Siemens Aktiengesellschaft (SIE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Siemens Energy Capital Market Day. My name is Sabine Reichel, Head of Investor Relations at Siemens AG. Later, I will be joined by Michael Hagmann, who's Head of Investor Relations at Siemens Energy. Now let's have a look at the agenda of the day. First of all, we will kick off with the Siemens perspective. We will have Roland Busch and Ralf Thomas who will give their view, followed by a short Q&A. The focus of the day will be Siemens Energy. Christian Bruch and Maria Ferraro will present the key investment and financial highlights. Jochen Eickholt and Tim Holt will give you an overview about service, operational excellence and the 3 divisions. And finally, we also have Andreas Nauen with us, CEO of Siemens Gamesa. He will give the highlights of last week's Capital Market Day. We plan to close around 6:30. And before we kick off, also a few technical remarks. This event is webcast on the Siemens Investor Relations website, and there will be also a replay available. And please also have a look at the safe harbor statement and disclosure on Page 2 and 3 of each presentation. And with that, we now will start. Please, Roland, Ralf, come on stage.

Thank you, Sabine. Welcome. On behalf of Siemens, I would like to welcome you to the Siemens Energy Capital Market Day. And I'm very happy that we have this important milestone. Remember, the whole process started in May 2019 when we announced that we want to spin our Siemens Energy business. At that time, it was a 17-month lead time, it was considered to be very, very ambitious. And at that time, we even didn't know that COVID was around the corner. So with an enormous effort of the teams from Siemens and Siemens Energy, we finally made it, and we are heading now for the spin-off in September 28. Today, we have a goal of giving you a better understanding of the investment case prior to the spin-off. I would like to give you an overarching perspective from Siemens perspective, also where we are regarding Vision 2020+. Ralf will talk about the highlights of the future relationship between Siemens AG and Siemens Energy. And then, of course, the majority of the day is dedicated to Christian and his team to really explain about Siemens Energy strategy and the investment case of Siemens Energy. What we want to achieve with our second and final step of spinning Siemens Energy is creating an ecosystem of Siemens companies, publicly listed companies, each of them focusing on their respective markets. Each of the markets is in a major transformation which requires companies which are agile, geared for the further market clearly focused. And this is what the 3 companies have in common. They are focusing on their markets, on their technologies which they have to serve with -- for our customers. Secondly, it's about innovation. It's about technology, innovation and speed. And in particular, in transforming the business in the digital way, because each of the markets is in the midst of a digital transformation too. And last but not least, it's about adaptability and agility, because we saw -- and corona was another point where we saw the future is not really predictable. We need agile empowered teams who can really shape their market as they are changing. And Siemens Healthineers was one of -- a very good example where we showed that we can create value with this strategy. Since its spin-off and an IPO -- since its IPO in 2018, the share price increased by 40%. And the recent announcement of the transformational acquisition of Varian would not have been possible or maybe much, much more difficult without access to the capital market and share -- having shares as currencies. Siemens Energy will continue that success. You have a company which is not only focused on the market, but has a clear opportunity to really use their capital and allocate it to their business as they need it, with an entrepreneurial freedom to serve their customers in the best way. And with Siemens, we have, of course, a leader in the digital transformation of industry, infrastructure and mobility. We are ready to connect the digital and the real-world for the benefits of our customers, and we are continuously investing in the digital transformation of our businesses. There are also some collaboration areas for these 3 companies. It's not only about a strong brand, but also the technologies which we are currently working on. Is it cybersecurity, is it the industrial Internet of Things, our platform, our ecosystems, but also functions like purchasing or IT, where we are still benefiting from the joint approach and collaboration between the 3 companies. Regarding Vision 2020+, we are fully on track. We do what we say. We are, again, talking about the Energy spin-off the whole day. Flanders spin-off is around the corner, and we have initiated all the steps in order to do that. The approval will be in the AGM 2021. Our cost improvement program is ongoing. We accelerated or even improved it. And we are leveraging also COVID-19 as opportunities, not only as a challenge. And we have shown that already in our latest quarterly numbers, that we are having a rather resilient business and we have a very, very good delivery in difficult times. We promised that we want to increase our revenue by 2% points, the revenue growth by an incremental improvement, our EBITDA profitability by 2% points, and earnings per share which is larger than the revenue growth. We are keeping on these promises, and we are committed to deliver on those. How do we do that? On the growth side, we explained it to you in that our last quarterly presentations, we are developing our business mix towards growth markets. Is it on the Eye, thinking about Food and Beverage; is it growth markets, in batteries and the like. We are continuously investing in our digitalization and along all our businesses. We're using opportunities also in terms of decarbonization and de-dieselization of energy, mainly for SI, gearing our business also for other growth areas like Asia, for example, or, again, the decentralized energy market. In the mobility, we are continuing our success story, having a very, very stringent execution, on the one side, but also improving and continuing to improve our market share, with a very, very dedicated team delivering on their commitments. On the bottom line, we are having a cost program, which we started early enough. We are executing it. As I said, we're accelerating and improving it even. We do that not only in the businesses, but also in corporate cost. The operational excellence and the stringent execution in projects is one of the major targets of our management team. And last but not least, we are very selective how we are allocating our capital in order to finally have a cash conversion rate which is one minus the growth rate. The 2 companies going forward, Siemens AG and Siemens Energy, they have a mutual benefit with the spin-off. We have similar levers, as you can see, on both sides, from focus, accountability, adaptability, transformation and value creation. But the major point is that we have at Siemens Energy, which is focusing on growth markets, and we are leveraging our digitalization. We are gearing more for customer orientation. And we are looking very, very careful the way how we are allocating our capital. At the same time, Siemens Energy has a tremendous opportunity now to use their own cash flow for R&D, for acquisitions and the like. It is a company with a portfolio which is best suited for the energy transformation, which is going on and is even accelerated, as we can see. And with the portfolio from power generation, transmission distribution to the consumption, we have a lot to offer in our Siemens Energy portfolio, and it's uniquely placed to deliver according to our customer expectations. So this is a clear path going forward in order to deliver value, but also increasing the profitability for both companies, and at the same time, deliver on cash flow. As we have shared with you already, we will have 35.1% shares hold by Siemens; 99.9% -- 9.9% on the pension trust, but this is not a strategic holding. And we also announced that within the next 12 to 18 months, we are further diluting our stake in Siemens Energy, with an approach to minimize the market impact. With that, I do believe that Siemens Energy has all its ingredients to be successful in the market. And with that, I would like to hand over to Ralf to talk about how the relationship between Siemens and Siemens Energy looks like going forward.

Thank you, Roland, and welcome, ladies and gentlemen, also from my side. Actually, everything has been said already. Siemens Energy is a company that has a comprehensive and outstanding portfolio of businesses, close to their customers, highly innovative, and with a great and experienced leadership team. That's one of the reasons why we said from the very beginning that we believe that this business is supposed to be independent, and to be crystal clear, that we mean what we say and act accordingly. We have been putting a deconsolidation agreement in place that doesn't leave any doubt that there will not be any interference in important decision-making processes, even though Siemens AG is going to be an anchor investor for quite some time. Having said that, let's remember, last year, same place, different setting, we had the Capital Market Day of Siemens AG in May. And we said we would provide a solid foundation on the financial side for Siemens Energy to be. And we have been walking our talk. With a BBB stable outlook rating of Standard & Poor's, we have been absolutely walking along these lines, providing Siemens Energy with a very solid financial basis, 36% equity ratio, EUR 1.9 billion liquidity as per June 30, and access to a credit facility of additional EUR 3 billion on Siemens Energy level, plus additional EUR 2.8 billion on Siemens Gamesa Renewable Energy level. I think that deserves the name, sound and solid. But on top of the financial foundation, it's also important to have clear and crisp and experienced governance in place. That's according to the German 2-chamber system, we -- that's the reason why we have been putting together a really diverse, not only in gender and passport, but also in experience, a very diverse team of Supervisory Board members, that is going to make sure that the transition and governance of Siemens Energy is going to be professional and experience from day 1 onwards. I think I don't need to mention that Joe Kaeser is definitely one of the most experienced managers when it comes to dealing with governmental business, large-scale energy project. I think he has been walking his talk many times. And I hope that I will be able to contribute with my financial experience leading the Audit Committee, if I'm elected into that position. But I would like to stress that, also with Matthias Rebellius, we have one of the leading opinion people in the area of decentralized energy. So with that set of 3 Siemens AG employees, we have been putting the best possible resources to strengthen governance from day 1 onwards. So what we also said from the very beginning, we want this company to be successful and also have a smooth transition. That's why we have been putting a couple of features in place that allows for that smooth transitioning. And one of them being, of course, the strong trademark that Siemens has, being encapsulated in a trademark license agreement, with an initial tenor of 10 years, allowing to benefit both Siemens AG and Siemens Energy from the long-standing history of proud and close customer relationships between Siemens and its customer base. We also will continue to support Siemens Energy with a preferred financing agreement. You do know that Siemens Financial Services has been tailor-making solutions for large-scale project businesses for years, and we will continue doing so. There is an initial EUR 1.5 billion of equity financing agreed upon and committed by Siemens Financial services throughout the first 5 years, with an additional EUR 500 million for the next 5-year period. All that will be done at arm's length as it used to be, because, remember, this has been a regulated industry that didn't allow for anything else than arm's length anyhow in the past. The third element of service agreements is quite comprehensive in the beginning, making sure that all the support processes needed to run operations smoothly and still allowing Siemens Energy management to focus on core activities will be captured in service level agreements, mainly supporting in the area of accounting, payroll, IT services and the like, making sure that the transition process is as smooth and anticipated as possible. The last element I would like to mention is the guarantees. We talked about them quite frequently. It's the nature of the business models that requires guarantees from the customers for large scale projects. And that has been provided in the past by Siemens AG. The status was EUR 42 billion as per June 30. This will unwind over the course of the next couple of years. Roughly 50% of that will be withdrawn and executed accordingly in projects throughout the next 5 years to continue thereafter. And there is a group of banks taking care of the guarantee needs of Siemens Energy in the future. Let me conclude with a short view into the rearview mirror where we started out last year. In May, when we said we would be able to carve out this comprehensive set of businesses on a global basis by March 31, some of you may have been having doubts or even concerns that this would be doable. And the teams have been executed exactly according to plan, have been completing all these decisive steps you see here with the tick marks, not only in time, but also on budget and even a bit better. So therefore, this is giving me an opportunity to say thank you to all those helping hands at Siemens and our supporters, making that happen what appeared to be impossible. Only a great team can accomplish that. And first and foremost, I think it's also a clear indication of the strength of the leadership team of Siemens Energy. The next steps after a comprehensive Capital Market Day today will be that the prospectus will be disclosed in a couple of days, providing even more information than you may see and hear today. Thereafter, Maria and Christian are going to be on road show. And just in case, if you haven't been addressing your needs in that regard yet, please contact Michael Hagmann, Head of Investor Relations of Siemens Energy, and make sure that you get in contact with the management team. And then finally, on 28th of September, Monday, 9:00, we will listen to the bell ringing at the Frankfurt Stock Exchange. Looking forward to that and a great team in Siemens Energy that is going to make a difference in the market, be it on innovation, be it in technology and for their customer base. With that, I'll hand it back to Sabine.

Thank you, Ralf. Thank you, Roland. Before we go now ahead with Siemens Energy, we will have a short Q&A. So you will have the opportunity now to ask questions, just to Roland and Ralf. So nothing Energy related. It's the Siemens perspective that we will focus on now, and the rest will come later. [Operator Instructions] Okay. Andreas Willi, JPMorgan. You are winning the first prize. Oh, we cannot hear you, Andreas.

Andreas, maybe you're still muted.

I can see you, but please -- I think the microphone is -- maybe...

Maybe you give it another try.

Yes, or maybe we -- I have another -- Andreas, are you there? Otherwise, we will try again later after the first question. Okay. So maybe we now go with Gael de-Bray, and then we try again, Andreas. Gael. We can see you. Hopefully, we can hear you.

Can you hear me?

Yes. We can hear you.

I think you've just talked about the Siemens AG's willingness to create an ecosystem of listed companies with Healthineers a couple of years ago, now Energy in less than a month's time. Is there any intention at Siemens AG level to continue on that path and to make some of the current Siemens AG businesses more independent going forward?

As we have shared with you in our last quarterly result presentations that we feel that Siemens, as it is now, with industry infrastructure, mobility, we are well suited to really -- and well positioned to serve the markets, with a strong technology backbone where we can really leverage different technologies in different markets, clear focused. And we have also proven that we are able to run this business in a market leadership position. So we feel that this is a very integrated and strong company which we'll develop this way going forward.

Thank you. So then let's take the next question. I have not seen Andreas yet back, but then we will take Martin Wilkie now. Please, Martin.

It's Martin from Citi. Can you hear me okay?

Yes, we can hear you. All good.

So just a quick question, following the recent acquisition at Healthineers, it seems Energy wanted to make a large acquisition in the future. Obviously, a lot of technology change coming in the energy sector. Do you see the listing of Siemens Energy as providing a similar currency that Siemens would want to be involved or not? Just to get some sort of sense as to how you might think about Siemens Energy expanding and growing through acquisitions in the future.

Well, very interesting question, Mark (sic) [ Martin ]. Of course, we thought about that. And the clear answer for this is, I believe, and we believe that Siemens Energy has quite a lot on its plate at the moment. So it's rather theoretical discussion that we would have. Just in case there would be a great opportunity arising in a few years down the road, and the company, being in a steady state, so to speak, we can imagine everything. But as Roland has been pointing out before, it's obvious that we are committed to sell down our 35.1% stake from a Siemens AG perspective in Siemens Energy anyhow on the way to get there through the next 18 months if market conditions allow, and therefore, this is more of theoretical nature. But as pointed out at several stages, and I would like to reiterate that statement because it's so important, this is going to be an independent company. So it will not be Siemens AG making decisions on their behalf or for them. They will find their way to be successful in the market. And they got all the ingredients, including a very strong balance sheet, with all the room to maneuver if need be. And they are also very well positioned in terms of the market positioning in a very competitive environment. So therefore, I'm sure they will find their way, and they will not need Siemens AG's advice on whether or not making acquisition at the right point in time.

