Siemens Aktiengesellschaft (SIE) Earnings Call Transcript & Summary

Technical difficulties with the biggest presentation of the day. Pleasure Ralf to have you with us again. What a difference a year makes.

Can we maybe start a little bit with -- let's start with Germany, shall we? Obviously, there's quite a lot of money coming down the pipe theoretically, assuming Friday goes to plan. Talk a little bit about what that means for Siemens, what that means in your broader sense of Europe and what that means for the outlook.

So first of all, thanks for having me again. And I think you're perfectly right. What a difference a year can make or what a difference 11 years can make since I have the pleasure to be in that role for Siemens. I mean, at the end of the day, Siemens is a globally acting company. And of course, we very much appreciate that Europe obviously is on a way to find new momentum, in particular, Germany. However, we are quite proud that we do have a meaningfully and well-balanced global value chain that allows us to tap on different markets at the same time. We have been spending and investing a lot of your money into -- getting into that fairly resilient mode having twin factory concepts around the globe, developing products in certain growth markets for the market. I'm sure we're going to touch on China later on. So I'll spare my words for that one. And therefore, we do appreciate, of course, if and when, for whatever reason, the German new government to be is getting momentum into German economy because from a -- as a German passport holder, at least, it's disappointing to see that you are not growing for 3 years. And a country that has such a lot of capabilities to breed literally productivity that needs to unfold its beauty sooner or later. And of course, we are born in Germany as a company, but the point I was trying to make our global bandwidth is quite good, and it's helpful these days. I mean, I have been asked quite a couple of times about the U.S. I'm sure you are going to ask about that as well. And we have 20 -- last fiscal year, we had 25% of our revenues in the U.S. We are running 28 factories there. We have 48,000 people on our payroll in the country, and we have investing, including the Altair acquisition once it's close, close to EUR 100 billion throughout the last 20 years. I think we may say we are well balanced and the same is pretty much applicable for other geographies. So every incremental help to get GDP in Europe on to higher grounds again, is helpful. Investments will definitely tap on latest technology when it comes to automation, digitalization, electrification. And even though not spelled out frequently any more sustainability being translated into meaningfully and responsibly deal with scarce resources makes a lot of sense too and are there to help our customer industry to become more efficient and effective.

****Just to touch on Germany, the headcount comments that you -- or headcount announcements you made yesterday was something you talked about back in Q4 results. So it's a culmination of the discussions with the unions. But how complicated does that become for you in the context of money flowing from the government and the profitability that you guys have in Germany?

There was a lot of, honestly speaking, surprisingly to me, a lot of noise yesterday after we just announced numbers to that what we indicated with the same dimension, with the same footprint and everything already last year in November. But I mean, at the end of the day, looking at it from a pragmatic point of view, only half -- less than half of that, what we announced is going to hit the ground in Germany. We need to and have announced that several times at several stages that we need to follow growth opportunities and not geography and passport holding. So it cannot have been catching anyone by surprise from my point of view. And last but not least, I mean, if you take things and put them into perspective for 2,600 people that roles in the company that will not be there anymore by the end of 2027. There is openings at the moment, give or take, 2,000 in Germany. So we are willing and will invest in reskilling and upskilling people. So I do not think this should stand in the way of any parastatal placements of orders. And on top of that, even though I, of course, appreciate the momentum being created by politics in that field before we see that being translated into new orders and tangible revenues that will take some time until then I think that event and that announcement of yesterday will be digested anyhow.

Okay. Let's talk about the U.S. then. So I think 1 of the prevailing themes in the last 36 hours or so has been the fact that less the actual fiscal impact of tariff on a given company, but more of the impact that it's having on customer activity, particularly in the U.S., is slowing decision-making, it's deferring decision-making and the uncertainty is effectively creating an activity or worse. So just talk a little bit about how you think that evolves for you, what you're seeing on the ground in the U.S. across both your -- or in fact, all 3 of your big businesses? And just give us a sense of what sort of environment you're seeing?

