Siemens Aktiengesellschaft (SIE) Earnings Call Transcript & Summary

For your information, this conference will be recorded. At this point in time, I would like to hand over to Clarissa Haller. Over to you.

Thank you very much, and a very good morning, and welcome to today's phone conference. Together with me is Joe Kaeser, our CEO; and joining us from Denmark is our Supervisory Board Chair, Jim Hagemann Snabe. Now likely on the run down of the telephone conference, Mr. Snabe and Mr. Kaeser are about to communicate the decisions that were made last night to you. Afterwards, of course, you will have the opportunity to ask questions. Just one quick information. It was not easy to actually set up this call because, of course, in times of corona, it seems that telephone conferences are a rare good. The operator has given us exactly 60 minutes. So unfortunately, we will have to close the call in 60 minutes, and we cannot do any longer. So after 60 minutes, the line will simply be shut down, no matter if we are finished or if there are other questions. [Operator Instructions] And with that, over to Mr. Snabe.

Thank you very much, Clarissa, and good morning, everyone. I hope everybody's healthy and your families are healthy as well. And thank you very much for joining us on such short notice. Now normally, of course, we would have loved to welcome you right here in Munich at the Wittelsbacherplatz. But unfortunately, as you all know, through the current health situation and the coronavirus, which is everywhere, we cannot do that. Now, of course, it has a dramatic effect. And globally speaking, we are faced with tremendous challenges. And of course, Siemens will contribute their share to making sure that these challenges will be overcome. Of course, Mr. Kaeser and I still want to answer your questions. You all saw yesterday that the Siemens Supervisory Board has made important decisions. Mr. Kaeser and myself, would like to take this opportunity this morning to give you the opportunity to ask questions. Of course, first off, we're going to, once again, clarify the decisions that have been made. Now ladies and gentlemen, the Supervisory Board has made a host of staffing decisions for the future leadership of Siemens, and I'm about to elaborate in more detail. But before that, I would like to, once again, just take a step back with you and basically look at yesterday's decision in the overall context of the bigger picture. Now our goal has always been to transform Siemens from a position of strength, as you know. And of course, growth and agility are a big focus for us, and the Board and the Supervisory Board has developed a plan for that, which we are consistently implementing. Here, we have 3 clear steps: strategy, structure and people. Also here, we have remained very consistent. So let's start with the first step, which is strategy. With our Vision 2020, we have developed a very successful strategy and implemented it. Of course, we've also made some very important portfolio decisions in the last few years based on that, just to take the consolidation of wind power with Siemens Gamesa, but also if you look at the IPO of Siemens Healthineers as another example. Now the Vision 2020+ was, of course, the next logical step for that and also addresses the fundamental structure, but also addresses the speed. Now the goal here was to give more entrepreneurial freedom and responsibility to the Siemens business unit, and they are, of course, supposed to shape the future in their individual markets individually going forward and also implement measures faster going forward. The spin-off planned for September for Siemens Energy is, of course, an immediate consequence of this approach. On the flip side of things, digital industries, smart infrastructure as well as the mobility business are, of course, the majority of the Siemens business, the focus of the majority -- of the focus of the Siemens business going forward. That brings us to the third building block, the people, the people that will be leading these companies going forward. Now for us, it's always been important that Mr. Kaeser will, of course, largely finish the transformation of Siemens before he hands over the responsibility for the business both to his successors. And it is exactly because of that, that we need to align yesterday's decisions in this context. And of course, we are aware that it is not ideal to take this point of time in the process to change management. However, if it is necessary and if it is crucial at this point in time, it is also crucial equally so to make a decisive step and to make that solution. Now Christian Bruch is CEO and Maria Ferraro is CFO for Siemens Energy. We are going to strengthen the leadership team of Siemens Energy [ overall. ] And I'm also very happy to say that we had -- that we have now started an orderly transition process for Siemens because, of course, having done so this early, it's made it possible to answer the succession question at the top of Siemens AG earlier than expected. Now I've always said that a leader is best measured at the capability to develop and build up their successor and then pass on responsibility accordingly. And with yesterday's decisions, we have determined 2 strong leaders for Siemens' 2 companies. Now with this, the new Siemens management or I should say the management of the overall Siemens family is in place with the future CEO and the CFO and the future Chairman of Siemens Energy. All those decisions have been made. And the same thing, of course, applies for the future CEO of the Siemens AG. Now with that, we have a clear and structured succession process that is now completed, and we are actually ahead of our original plan and schedule, because many of you know that we said originally that this decision will be made in the summer, but now we already done so in the spring. Now what did we decide on yesterday in detail? Well, first off, Joe Kaeser is going to be the Chairman of Siemens Energy. He's the proposed Chair. He will support the Siemens Energy Board with his tremendous experience and knowledge. The responsibility for the Siemens Energy is now handed over to Joe Kaeser and the Siemens AG Board with immediate effect. I am very happy about this decision. I'm really looking forward to working with Joe Kaeser in this new context. Now the Siemens AG Supervisory Board has also made another very far-reaching decision yesterday. And at Siemens, of course, we have a long tradition to recruit CEOs internally. Roland Busch, yet again, proves that he's going to be the new CEO of the Siemens AG at the very latest of the end of the next AGM in late February 2021. He, as of April 1, 2020, will also receive a new contract for 5 years. Also, when it comes to the responsibilities within the Siemens Board, many things will change. Already for the budgetary planning of fiscal 2021 and executing the budget, this already is in Roland Busch's remit of responsibilities. And starting October 1, 2020, he will take over all the relevant tasks and areas in the Board. He will be responsible for the integration and the steering of the future Siemens AG business. Now Roland Busch has an impressive understanding of technology in the wide-ranging vision. He is very close to our customers. And the Supervisory Board is sure that he is going to give Siemens new impulses and lead the business successfully through the integration. So he will therefore -- actually, the new chapter of the success story of Siemens. And I, personally, and we all wish nothing but the very best to Roland Busch. Now before I hand over to Mr. Kaeser, who is going to explain the changes with Siemens Energy in more detail, let me just say one more thing very clearly. We believe in our energy business, and we are convinced of the fact that this business is going to have a very successful future. If you look at the huge need for energy that the world has and how many people are not yet connected to the energy grid, then it becomes very apparent that there is a tremendous potential here. Now of course, there are challenges. The transition in energy policy and the energy policy turnaround, in general, is a huge challenge and also how we shape it in great detail. Another important topic, of course, is the energy mix. Surely, you remember that fossil fuels and particularly, of course, energy from coal was something that we just recently discussed at our AGM partially, relatively emotionally. And due to such sweeping changes, but also due to these big opportunities that we have lying ahead of us, I am very happy that Mr. Kaeser could be one for this important job at Siemens Energy. Now this is going to bring stability in the short run and help to make sure that we can finish this spin-off successfully. In the long run, we're going to have a very experienced Siemens Energy Chair for the Supervisory Board. And with that, I believe Siemens Energy is in an excellent position, both on a content level as well as on a staffing level, in order to be able to responsibly shape these topics going forward. And with that, over to Mr. Kaeser. Joe, over to you.

