looking at Capex, that remains stable as well, and of course, we mentioned some of the portfolio changes that we have made, and we will continue to make as we streamline our portfolio. Dividend policy, no change. We remain committed to returning cash to shareholders. It's at 40%-60%, of course, net income attributable to shareholders and balance sheet. Again, very proud to say and very important to us that strong balance sheet is consistent with a BB B solid investment grade rating. What are the key messages? Well, the key messages is that we continue to have full focus on sustainable shareholder value creation. Exactly what we talked about at the Capital Market Day in September 2020. What's great about that is since then, Gas and Power has and continues to deliver on its targets. We absolutely see the improving market trends and the market conditions for each of our businesses, and we continue to focus on our customer, ensure that we're allocating resources to those technologies and innovation that really results in growth and ensuring that our backlog continues to grow profitably into the future. We have higher margins, strong cash conversion, and these continue to remain priorities for us. I hope you can agree that the new reporting structure and the new group structure leads to a lot more transparency going forward that we will share with you, of course, starting October first, but on a quarterly basis. Also important for us is that we remain absolutely committed to the original target of greater than 8% for Gas and Power as reported all in for fiscal year 2025. Actually, I was on time and even short of time. Actually more time for Q&A. More time for Q&As. Excellent. So, uh- This is yours. Let's start in the room. Sean, if you start. Yeah. Hold on one second. I think they need to get my table up. Shall we? Sean. Hi. Yes, it's Sean McLoughlin at HSBC. A question around just joining the dots on the various thinking about your 2025 all-in margin target, capital allocation priorities, balancing- Yes. Do we rule out any M&A at this point? Yeah, I mean, Sean, we said we're gonna continue to look at what we've already been doing, which is looking at our portfolio and optimizing in certain places. I mean, in terms of large M&A, of course, that will also be in line with our financial policy. We instead of doing, you know, M&A in the traditional sense, we're looking more and more on how we can do this effectively, like through partnerships, et c. I would say step by step, we've also said it's more bolt-on in nature in terms of future M&A. Yeah. Thank you. Thanks, Sean. Can I use your water? Yeah, of course. Thank you. Hi. Good morning. It's Akash here from Hi, Akash. JPMorgan. I have two questions, please. The first one is on the bridge for to get at least 8% margin by 2025. Yeah. If we look at the current margin and the pricing that you have in the backlog and EUR 500 million incremental savings that needs to come. This current pricing and EUR 500 million savings, would that be enough to get to 8%, or do you need any more savings or productivity to get to 8%? That's question number one. Okay. The second question I have is on investment need, both R&D and investments, also to downsize your 80 P&Ls to 7. Like, do you see any need for any additional investments to address IT and other infrastructure? And also, how do you see the outlook for R&D investments for GP portfolio? Thank you. Okay. Okay. I think I got all of it. Those are three questions, right, Akash? The bridge one was in terms of based on our cost out programs, based on the initiatives that we've undertaken, because remember, a lot of those actions we actually have invested in already, and the future cost savings will come, especially, for example, you saw that there was 3,700 in headcount already impacted. But some of those individuals, it takes time for those cost savings to actually enter because it's time for when they actually leave the organization. That plus the productivity that we have already in the organization with respect to not only our cost out programs, but our ongoing productivity and the pricing assumptions that we have included absolutely is what we require to step-by-step get to the fiscal year 2023, because we're fiscal year 2022 today. We've confirmed 2023, and that then forms the basis for 2025. However, if conditions change and things happen, more headwinds, I think that's why it was important in terms of how we defend our margins, that we continue to work on aspects like price escalation, ensuring that those are embedded, hedging and so on. I mean, those are things that we continue to do. It's not anything that we lose focus on. Right now, based on what we have included in terms of assumption, that forms the basis to ensure that we get to those target levels. Investment in R&D in terms of our downsizing of our P&Ls, I would say, and I think you also alluded to in terms of IT, those types of investments are already embedded in what we're doing. I think going back to when we were created as Siemens Energy, we knew we had a transition period in place where we had to, it was essentially lift and drop a lot of those processes and tools and so on from Siemens AG came into Siemens Energy. We're doing a lot now to ensure that, we standardize or also make them fit for purpose within Siemens Energy within a certain timeframe. Those types of investments are already made. I don't foresee the fact that we just purely went from 80 internal P&Ls to a smaller number that has an investment attached to it. If that was a perception, no, that's not correct. The outlook for R&D, I think we said that we continue to remain at the EUR 1 billion level for the group, and it's not about how much we spend, but it's where we spend it. I would say that we're gonna continue to allocate that into those fields of action, those growth areas. Also please, because he would be so pleased to answer that question, please ask Vinod later when he does have his R&D presentation to further go into details. From my perspective in terms of financial planning, we stay at that level of more or less EUR 1 billion for the group. Perfect. Will? Hello, good morning. Will Mackie, Kepler. Two questions. Could you just help us by scoping the size of global functions and how that will be treated within the organizational structure in terms of the KPIs and what level of cost burden or whether it's even a revenue center in some way? Secondly, when we look at the bridge between where we are today and your +8% target at the divisional level, the largest contributor to the step-up in profitability comes from the transformation of industry segment, where you're moving from the losses towards those profit targets. I mean, this stage, could you at least guide us through some of the main levers which you expect to make that bridge and the pace with which that change in profitability could occur over the next two, three years? For sure. Let me talk about the Global Functions. I think in terms of size, this was something. Well, as part of our Accelerate Impact program, we wanted to tackle the S, the G&A part of our SG&A. This was something that was again, embedded in part of the, one of our cost out programs. You know, forgive me because I didn't mention that. I think it's a really important point, thank you for bringing it up. When we looked at the cost savings programs, it wasn't just focused on the businesses. It was actually also, all of the support functions, the global support functions were included in those cost out programs. They are now, like the rest, ensuring that we have double-digit reductions in each and every, in every area. That's, it's globally impacting all functions. I think that's important that I haven't put that out. It's the same level of cost percentages that we need to ensure, and it builds the foundation to come to that 8%. Those assumptions are built in. In terms of the bridge 8%, I mean the main levers, and I think you mentioned TI. Again, yes, I was, but remember TI is about EUR 4 billion in revenue. Yes, it has the greatest, let's say percentage to go from the -7%, the -7% to the 7%-8%, 6%-8%. It's again, all of those businesses have different needs, and some of them are already on a transformation programs even before they started and continue to progress, for example, in areas like compression or industrial steam. I mean, these are areas that have been right-sizing themselves and optimizing themselves already. Then you have, of course, the invest areas, and that will obviously also with the market momentum, continue to get to those margins. Remain very clear, each of those businesses have to contribute, right? Again, this is a midterm target. They're well on their way. I think we provided 21 figures, Will. You'll see that even in this year, you'll see that there is an increase in those businesses and that that will continue, of course, to contribute again to the fiscal year 2025. I hope I addressed it. Thanks, Maria. Next question comes from Sebastian. You haven't had a question, so Ben after that. Yeah. Sebastian Growe, RBC. I have one question regarding cost-cutting and another one regarding the P&L structure. You have on your page 13 in the presentation, you mention you want to joint renegotiations of gas and power and SGRE with 50% price reductions per ton versus spot market, and you also say you want to bundle renegotiations on sea freight with a cut of 50% on rate increases. I would like to have some more color on this. It seems too good to be true. On the P&Ls, Gael had a similar question, but I just want to confirm. You reduced the number of P&Ls by 73. Do you still internally measure all the KPIs of these 73 smaller business units? And if not, how do you ensure accountability of the performance of management there? Thank you. Yeah. Let me tackle the P&L one first because I think that is creating a bit of, maybe additional clarity required. The 80 P&Ls were what we have in our organization today that, like I said, it could be a very small P&L, but we actually then allocate costs all the way down from orders revenue, in certain cases, all the way down even to headcount. What we've now done is we said those go away. We have the seven full P&Ls for the organization, right? Where there's only one full P&L, that's Siemens Energy, and then we have the others for the business areas. Transformation of Industry have the four independent man-managed businesses. Those are the only P&Ls that have allocations all the way down. I'll give you an example, Sebastian. In terms of a project that we're undertaking in a certain country. In the past, it would have had to be actually a P&L developed for it with an estimate on all of the costs, including local and global, and also looking at SG&A and those types of costs and actually developing them, tracking, not only developing them, tracking them, and ensuring that we're allocating costs to various parts of the business. What we said is we don't need that anymore. Not that it's. Again, it's not diluting accountability, not at all. What we're going to work on is statistical allocations and/or what we used to call in my previous company, burden rates, and you work with that versus all of the complexity in the administration that comes behind it. We are not lessening the accountability within the organization. We will still have, for manufacturing facilities, of course, operational KPIs to ensure that we have the proper cost base, that we have the proper capacity, et c, and loading and so on. But with respect to the full-blown P&Ls, where we have allocations and monitoring and all of that, you know, it's the monitoring are now at the center for the organization, yeah. That mirrors externally. We've reduced the complexity, but not in terms of information. We still have all of the key financial indicators where necessary to ensure we run the operations appropriately. Exactly. In certain areas then exactly that. Yeah. Okay. Thank you. As it pertains to the first part of the question that was actually in Christian's presentation, and if you look at the slide, that was basically a cut compared to the increase in prices versus spot. By the fact that we were able to bundle, yeah, we were actually able to limit the increase in the raw material cost increases or logistics cost increases. Correct. That we would have suffered if we would have bought spot. Yeah, so that was what we have achieved. Already achieved. Yeah. Yeah. That's not going forward. That was what we have achieved. Right, next question. Ben, I promised it to you. Hi, Ben. Thank you. I've got three quick ones. The transmission margin, that change, you mentioned the difficulties around COVID, and I can understand that in terms of it being people-intensive. Is any part of that two-point margin drop what's going on with pricing? Because in the past that has been you know a variable. Second thing, in really simple terms, 'cause I like things simple. We've sort of nuked industrial applications. It's gone. It's now industry transformation. What went into Gas Services exactly? What is left in IA as it was? Mm-hmm. Why? What was the actual rationale for doing this? What is the key objective? Yeah. The final comment is the compression margins. I love the transparency. I am shocked by the outcome. Mm-hmm. EUR 100 million of losses in a business that when Dresser-Rand was acquired was a low teens business, you know. It's clearly really underperformed. I'm sure we'll get divisional data, but is this an integration problem? Is it an oil price problem? If you had to just simplify, what has changed since we last saw these numbers eight years ago? Right. What is it? Yeah. Yeah. I think if you look at the last two questions, I think it's better to pose them in the afternoon. Yeah. because we've got Karim Amin then speaking and talking about it. Makes it easier. For sure. I think, I mean, maybe if I just add a bit of color, and please do pose all of those difficult questions to Karim. No, I would say with respect to the various business areas, Ben, you're right. What we've tried to do is we've put the equipment and the services together so that that makes sense. It kinda streamlines it, and that was really the rationale. With respect to moving, as you said, IA, I think it was really ensuring that the pieces of that industrial applications is either in TI appropriately with the different needs that it's there, and of course, as you said, you know, with transparency, and this is what I mentioned last night, with transparency, you'll see where we're doing well, where we're progressing, and you're also going to see where we have progressed, but we're not there yet. I think then it's important for you to keep in mind our mid-term target, right? That we're going to ensure that those actions are in place to address that. To be fair to the colleagues, because I know that perhaps this is something that has not been visible, the amount of work that has gone into already turning around some of this with respect to the pricing environment, the market, you know this, Ben, it was a real downturn, excess capacity and so on. I think some of the right sizing that we've done, whether it was headcount or even locations, was specifically to those businesses. A lot has been done. Are we there yet? No. No. With respect to transmission, the pricing, I think you said the margin, the pricing aspect. Three things are included in there. It is supply chain headwinds. From that perspective, you're right. In the short cycle business, this used to be my past, it was a little harder immediately to pass on price increases, so that's something that we're working on actively. Then, of course, there was the cost increase as such and COVID. I think transmission, as you know, their facilities based on the closures in China, they were impacted by that. We indicated that in Q2, so that's also embedded in that. Of course, don't forget, we have some of the Russia impact, and that included, it is included in that transmission business. Again, Tim will bring you through this exciting business later, because it is exciting with a very large order book. I think the market momentum there in terms of the infrastructure spend that's coming is really, we are very well suited to capitalize on that. You're absolutely right, some of that is really embedded in the short cycle business and has impacted the half-year results, the transmission margin. Thank you, Gael. Thank you. Two questions, please. The first one is on the savings cost aspect of the business. Could you just give us an update perhaps on the restructuring cost that you expect to book over 2020 to 2025? Mm-hmm. Maybe a bit of an update on the headcount reduction as well. Sure. Do you actually expect some additional savings coming from the simplification of the structure you've talked about earlier? Mm-hmm. the reduction in the management layers in particular? The second question is on the backlog for the business. What is the share of the backlog that is attributable to the legacy PG projects and that is yet to be executed this year and next year? Thanks, Gael, for the question, especially the second one. In terms of the savings and the costs, I think you mentioned two things. One is the restructuring costs, and two was the headcount, the progress that we've made in headcount. Very good questions. I think if you recall last year, the lion's share. What we guided on in terms of restructuring costs were mid- to high triple-digit restructuring costs, and that was meant to be spent before 2023, right? What we said is the lion's share of those costs have been taken into consideration already, last year, and two reasons. Of course, we'd launched all of the various, cost savings, the additional program as well. We also, as you know, announced at the time, to your second point regarding headcount, we announced the reduction of headcount, just shy of 8,000, of which 3,700 headcount have been affected already from that target as of the first half of fiscal year 2022, since 2020. Hopefully that addresses that question. The backlog, the share, I know this is a question that we get often. Again, going back to last year, because this was obviously part of the reason why our margin deteriorated last year, and I said, "Look, we're really having a larger portion of those legacy orders being converted into revenue in the last six months of last year." At that point in time, I said, we have between 12 and 18 months left for those legacy projects. Now I can clearly say that is a very small percentage. He wants an actual percentage, but it's a very small percentage of the order backlog. Gael, what I can confirm is that that will be, again, almost all executed by the end of this fiscal year. Good. Next question, Nick. Thank you. Good morning. Two questions, please. Firstly, on working capital and then on M&A. On working capital, on your slide nine, you showed that strong free cash flow has partly benefited from this negative movement of net contract assets and liabilities. Mm-hmm. Our understanding is that's been a beneficiary of large order intake at Gamesa, where you get advanced payments for those contracts. Can you confirm that in the event of a slowdown in order intake at Gamesa, you'd expect a reversal of that position, and you'd expect a commensurate cash outflow from that? That's my first question. Mm-hmm. Thanks. Okay. No, I will take that question and maybe just to be very clear. On slide nine, in all of the slides actually, other than the Q2 slide where I showed the Siemens Energy liquidity and cash bridge, this is for GP only. Okay? With respect to the large order intake and SGRE, I think this is something certainly you can ask Jochen later specifically to SGRE. Let me answer that question with respect to GP. You're absolutely correct, and that's why I was very open and forthcoming to say, "Hey, we've reduced our operating net working capital by a lot of great measures," but also because of course, with the buildup of our order book, we have payment milestones, prepayments, advances that are associated with that. Of course, that is then in-house for us to then contribute and make sure that we execute on that order accordingly. What we've also said is, yes, this is a high level, and that's why we want to make sure that we maintain ourselves as a net cash company, because as I also said at Q2, within the next six months of this fiscal year, the balance sheet as we execute will