Siemens Energy AG (ENR) Earnings Call Transcript & Summary

Esteemed shareholders, ladies and gentlemen, as Chairman of the Supervisory Board, I hereby call the first ordinary general meeting of Siemens Energy AG 2021 to order and assume the Chair of the meeting as provided in the articles of association. On behalf of the Supervisory Board, the Executive Board and on my own behalf, of course, I want to welcome all our shareholders and their representatives, the press corps who is tuning in and all the other guests who are attending our shareholders' meeting over the Internet. Regrettably, because of the current pandemic, this year's shareholders meeting cannot be held in person. We must hold it virtually. That means our shareholders and their proxies cannot be physically present. With the consent of the Supervisory Board, the Executive Board has decided to make use of this arrangement, which is offered by German law under what is known as the COVID-19 Act. Attendance here on location at the Werner-von-Siemens Center in Munich at Werner-von-Siemens-Strasse 1 is limited to a minimum. I want to welcome as members of the Executive Board: The CEO, Dr. Christian Bruch; and the CFO, Mrs. Maria Ferraro. Maria? As members of the Supervisory Board: Deputy Chairman, Robert Kensbock; and Dr. Hubert Lienhard. Dr. Lienhard will Chair the meeting in my stead in the event that I am unable to do so myself. And I welcome the proxies appointed by the company, Mrs. Raphaela da Costa von Gehlen, and Dr. Moritz Maier. The other members of the Supervisory Board and Executive Board are attending this meeting on the Internet. We are able to maintain telephone contact with them. Ladies and gentlemen, I'd like to welcome all of you once again. Before moving on to the agenda, I would like to briefly explain the necessary formalities. Today's shareholders meeting was convoked in due form and good time on December 15, 2020, by an announcement in Germany's Federal Gazette. You -- we sent the convocation notice, along with the agenda and management's proposed resolutions, together with the invitation to this shareholders' meeting. You can also find the convocation notice, along with the other documents that are to be made available on our company's website. Now a few more brief pointers on the virtual shareholders' meeting. The entire meeting can be watched live on the Internet via an audio-visual simulcast by shareholders and shareholders' representatives who have logged into our Internet service. They can get online access by entering their shareholder number and their individual access number. Shareholders who choose -- who chose their own access password when they registered should use that password. My introductory comments as the Chair of the meeting and Chairman of the Supervisory Board and those of our CEO, Mr. Christian Bruch, are also being transmitted on the Internet for others who may be interested. Our remarks will be recorded and made available later on the company's website. The other parts of the meeting, however, will not be recorded nor are they permitted to be recorded in either sound or picture. We have carefully tested the necessary technical arrangements for the live transmission in concert with the service providers we have engaged. If the live transmission is unexpectedly interrupted, please be patient for a few moments. If we cannot restore the connection, we will send you further information by way of our Internet service and also post it on the company's website. Its web address is, as you can see here on the screen, www.siemens-energy.com/hauptversammlung. If you have individual technical problems, please contact our hotline directly. You will find its contact information as well on the website I just mentioned. The list of shareholders and their proxies can be viewed by participants by way of the Internet service. The list will be updated continuously until the end of the meeting. I will announce the exact participation figure to you later on. Regrettably, today, we will not be able to have a personal comment in the customary format of a general debate. Shareholders will not have a right to speak or submit motions during the virtual shareholders' meeting. It will also not be possible to raise questions or pursue follow-up questions today. However, until 10:00 a.m. the day before yesterday, February 8, 2021, all shareholders and their proxies who had registered for the meeting were able to submit questions in advance by way of our Internet service. Those questions will be answered today by the Executive Board and by me insofar as they concern the Supervisory Board. Shareholders and their proxies can vote during the virtual shareholders meeting solely by mail-in vote or by authorizing and issuing instructions to the proxies designated by the company. I will give you some more information about that later on. All shareholders who are entered in the share registered and have registered for the meeting in good time or their proxies can declare objections to the resolutions of the shareholders' meeting by way of our Internet service. Such objections will be sent directly to an e-mail mailbox administered by the notary public himself. Objections may be filed until just before the end of the meeting. I will inform you in good time before the exact cutoff time. The company-appointed proxies will not file objections for the shareholders. Ladies and gentlemen, I know that many shareholders and their representatives would have preferred an active dialogue. We would have preferred that, too. I hope that in the coming year, it will be possible to meet again in person. If not, we will have to find legally secure solutions for an interactive dialogue. Dialogue is a necessity for both sides. This brings me to item 1 on the agenda: The presentation