Thank you very much, Jim. Thank you very much for your kind words. I know that we have teamwork on the Management Board, but also on the administrative side on the Supervisory Board. And here also, I would like to thank the Chair. And I think without this very close cooperation, the coordination and the support, I'm sure that we will not be able to have brought the company through these difficult times over the last 2 years. Good morning, ladies and gentlemen. I'm very happy that we can communicate it through these channels today because I believe that it is not necessary to touch on the turbulences, the turmoil, which we face at present. This exists in the world and surely, we have seen a lot of things changing at Siemens. Some time ago, I have informed the Supervisory Board that I do not want to continue my contract with the company beyond the AGM, and it has never been my intention to do so. And I can say that there are many aspects which we want to take into account. On the one hand, we have the Vision 2020+. And this means we have decided what we are going to do or what the company is going to do over the next few years. I think we have got a very robust and sound ecosystem with 3 very strong, powerful companies in this industry. And surely, when looking at the profitability, they are clearly different. But nevertheless, they are also in a very, say, typical position when looking at the respective industries. And despite all the headwind which we get in these situations, cooling down of the global economy, then the trade wars between the major economic nations in this world, and of course, the pandemic as well, this is -- these are all aspects which we have to take into account. And of course, all this also applies to the carve-out or the spin-off of Siemens Energy. It is kind of a division of the company. This is not how we want to see it. We want to make both companies successful. And I think it is much more important to think that we now have a very good successor structure. Roland, I believe, is a very good choice in this respect. And I'm sure that he will lead the company into a fortunate future, a very positive future. And I must say Roland Busch is much better prepared compared to me in 2013 when I took on this position of the Chair -- Chairman of the Supervisory Board. And those of you who have been with us know very well, and this shows always, that we now have a very long-term and very planned plan for the succession. We had Mr. Kleinfeld, and now we have a similar situation. This is something which we want to do and bring about. And I think we are really on the right track. Now looking at the management team, I can say Roland Busch, for instance, I think he's really an excellent choice for the new team of Siemens. And Ralf Thomas as the CFO. I think this is an extremely powerful team at the top, at the helm of this company. And we're looking at all the things that we intend to do, not only because of pandemic development we see here, but also -- and I'm sure this will be with us for quite some time, but also, we're looking at the technological transformations, which we want to bring about in all 3 Siemens companies and, of course, in different ways. But nevertheless, I'm sure that all this will happen and therefore, it's also very important that we have very strong teams. And the strong teams, surely, this also applies to the other parts of Siemens. For instance, Siemens Energy. And here, well, this is the situation, and I'm sure that you read about it. The CEO and CFO and the designated CEOs and CFOs of Siemens Energy are leaving with mutual agreement. And we know that by the 1st of April, we have to take a final decision, that is how Siemens Energy and its Board of Management shall look like and who is going to lead the company. And surely, there were some aspects, which you know it from Siemens, you know it from the business and the market diversity. There are so many aspects which have to be taken into account. And at the end of the day, we took a decision, a decision which was announced yesterday. Since the end of September and at that time, the Supervisory Board really set the course for the future. And at the time I was talking to Mr. Busch Bush and Mr. Thomas on the Siemens AG side and Mr. Sen and Mr. Patzak on the Siemens Energy side, I had many, many, many talks and discussions with them. We talked about the areas of interest. And surely, there are certain interests which have to be taken account, particularly the -- as a result of the spin-off. And at the end of the day, we took a decision, which -- and this applies to Siemens AG and Siemens Energy, we thought we will have this kind of division. And surely, this is a decision that -- we have taken this decision in a kind of amicable environment, and I'm sure we all agree when looking at assessing such a step evaluating the respective