act a little bit against us. With that EUR 900 million that we have in cash as of the half year, we still stick to. Now, this is group by the way. Now I'm jumping a little bit, but this is the guidance is at group level. We still maintain that we will have mid triple-digit cash for this year, and we will meet our guidance accordingly. You're absolutely right. I mean, this is why we have to monitor and ensure that we look at our balance sheet and remain a net cash company ultimately, because those contract assets and contract liabilities are a very large and important part of our balance sheet because that's essentially the indicator of us executing through our backlog. Okay. Thank you. Turning to M&A and capital allocation, I guess given the cash offer, given the fact that Gamesa's working capital is relevant to your group position, if you think about doing more M&A, such as in the electrolyzer business, doing more bolt-on, do you think it's still appropriate to be paying a dividend? Would you rather save that cash to be investing in M&A and allow you to keep the strong balance sheet? Maybe just talk through your thoughts as to how you manage that trade-off. Thank you. No, it's a great question because I think it goes back to what we tried or what we're trying to achieve as a company from the onset. It was always essentially that one slide that it was about stabilizing ourselves, making sure we go through the transformation. Really allocating resources, if you'd like, to restructuring and taking the costs out, stabilizing ourselves. Now, of course, in light of the transaction, of course, we're doing that accordingly. Even going forward with respect to capital allocation from an M&A perspective, it would still have to ensure that it meets the hurdle rates that we have to maintain our solid investment grade rating. That's number one. Number two is we've always said in that order, by the way, that we have to restructure, we have to make sure, and then of course, we want to be a dividend paying company. Therefore, we'll always take that into consideration with how we make decisions with respect to M&A going forward. Thank you. That's a perfect segue into the break. We have a break of about one hour and 10 minutes, so if you're back at 12:40. There's of course food, which is of course important, but also we have a couple of pavilions out there. Yes. You know, do take the opportunity to ask as many questions as you like. We're really trying to showcase our businesses and try to showcase our products, and there are hopefully a couple of cool exhibits out there, or all of them are cool. Please do take the opportunity, and then I'll see you back at 12:40 P.M. In the afternoon, as I mentioned earlier, we're gonna go through the business areas. It's Karim, it's Tim, and then Jochen will be talking about SGRE. After that, it's gonna be Vinod on innovation and Dieter on sustainability. First, enjoy the break, and also please do enjoy the pavilions as much as well. Thank you. Thanks. Thank you. Thanks also to all of you on the web. It's hot. Hot up here. Right. I think it's still a bit empty. Who's first? Karim, you're first. Yeah. Karim, Tim, Karim, Jochen. All right. Karim, you can hand over straight to. I would. Yes. Right. Right. Welcome back, everybody in the room. I think we're also live on the webcast. Also welcome back to everybody on the webcast. We're now gonna go into the afternoon sessions with the new business areas presented. They are represented by Karim Amin and Tim Holt. As I said earlier, Jochen Eickholt will be talking about SGRE. The first one to present is Karim Amin, who will talk about the Gas Services business. Karim? Right. Is it working? Mic? No? Yeah, it's working. All right, very good afternoon. From my side, the first session immediately after lunch, and I think we had the chance to interact a little bit in the booth, which I found really very good starting point for me right now. I would like to start by taking you into the Gas Services journey. Before we start into the Gas Services, I think you have seen from Christian and Maria a lot with regards to how did we turn around the business since the start or the beginning of Siemens Energy in 2020 until the first half of fiscal year 2022, which just ended in March. Let me really put it in context of the business that we have today, which is Generation and Industrial Application, and there has been, I think, some questions earlier, what exactly went from Generation and Industrial Application into Gas Services. Before I answer this, I would just like to put you quickly in context of how did the Generation and Industrial Application business performed from fiscal year 2020 until first half of fiscal year 2022. If you just reconcile all the numbers that Christian and Maria showed us earlier and look at industrial applications business and generation business as it is today, big improvement in our market share, but this is only a sign of how good our portfolio is, of how well this portfolio is accepted by the market, 'cause we sold around 170 units in this period of time. The most important thing behind being able to sell these units is that we have leading portfolio products. So our products in the introduction of our HL, that you have also seen some of you yesterday in the factory, but I'll talk about it more today, is really leading in the market in terms of performance, power output efficiency, also in terms of competitiveness. We also introduced a new F-class. We have a leading SGT-800 in the 50-MW range. This is a very important, let's say, element behind the market share. Backlog for this division generation and industrial application moved from EUR 40 billion - EUR 45 billion. We added EUR 5 billion in this 2.5 years, which is really impressive. The most impressive part of it is that 75% of this backlog that has been added has been added in service contracts. Service contracts are long-term contracts, of course, but they are also contracts that are well adjusted for escalations with indices and so on. Margin quality has been maintained, and I think Maria also showed that in the larger context of Siemens Energy. In this regard, we have maintained our margin quality, so this did not deteriorate. We have a very important point that we look at, which is the net promoter score, how our customers score us. If we get on a scale from one to 10, a nine or a 10 in the score, then it counts. 50% and more of our customers gave us a score of either nine or 10, and this is a very important element for us that tells us how well we are doing with regards to the services we provide. Productivity has improved in these two businesses year-on-year, around 5% +. We reduced more than 3,000 headcounts, right-sizing the business. We consolidated or closed 50 sites. I'm talking here about manufacturing sites, repair facilities, workshops, etc. We right-sized our manufacturing footprint or the capacity, technical and, manpower, manufacturing hours capacity in the existing footprint that we have right now by 20%. This really helps us also in the journey of cost out and margin improvement that we touched upon, and we will talk more about it right now. This all resulted in an Adjusted EBITDA before special items that moved from 2% when we started the journey in 2020 to 6% as we stand end of March 2022. All on the strong background of successful cost out, better management of NCC, project execution excellence, and one very important element is the selectivity of the projects that we go behind. This is also an element that creates, I would say, a future resilience of our backlog of our numbers. This is how the picture is looking like. Now let me take you to the Gas Services as it will start from first of October. I think the first thing I wanna say is this is the first time that we are providing this great deal of transparency, opening the curtains, and really having a very good and close look at the business of gas turbines. Very simple, very sharp. I really have the pleasure to take you today through this fascinating business of gas turbines that has played a key and critical role in the past to balance the needs of the world when it comes to sustainability, security of supply, efficiency, of course, also, competitive products. I firmly believe that it will continue to play a key role also in the future when we look at the elements of balancing renewables as well as electrification of many sectors beside the power generation. Gas Services is having all gas turbines under one roof. On one hand side you have all the large gas turbines and steam turbines and generators. This comes from generation of today. This is the first pillar you see in front of you, ranges from 100 MW - 600 MW. Industrial gas turbines, irrespective of what it drives, could drive a generator, could drive a compressor, is in there, as well as the service business connected to these gas turbines. This is all in one business. If you look at when we construct this business, our market position, we are number one in terms of the number of units that we are selling when you look at fiscal year 2021 numbers. For all gas turbines above 10 MW. 10 MW is a very natural starting point because below 10 MW is pretty much the market of engines, and above 10 MW is more the market of gas turbines. Number one, and number two, when it comes to large gas turbines above 100 MW. EUR 9 billion of revenue, 65% of this revenue is on service business, 35% comes from our new units business. Around 25,000 employees. The margin is around 7% when you really look at these businesses. What is not in there, what went to Transformation of Industry, and that was a question earlier, is the industrial steam business. This went is the services of the industrial steam, went there. Compression is in the Transformation of Industry. Electrification, automation, digitalization is also in the Transformation of Industry. This is pure gas turbine plus large steam and generators. We have a backlog. We start with a backlog of EUR 37 billion. Now, let me first give you a bit of what is in this slides or deck that I wanna share with you today. The mission of this business area is to really monetize on the existing fleet. We have a large fleet that exists out there. We wanna add units to this fleet when there is a chance to add, and we wanna extend the life and maximize the service potential of the units which are already running. There are opportunities around decarbonization, around upgrades, around better efficiency. The message is first that puts things in context here. There is a very good resilient service business, and you've seen the percentage of this business in the backlog. The fleet is growing, and this adds more units to the service business. We have decarbonization opportunities on the existing fleet. If you look at the gas turbines market outlook, of course there is a strong drive towards decarbonization and renewables, but the outlook of the gas market has improved significantly when you look at it in 2020 versus 2021 and even beyond. This is telling us that for the next decade, there is a strong demand when it comes to also new units for gas market, and I will show you this in more details. The topic with regards to the portfolio competitiveness, and this is a very important topic. It also connects to competitiveness, it connects to R&D, the topic we talked about R&D. It connects to the quality of the margin that we could get out of our contracts has significantly improved when you compare our position in 2019, 2020 to where we are today. We also have this portfolio equipped with what it needs to run into the future. Siemens Energy is one of the leading companies with H2 capabilities for co-firing compared to its peers. Of course, we are driving this business towards a 10%-12% profit by 2025. This is the story of Gas Services. Let's just spend a minute or two on the market. You see in front of you two views. The blue is how IHS looked at this market in 2020. Then again, the purple is how this market has been looked at and assessed by 2021. We look at IHS, we look at our own project pipeline, we look at other marketing models. Message is the market has seen an upward tick. An average of 44 GW per annum was the view before. Today, the view is more than 57 GW per annum. Where is this market dynamics happening? Where this is coming from? There is a very strong evident growth in distributed generation. Not the big, power plants where you have heavy Capex, but the, smaller sizes, 200 MW- 300 MW unit sizes in the range of 40 MW- 50 MW, where Capex is more affordable. This is growing. We've seen an increase demand on, electric heat pumps, district heating, and particular in our business of Gas Services in district heating. Electrification of heat is a big trend. Also when you look at the central generation. The central generation has seen also an improvement in its market. I give you really very few examples. The acceleration of the coal to gas shift that happens in Asia and U.S. gives us a push. The capacity markets that is very clearly now needed in Europe to back up renewables, whether it's in the U.K. or Italy or Germany or Belgium, these are all areas where we have very active bids running right now and contracts being executed. It is much more pronounced today than it used to be three, four years ago. I think it's also very clear to us that when there is no capacity, if you look at the situation in U.K. back last summer when there was not enough wind coming from the offshore, or if you look at the situation in China or Brazil when there was not enough rain coming for the hydropower, there was really a problem, and the prices shot up big time. It is very important to balance the grid to have these capacities. Of course, we are looking at a stable service business and an outlook also of our utilization is very clear. When I translate this into number of units, right? From macro to what does it mean to us? This is the picture in front of you. In fiscal year 2020, we had around 200 units in the market. In fiscal year 2021, this jumped to roughly 230. We are looking at the first half of fiscal year 2022 at similarly the same amount. So far, we sold 50 units out of 150 already in the first six months, and this is more than the number two and number three combined. This is because the portfolio has been improved. Improved in its power output, improved in its cost position, improved in its performance. If you look to the right, these are what we call core revenue carriers. These are the most important segments in the large gas market, and these are our products. The HL in fiscal year 2020 did not exist. We barely sold two units. It was the market introduction. In fiscal year 2021, we sold five. In the first six months now, we sold 3. I believe that by the end of this year it will be six or even more. If you look at the F class, also we had a lagging portfolio in fiscal year 2019-2020. 2021 we sold 12, and also in fiscal year 2022, we sold six so far. This number is also going to increase The SGT-800 is by far the market leader in this range. This position allows us to really add units to the market and increase our service business. Our strategy is really around four points. We want to have maximum benefit out of the growth in the distributed. We want to get our service business much more in our focus and get more opportunities out of it, specifically when it comes to the large fleet that we have that needs upgrades and decarbonization. The decarbonization requirement in general provides us an opportunity that we can capitalize on. Of course, the operational excellence which got us from the 2% to the 6% will get us, if we continue on this track, to the 10%-12% with the right cash conversion ratio. This is our service business, and if you look at that, you see there is around 7,800 units, almost 1,800 in large gas. Eighty-five percent of this is covered by our penetration on service, so we serve 85% of our units. We have added 160 LTPs in the last three years, new. We have added or we plan to add 400 units until 2025 because of the portfolio enhancement that I showed you. Around 300 units will retire. Net there is 100 units more into the fleet. Of course, the newer units, they have better service numbers, they have better quality, and they also run longer. One third of our fleet today in LTP is five years old, so these investments will run at least 15 more years. Of course, we have a huge potential in the small gas turbines that is also growing at faster pace in terms of its service. Two clear opportunities for us. One, really capitalize on zero or low emissions power generation, and one, clear lever for us here is our high efficiency units, our possibility to burn hydrogen. Today we have capability to burn in some of our fleet 75%. In our HL, we are able to burn 50%, and we have a roadmap to get to 100% when the hydrogen infrastructure and quantity is present. I mean, the technology from our side is not the problem. The problem is how fast this infrastructure will be ready and how much hydrogen can be generated at economical prices. One example there is Keadby in the UK, where we are having the largest and the highly efficient combined cycle power plant in Europe right now running in Keadby 2, and we are working right now on the next project, Keadby 3, where we'll repeat exactly the same and add next to it a carbon capture facility. We also have units on the SGT-800 running on 100% green hydrogen in pilot phase. I think another important growth area for us is the decarbonization of heat, where many district heat facilities right now are either running on non-efficient units or even on coal, especially in Eastern Europe a lot, also in Asia a lot. Siemens has a very good position when it comes to heat pumps. We have more than 50 heat pumps out there, references in the market. Just across the street, there's Vattenfall, where we are also having the first example here where we are saving more than 6,500 tons of CO₂ utilizing our heat pumps to get the waste heat as a heat source and then push this for district heating. We also have other example in Mannheim, and this is growing business. I see CAGRs of more than 65% of this district heating opportunities until 2025. I wanna wrap by saying, we wanna monetize on this installed base. This is a resilient service base. We are adding more units to it every year, roughly 100 units per year. Top-notch, state-of-the-art, high efficiency, equipped with the sustainable fuels capability of the future. This strong backlog with good margin quality, and this recurring service revenues will give Siemens Energy and will be the mission of Gas Services to provide, say, the runway for the energy transition to happen also in connection with the other business areas that we'll cover now. Profitability drivers for us is definitely to continue on our productivity. We actually have a plan that is delivering. What Maria showed us is only half of the way. The journey will continue. We will continue to be selective on our projects, what we take and what we don't take. I think our new operating model that Christian showed us will give us the speed, the lean organization, and cash. Of course, cash is something that we have 100% our focus because this is what drives, let's say, the rest of the decisions in the company when it comes to R&D allocation and other elements. I wanna comment finally on the stable and modest decline. Stable is the service, and we see this is stable. We have triangulated this several ways, and the modest decline is our selectivity of turnkey. We are not doing the same amount of turnkey like we used to do in the past, so we are getting some of these projects outside of our backlog. I think this is what you refer to as '2023, end of 2023.' The new projects that we are getting does not have this big turnkey ticket sizes, hence you would see a modest decline there. I wanna finish now by really reiterating again our priorities. Operational excellence and cost out got us from nowhere to a very strong business in 6% range. This will continue with us to take us to the 10-12. Service performance, 100% is in our focus. Every decision we do related to R&D, related to investment into the market, has the service focus in the center of it. Growth in distributed, decarbonization of power and heat is real opportunities for the Gas Services business area. Of course, the fleet additions I talked about, the 400 units that are going to get there by 2025, will make our fleet younger and even bigger. Thank you so much for the attention and for the opportunity. I will hand over to Tim now to talk about Grid Technologies, and then we will have the chance to go into questions and answers after that. Thank you. Thank you. Good afternoon. I thought since the audience here was able to see some of the products that we have in Grid Technologies, to start with a small movie to really give you a glimpse what Grid Technologies is about. Can you please play the movie? Quite impressive. This is actually my fourth Capital Market Day for Siemens and Siemens Energy. Some of you know me getting really excited about service, gas turbine service, but I can tell you I'm equally excited, really equally excited about Grid Technologies. Why am I excited? This is really a market that has a lot of potential. Christian talked in the morning about the growth in demand on the electricity side. We talked about the renewables. I think Jochen will go into it. I think what you all have to remember is you always have to bring the electron from A to B. All these investments will trigger investments on the Grid Technologies side. I will talk a bit about the potential we have in HVDC and grid access that's really driven by offshore wind and show you how much potential we have with each gigawatt of wind we add, but also the potential having a portfolio that's sustainable. You see it on the right-hand side, our Blue portfolio, the SF₆-free GIS. This is also an area where we as Siemens Energy Grid Technologies will benefit. All of that with the accelerated investment that we see from governments, from customers, we're very confident and committed to get to the 8%-10% margin range in the midterm, as Maria had shown. I talked a bit about what do we do. We do large projects, HVDC. We do AC in order to bring the electricity efficiently from A - B. We do switchgear, we do products, the transformers that sit on wind turbines, that sit in power plants, that sit in data centers. Really the potential to have the products across the whole value chain. Combine that with grid stabilization and storage, and I'll get into that in a minute, and also our drive to go into automation, because that's really the next frontier on the grid to really do more automation, do less metal, steel, copper, and drive that business. We are in a good market position. On the products, if we look across the globe, we have a good solid number two position, and on the projects, on the solutions, we're clear number one, and that's by the way where the growth also sits in the near term. You see the breakdown, EUR 5.8 billion in 2028 revenue. Large majority in products. Solutions about 37%. I think I talked last Capital Market Day about growing the service business. That's clearly an area that's underdeveloped, and you will also see that in our four strategic drivers to really enhance and drive the service. 