Siemens Energy Ag

Once again, a wonderful good morning, ladies and gentlemen. Welcome to the Siemens Energy Q3 Fiscal Year 2024 Annals call. As a reminder, this call is being recorded. Before we begin, I would like to draw your attention to the Safe Harbor Statements on page 2 of Siemens Energy presentation. The conference call may include forward-looking statements, These statements are based on the company's current expectation and certain assumptions and therefore subject to certain risks and uncertainties. At this time, I would like to turn the conference over to your host today, Mr. Michael Hagmann, Head of Investor Relations. Please go ahead, sir.

Thank you, Francie. Good morning and a warm welcome to our Q3 conference call. As always, all documents were released at 7 o'clock on our website. And here with me are our president and CEO, Christian Bruch, and our chief financial officer, Maria Ferraro. Christian and Maria will take you through the major developments of the last quarter. And this is expected to take about 30 minutes. Thereafter, as always, Christian and Maria are available to answer your question. And for the entire call, we've allowed about an hour. And with that, Christian, over to you.

Thank you very much, Michael, and good morning, everybody, also from my side. Thank you very much for joining us for this conference call today. We are on track to meet our guidance and to reach our objectives for the full fiscal year. We saw a healthy order intake, good growth and profitability in line with our expectations, and we are making progress at Siemens Gamesa. The market for electricity remains strong, and we continue to see strong growth in pretty much all our businesses. and in the different regions of the world. As we discussed before, we see that the rapid build-out of data centers fuels additional growth and electricity consumption. For us, this means customer interest in generation equipment, grid infrastructure, and what we call electrification solutions. We see a lot of discussions happening at the moment. Orders will then come more and more in the next years. Order intake was healthy at 10.4 billion this quarter, even though it was down year over year due to the low order intake at Siemens Gamesa. It represents a book to build of 1.2. Orders for gas services and grid technologies were just shy of 9 billion euro, which means that they are after nine months already roughly at last year's full year level. As a consequence, our order backlog passed now 120 billion euros, and I'm pleased that with the growth, also our backlog margin quality continued to improve. This provides us with an excellent foundation on our future path to improve profitability of the company. Revenue rose close to 20% in the quarter and 12% during the first nine months. We did not only see strong growth at great technologies and transformation of industry, but we also saw strong growth at Siemens Gamesa driven by offshore. Profit before special items came in at 49 million euro on the quarter. And this was in line with our expectations, even though the results were hold back by one time effects from legacy effects. Maria will shed a little bit more light on it also to that you really understand it. because that is not related to technology or products, but it's legacy items. This means that after nine months, we are at just over 400 million euro profit before special items, reflecting a margin of just under 2%. So even if you consider that profitability in the fourth quarter tends to be the lowest in the year, we are well on track to reach our guidance. The losses at Siemens Gamesa in the quarter were around 450 million euro and roughly at the run rate the first two quarters resulting in a loss of 1.3 billion euro for the first nine months you may also recall that we update the statistical models utilized for the evaluation of the entire wind turbine fleet once a year it is a comprehensive exercise in which we review failure rates cost assumptions across the whole fleet and review our potential agreements with customers Driven by changes in cost inflation assumptions and variations in failure rates, our assumptions have been updated with the latest information. All changes were well within our expectation in respect to the assumptions for the quality cost of the platforms in 4x and 5x. The change to our assumptions was overall not material, with the P&L impact below €20 million. Let me also confirm that we are on track for the reintroduction of the 4X before the end of this fiscal year and the 5X during fiscal year 2025. Based on the good development during the first nine months, we raised our cash flow guidance from up to $1 billion before to a range of $1 to $1.5 billion, and we confirmed the guidance for the full year for all the other group KPIs. Parallel to our activities to improve the profitability of the company, we are driving measures to satisfy the growing demand for our products. And during the last quarter, we have been announcing further capacity expansions, which will allow us to capitalize on the growth cycle in our industry. For our gas services business, we inaugurated the new gas turbine combustion burner factory in Budapest in May. And like the other examples from this quarter, this is in addition to an existing operation which allows us to make the most efficient use of capital for building up capacity. And the fast growth in grid technologies is supported by further factory capacity expansions. We had already announced a new high-voltage transformer factory in the US and India during quarter two. In July, we now broke ground at our Austrian transformer site in Weiz to increase our capacity And a day later, we broke ground in Nuremberg, in Germany, where we're expanding our capacity for DC switches. These steps, including the joint venture with Concha, will allow us to industrialize project execution of HVDC projects. We also have commissioned our vacuum interrupter tube production in Berlin, which adds in-house capabilities to provide our customers with SF6-free switchgear. I'm proud that after the development efforts, this product now lands successfully in the market. As you know, SF6 has 25,000 times the global warming potential of CO2 and therefore will be gradually phased out in the European Union from 2026 onwards. Moving on to Siemens Gamesa, you have seen strong revenue growth in offshore over the last quarters, which reflects the ramp up in our factories. We are progressing to improve productivity and with that our output. I still see room for improvement, particularly when it comes to blades, given that we intend to almost double our output from fiscal year 2023 to fiscal year 2026. Here you can see a picture taken in Allbook. where we are ramping up the production of blades for the SG14236, our most powerful turbine. Like in every quarter, I would like to give a brief update on some project highlights for this quarter. In gas services, which absolutely stands out, our record high order intake, was supported by the order in the Kingdom of Saudi Arabia. And Saudi Arabia is currently in the process of really transforming its energy infrastructure, which offers opportunities for us, not only in gas, but also in other businesses, which we do. Tiber and North Kassim will be two of the world's most efficient gas-fired power plants with a capacity of two gigawatts each. Each plant will be fitted with a total of three HL class gas turbines, steam turbines and generators and reduce CO2 output by 60% against the prior solution. And they can be fitted with carbon capture and storage facilities at a later point in time. And in this regard, a very, very successful project launched. Siemens Gamesa successfully installed the first 11 megawatt wind turbines at the Borkum Riftgrund project, Germany's largest offshore wind park with 913 megawatt. The project is a milestone in the industry because it is the first offshore wind project globally without governmental support. In grid technologies, one highlight this quarter was a contract in Denmark. We are grateful for the trust which Energinet is putting into Siemens Energy to support the acceleration of the energy transition in Denmark with a contract award of around 1.4 billion euro. The connection and transport of renewable electricity around the country will require 50 new or reinforced 150 kV high voltage substations, which will be built or upgraded over the next eight years. I'm also very pleased to see that we could secure a contract for a 280 megawatt electrolyzer system from our customer EWE in Germany. The plant in the German city of Emden is expected to go into operation in 2027 and will provide up to 26,000 tons of green hydrogen annually for various industrial applications in the regions. Seeing that the green hydrogen takes off much slower than people were expecting, I'm very pleased with what our teams are doing and that they are able, in a tighter market, to secure lighthouse projects. And I'm confident that we will be able to build this business up step after step. And with this, I would hand over to Maria to walk us through the detailed numbers.