Ladies and gentlemen, good afternoon and welcome to the Siemens Energy's pre-close group call for the third quarter of fiscal year 2026. Before we begin, please note that today's call is being recorded. The recording will be available on the Siemens Energy's website until the quarterly results are published. Before we start, I would like to remind you of the information and forward-looking statements disclaimer, which applies to the comments made during this call. At this time, I would like to turn over to your host today, to Mr. Tobias Hang. Please go ahead, sir. Thank you so much, Moritz. Good afternoon, good evening, and a warm welcome to the Siemens Energy pre-close call for the third quarter of fiscal year 2026. The purpose of today's call is to reinforce our previously communicated guidance and to recap the key messages that we have consistently shared over the course of the quarter, including during our Q2 results, at conferences, and in our ongoing investor interactions. We plan to publish our Q3 fiscal year 2026 results on Wednesday, August 5, at 7:00 A.M. CST, with a webcast scheduled for 10:00 A.M. CST that morning. As usual, we will share our company-compiled consensus one week ahead of the earnings release. Our silent period will begin immediately after this call. Let me briefly guide you through today's agenda. I will start with a short update on the current environment, followed by our perspective on market developments, demand, and pricing trends across our businesses. I will then touch on seasonality and conclude with a few additional remarks related to the third quarter. We will conclude the call with a short Q&A session to clarify some of the statements given during the call. Please remember that we cannot provide additional information than the information we have already provided during the quarter. Let me start with the current environment. From a business perspective, the impact from the Middle East conflict continues to be limited. As in the previous quarter, any effects are primarily related to logistics and timing rather than underlying demand, consistent with what we have communicated before. At the same time, we continue to see strong interest in new projects across the region. In addition to local initiatives such as Vision 2030, which are accelerating the shift from oil to gas, disruptions to the existing power infrastructure during the Iran conflict have further increased the need for additional capacity and higher reserve margins. Against this backdrop, we were recently selected to provide gas and steam turbine technology for the 2.6 GW Taweelah C independent power producer project in Abu Dhabi, a project that we booked in Q3. Importantly, we see no major operational disruptions and overall, no material impact on our guidance, underlining the stability and resilience of our organization, which resulted in a smooth execution in recent months. Let us now turn to the broader market environment. Our core message remains unchanged. We are operating in a structurally growing electricity market, driven by electrification and long-term demand trends. Market momentum remains very strong. Based on the current visibility, we now see a sustained gas turbine market in the range of around 110-120 GW on average per annum for the upcoming years. Importantly, demand is not driven by a single customer group. While data centers and AI-related demand remain an important contributor, order intake continues to be well diversified across geographies and customer types. The gas market remains clearly supply-constrained. While tighter supply conditions are attracting additional entrants, including smaller players and alternative technologies, this is expected given the market conditions. However, we do not see this as a meaningful competitive threat. Enhanced capacity additions for large gas turbines meet our current market view, and the overall market behavior is very rational. The additional capacity additions we are seeing in the industrial gas turbine space do not affect the overall supply-demand imbalance as those products cannot substitute large gas turbines in the medium term when capacity, efficiency, and total lifecycle costs are more important factors than short-term availability. Pricing across our markets remains favorable. In particular, faster delivery continues to command a premium, reflecting that for many customers, speed is currently more critical than efficiency. This is especially visible in projects related to hyperscalers and data centers, where pricing remains particularly strong. This accounts for Gas Services and Grid Technologies products and solutions. Overall, we continue to see no sign of demand weakness, and order visibility remains high, well beyond the current fiscal year. As we already mentioned, we see a strong project pipeline for Gas Services for fiscal year 2027. Let me now dive deeper into Gas Services. As already indicated during our Q2 results call, we expect the third quarter to be another strong quarter, and this view remains unchanged. We continue to see that the strong market demand has carried into Q3, and we do not observe any slowdown. A friendly reminder that quarterly order intake may be volatile due to the large project nature of the business. As mentioned before, this can result in timing shifts of projects between quarters. Accordingly, performance should be assessed on a full year basis rather than focusing on individual quarters. From a structural perspective, the market remains supply-constrained rather than demand-constrained, with strong backlog visibility and a growing number of commitments, including reservation agreements. It is also important to clarify that slot reservations are not speculative in nature, but rather represent structured agreements that are typically converted into firm orders within a defined timeframe. Siemens Energy's focus in relation to slot reservation agreements is the conversion of those into