of the accepted annual financial statements and the approved consolidated financial statements, along with the combined management report for Siemens Energy AG and the group as of September 30, 2020, along with the report of the Supervisory Board for the 2019/2020 fiscal year. You can find the full report of the Supervisory Board on Pages 166 to 172 of the annual report. I would like to concentrate for now on the main points of this item and go into the work of the Supervisory Board during the current fiscal year so far, along with several other items on today's agenda. The parent company financial statements and consolidated financial statements, together with the combined management report of Siemens Energy AG and the group for fiscal 2020, were audited by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, and each received an unqualified audit opinion. The Executive Board and the independent auditor explained the documents for the parent company financial statements in detail to both the Audit Committee and the Supervisory Board. After its own review, the Supervisory Board approved those financial statements. The annual financial statements of Siemens Energy AG are thereby adopted. The Supervisory Board additionally gave detailed consideration to the report on relationships with affiliated companies of Siemens Energy AG as submitted by the Executive Board together with the independent auditors' report on that document. The independent auditor audited the report on relationships with affiliated companies and issued it an unqualified audit opinion. After its own reviews of the report on relationships with affiliated companies and the independent auditors' report on that document, the Supervisory Board had no objections to the Executive Board's declarations at the end of the report on relationships with affiliated companies. It approved that report, and it affirmed the independent auditors' opinion. Ladies and gentlemen, Siemens AG has redefined its aspirations and has established independent companies that will be able to play an active role in shaping the transformation of their respective businesses. In so doing, these companies have what it takes to be among the best in their branches of industry. The era of big conglomerates is a thing of the past. They have been superseded by focused, adaptable companies, including, since last September, Siemens Energy. The pandemic has subjected companies to another significant increase in the pace of change and the pressure to change that primarily applies to the energy sector. The transition to renewable sources of energy has accelerated even further. That is why it was especially important to adhere to our ambitious schedule for making the energy business independent despite the COVID-19 pandemic. Yet even as late as September 2020, Siemens Energy AG had no business operations of its own and was a wholly owned subsidiary of Siemens Aktiengesellschaft. Ever since the spin-off took effect on September 25, 2020, Siemens Energy AG has been the ultimate parent company of the independent Siemens Energy Group. Independence became complete when the company went public on September 28, 2020. Among the matters that the Supervisory Board and its committees focused on during the first months after the spin-off was the compensation system for management, including compensation for the members of the Executive Board. The Supervisory Board also concerned itself with key issues relating to corporate governance. Among other measures, it adopted the diversity concept for the Executive Board and the targets for the composition of the Supervisory Board itself. Another main issue was the Executive Board's strategy for our company. Siemens Energy is a leading technology corporation in power generation and transmission. It offers an impressive range of products and services. Electrification is a growth field with vast opportunities all over the world. The challenge is, however, to meet the constantly rising demand for electricity while, at the same time, steadfastly confronting climate change in a way that takes due account of social responsibility and makes good economic sense. We have a strong management team: Dr. Christian Bruch; Dr. Jochen Eickholt, Maria Ferraro and Tim Holt. This strong management team has all the qualifications required for taking a prudent and resolute approach to this challenge. So that you, too, can get a personal impression of the new Executive Board team, they will be introducing themselves briefly as soon as I finish speaking here. The management team has adopted an ambitious strategic program, an ambitious plan. It is titled Energy of Tomorrow. It is the answer to the profound changes the energy business is now undergoing. The strategy aims to resolutely make use of the opportunities I have just described and to judiciously overcome the associated challenges. The entire Supervisory Board, and I'm emphasizing this, decidedly, the entire Supervisory Board supports the Executive Board's strategy wholeheartedly. Siemens Energy is part of the solution for the worldwide energy transition and also part of the energy debate. It is important and right for Siemens Energy to continue this debate on our responsibility to future generations and to play an active role in doing so. So we emphatically welcome it when the younger generation organizes itself, when it states its aspirations. The diagnosis is clear. But a cure, ladies and gentlemen, a cure can only come from an appropriate therapy. And as therapies, this therapy also has side effects that must be taken into account. That is why we must find solutions that are both effective and integrative because we have no Planet B. Companies are part of society. We must integrate interests and act for the benefit of all stakeholders. That