6.5% last year. Maria showed you this year. We're clearly having some headwinds in terms of supply chain. If you had been in this factory three months ago, you would have seen a Chinese truck parked there unloading products from our factories out of China to be used here in production. That is the shortage in containers. That's the shortage in logistics to get material from A to B. If you have a network of feeder plants of a global supply chain, that's what is really at the moment keeping us up at night and where the teams are really driving the operational excellence. If we do a bit of a deep dive in the key KPIs that we have, and I wanna walk you through it. Orders, order intake. You see the really nice increase from 2020 - 2021. If you see first half of 2022, we're at EUR 3.9 billion, so the trend is continuing, and we see this really double-digit growth right now in the business, primarily driven by the projects. At the same time, we also see it on the product side. A lot of buying from the U.S., from other parts of the world. You see the other one is really adding to the order backlog. Maria showed you earlier the order backlog, new unit, and service. If you take that new unit piece on the GP side, over 50% in the order backlog comes from transmission already. Book-to-bill is well above one. I talked a bit about the profitability, what we see in the headwinds. Fundamentally underlying, we have a very good year. Factory utilization is there. Order books are there. It's just the supply chain and the Ukraine war that's at the moment not helping us. I'll give you one example. On these transformers, we use a special paper to wrap the insulation. That supplier moved production last year to Ukraine from Switzerland. The factory is outside Kyiv, got hit by a missile. All of a sudden, we have to find other sources, scramble, but as you can imagine, the production is not running as smoothly as it could, but it's all external cost. It's not internally. It's really about managing the supply chain. The teams are really focused on it, working on it. As soon as we get back to a more normal, as Maria had shown, the fundamentals are really strong. Also, cash conversion, we talked about it. One of you had a question earlier. 1.7 just over the two years, really driven by the excellent order intake on HVDC, but we also see now the shift to the Blue portfolio. So how do we capture this growth and also the profitability increase? There's four levers that we are concentrating on. One is growing the solution business. I'm gonna show you how the HVDC market, how the solution market is developing in a second. Traditionally, we were doing three to four projects per year, executing. We need to double that capacity within the business to really capture the full market potential. The other one is really looking at profitability, and I'm not talking about the solutions. I'm talking about the products. We got 43 factories with a whole range of products. Not all are in markets that are growing. Some are also tied to what Karim just presented. We really have to look that we hit the markets and the products that are showing the growth and also the profitability. Second one, two focus areas on the product portfolio. I think one is focusing on the product pools, as I just talked about. Renewables on the transformer side, great potential. Normal power plants, yeah, it's similar to what Karim showed, a stable, slightly declining markets, and we really have to concentrate on those products where technology plays and where we see the growth rates. The decarbonized portfolio. I showed you the BlueVault on the side, but also there we see really potential to drive. The two other areas, where we also put a lot of focus on, one is how do we get into the grid automation and digital side. We're not gonna become a software company, but we're bringing a lot to the table in terms of customer access, knowing how the grid operates. This is also the question on M&A and partnerships. Really the focus on partnerships. The last one on service, really focusing, if you look at North America, the investments in the next 15 years on the aging infrastructure that you have on the U.S. grid is the same amount as was spent in the last 150 years, just to give you a perspective and the potential. In terms of market, in the middle, and I think you have seen it also from Christian, this is our addressable market. 5% CAGR, nice growth. You will ask, "Okay, how sustainable is it?" You go to the left side, I think we talked about the aging infrastructure, markets like the U.S. You look at how do we connect the offshore, the renewable generation that's being built. How do I get the power from offshore into the load centers? At the same time, how do I keep the grid resilient and stable? That's another big piece, that's driving also our business. On the right-hand side, you see the support. Those are the government support you see. EU, U.S., U.K., everybody committed billions in terms of grid infrastructure build-out. Now, you can ask yourself, "Is that money really gonna come? Politicians announce it. How does that translate?" Let me run you through Germany and take the customer view. On this slide, you just see the German market, until 2030, EUR 90 billion of potential in terms of grid market size. On the bottom, you see three of the four TSOs and their announcement in terms of what are they gonna spend in terms of infrastructure. You see a TenneT, EUR 4 billion -EUR 5 billion per year. They spent EUR 2 billion two years ago. When you talk to their CFO, he has a target. The CFO has a target to spend EUR 5 billion annually. Maria has a savings target, I believe, but it's EUR 5 billion. If you take that market, EUR 90 billion, deduct the parts, the scope that we don't address, overhead lines, cables for the offshore parks, and so on, it's still a EUR 35 billion addressable market for Grid Technologies till 2030, and that's just Germany alone. It's a huge potential. We're really well-positioned, and you have seen it also in some of the recent announcements, the wins we got. There are some big tenders out there with TenneT, with Amprion, with EnBW that you will see over the next 12-16 months being awarded. I'm very confident that we're in a very, very good position there in terms of technology, execution capability, but also customer intimacy, because of the work we did over the last years with those customers. A lot of talk about HVDC. Why are we so excited about it? The left side, you can see the project announcements, 2022, 2026. How many projects are gonna be announced that they are awarded? EUR 6 billion in 2022, EUR 9 billion in 2026, and I'm not sure that number is not gonna grow based on all the activity we have seen over the last months and also weeks driven by the Ukraine war. You can clearly see also a shift here. Very much European-focused. That's the renewable build-out, the energy transition. Rest of the world, it's kind of spread around the world, and by the way, the number is without China. We also see now the first, or we have the first discussions in the U.S. The whole offshore build-out in the U.S., the grid connections, HVDC across are all growing. You know, we keep a project list, that's growing by the day, and there's about 70 projects in various stages in that list that are moving through the different stage of realization. What it also does, and I think that's also very important, in the past, there were between two to six projects awarded annually, with two to three players in the market that bid for it. You basically bid for every project independent of scope, T&Cs and so on. With the growth in project announcements, it also enables us to be selective and not to bid every project in order to fill capacity. I think that's a very important part because I think the question will come: How confident are you that you can execute the project? The next big wave of projects, if you look at HVDC, currently it's direct connection. You have an offshore wind farm, you bring it to shore. You have a shore station in the north, a converter station, you bring it to the south. It's really going to what we call DC grids. It's interconnecting between different countries and having different flows of the power. Why is that important? If you look at when you have a wind peak in the U..K. Maximum wind speeds, you can do maximum production on wind. That wind peak is gonna be seen in Germany about 15 hours later. If you go to a fully renewable world, you can use that peak excess power that you have in the U.K., bring over to Europe. When that peak comes to Europe, you bring that power back to the U.K. That's really the driver of the DC grids. I will say there's currently probably only two companies who have the technology and the expertise to work on this, and we're clearly one of them. This is also a discussion with our partners. The other big area that we see coming is electrification of industries. Christian talks about it. Karim is gonna talk about it. It's the electrification of the oil and gas industry. Having these HVDC connections out to the platforms and have the compression run on the platforms without gas turbines, but run them with motors and have the big plug out in the sea that can power the different platforms. I talked a bit about already about the offshore wind, and what I want to do here is really break it down and show the potential. It's not just HVDC. If you have 1 GW of offshore wind, that's gonna get announced. I took 10 MW turbine size. There's 100 transformers and switchgears that sit in each turbine, and maybe some of you saw the transformer out on the truck out there. These are the ones that go into the turbines. Those are the ones that are specifically designed for those turbines. This is not a commodity. This is an engineered product that we develop with the wind OEMs, and we do that for Siemens Gamesa, we do that for Nordex, we do that for Vestas. We're doing it for the major players in the industry. We talked about the platforms, and then there's the service piece, but at the end, each gigawatt of offshore wind announced sums up to EUR 300 million-EUR 400 million per gigawatt in market potential for Grid Technologies. Storage, also a big topic and, you know, we had the discussion also outside. It's a market that shouldn't be limited to just the cells in the battery, but what's around it. At the end, it's about utilizing an asset, a solar park, a turbine over a longer time. Yes, you need expertise on battery modules, but you also need system integration, you need EPC capabilities, and you need digital services, and we already have some success stories here. One is we have something that's called a BlueVault technology that we use in offshore. Those are batteries in a highly secure, highly protected environment. It's small, it's a growing market, but it's technology we can grow from. The other one, and that's also sometimes forgotten, is storage is also very small storage in terms of duration. It's more about grid stabilization. How do you make sure the grid is stable? There we have also what's called ARES, the Rotating Energy Stabilizer. I think on the picture, it could be Jochen, because when he was in gen, there's a generator attached to it. It's also a business that helps us to get into the storage market. I hope I was able to bring across that there's multiple revenue drivers in Grid Technologies that are really well-positioned. It all depends on operational and project excellence. It depends on how do we manage the profit pools and the portfolio, and how do we grow the storage and the automation piece. You see that mid-single-digit revenue growth commitment and also the 8%-10%. This really also are my priorities. They are the priorities of the Grid Technologies team. Maximize, really maximize the growing HVDC and grid access market. That's near term, that's midterm, that's long term. It's really how do we concentrate the portfolio, really invest in the technology for decarbonization, and then look at the high-growth markets, digital grid storage through partnerships and expand there. Thank you so much. With that, I give it back to Karim. Thank you. This time on the Transformation of Industry. We'll talk now about the Transformation of Industry, and I wanna connect it a little bit with what we talked about in the Gas Services because the business of Transformation of Industry is put together, configured based on what we believed are the key portfolio elements that are needed for the industry and how can we connect the dots and offer something that is unique and helps this decarbonization story. Let me start here by just painting a picture together with you. If we look at this CO₂ emissions, per annum, roughly depending on what we read, there is 40+ gigatons of CO₂ goes every year. Of course, one-third of that is the power generation, or comes from the generation side. Of course, Jochen will talk a lot about how the renewable energy will solve this one-third. I explained also a little bit to you how we do with regards to our fleet, existing fleet. But the majority of it, if you put this power generation aside, comes actually from industry and transportation. Industry is responsible for roughly 25% of the CO₂ emission, and it also consumes around 40% of the electricity that we generate goes into industry, which adds another indirect CO₂ emission. Transportation is also another 20% or something. Industry and transportation by far combined are in the focus and in the center of the decarbonization of energy transition. It's super important that as much as we are looking at renewable energy and zero or low CO₂ emission strategy that Christian talked about, it's also super important to look at how do we decarbonize industry, hence the Transformation of Industry business area. If you look into the center, we have compression. Many industries, they need compression, compressed air, they compress gas, they need process heat and steam, so our industrial steam and generators sits in the middle. There is an element of hydrogen, and with the decarbonization, this hydrogen needs to be green, so the electrolyzer business that we talked about earlier, and we also saw yesterday, and we saw outside. Then there is the electrification, automation, digitalization of the industrial processes. This is the four portfolio elements that we look at and we say, if we manage to connect the dots, if we manage to get the optimization out of a system and not out of an individual product or application, then we are making a real step towards decarbonization of industry. I will show you some examples, and you can connect this to what has been said earlier and what will be said later. Of course, we always have to put in mind that there is a need for renewable energy. The Siemens Gamesa Renewable Energy in the back comes to the picture that I wanted to draw with you. Of course, there needs to be elements that comes from Gas Services like the heat, we talked about the heat pumps, or like the service deployment that we have, as well as, of course, the Grid Technologies that Tim just talked about. If you take all that and you look at what the industry is trying to achieve, it's either something around production of green steel or other metals, aluminum with less CO₂ footprint, sustainable fuels, you know, all the discussions around e-methanol and e-kerosene and e-gasoline and so on. Of course, sustainable industries around pulp and paper and fertilizer business. A lot will benefit from this Transformation of Industry value proposition that this picture is trying to paint for you. What are we trying to do with the Transformation of Industry? We're trying to really lead and provide a one-stop shop for the energy transition in the industrial verticals by understanding what are the drivers of these industrial verticals and trying to connect how can we construct an offer with these portfolio elements I showed you in the first slide. This market has significant growth. There is 9% or even more CAGR until 2030. We really believe we are significantly in the heart of this transition because we have a very strong industrial customer base. We have more than 5,000 industrial customers in all the businesses that we are dealing in right now. We have a global network. We have all these technologies or portfolio elements I showed you. The most important thing is we have the capabilities of an integrated technology company. We have the capability to deliver and execute large projects. We have the capability to be in each and every market when it comes to business development and constructing a proposal or a bid or localization or service or supply chain. Our target is to have mid-single-digit revenue growth by fiscal year 2025, really centered around the potential coming from H2, from hydrogen, green hydrogen, and from the electrification, automation, and digitalization, and we are looking at the 6%-8% by 2025. You know, I think when Maria showed you the variance, you were a little bit looking at some business and says, "You know, the -7%, what is this?" We will show you now how we are tackling these elements so that together we go to the 6%-8%. We look at these four elements, four portfolio elements in two dimensions. There is business that is around growth, and this is what we call sustainable energy systems. You need to connect sustainable energy systems in your mind with electrolyzer business, hydrogen business, and the EAD. These are businesses that will