orders within an average of 6-12 months. It is also visible in our order backlog of around 60 GW as of Q2 fiscal year 2026. This short-term conversion offers us the opportunity to benefit from increasing pricing dynamics and a better planning horizon. Generally, we apply rigorous project selection process, enabling us to work with a limited number of clients and maintain long-term engagements supported by sustained service opportunities. We have also continued to expand capacity in a disciplined manner. The capacity additions we have announced in recent years are not only justified but necessary to address the market's structural supply-demand imbalance. Even with the additional capacity coming into the market, we continue to see tight supply conditions. The progress on our capacity expansion is running well. In the second half of this fiscal year, the first phase of the medium-sized gas turbine expansion will come online, adding 30 additional units to the 50 we were producing per year before. This offers us the opportunity to increase our deliveries by more than 1 GW in comparison to the previous quarters. Big step-up in capacity additions will take place in fiscal year 2027, and we will be able to produce around 50 large gas turbines per year in comparison to around 35 units before. Turning to profitability. Current quarter may see benefits from stronger operational performance, as we observed already in Q2, including potential positive FX effects. Typically, service revenues based on long-term service agreements follow after a lag consisting of turbine delivery and warranty phase, which means that the full benefit of today's order intake will materialize and generate three years after installation. We already see the pricing strength in new unit business is carrying over into service contracts, which supports a gradual improvement in service margins over time. On the supply chain, volumes are increasingly secured well into the beginning of the next decades. Supply chain constraints remain present but are significantly less severe as we are focusing on having the framework agreements in place to serve our new units and service activities with external and our internal supply. Let me now turn to Grid Technologies. The underlying market remains extremely strong and continues to be driven by the global need to expand transmission capacity, integrate new renewables, replace aging infrastructure. Grid is still, in our view, somewhat underappreciated by the market despite being one of the most attractive long-term growth opportunities. Regionally, Europe is currently ahead in terms of investment, while momentum in the U.S. is clearly picking up and several other markets are showing strong growth. In the U.S., we saw strong demand, also from data center-related projects. We have booked around EUR 2 billion orders related to data centers in the first half of the year, which reflects almost same amount as to the entire fiscal year 2025. As mentioned, customers in the U.S. are willing to pay a premium when the equipment can be delivered faster. Our portfolio for data center consists of power transformers, circuits, breakers, STATCOMs, and general solutions to connect the equipment. From an operational perspective, we continue to be very well-booked, with high backlog visibility and strong book-to-bill ratios over multiple years. Capacity expansions are progressing well, and the benefits from these investments are increasingly visible in both growth and margin developments. We could raise our guidance to a revenue growth of 25%-27%, from 19%-21% before, and the profit before special items targets to 18%-20%, from 16%-18% before, for fiscal year 2026. Already meeting our midterm targets for fiscal year 2028 two years earlier. Margins continue to improve steadily, driven primarily by operating leverage, productivity gains, and execution improvements rather than pricing alone. Another important factor is our continuous capacity expansion, which is taking place globally. We are expecting a step-up in the revenue in the second half of the year as several brownfield expansions in Austria, Italy, China, and Saudi Arabia come online. Between 2026 and 2030, we will further increase capacities for large power transformers and switchgears by 50%, which counted to 45% of the revenues in fiscal year 2025. Overall, growth remains limited by execution capacity rather than demand, and we continue to see a very robust outlook for this business. Let me now turn to Siemens Gamesa. As already communicated on order intake, a significant portion of offshore orders has shifted to fiscal year 2027. As a result, order intake in the third quarter is expected to be mainly driven by our general baseline orders in onshore, related mainly to repowering orders in the U.S., comparable to Q2 fiscal year 2026. For Siemens Gamesa, our priorities remain the same. Focus in onshore remains on execution and a cautious rollout of the new products. In offshore, we continue to invest in capacity and productivity to deliver the existing backlog, while service focuses on profitable operations after negative impacts from the years before due to fixing and mitigation of quality issues in the installed 4x and 5x fleet. Our key message remains unchanged. We expect profitability to improve over the course of the year, with a negative first half, a positive second half, and a break-even result for the full year. Cash flow, however, is expected to remain negative, turning positive in fiscal year 2028, as mentioned previously. Let me briefly comment on Transformation of Industry. The business has shown a strong operational turnaround and continues to deliver solid margins and stable growth. However, in the context of our overall portfolio, it remains less central for our electrification strategy compared to other businesses. Let me briefly comment on the article published on Transformation of Industry a couple of weeks ago. Siemens Energy routinely