Siemens Ag Spons Adr

we're about to begin. Good morning ladies and gentlemen and welcome to the Siemens 2020 first quarter conference call. As a reminder this conference is being recorded. Before we begin I would like to draw your attention to the Safe Harbour Statement on page 2 of the Siemens presentation. This conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions and are therefore subject to certain risks and uncertainties. At this time, I'd like to turn the call over to your host today, Mrs. Sabina Reichel, Head of Investor Relations. Please go ahead, madam.

Good morning, ladies and gentlemen, and also a warm welcome from my side. The earnings release and Q1 presentation were released at 7 a.m. this morning. You can find everything on our website. I'm here with our CEO, Joe Kaeser, our CFO, Ralph Thomas, and our Deputy CEO, Roland Bisch. Since this AGM starts right after this call, we will limit the time of the call to 45 minutes. Joe and Ralph will start with a brief presentation, and then Joe, Ralph, and also Roland will be here for Q&A. With that, I would like to hand over to Joe.

Thank you, Sabine. Good morning, everyone, and thank you for joining us this early. to discuss our first quarter results ahead of our ATM here in Munich. Two weeks ago, I attended the World Economic Forum in Davos, where we've all met many customers, partners, investors, government representatives, and also, obviously, social, societal stakeholders from across the globe. The theme this year, as many of you know, was centered around how to build a cohesive and a sustainable world. Needless to say that decarbonization was the key focus and the question how to limit global warming and reach the target of the Paris Agreement. And obviously not surprising that NGOs and climate activists took center stage in the public debate. Although, already five years ago, Siemens has been the first major industrial company which had itself set the target to be carbon neutral by 2030. We have also come under activist scrutiny by delivering a signaling system to a transport company associated with coal mining in Australia. While we do what we have to do, it still shows that the importance of adding ESG matters into strategic concepts and business plans along the value chain is a relevant topic. Siemens Energy in particular can and will play a significant role in supporting the global energy transition from conventional generation to renewable energy and supplying technology to produce synthetic fuels for the hydrogen economy. And that's why a strong, profitable and innovative renewable energy business is a key element for the strategic direction for the equity story of the newly founded Siemens Energy. Therefore, we entered into constructive discussions with our fellow shareholder and customer, Iberdrola, and agreed to acquire Iberdrola's 8.1% stake in Siemens Gamesa Renewable Energy. That will increase our stake to around 67% of the total company. We also agreed to unwind the existing shareholder agreement and enter into a partnership agreement to work together closely to further drive the energy transition in a mutually successful way. That also includes working together even closer in the area of smart transition and grid access. This step will enable SGRE to secure additional about 100 million euros of savings starting by fiscal 2022. The net present value is around 900 million euros all together for SGRE, which obviously we have a 67% stake and benefit from. We have had a very intense shareholder dialogue with the SGRE management, the relative and relevant SGRE management, and they have committed to achieving those goals and put them into the mid- and long-term business plan and commitment on their side. As previously announced, Siemens AG will transfer all its SGRE shares, including the newly acquired ones, to Siemens Energy as a vital cornerstone of the company's long-term transformation strategy. Let me now give you my quick assessment of our fiscal Q1 performance. As expected, we saw a slow start after a powerful finish in 2019. Overall intake on orders was quite strong, with close to previous year's record levels, and the book-to-bill subsequently translates into what we believe an excellent 1.22 book-to-bill ratio, although obviously driven by large-scale orders in the project environment. Digital industries, smart infrastructure, and mobility as the components of the newly what we call industrial Siemens performed as expected, with some really nice pockets of strength such as in software, especially in the bookings there, low voltage, and China. As for Siemens Gamesa and Siemens Healthineers, I'm sure that you are not the only disappointed shareholders. While we know that Healthineers management reiterates its guidance based on health top-line growth, we believe with the new shareholding development at Siemens Gamesa Renewable Energy, This will help redirect internal focus to more relevant external factors, such for example, project execution. At Gas and Power, the key focus is to deliver the numbers forecasted including planned cost savings and get the new setup ready for a proper listing as planned. If you look at the full year expectations, We do confirm our outlook for fiscal 2020. We also continue to expect a trough in our most relevant short cycle verticals, not before mid-calendar year 2020. That does not change what we said at our original guidance. Obviously, and needless to say, that at this point in time, it's too early to assess the potential economic impact both from the domestic as well as the global supply chain impact of the epidemic virus issue originating in China at this time. With that, Ralf will give you now a more detailed and brief overview of our fiscal Q1 performance by sector. Ralf, please.