Thank you. So we have time for 1 or 2 more. I can see one via phone. I think that's Daniela Costa from Goldman Sachs. Daniela?

Can you hear me well?

Yes. Hello, Daniela.

I wanted to ask a question regarding sort of, going forward post spin, I think you've been clear about how you think about the portfolio in terms of simplification. But what would be -- what would you say sort of your next priorities are in terms of how would you rank giving cash back to shareholders and thinking about the dividend and the buyback post the spin versus maybe reinvesting more into the organic business of what's left in Siemens in terms of M&A?

Thank you, Daniela, for that question. Very important, obviously. Capital allocation is always on top of our mind, as you do know. For the time being, I think we are clearly set for the next couple of months. We said that we are going to keep our strong commitment to deliver shareholder value. We do see huge potential, as discussed, to get into a re-rating process now over the course of time. And we also will make sure, with the next steps that we announced already, with the Flanders spin, that we will continue delivering value to our shareholders. We are committed to our dividend policy, and we will also continue our share buyback adequately and also reflecting market conditions, of course.

Thank you. And now the last question, and I can see Andreas Willi is now back again. So Andreas. Hopefully, now technique works.

Yes. Does it work this time?

Yes. We see you. We hear you.

Sorry for the earlier problems. I wanted to ask you about the guarantees and the ramp down where you've given some more information now for the EUR 42 billion. You said it's -- half of it's going in 5 years, if I remember correctly. What does it mean for your willingness to go below 25% in Energy in terms of the connection of the speed of that ramp down? And maybe a little bit more disclosure, what is there to Gamesa in terms of -- is the long tail mostly at Gamesa or is that also service contracts on the gas power side?

Yes. Thank you, Andreas, for that question. Very important and close to my heart, obviously. First of all, the ramp down will be driven by the execution of the underlying projects, obviously. That's why I gave you the whole 50% over the course of the next 5 years. Of course, once having reached that status and then unwinding the residual amount, we talked about a couple of really long time projects with service projects, both on the Siemens Gamesa and the Siemens Energy's former Gas and Power side. So of course, this does have impact on that what you call willingness to step down below the 25% shareholding. Maybe we take that bridge when we come to it. But our commitment is to a company, now that transition process of Siemens Energy becoming a truly independent, separately listed company, and we want to make sure, including the guaranteed topic, that they have the freedom to maneuver and don't need to worry about support processes. That's why we have the service level agreements. Continue tapping on the strength of Siemens Financial services being jointly at the customer place, having tailor-made solutions in place, and also benefiting from the strong brand. So therefore, the combination of all these factors should enable and will enable Siemens Energy to transition smoothly into a steady state, which I do expect then to develop over the course of time. We will sell down our 35% shareholding. And we will also find the right point in time to then also share with you the details in the long tail, as you call it, of the guarantee stock that is in place. We will be transparent on that anyhow, and we'll keep you informed on how that develops. But that rule of thumb, 50% over the course of the next 5 years, I think that's an indication that we wanted to share with you because it's a material amount. On the one hand side, we have been bringing in a group of banks, as mentioned before, to cater for future needs. So the process of getting also truly independent from that end is on its way, and we'll be very transparent for you to follow-up.

Thank you, Roland. Thank you, Ralf. With that, we will now finish the Siemens perspective. So you can leave the stage now.

Thank you, everyone.

And we have now as next, Michael Hagmann on stage, Head of Investor Relations at Siemens Energy. And he will walk you now through the day. Goodbye.

Thank you very much, Sabine. And also a very, very warm welcome from my side in the name of Siemens Energy. My name, as Sabine has said, is Michael Hagmann. And I joined about 6 months ago as Head of Investor Relations. One thing I can assure you is there's an awful lot of enthusiasm in this organization towards that spin-off, and I hope you will see that also in the presentations. So the first person to present will be our CEO, Christian Bruch. And Christian, please come on to stage. And over to you. Thank you.