is why Siemens Energy has affirmed its commitment to its ESG principles, environmental, social, governance, and is acting accordingly. A special point to be emphasized in this context is the Executive Board's decision that the company will no longer, we will no longer, engage in new bidding rounds for power plants fueled solely with coal. The company will meet the obligations it has already undertaken toward our customers and partners. That decision is an expression -- it's an important expression of our consistent focus on guiding Siemens Energy step by step towards sustainability and climate neutrality. Against that backdrop, the Supervisory Board also welcomes the company's activities in new lines of business and forward-looking technologies, including Power-to-X and green hydrogen. Siemens Energy is thus investing in the development of a decarbonized economy and is helping to drive that transformation. In addition to principles for sustainable management, the Supervisory Board has also adopted the diversity concept for the Executive Board and the targets for the Supervisory Board's own composition. Ladies and gentlemen, esteemed shareholders, in addition to the usual formalities to be decided on -- at an Annual General meeting, this meeting will also address major issues that we have submitted for your decision. They include electing the independent auditor, electing the shareholders' representatives to sit on the Supervisory Board and, of course, as I announced earlier, questions of remuneration. Item 4 on our agenda concerns appointing the independent auditor for our parent company and consolidated financial statements as well as the auditor to review the semiannual financial report. Based on the recommendation of the Audit Committee, we are nominating Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft of Stuttgart as the independent auditor of the single entity and consolidated financial statements for fiscal 2021 and as the auditor to review the abridged financial statements and the interim management report of the group for the first half of fiscal 2021. The Audit Committee and Supervisory Board have diligently and meticulously examined E&Y's role in connection with the developments in the Wirecard Scandal. Of course, it has, and of course, they have. On the basis of the facts available to date, they have found no reasons that would oppose electing E&Y as the independent auditor for fiscal 2021. Item 5 on our agenda is the elections for the Supervisory Board. The term of office of all Supervisory Board members representing the shareholders will end at the conclusion of today's shareholders' meeting. New elections are, therefore, necessary for these 10 Supervisory Board members. All the current members of the Supervisory Board representing the shareholders are standing for reelection. Based on the recommendations of the Nominating Committee, the Supervisory Board proposes the following individuals for election in alphabetical order: Mrs. Christine Bortenlänger; Mr. Sigmar Gabriel; Mr. Joe Kaeser; Mr. Hubert Lienhard, Mrs. Hildegard Müller, Mrs. Laurence Mulliez, Mr. Matthias Rebellius, Professor Ralf Thomas, Mrs. Geisha Jimenez Williams and Mr. Randy Zwirn. The following criteria, in particular, governed the choice of candidates. Of course, first off, experience in the energy sector or in finance with respect to the Audit Committee, in other words, expert knowledge of the field. And of course, internationality and diversity was a further criterion. A global company should be very careful in its actions in these areas as well. Experience with regulatory affairs and international relations was also a criterion. This is necessary to carry out a successful energy transition. And an appropriate involvement by the primary shareholder, Siemens AG, to assist in the stable transition of Siemens Energy into an independent entity was a further criterion, especially in times that are as turbulent as these. At the same time, of course, it goes without saying that we wanted to safeguard the independence of Siemens Energy, the release of control from Siemens AG. This was an important aspect in the spin-off. This is why it was important to take important precautionary measures, and this is why we decided to appoint a special independent director. This will ensure that the various bodies of the Supervisory Board will be able to reach majority decisions independently. To enable you to form a better impression of the nominees, I would like to introduce each of them briefly. And I believe it's important for you to see who will be representing you in the company and, therefore, safeguarding your interests. We will start alphabetically with Mrs. Christine Bortenlänger. She is the Managing Director of the Deutsches Aktieninstitut e.V. She has extensive experience in managing and supervising both exchange-traded and unlisted companies. Her expertise with the financial markets and her knowledge of law and compliance are outstanding, as is her knowledge of organizational and cultural change. Sigmar Gabriel is a former Vice Chancellor, a retired minister of the federal government in a variety of capacities and a retired state Prime Minister as well as one of the most internationally eminent politicians in Germany. Mr. Gabriel brings outstanding qualifications to the table, especially with his international network and his experience with environmental issues. Among his many positions, Hubert Lienhard is a member of the Supervisory Board of the energy utility, EnBW. From 2008 to 2018, Mr. Lienhard chaired the group Board of Directors at Voith GmbH & Co. KGaA. He has also long been an active -- been active in major business associations. For instance, until 2019, he was Chairman of the Asia-Pacific Committee of German Business, and