grow, and we will invest in them to grow. There are two other businesses that needs to be stabilized and turned around. Very similar picture like Gas Services. This is a topic around operational excellence, cost out, footprint adjustment, right sizing, as well as managing selectivity and NCCs. This is the industrial steam business and generators, and this is the compression business. Two dimensions here that we are looking at. We have a good market position. If you look at the businesses for turnaround, we are clearly number one in industrial steam. We are clearly number two in compression. In electrification, automation, digitalization, we are also have a very strong position in the markets that we deal in the verticals that we work in. I think in the electrolyzer we have great potential because we are pioneers, and you will see some of the examples what we are doing in a minute. Market is growing, as I said. You could see all the investments. We read about it every day. Also countries, and I think if you connect this also with the geopolitical discussion yesterday from Sigmar Gabriel, you see countries are really trying to put themselves in a new dimension. Gulf countries, for example, really see that the era of oil and gas needs to help them to propel themselves into being a real player in green hydrogen and sustainable fuels. China is investing. Europe is leading the decarbonization. You see the CAGRs. The blue part is the growing business, electrolyzer business, EAD, and the purple part is the business that we need to really turn around when it comes to compression and when it comes to industrial steam and gas. Let's have a look at where the opportunities are. If I look at it today with our team, we see right now more than 900 opportunities at various stages of development. Around 25 GW is on our pipeline. If I just click one more, you start to see some colors around that. These are real projects that we work on. I will pick a few of them to go into more details so that we see also the application, we see the scope of Siemens Energy, what Siemens Energy could deliver, and we could also imagine what will happen when this scales up, right? How the integrated energy company could really play a role here when the scale-up comes, because pilot is something, and then when you want to manage it on a bigger scale, of course, is a different story. Hydrogen for industry, the green. A number of projects in Wunsiedel in Germany, with BASF in Ludwigshafen. We'll talk about that. If you look at e-methanol, right? We see a lot of these activities happening. E-ammonia, e-fuel, Haru Oni is one project I will talk about in Chile. UAE is also looking right now at sustainable aviation fuel, and they are using the competitiveness of having very cheap, I would say, solar power to use it for generating H2 at cheaper rates. Let's just take one or two examples just to understand what does this mean for us, for our business. I wanna pick an e-methanol for shipping example. This project we're working on right now in Sweden, it's called Liquid Wind, is the project. There is a 50,000 tons per annum e-methanol production that will be used for shipping, but also for chemical industry, as an input for chemical industry. Clear improvement in CO₂ reduction. There is a no-brainer about that. Siemens Energy comes with the portfolio, comes with the electrolyzers, comes with the compression. You need to compress certain processes, the electrification of the balance of plant around it, high voltage and low voltage and medium voltage, engineering, as well as creating the digital twins that will help us to optimize operation, but also help us into the service. You see also what our customers are saying. You know, if you look at the notes, you can connect it immediately with the video of Bernard Looney. It's pretty much the same statements but in different way. 72 MW, EUR 80 million project. Of course, it's not gonna move the needle in the billions you saw in Siemens Energy, but that's the start. Another project which is also very important for us right now, and it has the chance to really scale up quickly because there is a phase II and a phase three connected to it, is green hydrogen as a feedstock for decarbonizing the chemical industry, and in this case, it's a project with BASF in Germany. We are right now in the first phase of it. It's a 50 MW of PEM the electrolyzer that you saw yesterday. 40 MW of high-temperature heat pump, another portfolio element that we bring, and the project has the potential or the plan to go to up to 2 GW of electrification. That's what Siemens Energy could do to an industry. This is a customer like BP, like others, that looks at us and say, "We wanna work with you because of the three topics we talked about." We are on the same page. We have the capability to deliver these kinds of projects, and we also have the potential to scale in the same pace as these projects needs to scale. Production of a 1 ton per hour of green hydrogen via electrolyzers, it's pretty much, I would say, straightforward, but very important project. This is one of the first projects we started in Chile, Haru Oni, where you also have a wider spectrum of what Siemens Energy could do. Starts from wind turbines that generates renewable energy, and then you take that into production of hydrogen, and then you get the hydrogen. Then we burn some of the biomass and get some, with our steam turbines, get some CO₂. Then we take the CO₂ and the hydrogen and create, with the synthesis process, a sustainable fuel. Huge potential. We did phase zero, which was just a pilot, 1 MW. Right now we are looking at phase one, which is the 200 MW, 250 MW, and then there is further phases. If you look at also customer feedback there, that's the CEO of the company, same message, right? It's the capability of a company like ours that could look at this portfolio, I would say breadth, and put it together in a meaningful way. This is what I wanted to summarize out of these three examples. We have a customer base and a customer access in this industrial transformation that is, in my view, super advanced because of our history and our existing assets and fleets that has been gained over decades and decades. Customer base, more than 5,000, as I said, globally, and I talked about the NPS. This is really important to see how the customer are valuing our services. If you look at our project execution, proven track record of really working on very big projects and the project management of big projects, whether it's a combined cycle power plant or an LNG or a big electrolyzer, wind, whatever, is not very different, right? It's the skill set is not very different. Procurement, supplier base, logistics. I think we also have a unique industry expertise because we have references in all the major industries. We know what drives them, we know how they make money, we know what matters to them. A chemical plant is completely different than a power plant. It's completely different than an industry around data centers or something in this direction. I think on the service side, I did service for many years in my career, we have a deployment in every major country or city. I was talking yesterday to my colleague who runs the electrolyzer business, and if we are putting an electrolyzer in Australia and something happens in Australia, we can quickly tag along our Gas Services people in Australia, our service facility in Australia, our project management people in Australia, train them and get it fixed. If next day it happens in Brazil, we can do it in Brazil. With very little investment and very little time needed for that. Transformation of Industry is targeting to grow in line with this market growth that I showed you. We are focusing in these two dimensions, growth dimension and turnaround dimension. Fiscal year 2021 as a base is around EUR 4 billion -2.5%. Fiscal year 2025 will grow 6%-8% profitability. It's a long way, clearly, but if I look at where this profitability is coming from, it's definitely going to come from the turnaround businesses, the one on the, on my right, the purple. I think we have, I think, Ben, you asked the question of the seven and so on. I mean, this has improved. We halved our, let us say, negative numbers in the last two years. We halved it, right? I believe that, there is a good track until 2025. Let me focus a little bit on the sustainable energy systems because this is a very important, pillar of growth. I think we've secured the first projects, roughly 100 MW, but as I said, not moving the needle, but this market could be up to 30 GW by 2025, right? Or 2030, sorry. By 2030. It's also a huge growth in front of us, and we really see right now that the projects are scaling from the 1 MW, 5 MW to 50 MW, 60 MW even more. We really are in the middle of preparing our organization to manage these projects. There is a solution and engineering team already put in place, energy system design capability that are capable of doing this H2 and Power-to-X projects. Sales workforce has been trained. Manufacturing capacity is being expanded. Yesterday, we showed some of you what we're doing in Berlin, and that's not the end of it. We have 750 MW right now. I think by 2023 we will go to 1 GW, and in the next slide I will show you our plans further. There are development funds that we are accessing from different institutions and entities, as well as spending also our own R&D in this area, and Vinod will share more about this topic with us in a while. 750 MW is where we have our capacity right now. By 2023, this will go up to 1 GW, and then we intend to expand until 2025 up to 3 GW. Getting really ready for this growth in the market. Meanwhile, the pilot projects that I showed you give us also the learning curve so that we are optimizing our performance, our should-cost curves, and are getting all the lessons learned also in terms of execution, service models, etc. We deployed our go-to-market, and the good thing is that Christian talked about this unified go-to-market. In all the regions right now, we will not have people go to our customer and say, "I am the one who will do the electrolyzer for you." Next day comes the other guy and says, "And I'm the one who will do, let's say, the gas turbine or the, HVDC or the transformer." It's gonna be one face to the customer that represents the portfolio of Siemens Energy, and this will give us a very, very fast scaling up capability to cover the entire scope very quickly. Expanding of partnerships is very important. We will not do everything alone. We will partner where we need to partner, whether it's a geography or a packaging or technology. Delivery model. Talked about the gigafactories, I talked about our capability also to do large projects. There's also a very important element about recycling and refurbishing. These electrolyzers needs to be, after a while, maintained, maybe parts of it needs to be replaced to improve its efficiency, upgraded, recycled to have the sustainability element in the supply chain as well. Also our portfolio development will continue with us when it comes to, as I said, the improvement of cost, modularization, standardization, scalability, etc. I think a very important element of this digital software and solution, because you really need to look at that from a connected picture. You know, we have to connect the electrolyzer together with the wind turbines, together with the gas turbine, if you are putting the hydrogen into a re-electrification. This is what gives the system the capability to provide more out of the sum of its parts. If I take you to the next element of growth, which is the electrification, automation, and digitalization, we are also in a good market position. We need to expand this more. We need to take this to different industrial sectors. We have already seen certain key successes. More than 8% order entry growth we have seen in the last year. We are really looking at scaling up in certain markets. Asia Pacific is offering real opportunities for us, Americas as well. Think the topic around this digital value-added services and solutions, how you really provide an industrial vertical with a complete digital twin of its industrial process and optimization of this industrial process, as well as operation and maintenance of this asset, is a very important element that is more and more needed by our customers and our partners. I think we also heard it from BP. They touched on it as well, the elements of digitalization. I think also in the time of, I would say, supply chain disruption, pandemic that we went through, this becomes even more and more prominent. Summary of Transformation of Industry is the growth in H2 is for us to capture. This Power-to-X business is a business beyond the product of the electrolyzer that you just saw. It's not a business of selling this stack. Nobody ask us for the stack only. There is always an element of a wrap. There's always an element of, "I need the product," which is the hydrogen. How fast could you get me that? So the schedule, what is the performance? What is the degradation? What is the maintenance? How fast can you deploy people if I need to fix something or to upgrade something? So it's really the business model around it, which is very important. The growth in EAD business is also 100% in our focus, and we are looking at the potential of the service business out of these new deployed assets. Similar to how we created a good service business around the core business that we have, around the compression, industrial steam, Gas Services, gas turbines. Also, we want to have a service model that is resilient, that is adding value around the electrolyzer business or around the digital offerings that we put. If you look at the profit drivers, it's really the turnaround of the two businesses, compression and industrial steam. Let me give you a few examples of what we did. If you look at the compression business, because it was, let us say, one of the transparency slides of Maria that puts a lot of focus on that. Compression business improved its new unit profitability, and you need to always remember when we put the compression business, we put new units and service together. This gives us a different level of business numbers and also gives us synergies, a lot of synergies, that we tap upon. From fiscal year 2020 - 2021, we improved the new unit profitability by eight percentage points. I mean, the 7% is, I would say we have jumped this bridge before. Three out of nine manufacturer sites have been closed. This helps us to rightsize the business to reduce our under absorption and to consolidate. Nine hundred headcounts has been reduced. Productivity higher than 8% year-on-year has been achieved, and 40% of non-conforming costs went down. This is the story of the compression business in the last 18 months, and this is the story of the compression business for the next 18 months, because by 2025, the compression business will be positive. When you put it together with its service business, it will reach the target range of 6%-8%. That's one of the main focus areas that we have. I think all my colleagues can also add to this later, but it's actually a topic that we are proud of, that we made the positive impact on the compression business. If you look at the industrial steam and generator, it's not in the same, I would say, deep level, but it was also a turnaround story. We are the market leader in industrial steam. Industrial steam for us is also a part of our sustainability. We are not going into coal-fired applications for industrial steam, so we also limit our market potential there, because we have our sustainability targets in focus, but we also improved our productivity 5% plus year-on-year. We have improved our NCC. We are very selective in where we go for the projects, and nevertheless, we are at 28% market share. I believe that this market share could also go up to 30% before 2025, but we will see how this business will go. I have to tell you, this business is also pretty much investments from industries, and industries are looking at the situation of COVID and the situation of inflation and interest rates and make decisions of course, based on that. It suffered a little bit in COVID, but it really, it's picking up right now. Mid-single digit, 6%-8%, not an easy journey of course, but we came from, I would say, a much more difficult point, and we believe that we can push it to this level by 2025. In summary, Transformation of Industry is the heart of the energy transition in industries. Compression processes, process heat, process steam, electrification in general, and green hydrogen are elements and ingredients that are needed by most of the industries, if not all of them. We put them in one business area, and we support this business area with everything we've got. We support it with our project entity capability, more than 2,500 people that executed the likes of Egypt mega deal and so on, will be the people who are behind this Transformation of Industry execution. Service, I explained. Logistics and these global functions that Christian talked about will serve all the business areas. We will give the Transformation of Industry a very strong head start. We will drive the growth potential in the decarbonization processes through this EAD business. Compression and industrial steam, we will continue our journey of operational excellence and creating value. Specifically now that we also have the opportunity when we put the units and service together and when we are putting our new operating model, which will make us faster in decision-making, more lean. There is. I think it was a question to Christian about the strategic portfolio management. Of course, I mean, this is a business area where there will be a constant assessment of where are the portfolio gaps that we need to fill and how do we position ourselves for the future. Also these market trends are changing, right? We need to anticipate what will be the next trend and then take the portfolio decisions accordingly, and we will leverage our strength as I explained in detail. That was the story of Transformation of Industry. I hope I could give you a bit more clarity of why we put these businesses together, why they are separately managed, and how Siemens Energy would take this into its integrated technology energy company story. I think with this I stop, and it's time for questions and answers. Oh, it's time for Jochen. Jochen. Excuse me. Jochen. Welcome. Welcome to the world of wind. I want to share with you that it's extremely exciting to work in this world. I've been there for a little more than 10 weeks, 11 weeks. I've never really worked in a business environment with such positive prospects. Of course, there are some, how shall I say, rather short-term challenges. I think on some of these, we're going to have a little bit of a discussion a little later on. SGRE in numbers. We are a kind of EUR 10 billion revenue business as of today. We have an order backlog of slightly above EUR 30 billion, which is a little bit more than 50% of what GP has as an order backlog. It's a 26,000 employee operation. I think a rather significant part obviously of the portfolio. Perhaps also remarkable, we've got installations of 118 GW as of end of last year in around 80 countries. The business is becoming more and more global, and the installed base is getting more and more substantial. I wanted to talk a little bit about the market. I wanted to speak a little about the challenges which we face right now, and then since we discussed challenges, it's perhaps also appropriate that we discuss a little bit how our response to the challenges, and that perhaps also finds your interest. Regarding the market, there are of course various studies around. Studies which explain always slightly differently the situation. In the end, I believe it's fair to say that, going up to 25, we have a rather stable development of the market, which then a forecasted development which is massively around growth. It's such that also per today, many of the authors of the studies find it rather difficult to quantify more in detail what is going to happen. Please remember, that there is also ongoing, for instance, political endeavors to actually support wind, to support, the political approach towards it. Just to mention, you know, a couple of days ago, we had this convention of four European countries talking about