Thank you very much, Michael. And welcome also from my side to a historic day, ladies and gentlemen. It's the first Capital Markets Day of Siemens Energy, a company with a unique portfolio of fantastic people and a growing market. My name is Christian Bruch. I'm the CEO of Siemens Energy. And it will be my pleasure today to walk you through more details of our company, what we are putting here together, that you, as our, hopefully, future investors, understand what is this company about. Before I start in the overall explanation of the company, I really would like to put the main points in a nutshell and really explain to you the key elements why we believe we are a very interesting investment case and the 6 levers really to deliver shareholder value. First of all, with 150 years of experience and energy technologies from the Siemens side, we're putting together today a leader in the energy industry. And the spin-off allows us to drive operational performance really with a step change, more focus on operational performance. And really, there's no cushion on reality, and this is something which will help us also going forward. We are starting, today, of a leading portfolio in the industry. We are #1 or #2 in most of the markets we're active in. And you're going to see it throughout the presentation about our portfolio, what we want to monetize on and what we have today. The Service business is the strong core value driver of our company. 40% of our revenue stream is Service, resilient, long-term profitable. And we will explain to you in more detail what Service business is about and how we intend to drive it going forward. On this strong base, we obviously want to develop the future portfolio of Siemens Energy, with a focus on service and sustainability. And at the end, it's about monetizing on a strong base what we have and investing money into the development of the future energy world and into the energy transition, to, at the end, deliver more EBIT and more cash to our shareholders. I'm extremely pleased, really, to lead this management team, which, together with all its employees at Siemens Energy, want to take the company to the next level. And allow me briefly to introduce to you my management team with -- which is really helping to take the company to the next level. Let me start on the right-hand side, with Tim Holt, who has been a long time with Siemens in the Energy business. Big experience in conventional energy as well as renewable energies, has been working with digital transformation, broad expertise in service business. Tim will talk about the Service business as well as the Transmission business today and explain us on how we drive growth and value from that. Jochen Eickholt has, in the past years, led the Mobility business of Siemens and really restructured the business and drove profitability 350 basis points over the past 5 years, by rigorous implementation of operational performance measures. And Jochen will walk us today through our operational excellence program. And also, we'll talk a little bit about our divisions, industrial applications and generation. Maria Ferraro did join us from Digital Industries from Siemens. And close to her heart is EBIT and cash focus. And she will talk to you in much more detail today about the financial numbers of Siemens Energy that it's better for you to understand how the company is structured, how does the performance look like, and how are the measures with what we drive EBIT and cash. A couple of words to myself. I joined Siemens Energy in May from Linde, where I have been responsible over the past 6 years for the Global Engineering business as well as for the technology of the group and also the digitalization transformation of the company. The Engineering business at Linde is, from a structure, even so a lot smaller, but very similar to Siemens Energy business. It is about products, solutions and services to an industry, which is obviously very much around generation and process industries. With measures in terms of driving operational performance, not rocket science; simple things: project selectivity, focus on non-conformity costs, really driving the cost base, we were able in the past years to drive up the EBITA margin of that business by 700 basis points over the past 5 years. A lot of these measures I see today also in Siemens Energy, and as I said, Jochen will walk us through this operational excellence program. Some of these elements have been started already last year, but we want to obviously accelerate a lot of these measures to drive forward also the operational performance. In the next 6 hours, me and my team, we want to walk you through the who we are, in which markets we compete, and how do we want to take, as a team, the company to the next level, to make understood that we are the right investment in this market. I'm also very pleased that we will have Andreas now today with us, which also -- who will also share with us the view on the wind market, which will be a core element also in our strategy going forward. Before I go into this and talk more about the company, let me address a couple of points and put it in perspective, why it is so important, why do we need a company like Siemens Energy? And we're looking today in a world where, obviously, energy and electricity systems mission-critical to the world. But we have continuously changing boundary conditions: climate change, population growth, digitalization. So these are all elements which not only make the market growing, but also transform the market continuously. And this market will continuously, over the next decades, need new solution, new technologies, new business models. And obviously, if you look on this, overall, on the market, we are looking in a growing electricity market. And roughly, we assume over the next 20 years, it's around 50% increase in global electricity production. At the same time, obviously, all these different trends like population growth, more access to electricity, new applications like e-mobility or data centers, going to go all push, obviously, for this electricity increase. And at the same time, obviously, we have the one question to resolve as a society. How can we meet this growing demand of electricity and at the same time protecting our climate? And this is where Siemens Energy comes into play. This is where we want to deliver, with our customers, answers, how can we get from, today, from a very diverse energy world, into a future, more sustainable energy world, in the tomorrow. And obviously, all our people are motivated by the fact that we energize society. We want to accompany our customers in the transition to a future energy market. What are the right solutions to really tackle the challenge of growing electricity demand and more sustainability? How can we balance reliability, affordability and sustainability of supply? And very often, and you will see it throughout the presentation, it is a lot also about talking interim solutions sometimes. It is about the better conventional solution sometimes. It is about finding the right step after step after step to transition to a more sustainable energy world. And this is why we bring different capabilities together, which make us the speaking partner of our customers in this market. I've spoken a lot to customers, really, over the past couple of months, and I always see this high interest and willingness to talk to a company which has broad expertise and a lot of knowledge in the energy world, and this is what we want to be. And this is why I'm super proud that we put together today a world leader in the energy industry. 1/6 of global electricity production today is based on our technologies. And we are a world leader which is close to its customers. We are present in 90 countries of the world. And we are a world leader which is -- already has embarked on a journey to a decarbonized portfolio. 30% of our revenue today is based on wind with Siemens Gamesa. Around 20% is on transmission. And these 2 things, obviously, also in a future decarbonized world, going to present the backbone of an energy industry. And there's also obviously a lot of conventional technologies. And we want to talk to you about so what is this exactly about and why it is so important to have these products and solutions available in a market which is transforming. So we are putting together a leading pure-play energy technology company, which cuts across really from generation of electricity to transmission of electricity, over to storage or green hydrogen production, which captures really the whole width of technology portfolio, from conventional to renewables, and provides products, solutions and services in this regard to the market. Siemens Energy going to report the numbers in 2 reporting segments. And you as investors obviously going to see this reporting in the quarterly results, which is GP and SGRE. GP, as an overarching segment comprises roughly 2/3 of the revenue stream and Siemens Gamesa roughly 1/3 of the revenue stream. And with this setup we are having in the company, we are a mirror of today's energy markets, really from conventional technologies down to renewable technologies. And you see below the segments the divisions. And let me briefly go through the divisions, and you will get, today, much more detailed and dedicated presentations on how the business works in these different divisions, how do we look on it, what is the homework we have to do, and what do we want to tackle. Let me start with generation, which comprises everything which is around central and distributed power generation in the markets, so gas turbines, steam turbines, generators, full power plants. This is what we're doing. Good 50% of that business is Service business. Industrial applications, we used to call that oil and gas. So why did we rename that business? There's so much more in this business than just oil and gas. This is a business about improving process industry. This is a business in terms of really bringing electrification, automation and digitalization to rotating equipment and process industries. So they are serving all type of industries like oil and gas, but also like chemicals, like steel, fiber, any type of process and industry. And this is something we want to build on. With the transformation of this market, we obviously want to bring more solutions around electrification, automation and digitalization of rotating equipment to our customers. Roughly 60% of this business is service. And this is something also what, in the separate presentation around industrial application, we will explain that -- how we want to deliver on this and really drive this forward. The Transmission business covers everything around the transport of electricity. And as I said before, with the increasing transformation of the market, it is really something where we will see also more needs for transmission. We will see more needs, really, for infrastructure. And this is, obviously, for us, a strong business, which also has been proven to be very resilient in corona times. And this is something, going forward, where we will continue to push. New Energy comprises all activities really around new technologies, what's going to come in the future, with particular focus on green hydrogen. It's a very -- let's say, strong discussion at the moment. Siemens Energy is -- since decades in electrolyzers, electrochemistry, and obviously, also green hydrogen. Actually, I have been, during my Linde times, been operator of the largest pem electrolyzer, which produces green hydrogen. And this is also what we want to push for and where we want to invest in. I'm a strong believer in hydrogen as one core element in the future energy world. But let me be crystal clear, this is something where we invest, today, money. This is not an area where we can earn money today. This is a future bucket of cash, which is important to develop at the same time while we drive profitability in other areas. But this is something which only will provide cash in the midterm. Even so, it's important, obviously, for us as the energy technology company to be present in this field. And obviously, we have Siemens Gamesa, with onshore, offshore and service. And Andreas will talk in much more detail about Siemens Gamesa. Onshore, you have seen throughout the year, had a disappointing performance, with Andreas and his team are now tackling and resolving, and Andreas will explain on how they do this. Offshore and service develops extremely nicely. Record order intake in offshore, very strong, growing market, and this is something, obviously, what we want to leverage on. So looking across this portfolio, that is a way on how to drive a sustainable, reliable and affordable energy systems with our customers. And this is what we want to do with this company. Coming from a portfolio today, and as I said, we have the #1 or #2 market position in most of our markets. But also, looking on the portfolio, there's a lot of elements where we already address future, more sustainable solutions. These are exactly the interim solutions I always talk about when it's about a transition into a new energy world. And it's not just about a wind turbine or electrolyzer. It's really across all divisions. Let it be from a net 0 hybrid power plant, which actually combines battery units together with generation technology over to a gas turbine, which takes hydrogen to make sure that you gradually can move from a natural gas unit to a decarbonized unit down to SF 6 free transmission units, with SF 6 being obviously also a hazardous greenhouse gas and where we really change also, in the transmission area and the transformer world, the way on how to design products. That is the way we want to go forward, really, in terms of making sure that, step after step, we can achieve a more sustainable energy portfolio, and with this, a more sustainable energy world for our customers. It's not just about the products. And I'm always impressed, over the past months, when I see what type of projects this organization can deliver in terms of executing on projects. We energize societies and we energize countries. And there's a couple of examples I want to give here with Egypt, Iraq and Bolivia, really where there's a whole offering in place from generation over to transmission and really bringing electricity and energy to the people. And it's about the solution competence which is unique, and there are very few companies who can do this. And let me pick the example around Egypt. And this has been a project which has been communicated before, a EUR 3.7 billion contract when we did the whole project, executed in record time. It converted Egypt from an electricity importer to an electricity exporter. And at the same time, these are the projects where we, as Siemens Energy, build trust with our customer. So as a consequence we got, after the execution of the project, a 10-year service contract, which we are now executing, which provides a lot of value for us also as a company based on the trust the customer has earned through the execution. Let me be also very clear. If you do these type of projects, it's about also selectivity. It's about the right risk-reward balance in this solutions business to understand, does it really provides profit to the bottom line? And this is something what we will drive very rigorously and very selective to pick the right projects where we can earn money. And this is, also from my previous experience, one of the biggest levers we can pull really to improve the profitability of the company. This will take some time, no question, but this is an important element to look on EBIT first and then on top line. And this is an important element we obviously look on the selection of the project. But these are the type of projects which build trust of customers. And these are the type of projects which very few companies in the world can actually successfully execute. Once we have installed the units, we come to our market-leading Service business, and making sure that we obviously serve, really, for the whole operation time, the customers. And it's massive. It's huge. The backlog is nearly EUR 50 billion in this Service business. I was impressed, when I joined the company, to see how big it is, how present it is really across all regions and all markets. And it's obviously very resilient and very nice. And you see, in industrial applications, roughly 60% of the business is Service. In generation, more than 50% is service. And there is room for improvement, more business to come in transmission and SGRE. But this is a very nice business to have based on a massively installed fleet, 90,000 units globally in GP serviceable assets in the market, more than 100 gigawatt installed power at Siemens Gamesa. And this is obviously one -- what we want to leverage going forward. And this is also one of the benefits having multiple divisions in the company. We have a very strong and big experience in Service, in generation and industrial applications. And a lot of the things we're doing in generation and industrial applications, we can leverage also to the other divisions. If you service, remotely, a certain unit; if you interface with the customer, how do you manage operational data? That is actually very consistent across the different divisions. So there's a lot of synergies by bringing these elements together and drive, jointly, service to really understand how can we best service our customer, how can we interface with our customer and drive this forward. As I said before, we are coming from a strong market position today. #1 or #2 in most of the markets we are active in. And this is obviously also what brings a lot of the trust from our customers. I've been talking a lot to customers in the Americas, in Asia, Europe, Middle East, over the past months since I'm with the company. And I'm impressed by the high interest of the customers really to talk to us and really to think about future solutions and what can we do to help their problems really on how to make their systems more efficient, on how to decarbonize and what is really the way forward. So this is a unique capability, what we have; this is a unique trust, what we have; and this is something, obviously, what we want to monetize on also going forward in interaction with our customers. Let me talk a little bit more about the business in detail. And this is a very important slide because it breaks down the different businesses into the revenue streams based on 2019. We are bringing, on the 28th of September, a EUR 29 billion energy technology company to the market. And you see the different businesses: 65% GP; 35% SGRE, as I said before. And since this is so important, let me walk through the different businesses step after step. First of all, let me start with generation, roughly 30% of our revenue. Around 10% is central generation business, so large steam turbines, large gas turbines; 4% is distributed generation, so smaller gas turbines, particular generators; and more than 50% of the business is service. There is no question we have homework to be done in that business and in this division. And this is already addressed. There are certain programs have been also communicated in 2019. We're executing these programs. We're intending to accelerate some of the programs. And it's about reducing the cost structures. It's about selectivity of projects, as I said before, reducing nonconformity cost. And this are these elements, which Jochen Eickholt is going to explain a little bit more in detail later today. At the same time, it's about harvesting the opportunity which we believe lies into distributed generation and also pushing for more profitable service in this area. Industrial applications, which represents roughly 17% of our revenue, looks, in terms of the challenges very, very similar. It's also about, on the one hand, improving cost basis, and on the other hand, making sure that we can capture this huge value we have from our existing fleet and drive the Service business going forward. Transmission represents 20% of our revenue stream and has been a business, even during corona times, which is -- has been proven as very resilient. Also leveraging our strong position which we do have on the HVDC projects. And obviously, benefiting also from the infrastructure changes we do see due to the energy transformation. And this will be very much also in terms of developing new innovative products, what can we do more about grid stability, what can we do about, let's say, service and digital-based solutions for the transmission world. And this is something what, obviously, also Tim, in his presentation about transmission, going to talk more about later today. Siemens Gamesa, as I said, actually very simple, fix onshore, drive offshore, drive service. And this is what Andreas and his team is rigorously tackling now. Andreas has been presenting to their Capital Market Day, but he will give us a summary of the main views as of today. All in all, in this combination, this is a very resilient business. This is a business which had a book-to-bill ratio for all its business in 2019 above 1. And this is also a business where we expect also, overarchingly, over the whole company, we expect to be also with a book-to-bill ratio above 1 even in 2020 with corona. So it is a resilience we do have in this business which is impressive and which we obviously want to leverage on. At the end, if I put it in one sentence, Siemens Energy, and I can only repeat myself what I said at the beginning, is about monetizing on what we have and investing money in the future portfolio, with a focus on service and sustainability. So how does this engine work? And how does it all connect, these different elements, products, solution services, to a highly resilient value-generating machine? We are a product-led service business. Products and solutions are done really to drive the service business. So we sell a new unit, and we sell a long-term service agreement with it through the maintenance and repair, go through the phase of modernizing and upgrading this, and enter the circle again once the unit is replaced. And you see, obviously, there from the large gas turbines conversion rate, roughly 100% from the large gas turbine are converted really to long-term service agreements. Around [ 60% to 70% ] of the smaller turbines are converted to service contracts. This is long-term durations. You see it for the generation business, where it was 12 years, 80% retention rate of customers. You see it for the wind business, in the average, around 9 years. And this is obviously what makes this business so resilient and so nice, actually, as a business to have. And this is why we want to grow it and really drives the circle over and over and over again. And Tim walks you through, later today, also the mechanisms, what you can do around the cycle also to drive our profitability. It is coming from a huge backlog. The Service backlog is around -- close to EUR 50 billion. And this is something obviously why we enjoy this business so much. Let me come to the markets where we are and where we are playing and where we compete, obviously. And as I said before, the electricity market is growing. We assume or we believe 50% electricity market growth in the next 20 years. So there's 2% CAGR, really, year after year after year. And there's obviously different elements contributing to this: population growth, excess electricity, new applications like data centers and e-mobility, but also the electrification of industries, which more and more takes place to really achieve a more sustainable industry setup also. But the market's not only growing, it's also tremendously transforming. If you look on the resource base for electricity generation, today, we're looking on electricity generation which roughly is 40% based on coal, a good 20% is based on natural gas, 10% is nuclear, and less than 10% is wind and solar. This is going to change going forward, and nobody exactly knows how. But I have a couple of beliefs where I believe is really going to happen over the next decades to come. First of all, in a growing electricity market, the share of wind and solar are going to grow. We believe it will be, until 2040, around 30% to 40% share in the overall electricity production. And this growth in renewables will at the same time also drive transmission and infrastructure. The location where energy or electricity is produced and where electricity is consumed going to depart more and more. And this will require solutions for either transport electricity for longer distance or to transport electricity or green electricity via a molecule, for example, via hydrogen. Even with this over-average growth of renewables, I'm convinced that gas will remain a key pillar of the future electricity generation over the next decades to come. And this is also driven, obviously, by the coal-to-gas shift, what we will see in all areas of the globe. So gas remains a key enabler in the industry. We believe it will be much stronger going into decentral applications, but it will remain a key pillar in the industry. And we have invested a lot of money ourselves over the past years to really upgrade our gas turbine technology. We have an excellent portfolio there. And this is a portfolio, what we want to monetize on going forward. Coal, we strongly believe, will go down. Obviously, it will be different from every region. And every region has a different need with regard to balance, affordability, sustainability and reliability of supply. But we believe we will see a lot of coal-to-gas shift or coal-to-renewable shift. And then the question is, once again, how does this go together with the transmission grid? How can we ensure grid stability? What backup solutions are required? And these are the elements, what we want to shape as an energy technology company. You may have heard that we are currently, in