he was my immediate predecessor in that capacity. He has outstanding expertise in Siemens Energy's lines of business and economic regions. Mrs. Hildegard Müller is the President of the German Association of the Automotive Industry, the VDA. She is also a retired state minister and a former member of the Executive Board of Innogy, which is another very sustainable green company. Her extensive experience there, including as former Chair of the Management Board of the German Association of Energy and Water Industries, has enabled Ms. Müller to gather valuable industry knowledge and extensive experience with regulatory matters. She's really very experienced in this area. Laurence Mulliez is the Chairwoman of the Board of Directors of Voltalia SA and President of Globeleq Limited. Mrs. Mulliez has diverse expertise in financial and management matters in such fields as financial economics, energy and chemistry. She was also CEO of EOXIS, a company that generates electricity from wind and solar farms. And thus, she brings to the table very valuable experience and expertise for the energy transition and also as a member of the Audit Committee. Mr. Matthias Rebellius is a member of the Managing Board of Siemens AG and CEO of Siemens Smart Infrastructure. He represents the interface in the value chain between Siemens Energy AG and Siemens AG, including with an eye to cooperative arrangements for the benefit of both companies in the world market from the distribution and generation of electricity to buildings and from buildings. Ralf Thomas is the CFO of Siemens AG and a member of that company's Managing Board. Mr. Thomas is not only known as an exceptionally outstanding and internationally respected financial expert but is also extremely well acquainted with the business lines of Siemens Energy AG. On the Managing Board of Siemens AG, he is also in charge of Siemens Financial Services, a very important partner for Siemens Energy in the acquisition of projects in the conventional sphere and, in particular, in the renewable energy operations of Siemens Gamesa. Geisha Jimenez Williams is an independent corporate consultant and an expert on the energy business. She was the CEO of Pacific Gas and Electric. And before that, she was a member of the board of management of Florida Light & Power, now NextEra, a pioneer of the transformation of the energy system. This experience has given her excellent experience with customers and in managing complex transformations. Randy Zwirn is very well known to us, today, is a member of the Board of Directors of Babcock Power, Inc. Until his departure in 2016, Mr. Zwirn was in charge for many years of the important service business of the energy division at Siemens. Mr. Zwirn is, without a doubt, one of the best connected personalities in the world's energy business. He is well acquainted with Siemens Energy. He had also has the constructive critical distance needed for activity on the Supervisory Board. And ladies and gentlemen, it's not really that relevant for Supervisory Board work, but Mr. Zwirn is celebrating his birthday today. So my dear, Randy, happy birthday to you. Esteemed shareholders, ladies and gentlemen, we believe we have made a good selection of nominees. I therefore urge you to endorse them in this election. Siemens' decision to spin off its energy division and establish Siemens Energy has focused at all times bilaterally on the sustainable success of both Siemens AG and Siemens Energy AG. The Chairman of the Supervisory Board of Siemens AG, Mr. Jim Snabe, and I in my former capacity as President and CEO of that company, made important choices to set the course of that process early on. They included, in particular, making an early decision on a successor for the position of President and CEO of Siemens AG and on the focus of the Executive Board of Siemens Energy AG. I agreed to support the advancement of Siemens Energy as Chairman of its Supervisory Board. As had long been planned, my term as a member of the Managing Board and as President and CEO of Siemens AG ended at the end of the Annual Shareholders' Meeting of Siemens AG on February 3, 2021, which is just last week. The day after tomorrow, on February 12, 2021, I will resign from my position on the Supervisory Board of Siemens Limited India. After that point, I will no longer have any ties or obligations to Siemens AG. Nevertheless, it is essential and very important for us, and to me as well, to address all reservations shareholders may potentially have with respect to independence, even if all the criteria have been met formally. For that reason, in Mr. Lienhard, the Supervisory Board has appointed a special member with regard to Siemens AG, upon whose election, Siemens will be voting only with a significantly reduced number of votes. That emphasizes Mr. Lienhard's special position, which is based on the role of a lead independent director. It also complies with the terms of the release of control agreement with Siemens AG and Siemens Beteiligungen Inland GmbH. One of the Supervisory Board's most important committees is the Audit Committee, which is to have a majority of independent members at the least. That goes without saying. Nevertheless, the Supervisory Board believes it is wise for Professor Ralf Thomas, with his extensive expertise and experience, to start out as Chairman of this important committee. This is also a matter of great significance for a smooth transition both to us, to the Board of Management and to Siemens Energy AG, that will ensure the continuing integrity of the internal controlling system and compliance of the new company. After this transitional period, plans call for the Audit Committee to be chaired by an entirely independent member of the Supervisory Board. Regarding that point, we have agreed that