reviews its portfolio to ensure every business has the best strategic and financial conditions to compete, invest, and grow over the long term. As part of this ongoing work, we are assessing the best long-term setup to accelerate the growth journey for Transformation of Industry business area, always guided by what best serves our customers, employees, and shareholders. No decisions have been made. We therefore continue to focus on operational excellence and active portfolio management in the segment. Let me now briefly address seasonality. In Gas Services, the historical pattern slightly changed over the past quarters, mainly driven due to a higher ratio of new unit business, which was visible in the second quarter. At the same time, the new units running through the P&L are coming with better margin profile, uplifting also the margins in the quarter. The less transactional services are conducted. Therefore, the lower margins in the second half of the year are expected to be less pronounced than in prior years. We continue to expect Gas Services orders in Q4 to be below the strong levels of the first three quarters, reflecting normal project phasing as we saw in the previous fiscal year. However, we anticipate a strong start to fiscal year 2027. Q3 remains a very robust quarter, as previously highlighted. For Grid Technologies, revenues are expected to increase in the second half of the fiscal year, driven by brownfield expansions that add capacity to existing assets and support a corresponding improvement in margins. CapEx for fiscal year 2026 remains at around EUR 2.2 billion. Given that we spent only around EUR 700 million in the first half, CapEx will increase significantly in the second half of the year. As indicated at the beginning of the year, we expect the reconsolidation line at profit before special items to be around EUR -400 million. We see it more pronounced in Q3, but still peaking towards the end of the fiscal year as in previous years. Let me briefly touch on cash flow and capital allocation. Our key message remains unchanged. Cash generation is structural and supported by strong profitability, advanced payments, and a growing backlog. We expect cash conversion to remain strong for the full year. Even after dividends, share buybacks, and ongoing investments, we expect the business to remain in a solid net cash position. After we finished our first EUR 2 billion share buyback tranche shortly after our Q2 results, we already started the accelerated EUR 1 billion share buyback early June. After we finish this share buyback tranche, shareholders' returns in fiscal year 2026 will be at EUR 3.6 billion, including dividends. We have upgraded our free cash flow guidance to around EUR 8 billion from EUR 4 billion-EUR 5 billion before. We continue to review our capital allocation framework, and we will provide a more detailed update at our extended Q4 analyst call later this year. Finally, a few additional remarks. In the United States, we continue to see a very busy market environment with strong demand, but also capacity constraints on the EPC side and typical permitting delays. Importantly, we have not seen any cancellations or any delays on our side, and our contractual structures provide a high degree of protection. In Germany and Europe, more broadly, demand remains robust despite ongoing discussions around energy policy. We continue to expect meaningful order intake, including several gigawatts of gas turbine orders in Germany over the course of the calendar year. Overall, we continue to operate with a strong focus on selectivity, pricing discipline, and close customer engagement across all regions. Finally, a brief comment on foreign exchange. As we guide on comparable revenue growth, excluding currency translation and portfolio effects, we continue to see higher comparable growth than nominal growth. For the third quarter, we expect comparable revenue growth to be around 200 basis points higher than nominal growth to group level, compared with 560 basis points in Q2. Let me conclude the key messages. Demand across our markets remains structurally strong, global and diversified. Market momentum continues to be very robust and the supply-constrained environment supports strong pricing and visibility. In Gas Services, demand remains strong with continued service momentum supporting the margins. In Grid Technologies, execution continues to drive both growth and profitability, supported by strong structural markets. In Siemens Gamesa, order timing explains current volatility while the underlying turnaround remains on track. Overall, our performance continues to be driven by disciplined execution, translating into improving profitability and strong cash generation. With that, we will start today's Q&A session. If you wish to ask a question, please press star one on your telephone keypads. I repeat, please press star one on your telephone keypads. If you no longer want to ask a question, please press star two. The next two people in the line in order to ask a question will be first Max Yates from Morgan Stanley, and then Alex Jones from Bank of America. Max, please go ahead. Thanks, Tobias, and thanks for taking the time. I just wanted to check on the Grid orders, because it felt like there wasn't maybe a sort of explicit comment there. I guess you benefited from a large order last quarter. Is there any framing you would give us in terms of maybe what you would consider an underlying order rate in Grid, and also whether you've had any large orders? Maybe just a very quick clarification. When you talk about the good order level from Q2 being sustained in Gas, is that a gigawatt comment or is that a number in terms of absolute euro value? Thanks a lot, Max, for these questions. On the one hand, you're right that in Q2, we had the Bornholm order in Grid Technologies, as one of the large HVDC orders. As you know, these HVDC orders are always in the amount of around EUR 1 