I mean you're perfectly right. Whenever there is uncertainty on the political side that typically translates into kind of paralysis for decision makers. I do think the fact that we see that on a broad -- in a broad space at the moment, not only restricting to the U.S. but also to other geographies and the tensions related to the political environment, they will definitely not accelerate decision-making processes anytime soon. On the other hand, Siemens being a business-to-business business, we have a lot of rationale decision makers, and we have a huge backlog of EUR 118 billion at the moment. that will definitely not be affecting then the short-term revenue development. We see some hesitance in some areas when you see people that were more ambitiously driving their business models. They wonder what role ESG is going to play in the future and should they and when should they invest. But I didn't hear of anyone saying, I withdraw from my commitments to be CO2-neutral by XYZ. So the structural demand in the industries we are working seems to be okay. There's always short-term fluctuation. I mean I'm sure you have been following up on that as well when a large player in the data center field is considering the leasing commitments to be changed or not that has impact, but does it affect that what you really plan to do for the next 6 months, probably not because delivery and implementation times exceed that period of uncertainty. If and when that uncertainty would prevail for a longer period of time, say, 1, 2 quarters or alike that may then be a different ball game. I don't see that coming, to be honest, because there's obviously also quite some reaction already building up to it and no one intentionally wants to be in that, German has a word for that, [Foreign Language]. I don't know the English term for that, if you're shocked and paralyzed and don't do anything, you would not stand that for a longer period of time. Therefore, I think it's temporary in nature, still negative on the global GDP development, obviously. On the other hand, we also need to admit, and I hope that doesn't sound sarcastically to you, if and when tariffs are developing along the scenery that is described at the moment, and the aggregates of factories become smaller productivity is even more of the essence and we do assume that in markets where labor is not there to the extent that is needed, automation and the tools and features we can provide and solutions we can provide to our customers may even accelerate our business for them. I'm not looking forward to that scenario, but at the moment, it seems there could be also a flip side to us, and we will grab each and every opportunity as we did in the past.

Okay. So the sort of prevailing views around order momentum into Q2, your comps actually in the U.S. are pretty easy when you look at Q1 -- sorry, Q1, Q2 for you. The impact that you're talking about is really just around the edges, you're not expecting any kind of meaningful impact on that guidance at the moment?

So we do not see any impact on our guidance nor for the second -- not for the second quarter nor for the annual outlook that we have been giving. I mean, I have been commenting on that and maybe use that opportunity also to give you a quick run through on that one. I mean we have been talking about that we expect normalization of the industrial space in automation, in particular, is going to be completed by the end of the second quarter, give or take. That's still valid. We have been discussing a lot the demand in China. And if and when it's going to come back, we have been discussing stock levels in our -- on our distributors' shelves and all that, what we said before is still valid. Maybe we even move a notch better than we originally expected when we have been guiding for the second quarter of our current fiscal year, which ends March 31. And what we also do see is that normalization at the end of the day, you measure that with the normal course of business, orders coming in and being delivered in a certain relatively short period of time. As we speak, this is happening. And therefore, we are very consistently looking into the second quarter's performance, same is applicable for the other businesses that we are running, Smart Infrastructure and Mobility, so from that angle, definitely no impact from those topics you just mentioned, not for the second quarter and not for fiscal year '25. The way I have been reflecting on that was more looking at the global developments and if across a whole set of different industries, that decision-making is procrastinated and procrastinated. That's not only hitting the numbers. This is also hitting the sentiment and the mindset of people. And then it's getting a bit difficult to assess where and when is it coming back. So fast forward, looking into a perspective of 2 to 3 years, I think all that what we have been seeing on trends about automation, digitalization and electrification is still valid, because it's driven by the big megatrends of demographies and also skilled labor shortage in that. And therefore, a big need to find productivity in other ways and if not in automation, where else?

You mentioned China briefly. Can you talk just a little bit about the trends that you're seeing on the ground there? I know you talked about consumer electronics as being probably the only end market in DI that was actually showing signs of improvement. Have you seen much change in the way that business is happening in China, maybe extend that into a little bit of a comment on the competitive environment as well?