our company looking into this, how do we continue with coal, and I would say a couple of words to it a little later. So how are we taking this company to the next level? So how do we deliver? And let me address it, first of all, overarchingly from our program, what we call Energy of Tomorrow. And this is really addressing the transformation of the market in 2 steps. The first one is about accelerating impact. It's about doing our homework. And it's a lot about how we do things. It's really, how can we get leaner, sharper, faster to do our business, to route the revenue to a more effective machine. And this is a lot of the things also what Jochen going to talk about on driving operational excellence, monetizing on our good portfolio, what we have and really drive profitability up. At the same time, we are already starting to develop new technologies to help the energy transformation. One example I gave was the green hydrogen. We spent a decent amount of money in our development money to push for the electrolysis as one of the key technologies. There's a lot more, and I will talk about some of our innovation examples later in the presentation. And it's also about establishing how do we work in networks. The energy transformation will be a lot about collaboration, collaboration with customers, collaboration with partners, and really building new solutions based on collaboration. And obviously, this is very much, once again, about how are we doing things. At the end, our mission -- our vision is obviously very ambitious. We want to be the most valued energy technology company. And this is really driving energizing society and making sure that we can really electrify the world and really help also the way to a more sustainable solution. This will also drive our view on how we manage data. And I will talk about the digitalization a little bit, but it's really also becoming a more data-based, a more data-focused company. We are in a data-driven business. And obviously, we want to act as a data-driven company. So this is the program we are talking about. And I will provide you more details, particularly about the accelerating impact phase, but also Maria will show you more numbers around it. And Tim and Jochen and Andreas will walk you then through the different businesses and the activities we're tackling there. Before I come to the overarching picture, let me address you what I as CEO of this company is focusing on currently. And this is 5 main areas I would like to highlight. First of all, I'm a big believer in rigorously following up on operational performance. It's about the passion for details. It's about making sure that we rigorously review where is EBIT and cash generated, where are our challenges, how can we really make sure that we fix things which are there. And it's just the passion for detail at the end to deliver on the performance. At the same time, we need to be simpler and less complex as an organization, clear accountabilities, lean structures, right people at the right place. This is what we're driving. This is what I look at personally to make sure that we get the machine as effective as possible to leverage the value of this fantastic portfolio, what we're having. Even so we're having a fantastic portfolio, there's elements, because our market is transforming, which going forward, will not provide the right profitability or not the right solution for a transforming market. And we will have to make hard choices on underperforming portfolio elements. And it can be about fixing them, partnering them or stopping them. And this is something what we're -- continuously will look into and are looking into while we work through this transformation of the energy world. We will not be successful without innovation. And this is something where I also personally will follow-up on how do we allocate our development money in the different areas to make sure that we also deliver long-term potentials and long-term EBIT and cash. We have a strong innovation machine today. And there's a lot about elements, and I will talk about this in a slide, where we can really make sure that we get it more effectively, more focused, opened up to customers and really get the most value out of our innovation. Siemens Energy spends EUR 1 billion every year in innovation. And this is obviously something where we want to get our, let's say, profit back afterwards once we have invested into the development of new technologies. And at the end, last but not least, I have a very high customer focus. We are in an industry which is driven by customer relationship, by trust, by also understanding jointly where this transforming market is going to. And this is something which is very close to my heart, really understanding how can we co-create projects and solutions together with customers, really understanding where the market is going, also making sure that the customer has the trust in our abilities to deliver on their projects. And I have spoken a lot to customers over the past couple of months. And I'm very pleased with the openness, really, to work together with Siemens Energy as the leading energy pure-play company in the world. Let us come to the performance of the company. And we're coming, obviously, from a history where we had seen deteriorating performance, coming from a good level going down. And this is why also, in 2019, on the Capital Market Day, certain measures were presented also to improve, really, the profitability of the business. I come to this in a slide on how these programs are running, but we obviously see an even faster deteriorating market today. We all have suffered from COVID. And I think the whole world is suffering from COVID. And our industry has been facing significant headwinds, and so did we. But I -- first of all, I have to say, I'm extremely pleased and proud how the Siemens Energy team has mastered, really, COVID. We were able to keep most of the sites running. We were able to serve our customers. Never forget, we are mission-critical for the societies in terms of providing solutions to produce electricity. And the team has done an outstanding job on, really, keeping the projects going. There have not been any major cancellations of projects. And this is what I have to say, I was very pleased to see this, managing COVID, and at the same time, really managing the listing process, which is also on track. So this has been a tremendous success, really, of the Siemens Energy organization. Going forward, we know all that we have to do homework. I'm not satisfied with the operational performance. The organization is not satisfied with the operational performance. And at the end, it's about relatively straightforward matters. Look on your cost base, reduce nonconformance costs, improve the gross margin of the project business, build capabilities in best cost countries, and rigorously following up on this to drive performance, to get it up to a level of 6.5% to 8.5% EBITA margin, including special items, and in the midterm, 8% or higher, including special items, really, then on the midterm. One element around this definitely also will be of the measures, being more selective on projects, and Jochen will present key elements around this also in his presentation. Going back to the programs. What we also have announced in 2019, those of you who have been there at the Capital Market Day, know this program, that we announced a cost reduction measure, around EUR 1 billion of programs. We are halfway through the program. We are on track with the program. We expect to deliver the other EUR 500 million. But at the same time also, we do know and we do see that the market headwinds are higher than we anticipated actually when we set up this original program. So there's additional minimum EUR 300 million savings tackled. We are, at the moment, working through the details of these programs, how we can do it and how we can tackle it. And this is absolutely something which will drive up the margin going forward in the line, what I have been presenting before. Also, Siemens Gamesa has been presenting their LEAP program, and Andreas will walk us through it, in terms of how to improve the performance in onshore, but also really how to drive innovation and bring the right products into the fast-developing wind market to make sure that we, as a company, Siemens Gamesa, can really develop successfully in this growing wind market. If we want to deliver on this improvement of the performance, I want everybody in the company to be aligned also with the shareholders' target. And we have implemented an incentive systems which is really geared around the shareholder value. So the compensation scheme of the Executive Board is around EBIT, ROCE, and cash on the short-term incentives, and total shareholder return, earnings per share, and our ESG program, which I will talk about a little later in the long-term variables. We also want to have skin in the game for the Executive Board. So there is an investment obligation to be invested heavily in the company to drive an ownership culture. We also want the whole organization being incentivized with the stock price and really drive an ownership culture in the company, which is all linked to the share price performance. And this is what we are rolling out now to make sure everybody is aligned with the shareholder targets also to drive the company. Let me come to some of the key levers I talked about before, what we want to tackle in our Energy of Tomorrow program. And let me start with digitalization. And I'm a big believer in digitalization, a big fan of digitalization. And you always have to look on it from 2 ends. The one thing is about building and generating products which can generate customer value. And we have, over the past years, developed a lot around digital offerings. Let it be from cybersecurity products which connects an operating power plant to our supervision; remote services like remote monitoring, but also a complete remote commissioning of gas turbines. And corona has given all these applications a big push. And everybody has seen that these solutions are working. Everybody is much more open to accept these type of solutions. And these are solutions we want to also drive growth with in the Service business going forward. But it's also about transforming ourselves. You can only be a good digitalization company or offering good digital products to your customers once you transform yourself, once you are data-driven. And it's about processes. It's about data consistency of the company. It's about automation of processes and really strengthens the digital backbone and -- to make sure that we really can come to the next level. It's about IT structures. And this is what we're driving at the moment, really getting data-centric in our company to make sure that from this level, we can also build the future service product. I talked before about the portfolio and also the need to continuously review it and look at it. It's active portfolio management. And the question is always, how future-proof are the elements of our portfolio? What do we have to do? What is happening in the transforming market? And this will be a continuously ongoing process. While the market is transforming, we are transforming. And we have, earlier this year already, obviously, taken a different view on our larger aero derivatives, gas turbines, and Maria going to talk about the exact numbers as a consequence, on the financials. But where we did not see in the new units business anymore the long-term profitability, but at the same time, driving service off the installed base. This is a logic we are looking in, in terms of continuously making sure that we reshape our portfolio step after step after step. The other element, I addressed already in the beginning is coal. There's a lot of discussion on how to continue on coal. Once again, just to recap. 40% of the electricity generation today is coal. Globally, if I look to Asia Pacific, it's 50%. At the same time, the world has to get out of coal midterm. And this is why we're looking into this at the moment, how can we actually balance the needs of our customer with our own sustainability aspiration. What is the right way to do it in terms of looking on affordability, sustainability and reliability of supply? And obviously, also, how can we balance the employee interest from ourselves there in terms of really managing this coal business? We will announce a plan by the end of the year on how we continue with coal. But we definitely keep our customer commitments. And also, we intend to continue to provide services to make sure that existing plants run at the most sustainable setup to reduce, really, CO2 footprint as much as possible. And I strongly believe, and I can only repeat it. I believe the fastest way to a sustainable energy world is by driving also interim solutions. Let me come to innovation, and this is a massive innovation power which sits in Siemens Energy. I'm very impressed what we have here. 24,000 patents. We spent EUR 1 billion a year on research and development. And we have fantastic examples where we are putting together new products which already are addressing a lot of the challenges of tomorrow. And it's always in the market around the 4 Ds: the decentralization, demand growth, decarbonization and digitalization. And if I just walk through the -- for example, given here on the slide, just to give you a flavor of what the organization currently is doing, and looking on the more decentralized application like the floating power units, which is something which we see more and more as a market trend, where you really have the power units on a barge floating to allow quick access to electrical power. I talked already about our market-leading electrolyzer solutions. Siemens has been long-term in this business. I believe in green hydrogen. It's quite a journey still to go. It's now really about the phase where the bigger demonstration projects have to go into operation and really develop the boundary conditions, in which boundary conditions can these type of systems around green hydrogen really be commercially viable and successful. The Sense products is an interesting element. We've put IoT devices on more or less every transformer what we have -- so there's more than 1,000 units out there where the transformer also comes with an IoT connectivity and really provides data. That is in a business which is today not very service focused. But by doing that and by generating the data, we more and more generate, also, interest with our customers to look into this data to see on how we can create value. And this is exactly about these type of new business models what I was talking about at the beginning. How can we generate data from our assets? And what is then the solution which provides value for the customer? And I think the Sense products are a fantastic example for that. It's not always about the product or the what. Sometimes, it's also about how we do things. And in this regard, additive is a fantastic example on how you can really change fabrication processes. And with this, also manage your stock differently, have a different part of spare part philosophy, increasing, really, the speed on the production chain. And this is something which, particular in the rotating equipment area, allows us new designs, new geometries, and where we're really at the forefront on developing new solutions. At the end, the focus going forward in R&D will be, for us, driving service and sustainability. And it will be a strict capital return criteria to cite, is it really worth to invest money? Do we get a payback from this development? And for me, as I said before, it's also about co-creating. Energy technology is about collaboration. The market is transforming. Working together with customers, working together with partners, opening up, and finding ways on how can be as fast as possible and as lean as possible develop impactful solutions for the energy markets. And I can only echo what I've said before. I have spoken now to so many customers, and the interest really to jointly do -- develop new things, to jointly drive innovation is very, very high because the trust in Siemens Energy, as a company, the respect in seeing this long history on technology is extremely high. And this is obviously what we want to drive going forward, to drive the best solutions for a new energy world. Let me come to a couple of points which already also tap into this innovation piece, but which also show one thing: Why is it actually good to have several divisions in one company? Why it is better to have a broader portfolio at Siemens Energy than just being, for example, renewable pure-play company? And it's about optionality. The energy market is transforming, and it will require options. And it requires a combination of capabilities. And all these 3 examples here, and there's much more at the moment happening in our company, are combinations of capabilities in more than one division of our company, providing solutions to customer who have to transform themselves. And this is obviously what we continuously want to do. Every time a customer thinks about a new solution required, we want to be the speaking partner of choice of really doing this. And if I start in the middle. This is a nice example of combining knowledge out of our oil and gas business and from the transmission business and bringing together at the customer. This is an oil and gas customer where the need was to reduce its CO2 footprint in oil production. And a lot of these type of companies at the moment talking about electrification of the operations, what else they can do on the platforms. And this is bringing together customer knowledge and customer intimacy and market knowledge on the one side and bringing them the electrical capability through the transmission business. And at the end, you come out with a solution which is comparable in terms of CO2 reduction as if you would take 130,000 cars off the road. And this is why I'm so passionate about the company. These are exactly these interim solutions which make the world better today and really help us to get to a more sustainable energy world. A similar solution in terms of step-wise, going into a decarbonized solution is what we drive together with Uniper in terms of injecting hydrogen in an existing turbine fleet. So it's bringing together the capability of, how can you modify or change existing assets and producing green hydrogen at site and injecting it into the turbine, and with this, taking care of existing assets and step-wise, really, decarbonize these. Our customers have invested billions and billions and billions of assets. These needs to be tackled and transformed going forward. And this is where it requires climate-friendly solutions, even so it sometimes is an interim solution and even though it is based sometimes on a mix with conventional. But it's better to start today than to wait too long for tomorrow to find one silver bullet. I think this is the view, what we are taking in terms of driving forward, really, the energy world. On the right-hand side, you see an example from combining the Siemens Gamesa capabilities of the offshore wind capability together with our transmission group in terms of designing and also transform a module, which is really cost competitive, lightweight, and is really combining, on the one hand, technical capabilities, but on the other side, also execution capabilities, with a huge offshore experiences. And this is why it's also so nice to have Siemens Gamesa in the family and why they are core to our strategy at Siemens Energy. And Siemens Gamesa has been, since 2004 really being in a successful journey going forward. #1 in offshore, tremendous market growth. Andreas will talk about, obviously, on how to also improve onshore. And there's a lot of synergies between Siemens Gamesa and the rest of Siemens Energy. I mean it's simple things sometimes, like how can we pool procurement, how can we actually access our customers? A lot of our customers, what we are talking to, like oil and gas customers, are, today, investing into offshore wind parks. So these are exactly the same customers. It's the same trust base, what we're using there. And this is we're, obviously, also the go-to-market. We want to leverage, as much as possible, jointly to bring value to our customers and drive this forward. And there's also a strategic collaboration around new developments. How can we, for example, develop hydrogen at the bottom of a wind turbine tower and produce hydrogen directly offshore and bring the molecule to the coast. And these are the elements which will drive the future energy world, and this is why Siemens Gamesa is an instrumental part of the Siemens Energy strategy. I spoke a little bit about the market development globally. But what you have to see really is every region is slightly different. Every region has a different starting point and every region has a different opportunity. And let me pick as an example here, Asia Pacific. This is the fastest-growing electricity market in the world. In the next 20 years, more than 80% market growth. At the same time, it's also the fastest transforming market in the world, particularly driving a coal-to-gas shift or coal-to-renewable shift. We have, today, 18% of our revenue stream in Asia Pacific, and this is a number I want to grow. And this is obviously a lot about also how do we go to market, how can we partner with clients. And you may have read our technology partnership with UGTC in China on how to bring large gas turbines into the Chinese market. You may know about our offshore activities in different parts of Asia, combined, also, obviously, with rolling out our transmission capabilities and how we -- can we bring this together. We have launched our large gas turbine HA class in South Korea. So there's multiple elements what we're currently driving and it's really an opportunity for us, with a more rigorous going to market in Asia Pacific and really tapping into this growth going forward. We all do what we do because, at the end, I think we share all the same target. We want to live in a more sustainable energy world. And sustainability will be at the core of our actions. And as [ I ] can only repeat it, I strongly believe interim solutions are the faster way to get to a more sustainable world. But sustainability must be really in the core of our action. And supporting our customers in this transition is a key element of what we're driving. It starts with us. It starts with us as a company to walk the talk around sustainability. And this is why we set ourselves the targets to be 100% climate neutral in 2030 with our own operation. In 2023, we want to source 100% of our own power consumption from renewables, green electricity completely. And at the same time, it's also -- I mean the organization is only successful if you drive diversity. We start from a very low level. I have to say, and I would obviously love to see higher numbers, but we commit to 25% by '25 and 30% by 2030 in terms of female leaders in our management levels. And this is where we also continue to drive more diversity to be more successful as a company. We will walk through the sustainability agenda more and more once we come obviously also listed as a company. This is really close to all our heart. And this is something where all our people are working on, are motivated for: How can we drive a sustainable energy world? Let me put it into one summary in terms of the main levers, how can we become leaner, faster, sharper? How can we renew -- route the revenue through a more effective machine going forward? And it's about driving service. It's about, really, tapping into growth regions like Asia Pacific. It's really managing costs, how can we manage our manufacturing sites. And Jochen going to share a little bit about information where our challenges are. How can we improve the best cost country share in our workforce, particularly you see the growth in Asia. How can we more effectively organize our R&D centers? How can we increase the funding to our R&D? So these are the things which we are driving. There is a rigorous road map around all these elements. And this is what the management team and all the people in Siemens Energy are embarking on and are driving forward. So let me finalize and summarize why I believe we are the right investment. And let me go back to the first slide actually, just to put it in a nutshell. We're putting together a leader in the energy industry. The spin-off allows us a step change in operational performance. We have, today, a leading portfolio in the industry. Service business is, for us, a core value driver. And we're going to develop our portfolio with the focus on service and sustainability at the end, to deliver more EBIT and more cash to our shareholders. All this is only possible, really, based on our people. And I have to say this is the most impressive thing I have now seen over the past 4 months since I'm with the company. This is a highly motivated workforce. This is a workforce with a lot of passion for our customers. This is a workforce which really understands that we have to transform ourselves and wants to tackle it. And we're all eagerly waiting to start sailing on the open sea with our ship, Siemens Energy, and we're all energized with. The same thing I am telling you today, I tell my people in every webcast in, every telecast, in every meeting, what we're having, to make understood where we want to take it. And I'm super pleased to be part of this team. We are all energized by it. And I'm very, very confident about the future of Siemens Energy. Thank you very much for your patience during this presentation. I will hand over to Maria Ferraro for the CFO presentation and somewhat more numbers. And then afterwards, Maria and myself will be available for you for question and answers. Thank you.