arguments. Here, we also agree, and at that time, to take the decision now, and this is something which we decided upon. And of course, we could say that we have taken this decision together. And with our new team, Mr. Bruch and Mrs. Ferraro, I'm sure that we are really heading into a bright future for Siemens. And surely, there are important tasks, and these tasks are certainly not easy, particularly when looking at the development over the next few years. I'm sure it's not easy, but it requires some efforts. Dr. Christian Bruch is a very experienced industrial manager. He's a mechanical engineer by training. He's been working for RWE, then a brief stint at Siemens, then changed to Linde, took on positions and functions in the technology departments then engineering. And at that time, we met at major projects like the liquification (sic) [ liquefaction ] at Novatek in Russia, or we also met at many other occasions. I can say that he has got an incredible know-how in this industry. And he, in particular, is very familiar with -- and this has to do with Siemens Energy's future, how they will -- how this can be shaped. And of course, we are talking about hydrogen. Maria Ferraro. I can say that this is a new CFO for Siemens Energy from Siemens AG. And when looking at Siemens, I can say that we've got a very long-standing tradition that the CFOs always to be hired from out the company, and this is what has been done. It's always been in financial positions. And therefore, I'm quite happy that Maria is now on board and that we were able to find someone who is also not only international by birth, but also we're looking at her experience. She had been working for Siemens Canada, had been responsible for many, many projects at many, many tasks and designs and at the time she was the CFO of Digital Industries, as you probably know. And this certainly is an industry which is really highly demanding, particularly when thinking of the short-term cycles which we face in this industry. We have got a very strong, very powerful team, which will take over the respective responsibilities from the 1st of May. But nevertheless, we can say that as was planned, we will be able to bring about the spin-off of Siemens Energy in September. We also assume that we will have the AGM on the 9th of June. Surely, this is something which has to be planned always against the backdrop of the pandemic and its development, but when looking at the schedule, the timeline for the time -- for the carve-out and also for preparing the IPO at the end of September. Now before we answer your questions or a few questions from you, and I'm sure that there are many questions, we would like to inform you how we are going to handle the pandemic. We have set up a crisis committee, and they are meeting every day. And I think the safety and the health of our employees are top priority. And I don't think it is necessary to mention this, in particular. On the 19th of March, so this is yesterday, we had 57 cases in the company, 41 in Germany. And of course, we are observing and monitoring the development every day. And surely, based on all that, we are arriving at measures, which we have introduced in order to make a contribution to slowing down the spread of this virus. Very important. And Thomas, on the occasion of an analyst talk, had evaluated the situation, what the situation is at present. We are a strong company, certainly, and we've got a very high level of liquidity. We've got very good assets. We've got various sound and robust business portfolio situation. But nevertheless, we will also have to face this challenge, and we will be affected by it, and this becomes increasingly clear. It is not only about the short-cycle times or rhythms. Now we have to make sure that service staff, all service staff of the company, can go to our customers only, say, with -- or under constraints, under restrictions. Now this is the situation, things which we can -- the things that we can do. The things we cannot do, this is something which we are discussing at present. But nevertheless, we are quite upbeat, quite optimistic that we will go through this pandemic crisis in a very sound and very robust manner, no matter how long it will take. But of course, at this point in time, it is very clear that it will have repercussions for the company. And of course, we will evaluate these repercussions later. At present, it must be a top priority that we look at the things on a daily basis. We have to handle them and look at what is going on. We see the multi-causal effects in governments, the customers, the members of staff and the suppliers. Everyone is affected, and we are all fighting, struggling or fighting against an invisible opponent or adversary, you might say, in order to go through these difficult times. And this brings me to the end of my part, and I'm fielding questions now. Thank you.