billion+, also benefiting in that order intake. This quarter, we announced, let's say, an HVDC order, but if you read the news release very precisely, you will also see that that will be only booked in fiscal year 2027. The overall level should be probably on the same level as you would see Q1 or Q2 excluding, let's say, the larger HVDC order continuing as we saw in the previous two quarters. I think overall, I think we have already mentioned also before that the targets or when we had our order intake from last year in total, given that we should be at least at the same level. I think if you take out this large HVDC in Q2, we should be going into the, let's say, similar direction. Referring to your Gas Services order amount. In general, as we mentioned, of course, on the one hand, there is a certain relation between gigawatts and, let's say, EUR order intake. At that point in time, we have certainly our visibility on EUR basis, while the gigawatt number will be something we will be certainly. We are still not at the quarter's end, therefore, that is something we will see in the future. We are currently talking about, let's say, certain levels that will be always rather based on a EUR basis. Okay. Very helpful. Thank you, Tobias. You're welcome. The next question goes to Alex Jones from Bank of America. Thank you. Just two clarifications as well. Firstly, on the grid capacity, should we expect that to progressively ramp up over H2, Q3 a step up and then higher than that, or is there any sort of particular skew to that between the quarters? Just the second clarification, you talked about German orders there on the gas side, and several gigawatts, I think you said, before the end of the calendar year. Is that already reflected in your commentary about Q4 gas orders being a step down compared to the first three quarters? Thank you. Yeah. Thanks a lot, Alex. First of all, in reference to the, let's say, step-up of capacities in Grid Technologies, that will be something where, let's say, the capacities might have been even, let's say, opened up in Q2, you really have the efficiency ramp-up moving on so that we should be there at full capacities of these new profit additions by Q3. That should be therefore you can expect that after there's a certain ramp-up in Q3, it should be at a similar basis then going forward. In reference to the large gas turbine orders we might be expecting from the German infrastructure package in Germany, which we normally communicate somewhere between 4-5 GW. That is something which we rather see, let's say, at the end of the calendar year, therefore that would be nothing we would be currently reflecting in Q4. Thank you. Thanks a lot. The next two questions go first to Will Mackie from Kepler Cheuvreux, and then from Kulwinder Rajpal from Value. Will, please go ahead. Good evening, Tobias. Thank you for the time. My first question would be to go back and clarify your commentary about the balance of profitability within Gas Service H2 versus H1. If you could put some more color around why it would be perhaps less seasonal this year and less of a typical drop-off in profitability as we approach the year-end. Thanks a lot, Will. On the one hand, what we already saw in Q2, and that's what we tried to explain, was that even though, let's say, the ratio of the service business went down from 67% to 57%, you still saw that the comparable margin profile between fiscal 2025 and fiscal 2026 for Q2 was on a comparable level, mainly driven by also the higher margin projects we already signed for the new unit business. Therefore, as you see, let's say, a step up in the new units business, that is something where the higher margin profile of these projects running through will certainly also have a certain impact on the margin level. That will certainly, even though you might not have the regular outage season in the second half of the year, improve the overall margin profile. On the other hand, as you certainly see that, let's say right now, there's a high interest in having the equipment still running. There might be also some factors which might be benefiting, for example, service business also in, let's say, not seasonal outage seasons. I think these are, let's say maybe two factors plus the FX effects we might be seeing, which might be impacting the margins also on the second half of the quarter, so that the season patterns we saw in previous years are not, let's say, always the same anymore. That's great. I'll hand the mic back. Thanks a lot. Kulwinder, over to you. Yeah. Thank you, Tobias. Good evening. Just wanted to understand the comment around the annual market in the gas turbine business. I think previously we were pointing towards 90-100 GW, and now this is clearly a step up when you're talking about 110 at the minimum. Wanted to understand if just Middle East is the main driver or there are other drivers across the globe that are playing out and that is something maybe the market has missed. I think on the one hand, certainly the step up we saw now of interest for new projects in Middle East is one factor, but one of the major drivers might be also especially the data center-related topic, as we always mentioned also already in Q4 2024, that we see a base market of somewhere around 70 to 80 GW, which should also include the interest you see in the Middle East, for example, from the Vision 2030, due to the oil to gas shift, the coal to gas shift in other regions. On top of that, there's certainly the high demand we are currently seeing from data center-related topics, where you could also see a big step up in, let's say, investment decisions taken by some of the hyperscalers or data center-related companies. Therefore, the main driver for this step up will be rather related to AI data center topics. Thank you, Tobias. Thanks so much. The next two questions will go to Sean McLoughlin from HSBC and then Chris Leonard from UBS. Sean, please go ahead. Thank you for the time. Just