Professor Ralf Thomas will resign as Chairman of the Audit Committee as of the end of the next Annual Shareholders' meeting in February 2022. Ladies and gentlemen, a strong Supervisory Board must also include excellent representatives of the employees, one of whom we have here today attending, the rest of whom are listening and have dialed in via the Internet. It is very important and I'm very pleased to be able to present to you the representatives of the employees. Our constituting meeting with the employee representatives was held on December 4, 2020. The following members were appointed to represent the employees, and I'll read them off in alphabetical order: Mr. Günter Augustat, Mr. Manfred Bäreis; Mrs. Andrea Fehrmann; Mr. Andreas Feldmüller Mrs. Nadine Florian, Mr. Rüdiger Gross; Mr. Horst Hakelberg; Mr. Robert Kensbock, Mr. Jürgen Kerner; and Mr. Hagen Reimer. I know a few of them already quite well, given the offices they held in Siemens AG, and we also welcome the fact that we have colleagues represented in both bodies so that the transition can be both resolute and focused and seamless. Ladies and gentlemen, I look forward to working with all of the members of the Supervisory Board, both the employee and shareholder representatives as they are elected, and I'm firmly convinced that the constructive coexistence of the shareholders and employees' sides for the benefit of the company. We have a great opportunity offered by the principle of codetermination. And up-to-date social partnership will also be an important factor in our joint efforts to carry out an energy transition that must integrate environmental, economic and, of course, social aspects alike. The Supervisory Board also gave consideration to the compensation system for the Executive Board and the remuneration of the Supervisory Board. These points are being submitted for your decision under agenda items 6 and 7. I will provide you a separate overview of them for you before we turn to answering your questions later on. Ladies and gentlemen, esteemed shareholders, I want to thank the members of the Executive Board and the employees of Siemens Energy AG and all of its group companies for their outstanding commitment over the past fiscal year. I don't think I'm overemphasizing when I say that the year's conditions reached historic levels of difficulty, and we still don't know in which direction the pandemic will develop. And so therefore, I think it's important to be very circumspect and cautious in the dealings with our partners, social partners, employees and customers. That is job one. That is the principle that we must apply. It is extremely important to do that. And therefore, I'd like to express my sincere gratitude to you all for this wonderful dedication and commitment and your outstanding work. Yet at the same time, it was also a very special year for Siemens Energy. It was the year in which a new company was born. We now have the possibility of achieving something truly great together for all our stakeholders. The start may be difficult and it will be difficult, but the opportunities for the long term are great. As I said before, after all, we have no Planet B. And together with our customers, we can make important contributions, not only in diagnosis, but also, in particular, in coming up with a therapy for everything that is important to us. Now after the members of the Executive Board briefly introduce themselves, Mr. Bruch, will report to you on the 2020 fiscal year. Ladies and gentlemen, thank you for your patience and your attention. I understand that this introduction was quite lengthy, but it's important to be this detailed at the Annual Shareholders' Meeting, at which such important decisions have to be taken. I hope that we accomplish everything that we set out to do. And we expressly will work and do everything we can towards making sure that we have an in-person shareholders' meeting next year. I'm sure you join me in looking forward to a successful meeting. And now I would like to hand the floor to Mr. Bruch, the CEO of Siemens Energy. Please, Christian. The floor is yours.

Shareholders, I am pleased to be able to introduce myself briefly at our first AGM. I work in the -- I studied in Glasgow and Hanover. And after many years at RWE, I spent the last 16 years sort of gas and engineering at Linde, for the last 6 years on the Board with responsibility for international plant engineering and technology and digitalization. People and products, so now constitute Siemens Energy are people that I learnt as customers over the last few years. So I'm bringing an outsider's view. I can see what makes this company so strong and the fields whether potentials can be worked on better. What I am happy about is the possibilities offered by these changes. And of course, as part of a strong team, I can help create something new to shape the energy transition. I'm very grateful that as of the 1st of May 2020, I was appointed Chairman of the Board of Siemens Energy. The question of how the growing demand for power, and especially electricity, can be covered reliably in a future-proof way is one of the central questions for our future. Siemens Energy for me, like hardly any other company in the world is predestined to find solutions to these questions. With this broad technological base and its competence in implementing technologies in plants, products and services, Siemens Energy can make a decisive contribution here. For us, this means, on the one hand, great opportunities but, at the same time, also major challenges, demanding challenges. And shaping this interest of customers, employees and you, as shareholders, is something which I, together with the Siemens Energy team, will work to the best of my ability. I thank you for your trust in advance.