Thank you very much, Jim Snabe and Joe Kaeser. Ladies and gentlemen, we now have time for your questions. I will briefly hand over back to the operator, who will explain to you how you can ask your questions.

[Operator Instructions] Now on to our first question.

Hello? Can everybody hear me? All right. This is Oliver Sachgau from Bloomberg. I have one question on the management change at Siemens Energy. There were, of course, a few changes of opinion between Mr. Kaeser and Mr. Sen, for example, on the leveraging and also other fees at Siemens Energy. And did that expedite the exit of Mr. Sen? Or were there other reasons?

Well, there were no differences of opinions between me and Mr. Sen. That was, of course, reported from different sources. You cannot always comment every rumor, and that's why we don't. But Mr. Sen and myself are, of course, both in agreement about the situation. We're also in agreement of the different measures taken and also the timeframe, and that's why there are no founded -- substantially, well-founded reasons for these rumors. And besides, I've already given my information in my segment.

This is Michael Flämig from the Börsen-Zeitung. Now you've already mentioned that you've explained the reasons for the separation, maybe I didn't hear it. I didn't hear why you needed to create such a break. What was the crux? Mr. Kaeser, you said that both companies want -- that you want to make both companies successful. Does that mean that Siemens AG will continue to hold 30% of the Siemens Energy shares?