Yes, we'll be happy to do that. I mean, first of all, the momentum of normalization prevails and it's going along the lines we expect as I said, maybe much better to share the same set of KPIs that we typically use. I mean we do have orders on hand in the country that normalized pretty meaningfully, backlog is, I think, very close to that what I would consider to be normal again. Distributor stocks still in the area between 9 and 10 weeks of reach. And the real tricky thing to assess is OEMs end customer, what do they still have on their shelves and in -- back in November, I assessed the grand total of the 3 pillars to be, give or take another EUR 300 million that need to unwind from today's perspective, I think we will definitely see something around EUR 250 million, give or take, in the weeks to come and once in May when we disclose our second quarter ending -- end of March, I'm sure we will make another step ahead into that direction from a vertical, from a market segment perspective. Automotive in China is doing very far better than we know that from Europe and from the U.S. at the moment, they have been capitalizing on electrical vehicles quite a lot, including batteries and supply chain Tier 1 in that field. So there is momentum in that field. They also seem to make political decisions that go into high-quality industries again, which we will benefit from. And I also do believe that it's fair to say that the Chinese government obviously seems to position themselves in a way that they can react to potential tariff on odd situations. All that is still sitting on a long-term trend of a population that is rather stagnant or shrinking when it comes to qualified labor. And what they do locally is they invest then in high-quality industries, in particular, green field approaches where they really enter into high-technology Tier 1, M1 markets, high-quality market segments as we are providing for, takes me to the competition. And so what we do see, and we have been announcing that and pronouncing that a couple of times in the past, I mean, they are domestic players. They have been building up over the last 3, 4, 5 years. They have been improving, and they have been also winning share in the lower part of the market, M3, M4, they are quite competitive, also not only cost-wise, but also quality has been improving. We have to admit that. And when it comes to M1 and M2, the first 2 market segments with high-quality requirements, I think it's fair to say and that's what also analytical studies are telling us that we are still going strong in that field. Now what do you do if you want to compete in that mid-market more successfully than in the past? We have been initiating a program that is close to materializing. We already -- we have been developing products in the country with local engineering for local requirements. And we are in the process of completing them, completing that, we will continue. We be brought already a handful of new products into the market, including a complete supply chain with Tier 1 and Tier 2 suppliers on the ground, domestic-for-domestic and for neighborhood of course, then. And that is accepted, and we get quite some meaningful response from customers already. So our first reaction is good. Those of you who may consider going to the Hannover fair in 2 weeks from now, you will have an opportunity to see more there. And in a nutshell, that program, domestic program, in China for China, where we accepted the challenge and said we want to stand the heat of the Chinese kitchen and make sure that we can compete local against local that is materializing more and more. We have 18 products that have been identified in that scheme, local for local, with local supply chains and about 5 of them have been entering the market already. The other 13 are going to do that in the next couple of weeks, and we'll have a big product launch on March 26, right before the Hannover fair gets started. And we hope that the excitement will translate into orders.

Well, we're going. So if anyone wants to come, just reach out to me. Okay. Let's stick on the DI for 1 last question on mix. I know you don't like talking about the actual levels of margins in the various different businesses. But I want to push you a little bit on why -- if we look at your direct competitors, the margins that they report versus what you report are materially different. What is it about the DI structure? What is it about the proportions of the business that means -- that explains the difference? And how would you get that business to materially improve the margins on a sustainable basis?

I mean, let me try to separate the 2 buckets within DI, automation on the one hand side and software on the other hand side. Let me start with software. We have been embarking on the SaaS transition. I believe we may say we are extremely transparent on KPIs, how we do that, what we accomplished on a quarterly basis. And also with regard to target setting. We are making very good progress in that field. It's the third year now and expectation is that we will be done with that at the end of the fiscal year, still continue to invest. We feel very much encouraged to do the right thing. Why? One of the central intent of the program, SaaS implementation was to win in the small and medium companies environment. We are tracking that. We are sharing that with you in the quarterly disclosure and we have been winning more than 80% of the new customers for our software products in that particular field of small and medium companies. This is obviously underpinning that we are on the right track. That part of the market was, if you will, underserved from our end, we always have been doing very well with the large OEMs around the globe, but not in that field. So therefore, on the right track, on top comes that of course, we do expect to close the transaction of Altair throughout the next couple of months. And from that point of view, I think it makes a lot of sense to wait for that concept being done 90% plus SaaS transitioning plus the new setup. And I'm sure when we are going to see many of you, hopefully, at our Capital Market Day on December 9 this year, we will share then more details where to go in that field. It doesn't help for those who are in it while you are transitioning into that SaaS space more and more to talk a lot about KPIs of the typical nature and profitability and the like, we share our growth and top line momentum with you, but there's a lot of distortion. On top of that, only as a side remark, we are, of course, looking into the right and best possible and most transparent KPI to once then share with you the performance in our software suite, which is amazing from a top line perspective and is growing also into the direction of becoming a leading margin company in that field. So it's quite amazing how many different KPIs, non-GAAP profitability figures are floating around. And depending on whether or not the company is listed, depending also another criteria like incentive schemes being booked or not booked, it doesn't help to add another confusing new KPI with adjustments of adjustments. And therefore, at the moment, I'm rather thinking into the direction of cash flow-oriented KPI that should then give clarity and transparency about the performance. There's anyhow so many artificial aspects in accounting on the intangible side. But I don't want to get too much into technicality. So we will -- we understood what you're asking for, we accepted. And we will talk about timing and what it's going to look like in December this year then. Talking automation. I believe we have been quite transparent and the fact that we are not sharing profitability for that sublevel on DI is also, to a certain extent, driven by the fact that comparing apples-to-apples is not that easy in that industry. And therefore, we determined for the time being, we stay with the format we have, delivering profitability and top line development and free cash flow for each and every business, as we call the DI/SI and sharing top line momentum to give you a better understanding of where we are winning market share. And what the new financial framework that we are developing busily at the moment, and also, we'll share with you in December this year, what that's going to bring, I need to ask you for some more patients, but it will definitely be ambitious what we will share with you by then.