Thank you, Christian. Good morning, everyone. Dear guests and shareholders, it's my pleasure also to be here, and a very warm welcome from my side. My name is Maria Ferraro. In last May, in 2020, I had the pleasure to join the Siemens Energy team, where I assumed the role of Chief Financial Officer and Executive Board member. In my position as CFO, in short, I'm responsible for the financial matters of Siemens Energy. A little bit about myself. I'm Canadian, born and raised. By formal education, I'm a designated Chartered Professional Accountant, and I started my career a few years ago at PricewaterhouseCoopers in Canada just outside of Toronto. Looking at my professional experience, after my time in PwC, I spent some time in the telecommunications sector for a number of years in Toronto but also abroad, where I livid in France and spent some time in Asia. My journey with Siemens then started in 2004, where I joined the Siemens Canada financial team. And for a few years afterwards, I took on several leadership positions in the finance organization in the U.S., also in Canada and also spent some time in Germany. From 2013 onwards, I have the pleasure of being the CFO of Siemens Canada and then became the CFO of Siemens in the U.K. Both countries have a strong energy business and footprint and are embarking on their relative energy transitions. During my time there, it was very exciting, for example, as both countries experienced a very large growth relating to renewable energy. Since 2017, I've been living and working here in Germany, where I started my role as the global CFO of the digital factory division in Siemens AG, which then became the operating company of digital industries. There, I introduced the concept of sustainable value generation. My drive for profitable growth and cash generation was at the top of the agenda, and we were quite successful in this regard. And now, of course, since last May, I'm here with Siemens Energy. In my career, I've had the opportunity and the pleasure to work in different companies, different countries, both in headquarters and in the regions, having global responsibility for the P&L or leading support functions. I highly value these diverse and varied experiences and attained firsthand an appreciation of the strength of a global company like Siemens Energy. I've also learned that the value of our global team and the diversity in our company, including different viewpoints, valuing each other's opinions in all parts of our business. This is so important because I believe, together as one team, we are strongest, and we will come up with the best solutions for our stakeholders. I brought my drive and passion and energy for creation of sustainable value with me to Siemens Energy, and this is our collective goal: To create value not only with a very strong financial performance but also sustainably for society, for our customers, our partners, our employees and for you, our shareholders. This is my commitment. I am and will continue to personally drive these topics at Siemens Energy, together with my colleagues and our highly experienced and professional global team. Thank you again. I'm looking forward to continuing to shape Siemens Energy, and I'm very pleased to be here with all of you at our first AGM. Thank you.

[Foreign Language]

[Foreign Language]

Shareholders, viewers, investors, members of the Supervisory Board and colleagues. I'd also like to greet the representatives of the Siemens family. Welcome to our first regular Annual General Meeting of Shareholders of Siemens Energy AG. On behalf of the Executive Board and our employees, I thank you for the trust that you have placed in Siemens Energy. My thanks also go to our customers and partners. Since this is our first annual shareholders' meeting, I'd like first briefly to explain the setup of Siemens Energy again before turning to my report on our past fiscal year. And then I'll talk about the measures we're taking to improve profitability and then conclude with the viewpoints in the medium and long-term plans and orientation of Siemens Energy. Siemens Energy is a young company with a long history. For some 155 years now, our technology has been contributing to electrification of society, and for the past 136 days, we've been an independent company listed on the stock exchange. Virtually, no other company in the energy industry combines technologies, implementation expertise and reliability across the entire value chain in the way Siemens Energy does. By embarking on path to independence in 2020, we created an important prerequisite for focusing on the changes in the energy market so that we can continue playing a leading role in shaping the future of our energy supply. Siemens Energy is a leading global energy technology company. 1/6 of the world's power generation is based on our technologies that have been implemented by our employees in power plants, components and services. More than 50% of our revenue today is generated with renewable energies and transmission technologies. And with our global footprint, we are close to our customers. We support our customers with the most advanced and efficient technologies and solutions in the energy industry, regardless of where they stand in the energy transition. Our expectation is we energize society. That is what we do and why it is so relevant for society. Day after day, our employees undertake extraordinary things to keep critical infrastructure working and -- the lights on. Siemens Energy is organized as 2 reporting segments: Gas and Power, or GP; and Siemens Gamesa Renewable Energy, or SGRE. You can also see distinction in the financial figures presented in our annual report. Gas and Power consists of 3 divisions: Generation, in other words, efficient, low-emission power generation; Industrial Applications, industrial applications used by our customers in the process industry; and Transmission, our offer for low loss transformation and the transmission of electricity. One business area that is currently attracting considerable attention is our New Energy business. We've bundled our electrolysis activities for the production of hydrogen, for example. In Siemens Gamesa Renewable Energy, a publicly listed world-leading supply of onshore and offshore wind turbines, we have a 67% share. Fiscal 2020 was an historic year for Siemens Energy, thanks to its spin-off from Siemens AG. As in many other industries, 2020 was also, and above all, dominated