Well, thank you very much, Mr. Flämig. I mentioned -- let me specify that in April, we had to make a decision. And that, of course, regards the CFO and also other tasks for Siemens Energy. And within the framework of our analysis, we ended up with Mr. Bruch and Mrs. Ferraro as CEO and CFO, respectively. But I have many reasons. And of course, I've also explained not just about brand knowledge, it's about diversity. It's also about the collaboration between Siemens AG new and Siemens Energy. I've also mentioned that since September, we've been in intensive discussions, and this is, of course, with both units, with Siemens AG and Siemens Energy, that we've also evaluated everything accordingly. It was always clear to us that we would have a very trusting, collaborative relationship going forward. And we found that this was simply a better path. Now when it comes to the majority shares. We, of course, made it very clear that Siemens AG is going to deconsolidate Siemens Energy and is also going to go into the minority. Nothing's changed about that. We are still currently making decisions, so that process is ongoing regarding which exact share Siemens AG will want to hold in the very beginning. Now there is a range of different aspects. But the goal of a deconsolidation remains unchanged. Also, the goal to have a relatively oversee-able timeframe to reduce our share down to 25%. That remains unchanged as well. And Mr. Flämig, of course, you know that at the end of the day -- the good thing about a spin-off is that the shareholders, at the end of the day, will decide how they want to end -- act with the asset. If they think it's overvalued, they can sell it. If they think it's undervalued, then of course, you can buy more. And besides that, it's a really, really good story also for the shareholders who own the company and giving them the decision-making power.

Can I just check back on something?

Sure. Yes.

Now Mr. Kaeser, you said there was no difference of opinion between you and Mr. Sen. But I don't understand it. In the middle of the race, you changed horses, if there's no difference of opinion.

Well, as far as I heard there -- the question was whether there were any differences of opinion between Mr. Kaeser and Mr. Sen, there were no differences of opinion. And also, it's not a matter of person, it's just looking at the best possible solution for the companies. And once again, it was an amicable situation that we have made here, that decision that was made here, that those measures that are going to be taken are the right ones for all people involved and for the company. And right here is also Mr. Snabe.

There are no differences opinion -- of opinions between Joe Kaeser and myself, either. We always had a very close communication. And I, as well as the Supervisory Board, are convinced of the fact that we have a better solution after yesterday's decision. And so we were, therefore, also able to expedite the succession planning with these decisions. And with that, of course, we're creating clarity and a strong leadership team for Siemens Energy. Thank you.

This is Höpner from Handelsblatt. I also wanted to check on Mr. Snabe because you said that you had to make a decisive decision. And I was wondering why you think that was necessary because, of course, all of those factors that you mentioned as to why the new management team was chosen, all of those factors were clear in the phone.

Well, as was already explained, there were many dimensions that go into such a decision, especially, of course, if you make this decision relatively late. It is quite clear that with Mr. Bruch and with Ms. Ferraro, we have a very strong team. And we're all convinced that this combination is simply the better choice. Now of course, in the short term, that is going to present a challenge, and that's why I'm very happy that Mr. Kaeser is going to take over the -- this responsibility for Gas and Power in Siemens Gamesa in the Management Board. And that Mr. Kaeser already now also takes on the tasks of the Siemens Energy -- sorry, not take over the task, but has made himself available and has made the decision to be the future Chairman of Siemens Energy -- the Energy Supervisory Board, so that we can truly rely on his wealth of experience, not just in the short-term transition, but also in the long run. And that's why I, myself and also, the Supervisory Board of Siemens AG are convinced that this was the right decision.

This is John Revill from Reuters. Now you said that the number of share that you are going to hold at Siemens Energy will remain open. But on a scale, where are you more likely to end up, 50% or 30%? Or what's your take on that? What's your opinion? Number one. And second, what is the reason for the split of Mr. Sen? Can you just elaborate on that more?

Well, thank you very much, John. Well, there is no change on what we've communicated so far. We said that Siemens AG is going to deconsolidate Siemens Energy. We've also mentioned that there's going to be over 25% and less than 50%. That's the range. We've also said that as quickly as possible, we want to melt down this share in order to emphasize the independence of Siemens Energy. But what exact range we're going to end up, of course, that depends on a wealth of factors. We know that in the beginning, quite typically, there's always going to be potential flowbacks because, of course, there are different asset classes. And today's Siemens shareholders, of course, hold those, too. So there are a variety of aspects to consider. And we have to also see how the business developments shake out. But of course, the goal and the path remain unchanged.