Okay. Thank you. Let's switch to SI. Very strong Capital Markets Day in December, some very material margin improvement seen in that business over the last 2 to 3, 4 years. One of the biggest concerns, I think investors have, particularly around the electrical side of things, is the sustainability of those margins, not for you, but in the industry given how much capacity is coming online. Clearly, very strong demand trends and supply has been tight but it feels like it's coming -- becoming a little bit more in balance. So can you talk a little bit about the drivers of the margin improvement in SI? And as you look at that sort of top end of the range that you're now delivering in -- particularly when you think about products and electrification, what's the potential here? I mean, buildings is obviously the upside, but what is the potential here? And what are you looking to measure as that progresses?

Mean some of you may have been attending the Capital Market Day that we held back in '21 when SI has been committing to those targets against them -- against which they still are delivering at the moment. And back then, there was an extensive description and discussion around the different levers. And just to shortcut that, there was a huge cost out opportunity, which they grab, 17 quarters in a row now SI has been delivering over and above profitability levels of the prior year quarter, 17 quarters in a row and still going strong. On top of that converting profitability into free cash flow, also very consistently. So obviously, on the cost-out side and on the growth momentum, they delivered everything they had been committing to back then. On top of that, they started to groom small scale, but still relevant, their portfolio within SI, they had been back then identifying, give or take EUR 3 billion of revenue, which they were investigating from whether or not it's going to be core on the way forward being sold, fixed or at least put into a different perspective, and they continue doing so. We indicated in November -- sorry, in February when we have been guiding for the second quarter for the current fiscal year that again, wireless accessories is going to be divested. And they have been walking their talk again, and we will share information and data with you on the matter early in May when we disclose our second quarter. So all that has been built on a huge wave of innovation, technology being empowered. They have been building on many USPs. They have been also spending more than average in the industry on innovation, R&D. And they have been also focusing on growth segments very consistently. The leadership team there, you met them. It's very experienced, and they know exactly what they need to do. And also the top leadership team there, my dear colleague on the Managing Board. Matthias Rebellius and the CFO, Axel Meier, they are in business for almost 20 years, and they know what to do at which point in time, they have been building up a great team, a great team of leaders below themselves and second layer. So I believe the momentum being created on technology, market access in areas where they didn't have that consistently continue to groom their portfolio and time and again question whether or not a certain asset is core and needed on the way forward or not. And on top of that, of course, they have been also pushing into the right geographies at the right point in time. And as you touched on already, the building business is the biggest area for further improvement. I have been sharing with you their plans in December. And from today's perspective, I can only say [indiscernible]. Again, they walk their talk and they also drink their own champagne when it comes to being disciplined on cost side, and still growing economies of scale, have been playing a big role in the product business, obviously. We mustn't expect that this continues for good, but they are still asymptotically growing in that field and converting into margin and cash. So I do, I'm very optimistically looking forward that they will be able not only to reach the upper part of the historical margin corridor, but they have been expanding to 16% to 20% for the next cycle, and I think they are quite on a good way. All that what we said about the second quarter and the full fiscal year being between 17% to 18% from a margin perspective will materialize. And on top of that, we will see the disposal gains of the wireless accessories in the second quarter.

Okay. Great. I want to spend the last piece of the chat talking about portfolio. Obviously. Healthineers is obviously the big question. But before we do that, if we could just split 2 super quick question on Altair. It feels like it's closing quicker than you'd anticipated, what does that mean in the broader context of timing on what you also talked about, which is selling stakes of listed entities to fund it?