by the COVID-19 pandemic. Our organization adapted at the very early stage and quickly to the new general conditions. Whether working in home office and works on the factories, directly with our customers, our construction sites, our employees mastered the situation with outstanding commitment and dedication. In all our activities, the health and protection of our employees and partners had, and still have, the highest priority. Throughout the year, we succeeded in managing our business operations and keeping our complex supply chains open. Energy and electricity are the foundation of the economies and societies worldwide. We at Siemens Energy have made a contribution to keeping this foundation stable even in the crisis. We also succeeded this by providing a wide range of digital services, such as the remote maintenance of plants and the remote commissioning of turbines. As terrible as the consequence of COVID-19 have been, the pandemic has also boosted demand for digital solutions and services. At the same time, however, some of our customers have had to postpone investments or delay maintenance intervals. Their activities on construction sites were at sometimes at least interrupted. Even so, despite the challenging conditions, about 70% of our production facilities were able to operate at full or only slightly reduced capacities in the past fiscal year. All our factories are currently operating, and only 1 in 5 is working with slightly reduced capacity because of the pandemic. Despite all the precautionary measures of the work site, some of our employees were also stricken by COVID-19. As of the 9th of February, at Siemens Energy, we've registered some 3,100 cases. Almost 2,800 of these colleagues have recovered, fortunately, but tragically, we have recorded 12 deaths since the outbreak of the pandemic. We mourn their loss, together with their families. And we wish all those who are afflicted a speedy and complete recovery. Ladies and gentlemen, the pandemic is changing the way we live and work together. And it's also changing the world of energy. We are already operating in a market that is changing rapidly. We can see, however, that the pandemic has further accelerated the pace of the shift towards smart and sustainable energy systems. This conclusion is also shared in the World Energy Outlook 2020 published by the International Energy Agency. According to the International Energy Agency, what matters is a well-conceived energy policy. It's more important ever for making energy systems worldwide more resilient and for reaching climate targets, and the right technologies are also important. We at Siemens Energy want to make a decisive contribution here. We want to support our customers on their journey through the energy transformation by providing with sustainable, reliable and affordable energy systems and the necessary services. Ladies and gentlemen, ESG, environmental social governance, and its German equivalent, play a decisive role in the orientation of our company. We contribute to all 17 sustainability goals of United Nations Agenda 2030, focusing on 5 of these goals, including equality of the sexes, affordable clean energy and steps for climate protection. On the Executive Board, I've personally taken our responsibly for the topic of sustainability. Maria Ferraro is responsible for inclusion and diversity in the company, and this also emphasizes how important these topics are for us. In fiscal 2020, we set ourselves ambitious sustainability goals. By 2023, at Siemens Energy, we want to convert our own electricity consumption to 100% green electricity. At present, we've reached 78%. Siemens Gamesa has already been relying on 100% green electricity for its operations since 2020. And at Siemens Energy, we're making climate neutral in our own operations by 2030, as it is has reached its climate target already in 2019 and intends to be the first energy technology company to reach net-zero emissions by 2050. We want to offer employees equal and excellent opportunities for their personal development in the company. In the past fiscal year at Siemens Energy, we invested EUR 60 million in training and further education for our employees. Lifelong learning is a critical success factor in an industry that is undergoing profound changes, which will not cease. The safety and health of our employees have highest priority for us. To ensure this, we've redefined our safety principles and will continue to improve our safety-related behavior. Our goal is zero work-related accidents -- incidents. In the case of inclusion and diversity, we have set clear targets. By 2025, we want to increase the share of women in top leadership positions at Gas and Power from just over 20% present to 25%. By 2030, we're aiming at a share of 30%. Siemens Gamesa plans to increase the proportion of women for all employees and management to 25% by 2025. I'm convinced that diverse teams are more efficient and that active inclusion and diversity are factors that attract young people to an employer. Acting with responsibility is also basis of our corporate governance, and this includes maintaining the highest standards of integrity and compliance in everything we do. In the event of any misconduct, we act swiftly and consistently. Our integrity is the foundation of our business principles, and under no circumstances will it be called into question. Ladies and gentlemen, Siemens Energy develops and implements projects along the entire energy value chain. I'd like to give you some examples of successful projects in the past fiscal year. The energy transition also means providing highly efficient interim solutions for conventional power generation. Our new generation of gas turbines, the HL class is just such a solution with an efficiency of 63%. It sets a new standard for power generation with natural gas. Last year, we delivered our first HL-class turbines to customers in the U.S. and U.K. With them, our customer in England slashed its CO2 emissions by half compared to the old coal-fired power plant. That means they're saving of up to 3.7 million tons of carbon dioxide at a year or 1% of the U.K.'s entire energy-related carbon dioxide emissions. I am convinced that our gas turbines can make a decisive contribution to the energy transition. The background of energy infrastructure is always power transmission. An example here from our power portfolio is the grid connection of offshore wind farms in the North