Thank you, Christian. Good. Hello, everyone. Hi. My name is Maria Ferraro, the CFO of Siemens Energy. It's really difficult to follow Christian, but I will do my very best. A very warm welcome from my side, and thank you for joining us here today. I have to say, we're really excited and pleased to be here. This is a momentous day for Siemens Energy. And although it is virtual, we really do thank you for joining us today in our Capital Market Day. So before I start, just a little bit about myself, although Christian did a great job of introducing us. I'm Canadian, born and raised, a chartered professional accountant, and I started my career with PriceWaterhouseCoopers many years ago in my hometown of Hamilton, just outside of Toronto in Canada. After that, I did leave PwC to join a telecommunications company. It took me to parts of Asia, also in Europe. And then on a very momentous day, again, in June of 2004, I joined Siemens in Canada. Since then, I've held a number of roles within the Siemens finance organization. It took me to a number of countries. I actually was in my own home country in Canada, the CFO there, for a number of years. I went to the U.K. And since 2017, I've been here in Germany when I started my role as the CFO of the global Digital Factory Division. And then, of course, Digital Factory became the operating company of Digital Industries. And since May of this year, very pleased to be part of the Siemens Energy team. And I just want to make a comment about that because, of course, you're going to see us here, the 5 of us, and maybe even a few more here on stage, but we're just the management team. It's really the 90,000-plus people out there that make Siemens Energy what it is in the past, with this great legacy coming from Siemens and, of course, who are really passionate and energized, pardon the pun, to become Siemens Energy in the future. So I'm here to take you through the financial portion of our presentation today. In my presentation, I would like focus to always on 3 things. So one is our solid business foundation for our business, and I'll take you through that in the next slides. Number two is we have a clear path for margin improvement. And I think Christian touched upon that, not just our ongoing programs but, of course, our new program, the accelerating impact program. And number three, it's cash, cash, cash. We will focus on cash. We will focus on creating cash that's generated from EBIT. And these are the 3 topics that's sort of the red thread through the entire financial presentation today. Also Christian mentioned it, and we did talk about this at the meet the management earlier this year, we will be providing an additional layer of transparency today at the divisional level, and this is because we want you to understand our business better. But of course, going forward, that will change post spin, but we'll always endeavor to ensure that you have sufficient information to address your questions. Also as a note upfront, I have a lot of content in my presentation, a lot of slides to go through, but I will describe the Gas and Power segment in a little more detail. Of course, SGRE with Andreas Nauen here, he will present later, but they had their Capital Market Day last week. And I think they have their profound public disclosure, so I'll touch on SGRE, but I will focus on Gas and Power. So jumping right into it. I think we did that already. So of course, this is what we start with on day 1: a global diversified business with EUR 77 billion in order backlog, of which EUR 9.5 billion in recurring and resilient service revenue per annum as of fiscal year '19. And of course, I'll get into this later. I have this little bubble there that says asset light. It is operational asset light with low net capital employed. And we have a very strong net cash position, and Ralf touched on this earlier, and really pleased about that. And of course, our BBB investment grade with stable outlook rating from S&P. All of those 5 get us to that illuminated, if you'd like, circle at the bottom, which is our clear path to the 6.5% to 8.5% margin in fiscal year '23, adjusted, of course, for special items. So this is what we start with on day 1, which, of course, means we need a clear framework for value creation. And it brings me to our target framework here. So where do I want to take Siemens Energy as CFO? Remember my 3 items, the strong business foundation, margin expansion or looking at our profit and our cash conversion improvement. So first and foremost, if we go to the bottom left hand, you see there, flat to 3%, a solid top line development. In the midterm, we target a 3-year average revenue growth for Siemens Energy of flat to 3%. Because we know, and Christian mentioned, that it's not only about growth, it's also about being selective and pursuing profitable revenue opportunities. Looking at the top part of the slide, we think about profitability, and we have 2 metrics there. Very simply, we have to take cost out. It's about rightsizing. It's about looking at our capacities. It's looking about how we do things smarter, taking cost out. And being a Siemens -- independent Siemens Energy, this is what it's about. And we may have to make some difficult or tough decisions to make that happen with speed, agility and empowerment. I think it's very important. This is what we bring at Siemens Energy. Also looking at execution, of course, when it comes to profit, it's about execution, project excellence, understanding our commitments and delivering those commitments, from my perspective, on time and within budget. And with that in mind, we have a clear path, to the top left-hand now, looking at our 6.5% to 8.5% adjusted EBITA margin before special items. This is our target for fiscal year '23. And on the right-hand side, you see there, the greater than 8%. Why that's different? Because that's all in. That's as reported. So adjusted EBITA margin, excuse me, for Siemens Energy, this is our midterm target. So moving down around the circle, if you will, to the cash conversion rate of 1 minus growth, this is about cash flow, this is about excellence and it's about knowing our balance sheet. It's what Christian mentioned. It's about the passion for details and managing it step-by-step, which includes all parts of the organization. It's important to see that when it comes to assets, it's not just something that happens in the headquarters. It's all throughout the entire organization. And for cash, we aim for a rolling 3-year conversion of 1 minus revenue growth over the fiscal years of '21 to '23. So for the last 3 points that I mentioned, you see white checkmarks beside it. Anything that's denoted by a checkmark is something that we're trying to ensure in terms of accountability. We talk a lot about accountability. And those checkmarks mean that the profitability and cash conversion targets are parameters of our executive incentive framework. Now moving to the right hand of the side -- slide, excuse me. I think Christian talked very thoroughly about R&D. We have the EUR 1 billion in annual spending. This will remain in that range, give or take. However, it's ensuring how we're allocating R&D, not essentially the size, and looking at appropriate areas of growth. Our asset-light model, as I mentioned, supports attractive returns to our investors, while we continue to invest in our portfolio to act as the leading force of energy transition. Going to the bottom right-hand side now, I'm looking at financial policy. Of course, our solid investment grading is a key priority. It's a key priority for me as the CFO of Siemens Energy. And we've got a great start with our BBB stable outlook rating by S&P, and we aim to maintain it. And we plan on a 40% -- 40% to 60% payout ratio in terms of our dividend policy for -- and funded by our free cash flow. So in summary, looking at the financial framework, it's all about driving value creation. It's focusing on performance, profitability and cash flow improvement, of course. It's about a disciplined capital allocation and continuing to invest in R&D and deliver attractive shareholder returns. And it's looking at those profitability and cash conversion targets, those are embedded in pillars of our incentive program. So what am I presenting to all of you today? There's a lot to get through, but I thought we should, let's say, partition into 3 parts. The first part will be looking back, looking at our historical performance and really looking on the basis of that foundation that I talk about. In the middle, it's about sustainable value creation, what are we doing really to ensure that we meet those targets that I just outlined in the future. And number three is taking you through in a very detailed way our financial outlook for Siemens Energy. So looking at our historical performance. In summary, we try to encapsulate some of the trends because there are some very good trends in our historical performance. Number one is we returned to growth in fiscal year '19 across the board with a book-to-bill ratio greater than 1 in all divisions. You will also see that in fiscal year '17, the Egypt Megaproject does have quite a sizable impact. And it creates, let's say, tough comps or, from a comparability perspective, it does create tough comps. And in terms of our profitability, we stabilized in fiscal year '18 to a new normal, a new normal environment, of course, pre-COVID. And I think it's really important to stress that we as Siemens Energy demonstrated resilience, despite COVID-19, with year-on-year increasing top line, and I'll get through -- or I will detail that in our current trading overview. So now going into a bit more detail and look at the themes I just mentioned in terms of the numbers. If you look at orders on the left-hand side of the slide, very good progress made over the last 3 years for the group, increasing overall steadily since fiscal year '17 our sizable order backlog. Also in the last few years, as we mentioned, steadily increasing our Siemens Energy book-to-bill ratio. Very good trend. If we look at Gas and Power, of course, in fiscal year '17, you do see from the revenue perspective a bit of the spillover from our Egypt Megaproject, but it levels off in FY '18/'19 at approximately, give or take, EUR 19 billion in revenue. For SGRE, I think it is also noted, very performing well and steadily increasing revenue over the last 3 years or since merger as well. Looking at EBITA on the right-hand side of the slide. Of course, as you see, the drop from '17, of course, with the Egypt Megaproject. We had quite a favorable capacity utilization in that year, then leveling off again in '18 and '19 to around 4.5% EBITA for GP and just shy of 5 -- or 5% for the group. So summing up, a very strong '17, leveling off to a reduced business volume in '18 and '19. With a new normal, I think it's important to note, a new normal of our new units, but steady service, as Christian mentioned, steady service. And we stabilized our performance in fiscal year '19. So now I'll go into greater detail in the divisions. So here is the much awaited transparency. Again, we haven't provided that before, but it was important to us at Siemens Energy to provide that to you today, so that you can understand our business, understand the 3 components in our divisions, and we want you to have a closer look as well. So there's a lot of information, I have in the next 4 slides, very heavy numbers, a lot of content. So I'll be pointing out just some key factors per slide that I would like you to focus on. So firstly, for this slide, across each division, please look at the top. All divisions, book-to-bill progressing since 2017, all book-to-bill ratios greater than 1 in fiscal year 2019. So both Gen, well, Gen, for the most part, and Transmission also did have the Egypt Mega order effect in fiscal year '17 and was highly impacted, of course. But if you look at generation right now, you can see from fiscal year '17, down on -- from an EBITA perspective and from a revenue perspective, of course, impacted by -- it was great business. I shouldn't -- in fiscal year '17, it was a great business. We wanted that order, and it was a real success story. But of course, you can see the impact predominantly in our generation business going forward. In the middle, we have our Industrial Applications business. Looking at the last 3 years again, we can see that the book-to-bill also rose in the last 3 years, but there was weak order intake in '17 for new unit business, which impacted revenue generation in the future years. However, important to see that it's now stabilizing. Also on IA, if looking at the EBITA, we do need to look at our cost base and see how we continually improve that. We have programs in place that we're executing upon. But of course, this is something that we'll have to look at resizing, if you'd like, again to this new normal. Also of note, in both Industrial Applications -- well, Industrial Applications in fiscal year '18 and 19, included in the EBITA are onetime recurring M&A impacts, as you can see there denoted in the notes on the slide. Going to Transmission. Transmission increasing book-to-bill and steady margin improvement. One thing I should note, in fiscal year '18, even though we see a slight dip in the book-to-bill, this was the year that no large HVDC orders were given or won. And still, with a 0.9 book-to-bill, I think that's pretty, pretty good, real solid performance. So we see in Transmission a stable top line with continuous profitability improvement. So this is a strong business, progressing well with our marketing and technology leadership. And our colleagues will go through the divisions later in more detail. But going forward, I want to stress this. We're all at different, let's say, areas of maturity in '19, as you can see, division by division. But all divisions are looking about how can we ensure we have sustainable profit generation into the future. So now looking at our current trading under COVID-19. You see here 3 quarters, plus the 9 months ended comparable to '19 in our fiscal year '20 results. And before I start into this, I'd like to spend just a few minutes on COVID. As Christian mentioned, and what I'd like to say is, our business has been impacted by COVID-19, no doubt. We are not immune to COVID-19. Projects were delayed. Sites were closed. And this led to a holdup in progress on some projects and, of course, the inability of our service technicians to access site. Manufacturing facilities, as Christian mentioned, were also closed or shutdown because the safety of our employees and our stakeholders is most important. So we absolutely did the needful globally. However, just to echo what Christian said, it makes me extremely proud, truly proud to see how the team did in these very volatile times. And we kept the customer at the focus and at the core of everything we did when we kept the lights on. And it makes me also proud to say that there was only a limited number of scheduled outages that were shifted and also a smaller number even then that were canceled in the last months. So the team did a great job with respect to handling COVID. And as of today, the majority of our plants are in operation, up and running, of course, with COVID precautionary procedures in place and at just essentially normal loads again. So looking ahead, we anticipate that the COVID-19 pandemic will have less profound impact on our business. However, of course, uncertainties around the duration, the depth of the crisis and the variety of countermeasures within governments and countries around the world to come back to its effects may weigh on our performance, in particular, in the near term. So this is COVID. Now if we look at oil price, the current assessment is limited short- to medium-term impact. We have a really robust service business, and I'll get into detail in a moment about that, and that comprises 42% of the Gas and Power portfolio. Therein, around 1/3 is in decentral energy production on which the oil price does not have a severe impact. Furthermore, as Christian said, our Industrial Applications business also has significant business with other customers, additional customers, such as industrial customers. Thus, this limits the exposure to oil and gas and market in this division particularly. Overall, however, it should be noted that we are seeing some uncertainties in oil-dependent countries where we see some reductions and some delays in investment activities. This is no doubt, it's a very volatile and dynamic situation that we're monitoring day by day. So now looking at the overall numbers, again, starting with Gas and Power. It's been a really, despite all the global headwinds, I would say, stable orders, stable revenue, also in new units, which shows a stable to moderate increasing trend in the 9 months ended fiscal year '20. If you look, again, at profitability, this is where we did have COVID-19 impact predominantly in Q3, and it should be noted that this was planned for, we saw this really being the trough or the dip. And of course, this is related to a number of things, capacities, costs, but of course, also the fact that we had a less favorable revenue mix, again, mainly in generation. And our profitability, adjusted for special items, one in particular that I'd like to mention related to strategic portfolio decisions in Q3 of fiscal year '20. COVID-19 did not slow us down in terms of our ongoing streamlining and rightsizing initiatives. For Q3 fiscal '20, we made the strategic decision to streamline our AGT, or aero-derivative gas turbine, portfolio. This means we will no longer actively market certain AGT models. However, the servicing, where committed, will be continued. This decision resulted in an impairment of EUR 701 million, which we have adjusted out of our EBITA before special items metric. Also with respect to SGRE, it should be noted, order backlog, really growing well, strong order intake, but performance was weak. We know this, and the challenge is not only related to COVID-19 and predominantly in the onshore business. Offshore and service continued to perform well. And the Siemens Energy decline in profitability and overall result is negative, you see that here, and it's mainly related to SGRE. And GP had a positive EBITA contribution to our 9 months ended. So in summary, we demonstrated resilience, despite COVID-19 in our figures, the 9 months ended fiscal year '20. Siemens Energy order backlog continues to increase, both in GP and SGRE. The revenue generation, as you can see here, for Gas and Power, quite robust, even despite market headwinds and COVID. And COVID did impact both GP and SGRE in profitability. The decline to negative is mainly related to SGRE. So that's the current trading update overall for Siemens Energy, GP and SGRE. Now I would like to take you through and take a close look at the recent performance of our Gas and Power divisions. Again, a lot of information on this slide, you can all read it. I'll point out some trends that I would like you to think of when looking at our divisions. In generation, really good order momentum, slight revenue decrease, true, due to COVID-related delays and project shifts, but still good top line. Look at the book-to-bill. Now looking at the adjusted EBITA before special items, it did decrease, as I mentioned earlier, before due to fixed cost underabsorption and, of course, a less favorable revenue mix. Some small onetime topics as well. Looking in the middle at our Industrial Applications division. Revenue development was strong, strong, driven by our product business. And profitability, notwithstanding, there are some onetime effects in there. But notwithstanding that, our profitability in Industrial Applications was relatively stable when accounting for the nonrecurring disposal gain in the prior year period and despite COVID-19 effects, I think that's really important. Transmission demonstrated robustness with stable revenue and driven by their grid stabilization activities, decarbonization and renewable integration. And the profitability held up well, despite again COVID. And there was a onetime positive impact in the 9 months ended of last year. So again, in summary, looking at the 9 months ended at a divisional level. We have a resilient top line and positive profitability, all GP businesses, in all Gas and Power businesses. And the book-to-bill ratio, so strong top line remained greater than 1 in all divisions, and all divisions had a positive profitability contribution, which is extremely positive. Now that sums up the historical part of the presentation. Hopefully, you're all still with me. I'd like to take you now through the second part, which is about sustainable value creation. So you see this circle. You've seen it also in Christian's presentation, and this is what we call Siemens Energy value creation circle. And what do we think about when we think about value creation? Well, it's depicted here. It's about revenue that generates profitability. Of course, profitability also is generated by taking cost out, streamlining our costs and ensuring that, that ends up -- ensuring that we have cash flow at the end of it. All of this is together with our wrapped up, our solid capital structure, and I'll look at each of these components in the next slides. So first of all, we're looking at revenues, so the bottom left-hand corner of the circle, and it's about our strong business foundation, if you remember my 3 things. And it rests on these 4 topics: our broad portfolio and global footprint; our large order backlog, which provides visibility on revenue well beyond a 12-month time frame; our stabilized new unit business with positive order momentum behind it; and our resilient, resilient and recurring service business, which contributes greater than 40% to Gas and Power segment revenue. So now I'll take these topics for these one by one. So looking at this slide. Christian did an excellent, superb job of describing the left-hand side of the slide, so I won't go into any detail about that, but I'd like to look at this slide from a CFO perspective. There's many things that I like about our portfolio: the technology; our products; our large service share, which I'll talk about; our diversified customer exposure; our global footprint, as you see there; and looking at our core markets as well as further upside in the growing market of Asia. And again, I won't describe all of this again, but it's when, it's the breadth of our new units. And when you pair that with our mission-critical global service business, this is what forms this very robust and resilient basis. And also to highlight and to echo what Christian said, 10%, and it's good business, 10% of our business and our revenue is related to central new unit, large gas turbines, and we are in that business. It is a good business to have. However, we're very holistic. There's 90% also in other parts of our business. And of course, those new units are driving our service business and our base for service. So now looking at our order backlog, talking about why this is important. It provides very strong visibility, and this reinforces our business foundation. Our order backlog is large. It's EUR 77 billion, as you can see, in fiscal year '17 with a solid growth trajectory in the last 3 years, a 5% CAGR to be exact. And it's even a higher ratio. It's 2x annual revenue for Siemens Energy, by the way, and even a higher ratio for Gas and Power therein. And it's growing, like I said, since fiscal year '17. So just a few things to point out here. The Gas and Power order backlog related to service, EUR 35 billion in fiscal year '19, 67%, and it continues to increase since FY '17. And why is that important? It's really important because it gives us that visibility. Looking on the right-hand side of the slide, our order backlog conversion 1 year forward, 25% on average over the last 3 years of our order backlog converts into revenue within 1 year. Looking at Gas and Power, more or less, this is about EUR 13 billion. And if you look at Gas and Power revenue of EUR 19 billion, that means, at the beginning of the year, approximately 70% of our revenue is already contracted or in-house. This provides very high visibility. And for the last 3 years, this is our order backlog conversion of around 25%. And now going to the next topic, which is new units. It's -- I want to take a deeper dive into our new units business, specifically for the Gas and Power segment, which, as you know, has been hit hard in the past years. Again, looking at the left-hand side of the slide, and overall for the last 3 years in our new units business, in fiscal year '17, of course, this was positively impacted by our Megaproject in Egypt, and you see this particularly in generation. Subsequently, you can see that, of course, this levels off in the next 2 years, and we actually see that the new unit revenue stabilizes in fiscal year '19. And now looking at the right-hand side of the slide, we also see that new unit orders increased in all divisions in fiscal year '18 to '19. What does this signal? This signals that we're turning the corner. In orders, in FY '19, increased across all businesses, also in generation for new units. And remember in my current trading update, I highlighted the strong product business development. New unit revenue has shown a stable to moderate increase trend in our 9 months ended for fiscal year '20, despite COVID-19. So in conclusion, with