I mean, first of all, some of you know me, I would never ever speculate on a closing date, regulatory framework needs to be adhered to. What you do is you are prepared for what it takes to then successfully hit the ground running whenever closing is taking place. What I said a couple of times, and this is still valid we had been expecting the closing to take place in the second half. And from today's perspective, it feels like momentum is created to close earlier potentially. But before I get the last letter of the last regulatory body, I will not comment on the matter. But even if we close tomorrow, we would be able to pay for it. We would be able to know what exactly needs to be done by Mr. and Mrs. ABC to approach from the 2 different directions, each other and align. We have clear understanding of leadership teams and what priorities are. We do know the impact of -- from a P&L perspective. And we are quite confident that whenever closing is taking place we will be ready to execute exactly along the lines of the plan. We have been making for that. And therefore, it's as soon as possible is always a good thing to have, but never pushing too hard. And when it comes to financing, the transaction, we still stick to that what we said back last year. I mean, there are 3 or 4 areas we can tap on. We already back then had been closing the Innomotics transaction, providing EUR 3 billion plus of proceeds that has been in our pockets already by then. We announced that we would give or take use up to 6% of Siemens Energy shares that has been standing at that point in time when we talked about it at give or take, 17%. We have been selling down and we are fully transparent on that. As you know, from our weekly disclosures, which are publicly required in Germany. We are in the area of 12%, give or take. And that has been materializing quite successfully. We have been collecting EUR 2.2 billion of proceeds from that already on the Siemens Energy side, and we had an accelerated book building process for Siemens Healthineers shares, that was also quite successful EUR 1.5 billion. And from that, and we are, I think, exactly on the trajectory we originally planned. On top of that, not forget, we have a really very successful free cash flow management in place. Meanwhile, it's going to be the sixth year in a row that we will have double-digit free cash flow return on sales and this is also quite a relevant and material source of funding if need be and I don't need to talk about the rating we have. So I'm not afraid to pay for the transaction even more if it close tomorrow.

Very good. So let's talk about Healthineers. The way I'd ask the question is your -- the communication with respect to Healthineers has changed over the last 3 months, particularly with your own interview over the Christmas period. What is it that drove the change? Is I guess, one question. And then second question, perhaps you can -- obviously because you're not going to announce the results of a review. You've told us you will announce this in December. But maybe talk us through the pros and cons of the processes that you're going through, what is it that means that you should hold 70? What is it that means you should hold another number? The pros and cons, the thought process going into this because I think that's the bit that would help us understand the time line and where we might end up.

Yes. Let me start with a very short recap, 2018 when we IPO-ed the Healthineers business, we said from the very beginning that we are not religious about the shareholding as such, but we are at that point in time, and we repeated that time and again, a happy majority shareholder, knowing at that point in time at the IPO. And by the way, this is also part of the prospectus. So people can still read that. We knew that there was interesting opportunities on the M&A side coming up for the Healthineers. Now fast forward, they acquired Varian, very successfully integrated the business and have been living up to exact that momentum and even much better than they have been promising to do. And what we also said then after the -- on the in vitro business has been happening that they deserve the time to stabilize that and come to that point where they live up to that, what they are a market leader when it comes to imaging in vitro, in vivo and on the in vitro side, making good for that what they had been missing in the past and combining that with the market-leading position of Varian. All that has been happening, and what we always said, maybe we didn't pronounce it properly, but we always said that when we talked about that, and we have been asked frequently that at that moment, when we answered the question, we are a happy majority shareholder because we really have been that. And we always also said, and I don't want to go through the entire thing. But there is more than the medtech market in health care. And it's not only us, Siemens talking about that. It's all our industrial peers, statistically, I went through the exercise painfully, but I wanted to know that for myself every -- statistically every 2.7 quarter one of our peers in the industrial space and in the building space is repeating that. This is a highly attractive market outside medtech. So there is a secular growth market in which we are with Siemens AG products and solutions. It's about energy efficiency in buildings. It's about asset tracking. It's about scheduling. It's about many digital tools and opportunities we have, and we have been looking into that and we continue looking into that. The typical next question is then why does it take that long? It takes that long because the health care market, not medtech, also medtech, but the health care market is a highly -- geographically, highly fragmented market because in almost each and every jurisdiction around the globe, close to 200. You have different schemes when it comes to FDA, the Food and Drug Administration, regulatory framework, what can you do? What is considered to be clinical, what kind of data of patients can you touch on. And all that is highly fragmented. On top of that comes the different reimbursement schemes, who is ultimately paying for health care in the different geographies. And therefore, this deserves an assessment one after the other and then conclude whether or not we may use, which we can do, the access to C-level decision-makers in large hospital chains or in parastatal entities to make sure they understand the offering that we do have. I also said that, and this has been maybe creating the impression that there's a new perspective, when I had -- when we had these interviews before Christmas, that we do, of course, not believe if we had not that stake of -- by then 75%, we would invest EUR 45 billion to have that market access on C-level. But as we have it at the moment, we deserve and you as our owners deserve that we prudently look into that and make best use out of it. And this is exactly what we do at the moment. And we hope and we ask you for that patience of another couple of months. And then we will be as transparent and clear. And I'm absolutely convinced that you will fully subscribe to the rationale that we will then share with you in December. I cannot anticipate that. But I'm absolutely convinced that you will understand the conclusions we draw from that what we did. So there is not one single driving factor, a triggering event that makes it 70% or nil. It's a highly complex system that deserves the attention and the time being looked into it prudently and we will conclude with the full understanding of we are obliged to serve our owners and our shareholders.