the North Sea as the future, if you wish, power plant in wind for Europe. Long term massive growth, and I believe there is very little to say on top of that. If we now distinguish between onshore, offshore, and service, you would see that onshore is, you know, showing a rather stable development going forward. Again, this is also subject to further discussions of course, and there's also different studies. This is a slightly more conservative one, but I think in total, the market continues to be attractive. Offshore is showing the massive growth, and service also is showing substantial and extremely important growth for us over the years. I think there is very few markets globally where growth perspectives as such can be seen as more attractive. Now, we spoke about challenges, and we typically distinguish between so-called external and internal challenges. When we look at the external challenges, we have to see that of course there is an ongoing price pressure over the last few decades. Looking back at the statistics we showed here, we've also seen that decline in price measured in the average sales price per megawatt. We've seen that until 2022 actually. Most recently, that has to do with the challenges we see, an opposite trend. Going forward, we expect to be in the onshore business again at the price level of 2017 and perhaps even go beyond that a little. In that sense, the trend towards, you know, lower prices perhaps can be seen as being reversed. On the cost side, we see the things which sometimes were mentioned around the supply chain in total. I mean, there's various factors, many of them have been analyzed, but what we do observe is that on some of the commodity prices which we have to factor in, we've seen really massive cost development and that has massive effects on what we are doing. Although a turbine as such does not consist only of raw materials, as you can imagine, the effects of that are significant. This is one of the reasons why we right now find ourselves in ongoing discussions on a partnership basis with our customer base in order to compensate for those effects. Because you can imagine that, if you have signed a contract, let's say in the second half of 2020, and then from the second half of 2021 onwards are confronted with price developments, which by now have not ended yet. In the year 2023, we will continue to see increasing prices, then this is a concern and we need to find an answer to that. The answer to that typically is, not consisting of one or two measures alone. It's quite a bundle of measures how we try to compensate for it. Of course, we look at possibilities around hedging where that is applicable. We have agreements with Siemens Energy to, for instance, bundle our activities when it comes to procurement. For instance, on the transportation side, this is the case. We have of course set up for more long-term supply agreements. The typical behavior in the industry is that, you know, you sort of negotiate until the middle of the year or so the price level then for the next calendar year. This is the phase we are right in now, but of course you can imagine that more long-term contracts would be more beneficial in this context. You can also do what we do. In other words, have collaboration on the side of product development. At the end of the day, our portfolio needs to be standardized more, which sort of provides additional simplicity to what we are offering. We have on the side of the customers now achieved to some extent back-to-back agreements. We have had also clauses around the pass-through of raw materials. We do have regulations in place for the cost indexations, but in the end of the day, as I said, the effects which we did observe are not fully compensated yet and we continue to work on those. Now, external is one thing. We cannot deny that also internal challenges is what we are facing. On the internal challenges side, we see mostly then delays in the product development. That again, mostly around the so-called 5.X turbine, which is an onshore turbine, typically in the range of 6.6 MW. This is a delay which is a little tricky, a little difficult to handle. With some of you, I had the pleasure to talk about this already, because it's really about the non-adherence to workmanship standards on operative levels. Which then led to a situation where the assumption was that the progress was there, but the progress as such wasn't there. You did not have qualified components, you did not have qualified materials as such. If you have a bill of material, a BOM consisting of 4,000 positions, and if then 35 of those are not qualified, this leads to trouble, this leads to difficulties. If these difficulties are then, you know, meeting the supply chain difficulties with prolonged order times, you can imagine that this is, in the end of the day, a whole delay discussion. This is what it is about. On the 5X, we said we wanted to be kind of better off by the end of the calendar year, perhaps even faster. That remains to be seen because we constantly, whether it's on a daily and weekly basis, also monitor the progress. Still, I think we can say that we have also solid foundations in the organization. We have a growing service business, a permanently growing service business. We've seen an increasing awareness on the customer side to share the effects of what's being discussed. The 5X as such, although as of today a little bit my troubled child, is something which I think can be seen as really the success product if it's out there and if it's then ready for delivery. Of course we have many really highly talented colleagues among us. We've done, as you can imagine, over the last weeks, a couple of mitigating actions. We've set up a couple of short-term task forces, mostly around 5x, and then the procurement side. For that, we also mobilized some of our best colleagues, and I'm very happy to see that we do make progress there. However, we did also apply some other things, and that is a thing which you will see around the order intake figures in onshore specifically. We've been much more selective in what we want to take on board. We've reinforced the new project approval process, so that was not entirely clear to my understanding in the first place. We've also introduced cross-functional teams to make sure that we have a closer interlink between different parts of the organization. What's the target, of course, is that we regain control, if you wish, over the processes, over our business processes, and that we are also able to pursue our priorities really in the right sense. We would like to make sure that really process adherence is going to be one of the mottos of these days. Also there we observe progress. Of course that, you know, is a continued construction site. For the more midterm perspectives, we tried to formulate that into a kind of program, if you wish. We've in the past had a so-called program LEAP that was mostly around productivity improvements and base productivity improvements that turned out to be quite successful also with the other elements in there, like the India turnaround. Going forward, we would like to make sure that we are slightly more wind oriented here in this context. With our program Mistral, we are focusing on the headwinds. We've identified a couple of transformation measures, which in my view are needed. We look at the portfolio and its complexity. Our portfolio by far is too complex in my view. We will look at technology harmonization, for instance, across the blades, the drivetrains, and the electrical systems. Also there, I believe simplicity matters. We will also continue to review the footprint. The footprint, in my view, is by far too large. Of course, we have the complication here that in this business, many customers ask for something like local content, and then local content in its easiest form may be seen to be a manufacturing site somewhere. The question is really how many local content discussions can we afford? I think unfortunately, the situation is that we have to really be careful here. With the help of Mistral, we're going to continue to look at the short-term issues. We're going to look at the midterm issues around the turnaround in onshore because that's in the end of the day what it really is, the turnaround in onshore. On the offshore side, it's not so much the turnaround situation, but you've seen the growth perspective. We've given ourselves obviously the target to participate a little bit in the market development. That means we have to find recipes to manage the growth, and that growth is really substantial. As far as service is concerned, of course, the topic is that this is now an extremely profitable part, as many of you know. Therefore, we would like to make sure that this continues to be the basis for our success in that sense. Then there's also some further portfolio considerations, more in the long-term view, which we are going to look at. For instance, the value add structure on our side is something which we need to consider in principle. What are we doing internally, what not? That may then lead to additional and other effects as well. At the end of the day, it's a quite comprehensive program, still designed to be a focused program rather, so not everything we can imagine we want to put into the program. Indeed, it's the opposite. We would like to put into this program with a clear focus as few things as possible. Other things perhaps can be dealt with elsewhere because obviously some other things are important as well, but not everything can be done at the same time. What does this mean now for the businesses? For onshore, we would like to make sure that we really continue with our focused approach to the market. There are also price-wise, but also portfolio-wise, substantial differences between the different markets. We need to make sure that we are not doing everything everywhere. We need to apply the price discipline we recently set up. We want to make sure that the portfolio as such is probably going to be streamlined but continue to be perhaps even more successful and also technology-wise more attractive. When it comes to the so-called LCOE, we want to like to make sure that we are amongst the market leaders, if not the market leader. The other levelized cost of energy, this is probably, in the end of the day, one of the most important drivers in this business. Operational excellence, also mentioned by Karim, is something we continue to address here because there is a lack of it. We would like to make sure that we continue with our complexity reduction. Non-conformance cost is something which is a little, our concern these days. I spoke about the optimization of footprint. On the offshore side, we would like to maintain the market leadership. Please remember that, so far we are having a European market share of 67%, in some countries even higher. That is quite something and in my view, not so easy to maintain. We would like to be really part of the game. We would like to prepare also for the future technologies like floating offshore wind. I believe there is quite a lot of potential behind that. We've also extremely promising technological studies and, cooperations with our customers, so we put high hopes into this development. Of course, at the end of the day, we would like to benefit a little bit from the partnership with Siemens Energy, which then is around, for instance, the combined activities around hydrogen and how is that now possible to combine it with, for instance, offshore technologies. We would like to make sure that on the development side, we're not too revolutionary. We rather like to be evolutionary. The big technology steps typically have quite a considerable risk, and we need to make sure that this risk can be managed, and that's what we are intending to have. Technological innovation still continues to be, of course, a driver for the competitiveness in this field as well. There are new technologies, other technologies coming up, for instance, fluid-based bearings for the main shaft and so on. I mean, quite a different approach. On the footprint side, we reckon that we want to be extremely careful with expanding the existing footprint. We would like to make sure that we focus our investments rather into the differentiating side of the product, the scaling up. In other words, just taking two or three more sites or having them prepared for the same product. This is perhaps something we can better do with partners. On the service side, we continue to see that this is, for us, extremely attractive, but also for our customer base. Indeed, we see that the complexity of the product itself is developing, and therefore, it's also required to provide preparations or know-how for this increased level of sophistication. The whole service activity as such is getting more complex, and this is why we feel we are better positioned than perhaps others, certainly than the self-performers in this business. There is additional arguments for us to really go perhaps even beyond the market development. That remains to be seen. We want to be, of course, selective there as well. We want to be technology agnostic in some of the developments because foreign fleet as such, coming from other vendors definitely is part of our scope as well. Profitably so therefore, we would like to continue with this. We would like to develop also advanced solutions on the service area. Perhaps the most prominent, the most recent one is this, what I mentioned here, the revenue-based availability of the turbine. Where we actually do the operation and maintenance around those time slots where the output is most precious in the sense of the cyclical market developments. This is something we clearly have on our radar, and I think we are quite advanced on that. Concluding, there are some rather challenging market conditions, short-term certainly. In my view, we have now defined quite a number of actions. We found a lot of recipes to go forward and to successfully go forward. We see a structural growth long-term driven by everything which was said today. Renewables will be part of the answer of the future. There is basically no way around growth for us, and this is really a fantastic situation to be in. As I said at the beginning, I've never been to a business with such prospects. The SGRE organization that I can tell you is determined to turn around the company. There is a clear will to do it right this time, and we will continue to drive this spirit. As I said, sometimes focus is the key, and I think the whole management team is now increasingly focused on those priorities we define as priorities, because priorities are the priorities, and this is what we need to focus on. In that sense, I believe we are extremely positive going forward, going to the future. I'm sure that the short-term challenges will be overcome. Thank you very much. Thank you, Jochen. We're now gonna go into Q&A. Jochen, Tim, and Karim will be here to answer your questions. We will have about 20 minutes for Q&A. Just an org topic. Just in case you are intending to take the bus to the airport, it will be leaving at about 4:30 P.M. After this Q&A, we will have a short break before we go then into the sessions with Vinod and Dieter on innovation and sustainability. Who has the first question? Sean, you were the first. Thank you. Can you hear me? Yeah. Thank you. A number of questions. Firstly, for Karim, thinking about SES, what are your assumptions around where that gets to by 2025? How tightly related is it to that capacity ramp? At what point are you assuming break even? I suppose I'll start there. I think it's a very dynamic situation. We've seen recently after also the situation, you know, that happened with regards to the Ukraine war, that there is a faster accelerating demand on having, let's say, alternative fuels to connect sustainability and security of supply as, you know, two faces of the same coin. I think this gave us right now an accelerated factor that was not there before this event. This a little bit remains to be seen where it will take us. I think it will be faster. I think by 2025, before this, I would say we were looking at the decade and the end of the decade by 2030 that we'd see this really reaching this point. With the latest impulse, I believe we would see this faster. When exactly, I don't know. We are preparing, as you saw, by 2025, that we will have 3 GW of capacity, and if we need more, we will adjust as we go. Thank you. Jochen, the stable environment, I mean, we're looking at it on the figures you showed, a 16% decrease in onshore 2021 versus 2025. I'm just wondering, firstly, looking into 2023, you know, should we be concerned that there actually isn't any growth in 2023? That this is a little bit more back-end loaded towards 2025? Is the market already maybe too optimistic? And secondly, I mean, slightly longer term, how do you balance this decline in onshore? I get that there's a restructuring angle and optimization, but at the same time, you have to expand to keep up with offshore. Just wondering about kind of priorities there. I mean, it's first of all, the decline in the market in onshore, that remains to be seen if it really comes. Please look at many of the current political initiatives in Europe alone. I think they could say perhaps the picture is going to end up differently. We are not so concerned about that market development. Going forward, I think we have the benefits of having both parts of the business. For instance, it would be probably easier to compensate for the growth needs in offshore with the help of onshore if that is around additional capacities, for instance, on the personnel side. That's clearly the intention that we have these entities brought together much more closely. I mean, there's also much more rigor behind, for instance, a standard process framework in the sense of business processes. So the exchangeability of resources there should be supported, going forward much more than that was the case in the past. And on, on 2023? 2023, on the market size, market volume, I'm not so concerned about that. Thank you. Next question. Ben? Thank you. I've got three, but I'm gonna try and keep them brief. First one is for Tim. On the transmission side on the business, can you just talk about pricing, price conditions? There have been periods in the past where this has gone from an oversupplied market- Mm-hmm. to a tight market very, very quickly. Mm-hmm. What you're seeing in HVDC at the moment, you know, in the past, people have had to book slots in the factory, et c. How do you characterize that pricing environment right now? If you look at HVDC, we're getting there. I mean, we're now having discussions with customers that were not imaginable two years ago, talking frame contracts, direct awards, feed studies, exclusivity. We see that happening. You also see the customers who are more strategic and see what's happening. They're realizing it faster. Others are a bit more. Also, to be fair, it depends how much of a global market you see and if you're at the forefront or more in, you know, in markets that haven't seen a lot of HVDC activity, but we see it going to tight. Thank you. Second one's for Karim. There's lots of good detail on the fix that's ongoing at compression. I get it. But what I really wanna just understand, big picture, step back 10,000 feet down. Tim, what kind of went wrong? We took a very profitable business, actually, in Dresser-Rand with a big aftermarket, teens margins. It vanished from public view for a while. We mixed it in with oil and gas and the rolls business, etc, and now it's loss-making. If you were to say the one thing that wasn't done right, was it the integration? Is it simply the oil price? Is it a volume problem which is gonna change? How would you characterize it? Well, Ben, I can't really comment too much into the past, but I can tell you what we are doing right now is on the grounds of there has been, of course, deferred investments for quite a period of time. There was no investment in oil and gas. I mean, let's remember, like two, three years ago, all the oil and gas companies, including the large ones, were just not investing. This is one of the areas where you also put your big part of your compression business. I think there is definitely a topic with regards to consolidation of the footprint, the oversizing, and I mentioned a little bit what we did there. We did it for a reason, right? We were oversized compared to the market. I think also a third element is really the very clear focus on how to manage projects and manage risks. Where do you really step in and where you don't step in? That's another element. The losses are not necessarily just coming from, I would say the Dresser-Rand side or the Siemens side. It's really coming from which projects you are managing. Understood. Thank you. A final one for Jochen. I couldn't resist. If you had to compare what you're trying to do now, what you're tasked with doing on SGRE with what you did very successfully in mobility a few years ago, and I remember the Velaro trains and all of the hijinks. How would you compare the two for you? What are they similar in terms of challenge? What's the same and what's different for you as a manager? Well, I think perhaps it's fair to say that the train is not a turbine. Beyond that, of course, they are both rather complex technical installations, technical equipment if you wish. They're both business process-wise handled in projects, in large projects and oftentimes under political influence. In that sense, there are many similarities. Therefore, I'm rather optimistic that the toolbox we have at our disposal really is also the right one to take this business into, you know, this, the expected sense of future. I'm more than optimistic there. Of course, the product is different. Yeah. Any more questions? Gael? Yes. For Karim. Two questions, please. The first one is the 9% growth for the addressable market of TI compares to your own expectation of 5% for the business. I guess there's an element of selectivity within the compressor business. Is there a risk that you're gonna miss on the growth opportunities as well in the electrical and automation business as well as electrolyzers? The second question was around the profitability of the compressors business at -7% in fiscal 2021. How much was it in H1 2022? Okay. I think on the 9% CAGR versus our aspiration on the revenue growth, we on purpose did not really put a number. We said mid-single-digit or in line with the market. 