Right. And you've also said that this is going to happen in September, but how optimistic can you be that this is actually going to happen, given that coronavirus is around? So maybe the spin-off or the carve-out is going to be delayed, do you think?

Well, I mean, look, there's the plan. And there's, of course, changing realities on a daily basis. At the moment, the speed of change is incredibly high because, of course, there is a pandemic sweeping the world, sweeping the globe, which at the moment is not yet under control. And we just don't know when this is going to be under control. I think it's going to be decisive that the AGM on June 9 is going to be able to be held. That's, of course, our next big appointment. And the shareholders will vote on the plan. Now regarding our future, of course, that is. What we can do about this plan is that we're going to have a carve-out ready end of March. And starting now, we're also going to have the assets of Siemens Energy as a separate asset listed. So everything that we can do, everything that we can influence is something that we're going to be doing exactly the way that we've laid it out previously. Now the next crucial thing is, of course, as to whether or not we can actually have our AGM on June 9, and then we'll see. If it works, there's no reason to worry today that this shouldn't work end of September. But again, the 9th of June, that's going to be the next very crucial topic.

This is [indiscernible]. I have 2 short questions. Now the turbulence in the stock market, how have they affected the planned listing because, of course, the Siemens share has come down significantly, as all the other ones have as well? And the second question to Mr. Kaeser is, can you imagine after 2 years of cool-on period, could you also imagine to go into Siemens -- into the Siemens old Supervisory Board?

Thank you very much, Mr. -- Siemens, I also have to say something else. The AGM is actually the 9th of July, not June, I'm sorry. I misspoke here. So that's going to be the next crucial point in time. Just to clarify that. Now Mr. [indiscernible], over to your question. Well, the stock markets are -- yes, indeed, quite turbulent, I should say. And if you just look at the Siemens Healthineers and also Siemens Gamesa and -- they are 85% and 67%, respectively. And if you look at the market value, you can truly see interesting pricing for the SE and mobility. And just across the board, it's very interesting. But anyways, we're focused on making sure that the company remains stable throughout this largest crisis in times of peace and that we can steer the ship in a stable manner. And I think we've done that quite successfully so far. Now besides that, I think we all have enough ideas as to what the future of Siemens Energy can bring. Also for the new Board, for the new CEO of Siemens Energy and AG, I don't think we have to discuss anything more.

Can I just ask who's going to lead Siemens Energy if Mr. Sen is gone and Mr. Bruch is not yet there?

Well, Mr. Bruch is going to start as of the 1st May, 2020. Maria Ferraro will also start as of May 1, 2020. In the meantime, Tim Holt, who already was the COO so far, so basically the #2, if you will. He's going to be the interim CEO. The same is Michael Becker, today's CFO of the operating company, Gas and Power. And Maria Ferraro, anyways, as the internal Siemens colleague as well as Christian Bruch, both of them have already said that as of next week, they're going to start looking at the handover and the transition. And of course, as Mr. Christian Bruch is already working on the transition at Linde -- in the Linde management team. Now that was, of course, very important that this is already possible because, as mentioned -- Mr. Flämig has mentioned earlier, the timing is, in fact, a little bit critical. And that's why it was very important that we could work together on a content level already, that the colleagues could already get to know each -- to get familiar, get to know and familiar with their tasks. And of course, Mr. Bruch is very well known to our customers. Ms. Ferraro is also very well-known in our financial organization. So it's a very robust setup that we have here, if you will, for this transition, and that is why I'm not at all worried, if I'm being frank, that this could lead to a break or to any sort of friction. Quite the contrary, I'm actually quite optimistic that this very complex situation can be solved very well close to the date.

Alexander Huebner from Reuters. I've got 2 questions, actually. Well, Mr. Bruch is going to start his new position in May. And of course, this lets me conclude that the idea of finding a successor for Mr. Sen has been thought about some time earlier. So I would like to know, when did it all start? And the second question then is to -- is about your handing over at Siemens AG. It is supposed to -- or it is said that on the 1st of October, Mr. Busch is going to take over the -- in most of the important positions at Siemens. So Mr. Kaeser, what will be left for you? You know, of course, a Supervisory Board at Siemens Energy, and of course, there will be lots of work to do for you.