looking at the new unit revenue by business and the orders by business, the revenue has stabilized. And we're now seeing positive order momentum, which, again, shows the turning of the corner. Next, now let's look at service, service, service. Service is and will remain the resilient, profitable part of our business, and profitability in this business is attractive today. And we expect that profitability to sustain into the future. And it's not just about our long-term service contracts because, of course, that's great, that's recurring, as I mentioned, but it's also about ensuring that we look at things like innovation, digitalization, wanting to be a data-driven company, using that data-driven, additive manufacturing, and also looking at how we can provide those services more efficiently, looking at productivity measures, so thereby strengthening overall our profitability. So now looking at the left-hand side of this slide, in GP, specifically, but also in SE overall, our installed base continues to increase in the last years. We have a large share of service long-term contracts, in particular in generation. This provides visibility and resilience. And the services we provide for are critical and extremely important for our customers. And I think this is what makes the difference at Siemens Energy. Tim will provide more details on services later. Now let's go to the right-hand side of the slide to show the service revenue share by business for fiscal year '19. Generation in Industrial Applications very clearly are service-heavy businesses, with a 50% to 60% service revenue share. Please note, I think it's important for you to know for accuracy, the historical service business of decentral generation is reported under Industrial Applications. That's the reason why the ratio is slightly higher for Industrial Applications. Also Transmission, yes, at 8%, in its technology, inherently, the components do not trigger comparable service needs, such as you would have, for example, in generation, but this is something that Transmission is clearly focused on. It's growing its surface share. And of course, owed to the new unit rapid growth in SGRE, the service share is still emerging, still growing. And as a result, we expect that, that share will grow and continue to increase in the next years, thereby contributing positively in terms of mix effects to our group portfolio profitability. So overall, with respect to service, wonderful business. Service revenue has a positive and solid growth trajectory, long-term contracts, which is great. It provides visibility to our revenue generation, of course, and thereby our profit. And it's a growth opportunity from our growing installed base and increasing our order backlog again, in particular, in SGRE. We will continue to focus on service and strengthen our margins in service. And Tim, again, will very eloquently provide that detail in his presentation for service. So now we are in the second part of our value creation circle. It's about now looking at profitability. As a recap, we have a strong business foundation with our broad portfolio and our healthy top line, which gives us the basis for executing things like cost out programs, et cetera, and that really presents an opportunity in terms of profitability. So now it is all about profitability, and this will be our focus in the next years in terms of things like resizing; streamlining; optimizing; strict cost discipline, we'll talk about that later; and improving our efficiency and our operational excellence through project execution. Now I would like to just take you through a little bit in terms of our cost structure and the cost base reduction. So to start, this page shows our cost structure before special items for Gas and Power, we're specifically looking at Gas and Power. As you can see, since 2017, it's good development. We've been able to take out EUR 2.3 billion in cost of sales compared to fiscal year '17. This was approximately 10% of our fiscal year '17 cost base. So we can and we have and we are able to cut costs where necessary. However, given the market drop behind us was steeper, we just didn't do enough or fast enough, essentially, to remain in step with our declining market. On the right-hand side of the slide, as you can see, our cost and percentage of total revenue, the underutilization caused our profitability to decline and our costs as a percentage of revenue to increase. Now of course, this is not a positive trend. It's not a good trend, and it's not a trend we want. So the good news is, though, we're able to tackle this because, as mentioned before, our top line stabilized in fiscal year '19, and we continue to improve on our cost structure step by step. And I believe this really contains a lot of profit upside, which I will dive in deeper on the next pages. So also, I think mentioned already, we've made significant investment. We spent a lot in terms of securing future profitability, and we've heavily invested in the last years in rightsizing and streamlining our operations. At Gas and Power, again, this is Gas and Power only, approximately EUR 700 million of restructuring expenses were booked in fiscal year '17 to '19. I already mentioned, as you can see there, the strategic portfolio decision for AGT in GP. This represents the EUR 701 million. But why are we showing this? We're showing this because these numbers give proof to the fact that we can and are transforming our business. We have invested significant resources to strengthen the profitability of our business in the future to contribute to our target of 6.5% to 8.5% in fiscal year '23. So looking at the special items. The special items definition, by the way, for Gas and Power and SGRE are in the slide on the right-hand side. So besides restructuring, which I think I've focused on, there are standalone costs in there. They're not so significant at EUR 19 million for the 9 months ended as, of course, these were mainly reimbursed by Siemens AG and, of course, the strategic portfolio decisions, which I mentioned earlier. So now we come to the core of our profitability and how we're going to generate value in the future and our profitability upside, our cost programs. These formalize our action plans to address our cost structure, et cetera, so let me give you a brief overview. Looking on the left-hand side, for Gas and Power, you see the PG 2020 and GP 2020+ programs. These programs are mainly focused around rightsizing our production, our capacity and predominantly there in terms of reducing headcount accordingly. These programs have been publicly announced already and are currently in implementation. I will give you a more depth update in a minute. The next block in the middle, you see this, this is a new block called accelerating impact, and this is a new program quite broad in scope, looking at 4 things, as you can see, for each of the boxes. One is about footprint. It's about streamlining our global footprint, looking at our factory network, really looking at reducing complexity. Second is portfolio. I think I talked about that a little bit, our strategic decisions to continually streamline our portfolio and to achieve a leaner and simpler setup. Then, of course, project excellence. This is twofold. That's one hand really about being selective at the start. And on the second hand, it's about execution. It's about ensuring that we deliver on what we commit in budget and on time. And of course, within that is about reducing nonconformance costs, very important. The last box is supply chain -- or supply chain excellence. This looks at streamlining overall globally our logistics operations to make us more efficient. So in the middle is our new program, accelerating impact. I will not go any further at this point because Jochen will do a great job of describing that program later. So together with programs of PG 2020 and GP 2020+, plus accelerate impact, this -- these 2 together combined will uplift our profitability within Gas and Power. At SGRE, as described last week, and Andreas will touch up on this later, they have the LEAP program. This was announced and described very well last week. We regard this as a core module that Siemens Energy -- to Siemens Energy profitability upside. This is what SGRE has committed. And of course, I won't go into details any further. But this together are our cost programs, which will drive the profitability improvement across Siemens Energy. So providing a little more insight as to where we are. So at the CMD last year in May 2019, we announced the upsizing of our existing cost programs to EUR 1 billion in savings, here labeled on the left-hand side as PG 2020 and GP 2020+. We realized EUR 500 million already by June of 2020. This helped us to stabilize our profitability in fiscal year '18 and '19, despite a decline in business volume. I'll go into further detail in a moment. But as you can see there, a big blue check. By 2023, in a now stabilized new normal environment, the remaining EUR 500 million or the second block of cost savings, this, we expect to have full impact on our bottom line, full impact on our bottom line. And we expect to have those savings in by fiscal year '23. We also expect, on the right-hand side of the slide, the accelerate impact initiatives, which have been quantified at greater than EUR 300 million. So in total, we expect greater than EUR 800 million incremental, recurring annual gross cost savings in the next 3 years as compared to fiscal year '18, of which we expect a EUR 200 million to already be realized in fiscal year '21. So programs are on track, being executed. And as expected, we have those cost savings realized. What's important to me as a CFO is that we maintain really a strict cost discipline and to ensure that the cost savings programs, they fully translate into profitability improvements that hit our bottom line. It's sustainable savings that we're after. So looking at the next slide, going a little deeper into the existing programs, I think it's important to give you an update. As you can see, the realized first block, realized EUR 500 million, check. The major part of these savings relates to, as you can see in the middle of the slide, the 8,800 headcount reduction. With respect to that, you know that severance agreements, they take time. They're in place. But some of those take time, especially when we're looking at early retirement agreements, for example. It takes time to realize and have those cost savings in the P&L. But it's also important for these programs that the required cash outs are already funded, and we're funded in our open balance sheet by Siemens AG. And we have great visibility on these savings, and we know when they will materialize. So this is the first block, the realized block. The second block, which we nicely title as underway, this relates to the ongoing measures, plus, this includes corporate function reductions. We aim to streamline our corporate functions upon spin-off, and this will take time, of course. But this is also a core tenet of the underway bucket of EUR 500 million. So that, together, the realized plus the underway makes me feel comfortable, very comfortable that we will deliver the remaining EUR 500 million of savings to reach the overall original commitment of EUR 1 billion by the end of fiscal year '23. So that's the update on the ongoing programs. Now very briefly, like I said, Jochen will go into this in some detail, but just to, I guess, close the entire -- of all of the cost programs, this is the accelerated impact program so far, globally identified greater than EUR 300 million. As mentioned, those are the 4 key modules that will be attacked, if you'd like, in our accelerated impact program. And all of that is under the banner of operational excellence, which Jochen will talk about in a moment. So now third, and certainly not last, because it's not last, it's cash. Cash, cash, cash. There is cash flow upside, and I'll show you in a minute. We do have an asset-light business model, and it's a very good basis to start to excel on cash flow. We can do better. We will do better. We all want to do better in terms of managing our balance sheet step-by-step in all parts of our organization. And a major lever of this will be optimizing our working capital. So here, you have our net capital employed by segment. And if you look at the bottom, this is what I'll try to describe to you why I think our asset-light business model. If you look at Gas and Power, net capital employed at the bottom of the slide is around EUR 10 billion. And SGRE is around EUR 3 billion. When you subtract the nonoperational items, such as goodwill and intangible assets, the tangible net capital employed is only EUR 1 billion at Gas and Power and even negative for SGRE. So this is actually great news for us. This means that we need limited capital to operate our business. We also have highlighted a few line items here, such as provisions, which is mainly warranties, for example, and investments accounted for using the equity method. I'll get into that in more detail in a minute. And the largest block within net capital employed, excluding goodwill, is our operating net working capital. This is the second line, if you'd like, from the top, with EUR 3.5 billion for GP and EUR 1 billion for SGRE, which I will deep dive in a moment. So next, looking at cash flow. You can see, which is great, our Gas and Power business in the last 3 years has been cash generative and also in the 9 months ended fiscal year '20, despite -- and really despite all the challenges and the macro headwinds. So we know profitability and working capital are key levers that impact our historical cash flow generation and certainly also into the future. Accordingly, these are the 2 topics that we will focus on with laser focus in the months to come. As a reminder, cash conversion of 1 minus revenue growth for the rolling 3 years to come is a target. This is something that we are incentivized on. And also just for completeness, the segment free cash flow here is on a pretax basis. Reconciliation line includes income taxes paid for both Gas and Power and SGRE. Regarding free cash flow in the appendix, we also include a very comprehensive cash flow statement in Slide 40, which provides additional transparency. Now looking at our asset management, one of my favorite topics. Here, we see Gas and Power, and it's the Gas and Power focus. In this slide, over the last 3 years, even though our business declined significantly, the fiscal year '19 operating working capital, net working capital is at the same level more or less than fiscal year '17. So we were unable to reduce our working capital position. It goes without saying that I'm not satisfied with this. I'm not satisfied with our current net working capital base. We, as a team, are not satisfied at all. And we have a lot of work to do, really slow and steady. Programs are already in place, but this is about the passion for details. For example, when I joined Siemens Energy, we have monthly operating reviews. And of course, assets and looking at our overall working capital is something that we review. And I was shocked to see that, in certain divisions, there are some overdue balances that are clearly unacceptable, 30% to 40%, and we communicated that very clearly to that division, and they're working on it. But as you can see, there are opportunities where we can do better, and we need to tackle those one by one, especially in light of the challenging market conditions. So in order to create accountability, we set ourselves working capital targets, as you can see there on the target column. We aim to reduce operating net working capital by September 23 -- or '23 rather compared to fiscal year '19 by approximately EUR 1.2 billion. Again, the measures are identified. Programs are in place or initiated. We will revitalize those programs. We already have comprehensive working capital measures in place. We're managing overdues. Of course, we're looking at inventory. But one of the things that we're doing now, for example, is we're really looking at dunning processes and trying to ensure how do we prevent overdue receivables from occurring in the first place. Also when it comes to inventory, I'm really pleased to see that I think the tool originated in Digital Industries, it's called the Digital Inventory Management tool, or DIM. This is being implemented now in Siemens Energy. Why is that important? It's important because it provides visibility right down to the warehouse floor anywhere in the world. It gives you benchmarks and trends. It ensures that we're looking at things like safety and obsolescence stock and how do we optimize that. So I know in Digital Industries, we had great success with that tool. And I think now we're certainly going to bring those practices to Siemens Energy, so -- and overall, looking at slow-moving inventory in total, of course, and seeing how we can handle that in light of some of the market changes. So really, yes, excited in terms of how we're going to get this reduction in place. The team is all behind this, both in GP and SGRE. And I think this is something that we will focus on and really deliver on in the coming months and years to come. I'm passionate about it. So now I think I wanted to provide you an update or an overview of our equity investments. It's very important for me to highlight the most relevant one, which is Siemens India. There has not been a carve-out of the Indian Gas and Power business, which is part of the listed Siemens India Limited. Instead, Siemens Energy holds a 24% stake in Siemens India, while Siemens AG retains approximately a 51% majority stake. As a result, Siemens Energy will participate in the profits through its participation, which is of today with a market value of EUR 1.1 billion. So it's really important for me to stress that. It's just like SGRE, which has a market value. Siemens India also has market value of EUR 1.1 billion. With respect to how do we move forward and how do we work collaboratively together, we agreed, Siemens Energy agreed with Siemens AG and Siemens India on the future governance and collaboration through a shareholder and agency agreement. So overall, in the middle there, you see the rest of our equity investments, highlighted here, with a book value of EUR 448 million for fiscal year '19 and an associate income of EUR 81 million. So again, Siemens India, 24% stake. We have a market value of approximately EUR 1.1 billion, very important to highlight. So now to recap. Revenue, profitability, cash flow, those are all focused topics that, when working together, create value -- sustainable value creation to our shareholders with profitability and cash flow being, of course, of the utmost importance. But and certainly not last, it's also regarding that foundation around which is our solid capital structure. Our strong net cash position provides for funding for ongoing restructuring measures as well as reliable, consistent dividend distribution targeted at the 40% to 60% payout ratio. Now let's get started with this first illustration. I'll speed up a little bit now. I hear my time is up. We actually went through this a little bit at the meet the management in May. This is as of June. We have a very strong net cash position at Gas and Power on a consolidated basis. At Siemens Energy, excluding SGRE or GP, as of June 30, we had a cash and cash equivalents of EUR 2.2 billion, of course, partially earmarked for some restructuring cash out. With such a sizable cash position, we consider ourselves very well equipped to execute the ongoing restructuring and overall needs of our business. And as a result, as you also see in the middle, there's loans and leases. But de facto, we are debt-free at Siemens Energy, excluding SGRE, as the financial debt relates mainly to the IFRS 16 leases. So SGRE in green, also a sizable cash position with, on a net basis, net financial debt of EUR 0.3 billion. And overall, for Gas and Power, very important, net cash of EUR 2.2 billion. And Siemens Energy with a net cash overall also of EUR 2 billion. It's very important, Ralf Thomas mentioned this earlier, to not forget that Siemens Energy and SGRE, we have substantial undrawn facilities close to EUR 6 billion in total, which gives us significant financing flexibility. And of course, to round it off, and it goes without saying as a CFO, I'm very happy with our solid BBB investment-grade rating with stable outlook from S&P, and it's a priority for me to maintain that rating. So last but not least, last but not least, I want to conclude my presentation today with the financial outlook for Siemens Energy. So as you know, at Siemens Energy, we are in a special situation, and our prospectus will be published next week. I'm very well represented with many lawyers also here in the room, and they have indicated that I should be extremely precise for this portion of my presentation. So quite simply, I will read it out for you. So here, what we see here is the centerpiece of our financial outlook, which is the path to margin improvement of 6.5% -- or 6.5% to 8.5% for Siemens Energy overall. Here I'm showing you how we will get to the targeted 6% to 8% for our Gas and Power segment by fiscal year '23. As I explained, profitability stabilized at 4.5% in fiscal year '19, you see that at the left-hand part of the slide. We expect that the challenging market environment, including, but not limited to, COVID-19, the oil price and the resultant global macroeconomic uncertainties are impacting our profitability in fiscal year '20. But at the same time, we continue to progress with our cost savings programs, as outlined earlier and as planned. Therefore, we expect an adjusted EBITA margin before special items for our Gas and Power segment of 0% to 2% in fiscal year '20. This is the starting point for us as we embark on our transformation journey. We believe that our existing cost savings programs, PG 2020 and GP 2020+ and with accelerating impact, the combination of this with cost discipline and stringent resource allocation will make the difference. As a result, we expect to achieve incremental recurring annual gross cost savings of more than EUR 18 million -- EUR 800 million, excuse me, by fiscal year '23 as compared to fiscal year '18. Our colleagues at SGRE clearly outlined in their CMD their clear path to profit improvement to a target range of 8% to 10% adjusted EBITA margins by fiscal year '23 driven by their LEAP program. So summing up, I'm convinced that as a team, we have all the cards in our hands to achieve our targeted margin improvement. So next is our financial outlook. Here, I will lay out to you our formal profit forecast for fiscal year '20 and '21, which will be published in our prospectus next week. Further, we outline our outlook for fiscal year '23 and our midterm guidance, which will also be published in our prospectus. So let me start with the Gas and Power segment. For Gas and Power, we expect revenue in fiscal year '20 to decline by 3% to 5%. In fiscal year '21, we expect a return to growth in the range of 2% to 11%. I already mentioned that we expect an adjusted EBITA margin before special items of 0% to 2% in fiscal year '20. For fiscal year '21, we expect a margin before special items of 3.5% to 5.5%. For fiscal year '23, we expect a margin before special items of 6% to 8%. Now I move on to Siemens Energy as a group, including Siemens Gamesa Renewable Energy. For Siemens Energy, we expect revenue in fiscal year '20 to decline by 2% to 5%. In fiscal year '21, we expect a return to growth in the range of 2% to 12%. We expect an adjusted EBITA margin before special items of minus 1% to plus 1% in FY '20. For FY '21, we expect a margin before special items in the range of 3% to 5%. For fiscal year '23, we expect a margin before special items of 6.5% to 8.5%. For the group, in the midterm, we target growth of up to 3% over a 3-year period and a reported margin, i.e., all in, of at least 8%. Finally, on tax, in the medium term, assuming no significant changes in tax rules -- existing tax rules, we expect an effective tax rate in the range of 25% to 30%. So okay, that was the formal part. So to wrap up, yes, fiscal year '21 is a transition year with profitability expected similar to fiscal year '19. Two, our ambition for fiscal year '23 is 6% to 8% for Gas and Power and 6.5% to 8.5% for Siemens Energy adjusted EBITA margin before special items. And three, in the midterm, we target at least 8%, and that's all in as reported, so not adjusted for special items. Okay. So now just to close up very quickly because I am over time. I want to just come back to the 3 focus area that I think were the red thread throughout the entire financial portion of my presentation here. One is it's about our strong business foundation. I think we demonstrate that. It's our large order backlog. It's our top line. It's our resilient service business. It's about our clear path to margin improvement with all of our ongoing cost programs, plus our new accelerated impact program. And last but not least, it's about cash, cash, cash. It's about asset excellence. It's about cash upside from our rigorous passion for detail, looking at our working capital management going forward. We have our targets, as you saw earlier. And all to say, we are focused on sustainable shareholder value creation. And with that, thank you very much for your patience, and I will call on Michael. Thank you very much.