'Cause I think this is still, I mean, this is a business area that we put together recently, and I think we are still going through what is the right level to go there. We really look at on this growth business, we want to be in line with the market. On this turnaround business, we want to be selective and really make sure that we are taking the projects that really adds value to us. I don't know the number in first half of fiscal year 2022 on compression, but I can tell you that, and that's what I told Ben, that, if I look at last year compared to where we see ourselves going to end up in this year, there has been a significant improvement. Like we also mentioned the 8%. There's been a significant improvement, and the improvement are grounded with plans. There are plans with regards to shutting down capacity or reducing certain headcounts or some of the projects that has negative gross margins are going out of the backlog. We know these things, and you, when you really overlay it over time, you could see where the number was in fiscal year 2021, where it should land in fiscal year 2022, and where we see it in end of 2022-2025 planning period. I think our plan, our clear plan is that the compression business as a standalone business combined with service by the end of 2025, the units alone will be profitable. By the end of 2025, the combination will be in the target range of the bandwidth we gave. Right. Shall we take two questions from the webcast for Karim actually? If you look at Gas Services, 85% of the installed base is covered by service contracts. Yeah. How much of that is actually long-term service contracts? Around 60-65%. 60%-65% is long-term service agreements. Okay. One question for Jochen. It's about 2023. Even though you don't give an outlook for 2023, the caller is asking if you're comfortable with the current consensus forecasts. I would like to come back to the point that we said we're now looking at the year 2022, and once that is done, we also provide insights for 2023. Back to the room. Will? Thank you, Will Mackie. One question for you, Tim, coming back to pricing. Mm-hmm. You gave an expectation of growth around 5%. Within your assumptions looking forward, what contribution are you thinking about with respect to pricing, given the inflation clauses and the importance of pricing up the commodity effect? I think it depends a bit because you saw the portfolio. I think HVDC has a different pricing power that we're already seeing. I mean, this was revenue, right? What we're doing now, it's gonna trickle down to revenue because some of these longer term projects. I think on the product side, what we're gonna see is a rebalancing. I think there's parts where it's very hard to have pricing power because there's competition from, you know, Chinese competitors, Korean competitors. I think it's much more and if you look at the revenue growth, some might come out, some might go in much more. It's a bit. It's not purely current portfolio look at pricing and margin expansion where you grow. It's, I think it's a mix. The second question. The second question for Jochen. I appreciate it may be challenging, but when you look at your offshore backlog, I think you have about EUR 6.6 billion of orders. You've got about EUR 720 million or EUR 730 million of contract provisions against orders, which is largely in offshore. To what extent can you say you're confident that at least where you are financially, you've sufficiently covered the contract-related risk within the backlog of the business? Well, I mean, you know, we introduced various mechanisms to make sure that in principle the provisions are, you know, kind of adequate. Obviously, we have a couple of projects, not so much in offshore, but in onshore rather, which right now have a not-so-good margin quality, which is why they're called onerous. In principle, we think we can steer around that target, but there are still variables in that game, and this is why we would like to, you know, follow the path which was proposed. That is, a more detailed view perhaps can be shared beginning of August. We have to see that, for instance, for those projects which are the onerous ones, we continue to have material price negotiations per today, which, if the trend continues, that we see another further price increase, that would have an impact then on 2022. Two more questions from the web, and they all go to Jochen. The question is, how interchangeable are the manufacturing processes for offshore and onshore? It also pertains to the technology. How interchangeable is it, and does it help that offshore is growing while onshore is not growing from the capacity loading perspective? Well, I think we have a tradition of coming from different companies, not only Siemens and Gamesa, but then also Adwen or Senvion. Not all the technologies as such are compatible. I believe there is a big potential in driving further standardization in these elements. Once the standardization is driven further, then of course this will be beneficial for then also a potential swap of resources if helpful and needed. The second question is then about the 8% margin target, if it's still there, what would be the levers in terms of price, cost, and technology? Well, we put it under review. Therefore, we're looking at where and how we can achieve that. Right now, this is part of the ongoing investigations. However, I have to tell you, as I said, I've never worked in an environment with such prospects. I honestly do believe that this is only a question of time, and I believe the 8% can be achieved. Thank you. We've got time for one more question from the audience. Phil. Yeah. Thanks. It's Phil from Berenberg. I've got two quick questions, if I may. Actually, we can stick with one. It's for Tim, and it's in terms of this accelerating investment in grid infrastructure. I appreciate there's a need for this to happen, but it's at a time when we're talking about many tens of billions of dollars of incremental investment at a time when consumers are struggling to pay their current energy bills. Mm. I'm just trying to figure out how we square that circle, and if that investment is to continue near term, who shoulders that pain? Is it utilities? Is it consumers or governments? Thanks. Really good question. I think always keep in mind what I said at the beginning of my presentation. You cannot do all the wind build-out if you don't build the transmission. I mean, it all sits together. The second is look through the whole value chain. It starts at the beginning. Copper goes up, all the raw materials go up. You know, it's gonna trickle through the whole value chain. My opinion, there needs to be a serious discussion in terms of how much are we willing to pay as a society for clean energy and do this. I wouldn't exclude also higher prices, at least until costs come down, technology advances. But for now, I think that's a discussion that will need to happen. How it ends, I don't know, but I think it's a discussion that needs to be put on the table. Okay. You get your second. Yeah. My second topic, different one for Karim. On the topic of heat pumps, you talked about a 65% growth rate, CAGR, which sounds pretty attractive. I'm just trying to clarify, is that your view on the growth rate for district heating, i.e. products or a market which is within your scope, or does that include stuff that's out of scope for you? Also of the market size that you referenced, what's your current market share, please, in district heating? Yeah. We are referring to the market of district heating in this regard. Of course, there is also, and Christian talked about that, you know, the connection of what we gain as an experience from gas district heating and then turn it into the industry, you know, with higher temperature heat pumps and so on. We are right now in the discussion in the district heating. I mean, the market's small so far on the heat pumps. Most of the district heating happens either with gas-fired boilers or even coal. On the heat pumps, the market is small, but we are in this market very well positioned. I think our product is really gaining a lot of traction. That's why you see a very strong CAGR because we start from, I don't know, EUR 300 million, EUR 400 million right now. It's small, right? We see that it will increase very much. The average size right now is between 10 MW, but we are also seeing that this is increasing, that goes up to 50 MW as well. The projects in our pipeline is in the range of 10 MW each. Thanks. Good. Super. Another 10 minutes break. Thank you. Take the time to get some sunshine. Thank you. Vinod will be talking about innovation and Dieter about sustainability. There will be another Q&A with Vinod and Dieter after that, and then a wrap up. As I said, end is about 4:00 P.M. and the bus at about 4:30 P.M. Thank you so much. Thank you. See you in 10 minutes. Thank you. Right, everybody. We've got about two minutes to the grand finale. All recharged and recaffeinated, you know, at the desks in two minutes. Right. Everybody on the web, I think we need one more minute for everybody to return. Welcome. Welcome back, everybody. As I mentioned earlier, we have two sessions, one on innovation and one on sustainability. We're starting with Vinod Philip talking about innovation. Vinod, over to you. Thank you, Michael. Good afternoon, and this is almost the final lap, and I have the privilege to be sharing what we are talking about innovation with all of you at the end of a long day. First of all, thank you once again for listening across the course of the day so intently. What I wanna do in the next 20 minutes or so is talk about how we are approaching innovation. From my perspective, innovation is not just about product innovation, but it's also process and business models. What you will see in the course of my presentation are elements that you already heard from my colleagues earlier today who were talking about areas of growth, areas of transformation. Karim talked about heat pumps. Tim talked about how the HVDC market is developing. What you will hear in the course of my presentation is how all these dots are being connected. I think the place to start is why do we innovate? From our perspective, our job in the innovation community is to provide the businesses, the business areas in Siemens Energy with the offerings, with the options so that they can be successful in the market that is dynamic and fast-changing. In the course of my presentation, I wanna make sure that I get across these five messages to you. The first is that we are going to be dramatically shifting more and more of our innovation resources towards service and what we call fields of action. Fields of action are areas that we have identified which are going to be key for an energy transition with a net zero future in mind. These fields of action are cross-company task forces. These are groups of people who have different backgrounds, different expertise areas coming together to develop new products, new processes, and new business models that then our sales teams can take into the market. The second key message to get across is that we have established and will continue driving a very active portfolio management approach for our R&D investments. We will have clear KPIs, and you will see them in a minute, that we will not just look at what sort of projects to continue, but as important, rigorously and quickly stopping projects that may not be giving us the returns we expect. The third is having for our investments in R&D and innovation, a clear business case, a structured business case that is looking at customer paybacks. The fourth, and Christian talked about this in the morning in his opening presentation, is we also want to change how we innovate. Today we have an innovation community that is quite distributed, and we believe that we can create more focus, more speed when we start to bundle them in the right ways, in the right parts of the world. We will talk about how we are consolidating our innovation competencies in four global innovation centers that are also going to be much closer to the markets, the regions, and the customers. Last but not least, also something that I hope you also took away from all the presentations that my colleagues made, where partnerships are going to be key to our innovation strategy. Because we believe partners will help us reduce our own R&D expenditures, will help us de-risk what we do, and also reduce time to market. All of which, for us, are essential elements of a fast, effective innovation process. You know, some of these key facts and figures are known to all of you, but I would just draw your attention to three areas. One is we have a tremendously capable workforce around the world that has got a lot of experience, passion for innovation, and our job is to tap into this and leverage it. We also wanna make sure that as we look at our R&D investments going forward, they are all accretive in the margin band that Maria and Christian talked about today. Also, to make sure that those innovations that are service relevant, of course, are at a much higher margin level in line with the service expectations. We are already in a good way in terms of how we innovate with partners. We are working with 22 startups around the world. We are working with 10 of the top 25 universities. Together with all of this, we are also getting some positive feedback from the industry and from customers. This is a good base for us to start from, but we recognize that this is not enough, and we have to continue developing from this strong base. I talked a bit about KPIs, and for me, KPIs are really important. Coming into this innovation role as the CTO, having run the service business for a few years, for me, customer proximity, customer focus in the innovation practices is really important. Also what's important is to drive bottom-line impact. We have defined these set of KPIs, and I would draw your attention to three of them. The first is, as you can see, we are dramatically increasing the amount of innovation we wanna put towards service, and this dovetails perfectly into what my colleague Karim presented so well about how the service opportunity that lies out there for us is something that we can maximize and monetize. The second, as you can see here, is how we are shifting our R&D more to the fields of action, and I will come to that in the, in the next slide. What do I mean by these fields of action? In 2020, the amount of investment we were putting into these new emerging areas, as you can see, was quite low. We will dramatically ramp this up. In fiscal 2023, our aspiration is to have over 25% of our R&D in the GP, the gas and power R&D, going towards these fields of action, and we will continue to ramp it up because we believe that these fields of action, the innovations we do in these fields of action, open up new revenue streams that can help complement some of the market challenges we face in some of the core businesses as the world continues to decarbonize. The other thing I would like to draw your attention to is the on-time delivery for sales. For me, innovation is about customer impact. I specifically differentiate innovating from inventing. For me, what is important for an innovation community that is effective is a close connection to sales. Making sure that we are able to co-develop offerings together with strong input from our sales and marketing colleagues around the world, and then making sure that we understand what makes sense for them to take to the customers and set targets based on sales release dates. Because this is what gives the real focus to innovation, because now we are orienting around the customers. We already have a pretty decent starting point where we are in terms of key projects, and we wanna continue raising the bar when it comes to on-time delivery for sales releases. We wanna do all this by also reducing our own R&D as a percentage of revenue. This does not mean that we will do less innovation. What this means is two things. One is we will innovate more effectively, and secondly, we will partner up. You will see that in one of my following slides where through partnerships, we can also get co-funding. We will also very aggressively, from the innovation strategic perspective, look at the public funding programs out there around the world that are incentivizing R&D. We also will work with startups to make sure that we are leveraging their access to capital and using our ability to scale and manufacture and take it to market. This is how we wanna have a comprehensive set of KPIs that are also looking at what we do, how we do it, and how much we spend doing it. I talked about the five fields of action, but before I do that, I want to maybe frame the landscape a bit. When I look at the energy landscape, there are three different time horizons and three different ways to cluster it. The first is what you see on the left. That is what we have today in the energy market, established technologies. We as Siemens Energy are of course not playing in all of these, but these are technologies that are established today, many of them forming part of our core businesses. One part of innovation is to make sure that we continue to incrementally improve the competitiveness of our core products. Karim and Tim talked about that. The other end of the spectrum is what we call early stage development. These are technologies that are today probably 5, 10 years out, we believe will play a role in the next decade. It's important for us as an integrated energy technology company to start monitoring these, looking at these, and seeing how we can get certain early-mover advantages in some of these areas. The core focus of our transformational innovation is going to be in the middle section, which is what we call the fields of action. We have defined five fields of action. We believe that these are areas that are going to be extremely dynamic and extremely needing innovations from companies such as Siemens Energy. The first is decarbonized heat and industrial processes. The second is Power-to-X. The third is resilient grids and reliability. Given what's happening in renewables, the ability of the grid to be flexible, to be resilient is going to increase. Service will remain a backbone for our company, and