Well, now, I think we're now going to talk about the nitty-gritty, you might say, get down to the details. Now the question when and how and what has happened, when and where and how, well, the carve-out, the spin-off, the division of this company, of course, is always something which is being discussed on the level of the 2 Boards. We want to make sure that the 2 companies will be successful in the future. We have the intention that we remain successful in the future, too, to be successful when it comes to the carve-out to the spin-off, clear. That's clear. I'm sure that both companies will have or have a very good perspective, have a very good outlook, and this is something which we took into account. And of course, when talking about energy changing from conventional to, say, renewable energy resources, this is something which we have on our mind. I believe that this is really a historical transaction per se. I do not want to talk about disruption, merger end game and IT and all the other things now. This is something which we can elaborate on later. I think this move is of historical relevance. It will completely change the company and will also determine its way ahead into the future. And at least this is my experience, this is the experience I've gained over the last few years. It is not simply like having a plan A and now we have to put into the practice no matter what. No. Now we can really think about the things that you want to do and want to achieve. And of course, since the beginning of the decision, that is when the decision was taken into September, we always -- I've always made sure that we always have the right perspective. And I think this is what we call anticipatory management, looking-ahead management. Of course, we cannot not succeed in all cases. But I think it was a normal process all in all. Surely, there are -- was some -- there were some or have been introduced some backups. This is something which refers to the contents but also refers to, say, persons involved or affected. And surely, we have not been hit by things in an unprepared manner. It might be a shock for the public, yes. But now how shall I put it? It was a very, very, very clear plan. Our deliberations, very, say, clean. And I think I repeated this oftentimes. And this was the question, and Mr. Sachgau, Mr. Huebner, you all asked similar questions. At the end of September 2019, the Supervisory Board met at the time, and they decided that they want to move towards management by Mr. Busch or Mr. Sen and thinking about energy. And at that time, I've seen my role as such and said that I want to be, have been and will be someone who wants to make sure that -- or that I can lead the companies into successful future. Talking to Mr. Busch, turning to Mr. Sen and the Siemens AG, Siemens AG new and the dialogues, which we had at the time also with Mr. Sen and Mr. Patzak, we've thought about them as being potential representatives of Siemens Energy. So the point of departure was that we face a situation, we will have to make sure that everything will become a success at the end of the day, that we have seen -- of course, there will be conflicts of interests. No question about that. We thought about this. And if one hasn't got the things and the other one will have it all the other way around. So this is something which we had in our mind. We believe that we really have handled the situation in a very constructive manner. I'd lot and lots of talks in this group, in this circle, and we -- of course, we're very much aware of the fact that there are some, say, peculiar situations, which we have to face. And of course, how quickly Siemens Energy can be built up now being a stand-alone company or to what extent we still have to look at or use the services coming from Siemens AG. Surely, these are all issues which we looked at. It all depends on the speed, how quickly you can move things forward. Of course, there might always be different opinions, surely. But when looking at Siemens AG or Siemens Energy, all these questions are certainly justified, but they have to be solved. And this is how you can imagine the process having going on like this. It has always been like this. We always joined ranks. Both parties said this is the right way forward and this is how I understood my role as a CEO. And surely, you're really very busy when thinking about these things, and you will be busy by the 1st of October, surely. And between the 1st of October and the AGM, there are also the financial statements. And of course, we have to get the certificate in September, and the responsibility will be returned. And of course, I still am responsible for the fiscal year. And if the plan works out the way we have planned it and which we are following right now, then we will have some time that is between the -- between September and the 31st of December, lots and lots of things have to be done. And of course, you will understand that. It's not only about Siemens Energy, it's also about others. Lots of parties are involved. We want to make sure that everything can be dealt with, managed successfully. Yes, it will be very busy in those times. And we've got a 5 members of the Board right now. I don't know whether you noticed this. We've reduced the number from 8 to 5. So we will be busy, I can assure you. I am not worrying. I'm not worried that things would be boring for us. But nevertheless, I can say this actually has not happened over the last 6 years.