Thank you very much, Maria. I also welcome Christian Bruch back on stage. It's now time for the first Q&A on Siemens Energy, not on Siemens. I think we've seen 2 great presentations, and I'll hand over for the first question to Jonathan [ Monte ]. Jonathan?

It's -- because I'm a little confused by kind of 2 narratives that are forming. Obviously, there's one in today's presentations, and then there's a long kind of a news flow this morning from Bloomberg. So specifically, on the margin targets, 6.5% to 8.5% by FY '23 and then 8% thereafter. The target's obviously underpinned by today's savings. It looks like that includes the EUR 300 million from the accelerated impact. But on Bloomberg today, you're quoted as saying "Siemens Energy are looking at further plant closures." And I'm assuming those plant closures are linked to savings that are not in the presentation today. I'm just wondering when we might hear about that, the sort of magnitude that might be and what that all means for the ultimate margin aspirations of this business above and beyond the 2023 outlook.

Okay. Jonathan, I hope I have understood everything correctly. Thank you very much for the question. So you're related to further plant closures and whether these are all in there. At the moment, we're obviously working on the existing programs. As I said, we continuously look on what else can be done. There is no specific plans behind this yet, but we obviously continuously look in how is the market transforming and what do we need to tackle. But at the moment, obviously, this is something where there is not a specific or concrete plan in place at the moment. There are some measures, obviously, coming out of the execution, out of the running programs. Don't forget, in the past years, Siemens Energy has closed around 25 sites already, and we continue on executing on this. We are looking currently and won't further specific around this. But this is something now, over the next couple of months, what we're trying to understand better going forward.

Thank you, Christian. Next question comes from Alex Virgo.

That's an incredibly comprehensive presentation. I wondered if you could just talk a little bit about the confidence you have in the targets. I mean I appreciate that you put them on there, so you're confident in them. But I just wondered if you could talk a little bit about the difference between the last targets we've had with relation to these businesses, which were obviously considerably higher than the ones you've now given us. And then what the differences are that have led you to the current numbers? And then I guess just a quick one to pick up on the bridge you've just shown. I'm wondering why the COVID recovery cannot offset the COVID impact.

Okay. Let's see. Maybe I take the first half, and Maria will take then the second half of the COVID recovery. In terms of confidence in the targets, over the past 4 months, I have rigorously reviewed with all the businesses the different measures, the business plans and so forth. And I'm confident, obviously, with the business targets we put forward. At the end, it's echoing what I said during my presentation. It's about, honestly, it's discipline, passion for detail and getting things done. And I'm very comfortable with the leadership team, what I'm seeing here. I'm also confident with the refocusing on certain elements just to get things implemented. And I also want to echo one thing what I've said in my presentation. We're all aware, and you all know the business very well. Some of these elements will take time. If I say, for example, project selectivity drives at the end also, profitability up. This is something which is working against the backlog and which only comes then after a certain amount of time. And if you look on, for example, the developments, what we have achieved in my previous company, very similar mechanisms, very similar structure. And you see, obviously, then gradually, it starts slowly, and then obviously, then you'll see the changes ramping in after some time. And the same I do expect here. Looking across the company, really, I'm confident with the targets we have put forward. And don't forget, there is road maps in place already where people start to execute. The one thing we can all not judge on is really what is happening to COVID. I mean at the moment, we're assuming that in the current situation, we have actually reached a little bit the down cycle now from COVID. And from here on, we're going to recovering going forward. That is the one big question mark. But in terms of the general measures which we have put in place, that is something where I personally feel confident. And the difference for me is really a highly focused management team on this, and very clearly also, the tough wind of the markets sailing out there, right? Because it is obviously putting us as an organization out there in the market. And as I always say, there's no cushion for reality. And in this regard, it's driving the things on, passion for detail and disciplinary execution, hard work. And maybe with this, I would pass over to Maria.

Thank you. No, and thank you for the point regarding the bridge and the COVID recovery. As I mentioned, I think we planned for the, let's say, the trough or the worst part of COVID as of Q3. We saw that impact as I showed you on our current trading and the 9 months ended. However, it's a very dynamic and volatile situation. In terms of the recovery, we see this perhaps not as a V, perhaps more of an incline steadily over the next years. You know that we are in large, long duration projects. So this will take time to recover, and I think we denoted that properly in the bridge.

Thank you, Maria and Christian. [Operator Instructions] So Simon, over to you.