a question on the slot reservation agreements. You've previously talked about this normalizing, and I think you're suggesting that effectively these are structured agreements. How do we compare year-on-year for the overall orders? Should we be looking at growth in the total slot agreements as well as the firm backlog in the quarter? Or is this more about conversion of those slot agreements into firm orders? That's the first question. As mentioned during, let's say, the script before, our main focus really on converting slot reservation agreements as fast as possible into orders. On the other hand, I think we also gave a certain guidance on what we're expecting as total commitment for the whole year of 90-100 GW. Therefore, we are certainly still targeting to convert those slot reservations quite quickly. In reference to the 90-100 GW at that point in time, I cannot provide any additional color on if that is now slot reservations or direct orders. In general, as I also mentioned that we did this or will have a certain step up in deliveries. You can roughly see how much there will be still open in order to reach 90 GW or 100 GW on a yearly basis as a total target. Yeah. Thank you. On the idea of premium for quick delivery, again, is this just a question of, how can I say, fast-tracking RSAs into firm orders? How is this conversion happening? That's really mainly driven by slot availability. In case you have any short-term slots, that would be certainly then automatically also drive short-term conversion of slot reservations or direct orders for these slots. That is really driving it. That means short-term availability of slots in GT or in GS are the main drivers for these premiums. Thank you. Welcome. Next one will be Chris Leonard, and then the last question afterwards goes to Vivek Midha from Citi. Hi, guys. Hopefully you can hear me, just to follow up on the slot question. Previously you've obviously said order intake or slots can be lumpy, should we expect a pick up in slots looking into Q3 and probably especially into Q4 if you do expect orders to slightly phase and slow down at the end of the year? Should slots be picking up if you're saying that the overall market demand is heading higher towards 110 GW, 120 GW? Would that be a fair assumption? Thanks. Thanks for that, Chris. You always have to consider in case, let's say we are seeing continuing growth or strong demands in this quarter, which would be reflected as Max asked at the beginning, and then on a year basis, you can already see, let's say, what kind of gigawatts might be booked and what range. Therefore, if you then do the math, right now we don't really have any additional information on slots or gigawatts exactly. I think that gives you rough expectation in case, let's say, there's a similar trend as we saw before on a year basis. Unfortunately, I cannot give any additional flavor on that. Okay. Thank you. You're welcome. As we are over time, last question will be now going to Vivek, and I have one more person on the call, Richard Dawson. If you have a quick one, let's do that as well. First, Vivek, please go ahead. Hi. Thanks very much, everyone. Good evening. Just a quick follow-up on your comments around supply demand, if I may. You obviously gave us an indication around demand staying around 110-120 GW. At CMD last year, you'd given an indication that maybe industry capacity was around tending towards about 85 GW or so. Do you have any updated view on where supply is heading? Thank you. Well, we are mainly focusing on our own supply. We were certainly seeing that there were some discussions on other supplies. I also mentioned that, let's say, you have new entrants in the market. Generally right now we're seeing that all the other players we are seeing as direct peers are behaving very rational and based on their brownfield extensions should be meeting roughly the market demand, so that we at least do not see any path towards an overcapacity mark, but that rather all the capacity additions might still leave some higher demand than supply, maybe. Generally, that is really where we are focusing on, that we are using our brownfield extensions, behaving very rational, so that there should be a pretty close demand of supply balance. Thank you very much. Now the last question goes to Richard Dawson. Hi. Thank you for fitting me in. I understand that short-term availability of these slots drives a premium in pricing for those gas turbine orders. What creates a slot availability in the short term? Is this orders, firm orders slipping to the right, or do cancellations just create that slot availability? Thank you. Thanks a lot for this question, Richard. That's a very good question. On the one hand, as we are booked out onto 2028, let's say 2029 and 2030 is filling up very quickly, there's always a question, what is short-term slot? 2029 might be a very short-term slot where you have a lot of players being very interested in these slots. In case, let's say, a project might conceptually shift and you would have a short-term slot available due to something, that might be certainly something where you certainly also get a higher premium on. If, for example, something will be available in 2027, theoretically. Now, already now, 2029 slots is something which is seen as short-term availability, especially if you talk about large H-class ones. That's clear. Thank you. Thank you so much. With that, we will conclude our pre-close call today. Thank you very much for your participation and for your continued engagement. For that, now I wish you some, hopefully not as hot weeks as we had in the last couple of weeks, and a nice summer, and then we talk to each other probably on August 5th. Have a wonderful evening or afternoon. Thank you so much. Ladies and gentlemen, this concludes today's call. A recording of this call will be shortly available on the Siemens Energy website. Thank you for joining, and have a pleasant evening. Goodbye