this focus is not so much on the core service business, but what else can we bring in terms of digital capabilities, like digital twins, for example, to improve our ability to intervene at the right time to provide customer value. Condition-based interventions, not just time and periodicity-based interventions, which was the old model. Last but not least, in an energy matrix that has got 40%, 50%, 60% renewables, it cannot be reliable without storage. We do see storage as an area that is going to be dramatically critical. At the same time, what's important for us, and you will see that in the next slide, where we play in the storage market and how we play in the storage market is going to be really important because not every part of the storage market is of interest to us simply because of the complementarity to our strengths and the ability to be profitable. Also, you know, Karim talked about it, for example, in heat pumps, which is one of the topics under decarb heat. The CAGRs are pretty high, you know, 65%, so forth. For us, all of these areas, we have taken a very deep look at seeing how do we drive in specific technology elements in each of these five fields of action? What is the overall target? We believe that this is an opportunity for us that very few companies can satisfy. One of the biggest challenges, I believe, in the energy landscape is focus, because there are so many different technologies out there, so many different options out there, and the risk is you go after everything and you dilute your efforts. One of the things that we talk about a lot within Siemens Energy in our Technology Innovation Council, and Christian really makes this a point to say we need to be super clear as much on what not to do as we want to focus on what to do. Because very often it's the other stuff that we chase after that dilutes everything else that might be good. What we have done is we have looked at these five fields of action and underneath these five fields of action, defined a subset of topics. This subset of topics is what you see on this chart. We are not trying to do everything, but we do believe in certain areas like high temperature heat pumps that Karim presented. We do believe we have certain capabilities, certain strengths that give us a unique advantage in that area and gives us a chance to differentiate from the competition. Similarly, when we talk about energy storage, we are not going to become a battery manufacturer, but we do believe that we can procure cells from suppliers, package them in effective ways, integrate them together with our battery management solutions, and then provide an offering to a customer either for an onshore or marine application which is differentiated. These markets are rapidly growing, and you will see that in a minute. We have also made some estimates about these markets, but one of the things to be very clear about is the estimates we make today are probably going to be in two years' time revised because these markets are emerging so fast. In each of these areas, one of the key things we look at is do we partner up with somebody? How quickly can we get a pilot done? Because the real learning happens in pilots. Then how quickly can we engage with customers? One of the things I want to highlight over here is, for me. These technologies are also a bit fluid, which means that today I stand in front of you, and I talk about these technologies. Maybe 12 months from now, given the pace of innovation, maybe 10%-20% of these will be stopped, and then we will look at others. But at this point in time, topics such as high temperature heat pumps, fuel cells, solutions for industrial waste heat recovery, offshore hydrogen, direct air capture, and so forth, we believe that these are areas that there is a lot of good potential, and we will continue to drive this moving forward. The other thing I would like to highlight, and maybe also just to frame this so that all of you understand, not every topic on that slide before is at the same level of maturity. What we have done is we have defined three time horizons, the short term, the midterm, and the long term. In addition to the time horizon, there are two very important dimensions we look at. One is, what is the readiness of the technology? We have a stage gate process called TRL, Technology Readiness Levels, from TRL 1 through TRL 9. Depending on certain milestones these technologies have to pass, they mature in the technology readiness level. The second, and probably even more important dimension from an innovation perspective, is business model and market readiness. Very often, and one of the best examples of this in my experience was carbon capture. As a technology, carbon capture was developed 20 years ago and was also on a pilot level, pretty much ready for application 12 years ago. But the market wasn't ready. Even today, there are some areas where carbon capture works, but in terms of global scale, probably it will be towards the end of the decade where carbon capture becomes really an attractive market. Looking at technology readiness and market/business model readiness are two dimensions that we take into account. When you look at these selected technologies as an example, industrial heat pumps, Karim talked about it in the context of district heating. When you look at industrial heat pumps in the context of district heating plus efficiency improvement industrial processes, this market could be as big as EUR 5 billion global market over the next five to seven years. One of the things we wanna also do is, as we get into these markets, aim to be a significant market share. Now, that will depend a lot also on how the market evolves, but market share development, market share growth is also going to be something that we will be carefully tracking. Another technology that I'm really excited about because it was a great example of innovation from within the company, and this is the technology that's in the bottom left called ARES, the Rotating Energy System Stabilizers. The great thing about this example was that it was a bottom-up, grassroots level development. It was a group of engineers in one of the factories in Mülheim who felt that the know-how we have around generators can also be used for grid stabilization. They worked hand in hand with the colleagues from Transmission, tomorrow's Grid Technologies, and came up with offerings that are helping customers proactively stabilize the grid. This has been a business model that's been picking up really fast, and between 2021 and 2022, there has been a step improvement in how this has been accepted in the market. We clearly focus on short-term technology impacts because this is what we believe is going to provide the fuel, the wins that we can then focus on for the mid and long term. We take the sort of a portfolio approach, so we are not putting all our eggs in one basket. At the same time, we are not going after every basket, and we are making sure that we have the right mix. In general, the way we are looking at allocating our R&D in the future is about 50%-60% will be still focused on our core business because we do believe that the profitability and the cash generated from there is essential for the future. The remaining 40% or so will be distributed between these fields of action for the midterm impact, and then maybe 5%-10% looking at some of these long-term bets that may or may not pan out, but we do believe is important for a company that wants to be a transition leader for sustainability. We are also now looking together with the teams, working together with sales, marketing, and also the cross-functional, cross-company task forces of putting some numbers behind it. On the left side, you see our projections on how we believe the addressable market can evolve. I wanna be super clear, this addressable market is based on the topics or the technologies you saw two slides before. So this is not the entire market around transitions. It's about what do we believe are the markets we can address based on these technologies that we've identified under these fields of action. Now, I would have loved to have put a lot more granularity in the revenue numbers, but of course, at this point in time, these are still quite early. I can tell you when I look at where we were back in 2020 and what we are seeing coming up in the pipeline, Karim mentioned that the way the heat pump pipeline is growing, it's almost exponential. We see a potential, which of course now has to be taken by the businesses, validated by sales, put into our sales pipelines to see what can be the revenues that we can start showing in the business plans and so forth. The potential for growth here is tremendous. Of course, also the caveat that we are starting from a small base. We do believe that over the course of the next seven years, these five fields of action can become a tremendous opportunity for the company as we continue to shape our future. We also will correspondingly start shifting R&D dramatically. As I mentioned earlier, just from this year to the next, we will start shifting our R&D where over 25% of GP R&D will be going into these five fields of action. We will continue to drive this as we look into the future. It's gonna be almost a five-fold increase that we will have to drive over the next years. The important thing to highlight here is it is made as a business decision. We have a technology and innovation council that makes these decisions. The council consists of the managing board of Siemens Energy, plus a few experts, myself, and then we sit down every quarter, look at what needs to be invested in, we bring all the different perspectives, and we have this sort of a business-oriented innovation approach which we believe is the most effective way to shape our future. The aspect about the innovation centers is really important because one of my learnings, I've been in this space for 25 years now, most of it in R&D, product development, and innovation, is the faster you get to a pilot, the faster you get to a prototype that a customer can work with, the faster you will learn. So for us, these four global innovation centers, the one in Shenzhen was established last year, and the ones in Orlando, Berlin, and Abu Dhabi will be inaugurated over the course of Q4 and Q1 of next year. These innovation centers are going to be responsible for shaping the activities around these five fields of action. They will be spaces where we can co-create with customers, we can bring in startups, we can work with partners, and make sure that we are going into a rapid prototyping approach. Also, these innovation centers will have a clear focus to bring external funding because that external funding is a great way for us to augment our investments. Of course, it's gonna be a place to communicate, to show the power of the innovation power of Siemens Energy, and also become a place that can attract talent, and in the future, also have people transitioning through the innovation center. When they come in new, spend time in the innovation center, learn about the offerings of the company before moving into the business or a region, and to drive the business from that angle. These four innovation centers are going to become the cornerstones of our future innovation approach. We also have partnerships set up, and the way I look at it, we have four different reasons why, from an innovation perspective, we need partners. The cool thing is, as you heard from Mr. Looney this morning, our partners see the value we can bring, either in terms of go-to-market access, in terms of industrial know-how, in terms of scaling capabilities. We are also an attractive partner to them. We look at four different dimensions for innovation. One is partners who can help us accelerate what we do. The second is partners who can help us get either access to a market or help us localize. We also look at partners in areas where we believe strategically we need supply chain resilience. The fourth is partners who can help us close gaps in our technology or portfolio. Because one thing is clear, we don't want to invent it all by ourselves. We do believe the markets are so dynamic and there is so much innovation power out there. If we can find ways to complement each other, then we also become much more effective as an innovation organization. I will start transitioning to a close now with a few examples because I want to also highlight that these are not just words on a slide. These are real specific cases that are creating impact. We talked about high-temperature heat pumps. One of the things that is cool over here is it is a complementarity that builds on our core competence. We have deep knowledge in compression technology, system design, and integration. This allows us to go to the market as a first mover because today there is no other OEM who can produce heat pumps at the temperatures we can operate them at because of the refrigerant technology we use. Our heat pumps conceptually and also in early stages can go up to 150 degrees centigrade and also up to 70 MW thermal. This is something that is unique. We also start to see some early customer traction. With these pilot projects, for example, the one in Potsdamer Platz in Berlin, we will learn from it and build on it. I don't need to say too much about gas turbines and gas turbine upgrades because I think Karim talked a lot about that very effectively in the sense that at the end of the day, gas turbines are not a sunset technology. They are a very clear transition technology, and as these gas turbines become more fuel flexible, either hydrogen or green fuels, they also become a key lever of decarbonization. Finding ways to help our customers who have these turbines not become stranded assets by upgrading them, improving their efficiency, makes it not a liability for them anymore, but an opportunity. Similarly, when we look into the midterm, we know that the hydrogen economy will come, and whether it comes in the middle of this decade or towards the end of the decade remains to be seen. Having the technologies ready, having the systems ready, is really important for us from a midterm perspective. Over here, I think it was already mentioned earlier today, one key thing that we bring to the table is our ability to scale, design integrated systems. We already have very strong IP in this area, and now with the gigafactory in Berlin, we will be able to also show how quickly we can scale up at a level which I believe is quite unique. As digitalization grows in the market, the amount of data centers and the amount of emissions from these data centers is going to become increasingly relevant, and we are seeing that today. We are getting a lot of interest from the big five digital companies who want us to work with them in bringing our large megawatt-sized fuel cells as a way to displace or replace their diesel gensets for reliable power for data centers. This is an opportunity which we believe is going to be key in continuing to drive our adjacent markets and really make Siemens Energy this integrated energy technology company that, as Christian and Tim showed, connects the dots across the chain. With this, I want to wrap up. I want to recap the five messages. The first is we will be driving innovation in service and these new fields of action. We will have a very clear KPI framework that assesses progress, both good and bad, and makes the appropriate decisions in a timely manner. We will be making these investments based on clear payback. We will consolidate into these four global innovation centers that become the cornerstones of our innovation structure and strategy going forward. Last but not least, it is all about setting up the right partnerships to make sure that we save costs, we de-risk, and we drive shorter time to market. Thank you for your attention, and I'm looking forward to the Q&A after Dieter's presentation. Thank you. Thanks a lot, Vinod. Actually, I mean, innovation and sustainability is brothers and sisters at the same time. I mean, we are talking about the future of technologies and how we save the world through sustainability. Thanks a lot for giving me the opportunity to shed some light on our sustainability agenda. As sustainability is so much at the core of our strategy, some of the messages you might have already heard today, but I try to give it a little different angle and shed some light on why sustainability is so important and is such a great business opportunity for us. First, the electricity sector needs to decarbonize first, and we will benefit from that. Our technologies help already today in decarbonizing the entire value chain. Third, we act already now to decarbonize the value chain. Last but not least, we are super transparent in our ESG performance. To start with, we had it a couple of times, the energy trilemma. Energy needs to be sustainable, secure, and affordable. Of course, being the head of sustainability, I have a slight bias towards sustainability. If you look at what IPCC is writing in their latest report, climate change, given the geopolitical situation we are currently in, climate change still is a defining issue. There's two quotes I would like to give. We need immediate action across all sectors to keep the 1.5-degree scenario in reach. This is, let's say, the call for action. The good news is there are options available to halve the emissions by 2030. Honestly, after having heard all these excellent examples today, I ask myself whether IPCC has already had the slides of our capital market day today, 'cause it's really the technologies are there, they just need to be implemented. Sorry. The good news is also, if you look at the world map, what countries do already have a net zero target, we see that 83 countries have a net zero target, and this covers 74% of global emissions. The color coding talks about the degree of implementation, and of course, some of the countries do have it in law, others have it as a, let's say, political pledge, but 74% of global emissions, that's the good news. Even better news is the electricity sector needs to decarbonize first. Electrification is one of the key pillars, maybe it's even a precondition for deep decarbonization. If you electrify, of course you need a good grid mix, low CO₂ emissions in the grid, so that you really can deeply decarbonize. That's why a couple of countries have laid out dedicated net zero targets for the electricity sector, which are way before their country net zero target. We talk about the thirties, where in these countries, the electricity sector needs to be decarbonized. What happens is, of course, that the companies are taking care of that. We see today more than 5,000 companies do already have a net zero target. Many of them, our customers. BP is one of them. Bernhard mentioned it this morning. Actually this is where we come into place 'cause we help those customers in decarbonization. We help with new products and new solutions which are low or zero emissions, and maybe even more important, we help to decarbonize existing assets with the customers. Huge business potential here. I think these examples show how important decarbonization is in our overall strategy, and that's why we, of course, have made an inventory of our emissions. You can see easily in the upper line on the emissions which are connected with Siemens Energy, it matters most to take care of the emissions at customer site, 'cause that is by far where we, in our total inventory, have the highest impact and the highest emissions. Still, I want to briefly mention and touch the climate neutral program which we have. It was incorporated very early, even before the carve-out. We said we will be climate neutral in our own operations 2030. I think this is super important to have this target because it has also an impact on employee engagement. When we talk to our employees, they are eager to contribute and come up with idea how we decarbonize. By the way, if you think 2030 is maybe not ambitious enough, there is sub targets. It's 2023, we want to be at 100% green electricity, and you can see this little icon here, we have a science-based agreed target for our own operations as well, and they ask us to reduce our footprint by 46%. Actually, they ask us to do that by 2030. We are more ambitious. We want to achieve that by 2025 for our own operations. There's really focus on that one, and I think this is super important. We