Simon, we cannot hear you. You're on mute somewhat.

Okay. Then we'll take Andre until Simon has found the unmute button. So Andre, over to you.

I wanted to talk about pricing environment. What are you seeing at the moment? How experience has been in the last kind of 6 months across OEM service? And what is baked in your backlog? And also, most importantly, the targets that you put out in terms of pricing behavior impact across these 3 years?

I address it also in the Meet the Management slide. I mean, what I'm seeing throughout 2020 is, let's say, a somewhat diverse picture. I mean, in a lot of areas, I see stabilizing pricing with the orders we have taken into our books, I mean, which obviously is also a lot on the transmission side, but also on generation and IA, which is also around the distributed generation side, where I see, let's say, a margin environment, which is stable. And obviously, in the large area, it's a little bit unpredictable, honestly, because there are so many of the projects being pushed out. There is obviously still a little bit of a question mark where this is going to come out. We do see in 2020, really, there, let's say, pricing pressure, I would say. But I think it's too early to tell now is this now the general market trend? Or is that something which is COVID-related or one-offs? But in the rest of the business, and I think Andreas will talk about pricing also with regard to wind power, we see a stable pricing environment.

May I follow-up? Just on the target specifically, do you have stable pricing exceeded in the targets?

I would hand over to you.

Yes. No. The -- in terms of the targets, in terms of pricing, of course, we have some assumptions in there, but I just want to echo what Christian said. We've seen a stabilization, specifically in the new units for central distribution, for large gas turbines, and we have some increases in pricing assumed in our targets. Of course, we do. Thank you.

Thank you. Now over to Ben Uglow. Ben, please?

Hello, can you hear me?

Perfectly, Ben.

Absolutely.

Yes. Hello, Ben.

Yes. So a couple of questions. First of all, I noticed that you didn't really give any numbers around sort of gigawatts of large gas addition. And in the past, we've had sort of 30 to 35 gigawatt guidance. We've also had guidance in terms of unit volumes of 80 to 100 units between GE, Siemens and Mitsubishi, et cetera. Really, what I was interested in was what gives you the confidence that the footprint reduction that we're seeing at the moment is enough? So if we look at global large GT capacity, and there are some figures out there, on what -- how you see the market in the next 2 years, what makes you feel that enough capacity has come out of the system? And maybe if you want to -- we're trying to make our own estimates. If you want to give us sort of 10%, 50%, any kind of guidance on how you think about the capacity reduction, that would be very interesting. Second question. I was interested about the point about project selectivity. And I didn't realize maybe that that was such a sort of prominent issue within Siemens Energy today. If you had to look at the portfolio of projects and say and benchmark it versus where you were in Linde, where you were able to get 700 basis points of margin upside, where does Siemens Energy fall in that spectrum? How much upside is there simply from being more careful around projects?

Thanks, Ben, for the 2 questions. Maybe with the large gas turbines, in terms of the market looking on it, I mean, we are relatively conservative looking on a market. If I take it in units, roughly somewhere around 60 to 70 larger units per year. And I think there is we expected to actually balance out. And obviously, with this, the question is, okay, what does happen in terms of the capacities and fabrication? As I said before, this is something what we're also still reviewing on. Does this, let's say, change anything on how we do things? But this is too early to tell now. This is where, obviously, we -- over the next couple of months, we'll try to make our judgment what is the best fabrication to set up. I also said, and this is why I had in my presentation, generally, the number of sites. The fabrication site needs to come down, not only of the overall capacity, but also managing complexity, avoiding transport of goods between sites. So this is one thing that around 60 to 70 units is what we are looking at. In terms of the project selectivity, it's obviously a little bit of mixed picture. What I'm seeing is and as much looking over the past 4 months into the numbers, it is really we have buckets of excellence and buckets where we lose money in some areas. And then it's obviously the question, if you look on it, let's say, where we're good at and where we can differentiate, we also obviously earn money with. So making sure that you do not do the things which others can do maybe cheaper and not being -- how shall I say, to be religious about you want to do everything on yourself. And this is about partnering and really shaping your scope. I cannot yet tell you or break it down how much at the end would it mean in terms of comparison to Linde. But what I've seen, obviously, in my previous company, that actually by doing it, we actually figured out a different way of doing things, how the region is set up, sometimes doing more engineering and procurement scope and let somebody else do the construction, having construction partners. I think only once you develop all this network, you can really judge on how much is in there. But this is, at the end, obviously, something which will be a key lever for us, also because the value generator at the end is the logic of being a product-led service business. And the important thing is getting our units in the place. It's not the most important thing to do all the civil around it, and this is the element. But I think it's too early to tell now, honestly, working from these different elements, cost measures, project selectivity, soundness of backlog. I think and I hope that we have over the next road shows and next meetings and next quarterly results the chance to share more, let's say, views on this and exchange question and answers on that.

Thank you, and now we'll try Simon again. Simon? We still can't hear you. Maybe next time. Let's try via telephone. We can [indiscernible]. Right. Okay. So now we take Wasi Rizvi, please.

Yes. Mine's on the working capital, where you've talked about the increase in receivables and inventories. How much of that do you think is internal? And how much of that was market driven? I mean, is extended payment terms something you need to do in the market now? Is that something you need to be doing? And in inventories, I think we've heard in the past that speed of delivery has been a differentiator. So how do you manage the inventories down whilst you're trying to take advantage of the opportunities out in the market?

Maria, that is a prime question for you.

That's a prime question for me. Thank you. So maybe I'll take it in. So the first part of your question was regarding whether or not this -- in terms of some of the overdue receivables over the inventory balances are as a result of the market conditions. And I think, of course, it cannot be excluded that, so that impacted, of course, the net working capital. As I mentioned, coming off of such a strong '17 and then really trying to drive those cost initiatives and then resultant initiatives of reducing inventory and receivables on the balance sheet was a challenge. They've made some progress. We are looking at different ways to do things. I think the DIM tool, as I mentioned, in terms of the inventory, safety stock, looking at obsolescence, what you're talking about in terms of our commitments to our customers. I think those types of tools really start to show where we can optimize, always ensuring that in terms of what we deliver -- have committed to our customers, we're able to deliver but where we can optimize. So I think the difference will be these tools that's stringent and rigorous, let's say, following up. This is something we do monthly. And this is something that I do personally with all of the divisions, looking at each and every balance sheet position. So I'm confident that we're able to deliver those targets that I mentioned earlier with respect to net working capital. Thank you.

Thank you. And the next question comes from James Moore.

Yes, can you hear me?

Perfectly well, James.

Perfectly.

Great. Yes. I've got 3 questions if I could. The first on savings, the second on service and the third on headcount. On the savings, I understand you've increased from EUR 1 billion to EUR 1.3 billion. You mentioned because of worst headwinds, but then you also talked a bit about pricing having stabilized. I wondered if you could talk about what you mean by the worst headwinds that you haven't seen this time last year. The second question is on service. Thanks for the excellent revenue breakout. I wasn't really expecting to see service margins for obvious reasons. But I wonder if you might continue with Randy's occasional reveal over the years, from which I assume that the margin was about 14% in '02, 20% in '08 and 25% in '16. And I'm really just trying to get a flavor for how that's developed in the last 5 years. Are we still where we were in the mid-20s? I assume it must have come down. I wondered if it's come down below 20%. And the final piece of the jigsaw is how many people have left the company so far of the 8,800, please?

Okay. Thanks for the questions, and I would pass the number question with the people always to Maria to make sure we get the numbers all right. But let's say, with regard to the savings and obviously, the headwinds, what did we -- what do we see, what we didn't see? Obviously, there is, let's say, an impact in the overall industry, seeing also the oil and gas and the sustainability development. And I think COVID accelerates some matters. What we would have, let's say, expected a little later in terms of how you look on big investments in power generation or oil and gas investments or process industries. And this is why we obviously believe that we need to accelerate this program and need to extend by the additional EUR 300 million saving to make sure that, particular in the generation and industrial applications business, we get to the profitability we aspire. And Maria has shown you from where we're coming from. So you can also expect that, obviously, we want to land at a decent profitability there. Service margins, no, we don't share. And we will be there very strict. One important element for me is as because it always belongs together in terms of the new units and service business, and it would be, honestly, a [ distraction ] of the actual information. So I have to disappoint you there. There, you will get no further detail on the service margins. In terms of headcount, Maria?

Very good. No, in terms of headcount, I think if I take you back to the PG2020 and the GP2020+ progress, if you remember that first bucket of the EUR 500 million that I said is realized, that relates to the lion's share of the 8,800 people that are impacted by that first, if you'd like, tranche of the gross cost savings. Again, this is going till FY '23. But I think it's important to note, if you look on where the restructuring cash outs have happened, I've shared that with you that the lion's share of those restructuring cash outs also happened in the last 2 years. So that's a good assumption to take, James, with respect to how much of that headcount has been reduced so far. And we'll continue as we strive for that fiscal year '23 target achievement on the second underway tranche, okay?

Let's go back to your service answer. Without talking about numbers, we know that service profitability is good across almost all rotating industries. So that's no secret. The implied profitability of the OE businesses are extremely negative. Do you have the ambition? And do you think about it that way? I understand you talk about them in the round. Do you have the ambition to get to sort of breakeven in OE?

Absolutely. No. I think in this regard, I mean, this is something where I believe the cost measures we're tackling should bring us there. And also, it's quite diverse a picture if you look across the different products. So it's not that you, let's say, lose money on all the new units. That's not the case. It really depends on the distribution of the portfolio, and it must be our ambition to, let's say, achieve a setup where we can get to a breakeven there. And then together with the service, get a nice business. And I think that is possible, and it's our aspiration. At the same time, I also believe there's potential also in service. I mean, as I talked about the digital pieces, there's a lot of things which add to this existing fleet. And there's a lot of things where also our customers change to look on things. And there's also a lot of things which happening now in the industry and the thinking from moving to CapEx more to OpEx in terms of really improving existing assets. And this will unfold over the next years to come. And this is why I believe there is this potential in growth, but potentially also in margin if you drive it correctly.

Thank you. Let's go to the next question. That comes from Andreas Willi. Andreas, please.

Yes. I hope you can hear me. I have 2 questions, please. One, finance and one on strategy. On strategy, you highlighted on a number of occasions the focus on Asia, where you are underrepresented if we look at the revenue mix versus the size of the economy. Growing in Asia in project businesses has been a target for many companies, but often difficult in a profitable way. Most of your, let's say, more aggressive competitors are based there. So what is really the opportunity, specifically where you can have a differentiated strategy to go against Asian competitors in Asia? And maybe you could talk a bit about China, where we had a lot of news flow 2 years ago about partnerships and opening up the market. But since then, your market share continues to decline as does the one of your U.S. competitor. And the finance question, a lot of detail and commitments on the EBITA level prior to the special items. Maybe you could talk a little bit more about how we get from that number to the net income number in the next few years? You've given a tax rate guidance. Maybe talk about what exactly are the special items we should see in the coming years. So there's restructuring, but is that where stand-alone costs are going to be? And how much? Brand license fees, is that going to be part of that? Or is that allocated to the core? And then on the financial net line, obviously, we've got some numbers historically, but they're not that meaningful given it wasn't a real balance sheet. So maybe you could give some guidance on that line as well as far as you can.

Thanks, Andreas, for your questions. Let me take the strategy one, and obviously, Maria takes a finance question. On Asia Pacific, obviously, looking on Siemens Energy, and we are looking at a company with a lot of IP, with a lot of technology, 24,000 patents, which has a strong technology position. And if we want to leverage this position and really in Asia Pacific, it is about partnerships. So even if it has been said before, I'm going to repeat it. And the question on what is the go to market? What are the right partners? How we can do it? I come from a company where Asia Pacific has been the largest-growing market over the past 5 years. And this came with collaborations. This came with really, let's say, per market really a different go-to-market strategy and entry. And at the end, once again, it's about the detail. It's about executing it then and getting it on the ground. But it's a market which I can only [ beat ] 80% growth over the next 20 years, significantly transforming, and we have a strong technology position. But I absolutely agree. We should be careful on the elements where we can really provide value and where others are simply have a better cost base on the cheaper. So I'm looking for setups where we can really the maximum monetization on what we're having and not necessarily always the biggest top line. And this is really then obviously also influencing our view on partners in the region. UGTC has been a first step. We're obviously looking at different matters also where can we drive in other areas. But this go-to-market will be a key element for us to really grow in Asia Pacific. Maria?

Yes. Very good. So I think I got all of the components of your question. I think it was multi components, but first and foremost, the brand fee, to answer your question, that's not and will not be considered a special item. So that will be in the core of the business as you mentioned. With respect to our special items, as I showed earlier, of course, there's restructuring. There are the onetime impacts, Andreas. You saw that so far for the 9 months ended was just EUR 19 million -- sorry, looking here, EUR 19 million included thus far because, of course, Siemens AG for GP has taken on a lot of that. For SGRE, as you know, they still have their integration costs that are continuing to show up as a special item. And of course, we will provide, and we have, by the way, in the appendix, a reconciliation from EBIT to EBIT before tax and then can certainly take you through some of our assumptions regarding cash flow as you rightly mentioned. And historically, we didn't provide a full balance sheet. We can provide that further, if you'd like. Michael and his team would be happy to do so. Hope I answered the question. Thanks.

Maybe on special items.

Yes?

Big difference how Siemens Gamesa interpreted that historically. Lots of things going in that line that I will consider operational, where Siemens AG didn't use those -- didn't use the same definition and was much more stricter on what was added back. So where are you going to land between the liberal SGRE definition, the strict Siemens definition?

So I outlined specifically the special items definition within the presentation, which shows what we include, which is restructuring, which is the onetime costs for the -- for our independent structure, if you'd like, and also the strategic decisions, portfolio elements that we also account for that. SGRE is not changing their definition. They continue to have their definition as they have had in the past. They will continue to do so also into the future.

Right. Okay. We're coming to the last question, and that's from [ Sophia ] from UBS.

Am I audible?