Siemens Energy Ag

Welcome to the analyst call Q4 fiscal year 2025. I'm Moritz, the chorus call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tobias Hang. Please go ahead, sir.

Good morning and a warm welcome to the Siemens Energy Q4 fiscal year 25 analyst webcast. Today we are here in the factory in Berlin. First of all, I really have to say that we are sorry that you had to wait for five minutes. Of course, we're going to add the five minutes up on the end of the call, so that shouldn't happen. Please excuse for that. As you probably noticed already, we pre-released our results yesterday night and published all the documents around 9 p.m. on our website. Now, I'm pleased to have with me here President and CEO of Siemens Energy, Christian Bruch, and Maria Ferraro, our CFO. And in the next 30 minutes, Maria and Christian will take you through the developments of the last quarter and the fiscal year 2025. Thereafter, we will continue with our Q&A. For the entire webcast, we estimated roughly one hour. So with that, I would hand over to Christian.

Yeah, thank you very much and also good morning everybody, also from my side and thank you for joining our quarter for call. We do it here from the factory in Berlin and that is something I wish you could see it really continuously because we have our products around us and this gives a good atmosphere. As we wrap up fiscal year 2025, I would like to take a moment to reflect on Siemens Energy's journey over the past five years. And when we listed Siemens Energy on September 28th in 2020, we had a clear ambition. Focus and deliver on fundamentals, co-create innovations with customers and partners, and start the energy transformation. All this based on our purpose, we energize society. And since then we have come a long way. We are offering the right products, solutions and services to serve our customers in a changing energy world driven by higher electricity demand and the need for energy security. The trust of our customers placed in us and the strength of our portfolio is reflected in our continuous revenue growth since our listing, in total by 40% to almost 40 billion Euro in fiscal year 2025. At the same time, our order backlog has increased by around 75%, bringing us to another record high level of 138 billion at the end of fiscal year 2025. This is underlining the confidence of our customers and our ability to deliver complex, critical infrastructure energy projects. And the strong order backlog provides us good visibility for fiscal year 2026 and beyond. Our journey has not been without challenges. We started in a world which was determined by COVID and in fiscal year 2023, we were confronted with severe challenges at our wind business. Our focus on operational discipline and stringent execution brought us back on the successful path and since then the resilience of the company has been strengthened. The result of this journey, a 350 basis point profit margin improvement since our listing and a 1,500 basis point improvement since fiscal year 2023. Looking at this development, I want to thank everyone working at Siemens Energy, our team purple, to make this happen. I'm proud of what the team at Siemens Energy has achieved together so far, and the journey has just started. If the past five years have been about building the foundation, then fiscal year 2025 was the start of a growth journey with continuous margin expansion. Earlier this year, we upgraded our guidance and our half-year results to reflect our confidence in the development of our business. And I'm pleased to report that we have achieved the top end and partly overachieved our upgraded targets. Fiscal year 2025 has been a year with strong performance. We saw 15% revenue growth driven by robust demand across our core segments. We achieved significant margin improvement of 500 basis points year over year, thanks to operational excellence and the execution of more profitable orders, which we signed in the last couple of years. And finally, we generated an excellent level of free cash flow. While Siemens Gamesa continues its turnaround journey, the rest of our portfolio has demonstrated remarkable performance. For the fiscal year 2026, we have set ourselves ambitious targets. We also upgraded our mid-term targets for fiscal year 2028 substantially. For fiscal year 2026, we target a profit margin before special items of 9 to 11% and revenue growth between 11 and 13%. Mid-term for the fiscal year 2028, we are aiming for a low teens percentage range revenue growth and a profit margin before special items of 14 to 16%. More than doubling current margin levels within three years. And these targets are based on a robust order book, a culture of accountability and operational excellence. Looking into the development of orders and revenue in the different regions in fiscal year 2025, we have seen strong market momentum and are confident that this will continue in the next years and be a strong base to achieve our mid-term targets. During the last year, all our regions – Europe, the Americas, Asia Pacific and the Middle East – delivered consistent expansion in demand. The underlying favorable trends are intact and continuing for the foreseeable future as the demand for electricity and the need for modernization and expansion of the electrical infrastructure should proceed to increase. Our portfolio covers to a large extent today's and future technologies to meet this demand. And next to the coal-to-gas shift, peaker demand and the generally higher electricity demand from developing societies, as well as increase of electrification, 2025 water intake has been substantially supported by the electricity needs for data centers. Especially in the U.S., this has driven unprecedented demand for gas turbines and grid infrastructure and translated into record high order volumes for Siemens Energy in fiscal year 2025. We almost doubled the number of gas turbines sold globally from 100 units in 2024 to 194 units in 2025. Grid technology more than doubled the sales to hyperscalers to over 2 billion euro in fiscal year 2025. Driven by North America, but also across all other regions. It is for us a deliberate target to diversify the origin of our orders, ensuring that our growth is balanced and resilient. Based on the current growth momentum, we are adapting our footprint and aligning our operations to regional demand and customer needs. The increasing regional setup helps us to mitigate the continuous geopolitical challenges like tariffs, which we, for example, experienced in the second half of fiscal year 2025. Let me give you some additional highlights on new projects from the last quarter. In our gas service business, we sold in the quarter 5 gigawatt of gas turbines and signed 11 gigawatts in reservation agreements. This was mainly driven by Saudi Arabia and the US. With that, the total commitments increased to 54 gigawatts in fiscal year 2025, thereof 26 gigawatts orders and 28 gigawatts reservations. 12 gigawatts are related to data center. Pricing momentum for gas services continued to be favorable and is expected to continue that way in the foreseeable future. Grid technologies achieved the strongest quarterly order intake in fiscal year 2025, driven by substantial demand growth across all regions and the highest quarterly revenue in history driven by both product and solution business. We are confident that the profitable growth we aspire for fiscal year 2026 and beyond is supported by a strong electricity market. Fiscal year 2025 was marked by several milestones that provide a foundation for future success and shareholder returns. And due to our solid financial performance throughout the year, We were able to accept the Bund guarantees, improve our credit ratings and lift the dividend ban for fiscal year 2025. Our net cash position and Robo's liquidity profile allows us to pursue strategic growth and shareholder returns without compromising financial discipline. We have put the right measures in place to continuously drive profitability. This includes optimizing our cost structures, reducing non-conformance costs, and being selective with the projects we take on, ensuring they align with our target margins and long-term strategy. Our portfolio optimization efforts are well underway, but we will continue to review our portfolio elements. The divestment of our Indian wind business, which we have agreed in 2025 as a group of investors led by TPG, is an important step to focus our onshore wind power on selected regions. Throughout the whole year, we were investing in the growth of our core business and a further strengthening of the supply chain. Examples were the acquisition of RWG and CIC this year, which will help our gas service businesses to deliver on their commitments. We have been and are investing in the expansion of our factories. A strong focus is hereby the expansion of existing sites to achieve effective use of the capital spent and short payback times. I am pleased that also the development of partnerships to enhance our offerings into the market made good progress in fiscal year 2025. Here is to mention Rolls-Royce in the area of small modular reactors and Eaton in the field of data centres. You will see a lot more details on our future journey during the Capital Market Day in Charlotte and we are excited to discuss these measures together with you. We are positioning Siemens Energy to lead in the field of resilient energy, pursue profitable growth and deliver sustainable shareholder returns. With that, let me hand over to Maria for the numbers. Maria.