talked to our suppliers, and actually that was done by the end of last year. We talked to our suppliers also to find a target which is ambitious but realistic, to reduce our supply footprint. We came up with this 30% in our supply chain emissions. Last but not least, the 28%, as I said, it is aligned with science-based targets, so it's in line with the 2-degree scenario. We will reduce our footprint by 28% by the end of 2030. I think it is extremely important to have these kind of targets. For me, it's a midterm target. You probably think midterm in ten years is long-term, but in sustainability, things are sometimes a bit slower. Twenty-thirty, it really is important to have these midterm targets to make sure that we are act accordingly and that we steer our business towards this target. Our aspiration, of course, is to go beyond that. At one point in time, we will reach net zero across the entire value chain, and that is our aspiration to strive for that. In the next slide, I would call it a kind of a scenario, 'cause we went through a discussion and went through let's say scenario, how would it be possible to reach net zero? You see from 2019 - 2021, we already achieved 9% reduction in our emissions. This is actually ahead of the trajectory we are asked for from SBTi. The next one, I want to draw your attention to the portfolio adjustment and growth. This one is a very small box, but it has a very important message in it. Because our business growth, of course, is connected with additional emissions, but we will balance that through the portfolio adjustments you are aware of. That means on the way forward, our business growth is in terms of CO₂ emissions neutral, which I think is a very strong message that we can convey. We have a couple of other levers, energy efficiency and digitalization will also bring down our CO₂ footprint. We have the element of electrification, and we talked about that, how important electrification is and how the grid mix will change our CO₂ footprint. This is also an important element. We talked about the fuel shift, green fuels and this is maybe the covering word for that. It could be hydrogen, it could be e-fuels, it could be biofuels. That will also have an impact. Blue Portfolio, Tim was touching on that one, without the F-gases, with a huge impact on climate. Last but not least, carbon capture and it could be post-combustion, directly connected to the gas turbine. It could be in the industry, but that also will have a huge effect on our footprint. As you see in the color coding, this connects very well with what we now show to you in terms of readiness and maturity of these technologies and the markets. Clearly the focus in this decade will be on the electrification element. That will have the biggest impact. There is some insecurity towards the green fuels and the carbon capture, which we see having a bigger impact. We are starting from the thirties in the next decade. So that is what we expect. That is a nice bridge 'cause, I mean, Christian was also mentioning this morning he wants to have clear figures and topics we work towards. This gives us a basis on the discussion on how to manage our CO₂ footprint. The next slide actually gives additional concrete actions, what we are doing to manage our footprint. As said, the ambition is to decarbonize the entire value chain, so we have regular discussions. We have a sustainability council which consists of Christian heading that as our CSO, the division heads and the region heads, because it's also important to have all the regions in these kind of discussions. We have regular progress review and taking care of our footprint. Senior management is to a certain part incentivized on greenhouse gas emissions, so this is part of our senior management incentives, which also of course creates awareness. We want to integrate greenhouse gas emissions in business decisions, and here are a couple of examples. We already have today a transparency of our huge projects in the sales pipeline regarding their CO₂ footprint. We are piloting in one of our businesses a kind of a CO₂ budget, where we say, "Okay, you have this amount of CO₂, which is allowed for this area of business, and then please calculate your sales projects and see how you fill up this budget, but make sure that over time, of course, this budget is decreasing and we need to shift the business towards lower carbon emissions," which is of course also very important in managing towards our targets. We are currently developing ESG criteria, which we want to also apply in our R&D and portfolio strategy, also to make sure that not only decarbonization but also the social and the governance aspects are reflected. Last but not least, we implemented EUR 100 CO₂ shadow price in our infrastructural investments, which is also helping us steering towards low carbon technology in our own operations. Last but not least, we are transparent in our annual sustainability report and also CDP. We adhere to a CDP framework which gives a lot of details around carbon topics. You are invited to also go through that. I alluded now on decarbonization 'cause it's at the core, but of course I at least want to briefly mention sustainability is much more than decarbonization. We have our sustainability program more or less built on two pillars. It's decarbonization, and it is what we call responsible operations. Responsible operations, I mean, there is clearly topics with no compromise on, like health and safety. No compromise on health and safety, no compromise on health and safety, no compromise on compliance. As Christian mentioned this morning, we are a people company, so also the question of inclusion and diversity, people development and employee engagement, super important that we take care and want to have engaged employees, 'cause in the end it will lead to better results. This program nicely fits between our company purpose on the one side and on the UN SDGs, and we selected five of those SDGs which are at the core and where we have the biggest impact. The targets you also saw, which we communicated, so I think that is okay. I said we are very transparent, so if you have the chance, have a quick look in our sustainability report. It's quite comprehensive. It is about decarbonization. It is about the other elements of our sustainability program. It consists also, which I think is very important for the investors, it also has a TCFD section talking about this framework which is more and more relevant. On the left side, you see the ratings which we receive from the rating agencies. Also on the right side, CDP, I said, is a questionnaire. We adhere to that and report on that one. EcoVadis, and this is an interesting observation. EcoVadis is a customer platform where customers ask us to provide sustainability data. We saw this year more than 50 inquiries and requests from customers to clearly check our sustainability performance. For some of them, this is a precondition to stay in contact and in business with them. Also a very important element to be transparent here. To conclude here, we will benefit from the early decarbonization of the electricity sector. We have all the technologies at hand which are needed. Our technologies help to decarbonize where it matters most. We act now, and we know how to decarbonize our value chain, and we are transparent on our ESG performance. Now, thanks a lot for your attention. Now moving into the Q&A with Vinod. Yeah. Thank you, Dieter. Thank you, Vinod. We've got about 20 minutes for Q&A on the subject, and then we have a wrap up later by Christian. Who wants to raise the first question? Nick, go ahead. Thank you. It's a question on for Vinod mainly. We've heard digital twins mentioned twice in the presentation so far, once with yourself and once earlier. Can you remind us of your software capabilities and whether these digital twins you're developing yourself or whether you are subcontracting that part of the business? Thank you. No, these are twins that we develop ourselves, and we have a digital software team that is actually part of our, in the future, the Global Functions setup that is going to be developing products and software for the business areas. This is something that we do ourselves in terms of the capability building. In some cases, we do work with partners if we wanna have access to certain computational capabilities, but the core of this is something we develop ourselves. Thank you. Any questions in the room? This is core to our strategies, so there must be some questions. Phil. Yeah. Hi. Thanks. Is this on? Yeah. I've got a question on SF6 gas-free portfolio. This is something that we're hearing a lot about from competition as well. From the outside, it's hard to get any indication of market share evolution in SF6-free gas products. I was wondering if you can comment on customer adoption of these kinds of products at this stage, and also how market shares are progressing. Thanks. Yeah. I think it's a really good question, and we are starting to see customer interest coming in. I think we see this picking up in Europe a bit, but this is still some ways to go before we start to see the full scale adoption. Because as of now, still from a customer perspective, they don't feel the pain of having to go with a technology that requires them to invest a bit more, and also in terms of a pricing point of view would be something that's a bit higher. We are seeing early adoption, but this is still in early stages. Thanks. Just in terms of market share evolution, is it too early to get any? Yeah ...idea? I think at this point in time, what we can safely say is that we are one of the leaders. Clearly from a market leadership point of view, we are well ahead, but in terms of how the market share develops, I think it's a bit too early right now. Thanks. Any more questions? Sean. Thank you. Vinod, just thinking about your midterm opportunities. I mean, we've got some selected examples in the slides. I mean, if you had to put your money on one. I think the one thing to realize is this road to net zero is not going to be a single technology play, right? From my point of view, I think it is as much about how we package our offerings today and take it to market that is going to be as important as the technology itself. That being said, I would really believe that one important element that is going to be part of this innovation strategy, which is a highly under-addressed market, is the decarbonization of process industries. Technologies from our portfolio that are really going to help electrify and automate and decarbonize process industries will probably be after our core businesses, the next big area from an innovation point of view, where we feel that we can have a lot of impact. I think that's the space which also I think Christian talked about, Karim talked about. There is a massive opportunity which we believe today is underserved, and I think that's where we should focus on. It's not just about developing the next fancy, shiny tool, but really how do we get the technologies that we have, how do we package it, how do we understand the industrial processes, how do we bring heat pumps, how do we bring electrification solutions into process industries? I think that's going to be the place where the bang for the buck will be the highest. Thank you. Can I also ask on your partners, how that works in terms of IP? Yes. It's a pretty open spectrum. In some cases, we bring our IP and they bring theirs, and we actually do not co-mingle. In other cases, we do decide to do a joint development, and over there we would have the option of co-owning IP. In other cases, we would not have anything like that. We actually keep a pretty open range. In some cases, it's purely a service agreement. I think we also keep the options open on how we wanna use the IP, because I think very often we get too hung up in the IP game too early. In my view, sometimes the IP discussion can be too premature. Let's get into working together, understand what each party brings to the table, understand what each party gets from the other party, and then get into a go-to-market discussion faster. We have the full range. Thank you. Will. Thank you, and another question for you, Vinod, please. When I look at slide seven, where you've laid out your set of key technologies, when you look across that sort of sweeping range of areas to invest, where do you think you can build up the most sustainable competitive advantages through the partnership networks and the IP? Perhaps on the other side of that mirror, what would you say are the areas where there's the greatest, if you like, race to the forefront of technology where there's perhaps most risk because of competition from the USA or from China, for example? I think if I look at the, you know, for me, I look at the fields of action because I think that's where I would say we have the greatest opportunity to play a competitive space, right? So any area where we can bring our integration capabilities, so systems design, systems packaging, being able to model multi technologies, hybrid technologies like a gas turbine with a battery or a marine fuel cell fit into a certain marine operation or bringing in certain remote monitoring into process industries. I think these areas where we can either bring in our technology or acquire a technology, but package it in an effective way, I think that's where we have our biggest differentiator. Our ability to package and integrate on a system level is quite unique. I think in terms of risk, I would say some of the technologies that you saw on the long term, right? When you talk about batteries. I think that when you talk about long duration utility scale batteries, lithium-ion is not going to cut it. We have to look at an alternative. We can go down the thermal storage path, we can go down the heat storage path, but an area that is interesting, but I'm not convinced yet might pay off, but we are looking into it, is redox flow batteries. Because flow batteries have the potential to be at large scale, long durations, but there are still fundamental materials issues that have to be overcome. I think it's a combination, but for us it is okay to take that sort of a portfolio approach because sometimes with these long bets, you learn something along the way which you don't expect, and that then comes back and feeds into another area that gives you an unexpected benefit. This is how I would play that whole portfolio approach. Nick? Thank you. Another two from me, please. On your R&D strategy, you show your R&D intensity metrics 4.5% of sales dropping down to below 4%. That's quite an unusual direction to go in. Most of your peer group are increasing R&D as a percentage of sales. Most of the whole group has seen it increase over the last decade. Why are you reducing investment in R&D? I think the important thing, at least from my perspective, is it's the effectiveness of the R&D that we should really look at. It's not just the volume of money, right? I think that there are three things we will do to make the R&D more effective. One is the approach, how we use the resources we have, right? In terms of agile methods, in terms of task forces, in terms of MVP-based approaches will make us more effective in the R&D we do spend. The second is we will augment the R&D we invest with external funding. There is a huge opportunity for us to get external funding, which is not our own expenditures. That is the second, and the third is co-development. When you start co-developing with partners, you don't necessarily need to invest everything to develop everything from scratch. These three things for me say that we should be able to reduce the absolute internal spend with no compromise on effectiveness. Thank you. A question for Dieter. I'm looking at slide six and seven from your presentation. Forgive me, I just got slightly confused. At 2030, what is the Scope 1 and 2 emissions reduction you're committing to? To 2030? Yeah. It's 28% in our Scope 3 downstream, 30% Scope 3 upstream, and net zero Scope 1 and 2. It's a net zero commitment by 2030 on Scope 1 and 2? Correct. Thank you. Oh, Phil. Another question. Yes. Just another topic on the ESG theme really. I guess the question about ESG has been around for several years and I guess we've been in a pretty good macroeconomic and geopolitical environment, and that's changed quite a lot in recent months. Do we see any signs of ESG topics from customers potentially being a nice to have historically and increasingly in focus, but perhaps that might, you know, ESG topics if there's a premium associated with that, go on the back burner? I ask 'cause there appears to have been an article on Bloomberg today about, you know, Germany planning to bring back coal and oil burning in the event that Russia switches off gas. No one wants ESG to go backwards, but I guess there's a geopolitical and macroeconomic reality that we need to face near term. I mean, the question is really what happens short term. Sure. I'm perfectly convinced that the overall geopolitical situation does not change anything regarding the attention on climate change and how to decarbonize. It might be the case that there might be short-term a different focus, to be honest. At least on my desk, there has not been any customer request saying, "Hey, we change our behavior." Exactly the opposite actually. If you look, for example, the announcement Allianz gave two or three weeks ago, it seems like despite the geopolitical situation, topics continue and focus on climate change and of course the mitigation of climate change. If there are no more questions, I would say thank you to Vinod and Dieter. Thank you. Ask Christian back onto the stage to wrap up. Christian. Yeah. Thank you very much, Michael. First of all, thank you very much to everybody at home on the screen and everybody here in the room for your patience. You walked with us through a very busy and dense day. Many thanks for staying with us throughout the day and absorbing all this information, for all the good question and discussion. Highly appreciate. Thank you very much for that. Second, thanks for all the preparation to the team and the people behind the scenes who have prepared all the slides, all the content, all the venues, hosted you yesterday and today. Thank you very much for everybody in my team really who has made this happen. It was a great work. Thank you very much for everybody at Siemens Energy, for their passion for detail, for their passion for performance, for their passion for energy to really drive this company forward. I hope we could give you today a glimpse on how the company has come together. Also creating more transparency from October onwards in terms of reporting. We will share first information within the next quarterly calls, really to get used to it. Really it's also showing you on how this company is benefiting from all the changes which is happening in the energy industry and in the electricity world. Also hopefully making clear how much the world needs a company like Siemens Energy, which helps customers in this transitioning through a new energy world to a more sustainable future. If not, you know Michael always says when we close the quarterly calls, we are very approachable, and we have a fantastic investor relations team, and also the board is always very approachable for your questions. It's important for us that you understand where we're taking the company. In this regard, once again, many thanks for those of you who came to Berlin and spent the day with us. Many thanks for the people on the screen for all the attention throughout the day. Travel home safely, and I look forward to continue this discussion on how we turn around the company, but also on how we turn around the energy world of tomorrow and tap into massive opportunities which are out there. Many thanks. Get home safely, and see you soon. Thank you. Christian stole my punchline because I always end on the most approachable team. Please do reach out. If you don't reach out, we're gonna have one of those events every quarter. Yeah. Please do stay in touch and do reach out. Thanks also from my side, and it's to all of you that listened, all of you that came, and as Christian said, we had fantastic support. Thank you, everybody, for helping us. Have a safe journey home, and everybody else who was listening on the webcast, have a nice rest of the day. Thanks, everybody.