Let me add to that. As a member of the Supervisory Board, we just wanted to make sure that Mr. Kaeser is responsible for the fiscal year 2020, that the spin-off will be completed successfully. And Mr. Busch will then take over responsibility for the budget and, of course, for the fiscal year 2021. We tried to come up with the best possible optimum solution. I think we found it. Mr. Busch can now take over the leadership, the management. And Mr. Kaeser. I am sure that we can handle everything in the course of the AGM, that we can say farewell or bid farewell to Mr. Kaeser. But everything can be done during the AGM.

Oh, another question still open to you, Mr. Kaeser, I believe. Can you still imagine this post or this function at Siemens Energy? Is this an interim solution for the next 2 years, and then you will be the Chair of the Supervisory Board of Siemens AG? Or is that not something which is on your mind?

Well, I think this was Mr. [indiscernible] question. I answered it. But a bit, say, implicitly, to put it this way. Okay. Let me do it the other way around this time. The Chair of the Supervisory Board and the CEO, this -- and I want to put it in reverse order. I can say that we've got a wonderful chairperson of the Supervisory Board and lots and lots of things, which we've managed to bring about together. They will be -- but again, the successor planning we had -- we had a lot of advice, some of them looking ahead and what we could do. I don't think we have to comment on all the things, the slightly negative things, which have happened. But nevertheless, and this is something which I mentioned before, that we have more and more ideas what we can do in the near future. And we try to implement everything that we intend to do. Of course, this is difficult in this time and age. Surely, we really have to work hard in order to make sure that the company will really go through this fundamental crisis successfully, will come out of it more or less unscathed. And then, of course, both companies, Energy and the new Siemens AG, will have a good start right from the beginning, particularly for the new generations taking off. And of course, as I said, if things become boring after the 1st of October, then of course, I will be happy to. But nevertheless, we do everything that is necessary in order to fare well. We've got time for one more question before we have to wrap up this telephone call.

Yes, Angela Maier. I would like to ask a question about the business. Could you give us more details to what extent Siemens AG is affected by any shutdowns? And what about the second quarter? And what about the profit forecast for that period of time?

Well, thank you very much, Mrs. Maier. And Thomas gave you some, say, qualitative evaluations what our current position is. And I can say that there aren't any reliable forecast, which we can give because things and measures which have been taken change from time to time, from day-to-day, that is. And there isn't much more to be added to that. Health and safety of our employees is most important in this case. At present, all factories are still up and running everywhere in the world, and of course, smaller plants, which we closed down for precautionary reasons because we had some cases there. Surely, we monitor the supply chain very, very closely. This refers to -- or relates to the supply of our products and services to our customers, but also to the supply of the suppliers to us. Because I can say they are still doing a good job right now. We are very well on track. We also get the respective products. But things might change overnight, you might say. In particular, the car industry, for instance, if they determine or decide that they're going to shut down plants, then, of course, this will have an effect. Or if the customers say that they are no longer using our services when it comes to buildings, et cetera, et cetera, maintenance, et cetera, et cetera, so then the situation might be a bit or might be quite tense, tight. We can assume that we are going to feel the repercussions, the ramifications, all of this in the second quarter. And this, of course, at present is all demand-driven, meaning, the customers order less. The supply chain at present is still all right. And we are very happy. But China is back 95%, which means all our plants over there are up and running, and really, before the crisis -- they are almost like before the crisis. So this means that the peak has been -- is now behind us, and we now have to look ahead. And of course, we cannot look very far ahead. Looking at share prices, the share prices, which we have at present. I can say that the market also formed its opinion on P&L developments, et cetera. Thank you very much for your questions. Ladies and gentlemen, we now have to conclude the conference call. Thank you very much for your interest, listening in. I wish you a wonderful day and enjoy good health. Thank you.

Thank you. Ladies and gentlemen, today's conference call has come to end. We thank you for your participation, and wish you a wonderful day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]