Can I -- thank you. Can I push you a little in trying to understand how much of your health care exposure in DI or maybe Smart Infrastructure is probably more of an impact actually because of the electrical side of things, how much of that is actually driven by the fact that you sell MRI machines into the same hospital?

It's not the MRI. It's not the fact that you sell MRI to a radiologist at Cleveland Clinic Foundation. It's the opportunity. I mean what changed? I used to be a pre-Healthineers myself in the late '90s. By then you have been -- you hope that you get an appointment at the chief radiologist of a large hospital, and then you debate potential applications in the radiology suite. That has been driving technology forward, and Siemens Healthineers, nowadays Healthineers, back then Medical Solution has been a clear leader when it comes to MRTs to CTs and also to cardiology suites and the like. The radiologists I'm overdoing now was the sole decision maker that was back in the '90s. What happened since then? Hospitals have been building up scale, have been combining different locations, have access with remote diagnostics and alike. And at the end of the day, they have been developing into large-scale entrepreneurial entities. You don't talk to the radiologists anymore, you talk to the Chief Procurement Officer of Cleveland Clinic Foundation. They talk in their managing board about it and the decision-makers are sitting on C-level and it's the same individuals that need to determine whether or not they invest into energy efficiency of the buildings. And again, I hope I don't sound disrespectful, the hospitals around the globe are not in best shape when it comes to energy efficiency. They are not automated. They don't have sensors to find out whether the clean room deserves needs and has the same temperature and parts per million in the year, then it has to -- in another space in the same building. So we addressed that. Some of you may remember, we have in our quarterly disclosures the most relevant market segments for our businesses. And on the SI side, health care is, give or take, 5% of the relevance of the entire revenues. This market stands for, give or take, 5%. There is hardly any meaningful productivity initiative that I would be aware of in hospitals when it comes along when it comes to assess the efficiency of processes. And again, I'm fully aware of the fact that patients are not a piece of work in a factory. But a hospital, to a large extent is a series of well -- hopefully well-aligned processes in the nonclinical space. When it comes to scheduling, best -- making best use of the most expensive piece of equipment in a factory, utilization rates in meaningfully run factories is over and above 85%, sometimes even 90%. Guess what the utilization rate of one of the most expensive pieces in the hospital is MRT scanners, for example. This is quite frequently below 50%. And there is room for further efficiency with tools, processes and data-related algorithms that can lead the way to lower costs in the health care systems around the globe without incremental equipment or incremental resources. On top of that comes the scarcity of qualified labor in hospitals. We have a huge lack in that field. So there is an underlying trend anyhow that this part of any countries industry, and it is an industry meanwhile, needs to be improved anyhow from a productivity perspective and from a meaningful use of scarce resources. Therefore, there is relevance even though it's not tied into the same order for an MRT and other tools to come. So I really -- we are grateful that you are giving us this opportunity to assess this properly and then come to conclusions that are meaningful for all stakeholders, in particular, for the shareholders of Siemens AG.

Okay. We'll take it up in December. Thank you, Ralf.

Thank you.

Thanks, everybody.