Sea. Last July, we handed over the BorWin3 platform to our customer, Tennet. In autumn, we received the order for a further platform BorWin5. And when all 7 platforms are operation, they will serve around 7 million households in Germany with green electricity. The energy transition is just about the efficient generation and transmission of electricity but also about reducing energy consumption and emissions in industrial processes. One example of our work at Industrial Applications is delivery of industrial gas turbines and centrifugal compressors to our customer, Total, for installation in Africa's largest liquefied gas project in Mozambique. Our equipment will help to significantly increase the efficiency of the LNG plant. Wind power plays is a key role in the generation of renewable energy. And with it, Siemens Gamesa Renewable Energy plays a major role here. Our customer, Vattenfall, has placed an order with SGRE for 140 offshore wind turbines for a wind power plant off the coast of the Netherlands. The turbines will generate electricity for another 2 million households and further reduce the cost of offshore wind energy. Ladies and gentlemen, fiscal '20 was a challenging year, and we showed a sound operational performance. In figures, order intake for Siemens Energy grew by 1% to EUR 34 billion. The order backlog thus reached a total of EUR 79 billion. Revenue declined by 5% to EUR 27.5 billion. The book-to-bill ratio, the ratio of new orders to revenue, was a good 1.24. Taking a look at our 2 reporting segments, Gas and Power and Siemens Gamesa Renewable Energy, we see the following picture. Order intake at Gas and Power fell by nearly EUR 2 billion to EUR 19.3 billion. SGRE, on the other hand, was able to increase its order intake by a solid EUR 2 billion to EUR 14.7 billion. The order backlog at Gas and Power dropped to around EUR 48 billion, while the backlog at SGRE rose by roughly EUR 30 billion, also helped by the takeover. Revenue at Gas and Power and Siemens Gamesa declined, in each case, to EUR 18.1 billion and EUR 9.5 billion. In the development of our free cash flow before taxes, despite dropping by EUR 187 million to EUR 977 million, we were very satisfied. We were successfully in keeping money together in a difficult year. The adjusted EBITDA before special items for Siemens Energy is just below breakeven at a negative EUR 17 million. Our adjusted EBITDA margin for special items at Siemens Energy reached minus 0.1%, which is within our guidance. At Gas and Power, it was a positive 1.4%. At SGRE, it was minus 2.6%. The overall result was heavily influenced by negative special effects totaling EUR 1.5 billion. The bottom line showed a net loss for fiscal 2020 of EUR 1.9 billion. These special effects included expenditure on restructuring and also one-off cost relating to the spin-off, impairments and write-downs relating to strategic portfolio business and our aeroderivative gas turbine business. These are small turbines primarily used in the oil and gas industry. The demand for these turbines was too low. On the long-term basis, our market expectations were not met, and therefore, we streamlined our portfolio in this region. Against the background of the general economic conditions and the special challenges related to spin-off and setting ourselves up as an independent company, we have shown a sound operational performance. Completing the spin-off, listing Siemens energy on the stock market and supporting customers the best possible way despite COVID-19, reorganized the country and creating a base of future success, all that is only possible with a great team. And in this extraordinary year, our 92,000 colleagues worldwide have achieved extraordinary things. I'd like to thank them all for their commitment on behalf of the entire Executive Board. To help alleviate the additional burdens caused by the corona pandemic and to pay special tribute to their achievements, we gave our participating employees in Germany a special bonus. They received Siemens Energy shares worth more than EUR 45 million. In addition, we also established the employee spin-off incentive program to honor employee's strong commitment to completing a successful spin-off. As part of the program, employees received stock awards worth 3% of the total annual target income. These stock awards entitle the holder at the end of the vesting period in September 2023 to receive shares in Siemens Energy. The higher the share price rises, the more shares will be transferred. Employees can still participate till the end of March. Sorry, we cannot give a total sum at this point. But later on in my report, I shall be talking about the purchase and application of treasury shares. Ladies and gentlemen, the market expectations for the company also reflected in the share price. As expected, the share price of Siemens Energy was initially volatile following starting price of EUR 22.01 at its first listing on September 28 also because index-based funds had to sell their shares in Siemens Energy. Since then, the share price has increased in value by 44%. In contrast to that, the MDAX grew by 23% and the DAX by 13%. Admission to the MDAX in December 2020 is, therefore, a stimulus for us. At Siemens Energy, we want to shape the energy transition to be an attractive investment for our shareholders. Our dividend policy provides a payout ratio ranging between 40% and 60% of net profit. As previously announced in our prospectus, Siemens Energy will not be distributing a dividend for the past fiscal year due to the company's loss for the year after tax. Immediately after our listing, we launched our share buyback program with the volume up to EUR 393 million. The sole purpose of the buyback is to issue shares to employees and to members of the Executive Board. The program will run no longer than the end of March 2021. To date, we have bought shares with a total value of about EUR 307 million. Our success depends on motivated and talented and dedicated employees. At Siemens Energy, we're therefore encouraging employees to participate in their own company. To this end, we set up a number of employee share programs, which have proven very popular. Today, nearly 35,000 colleagues are already employee shareholders. Ladies and gentlemen, we at Siemens Energy are tackling one of the biggest challenges facing society: ensuring a reliable, affordable and sustainable supply of electricity to meet growing demand. Electricity consumption is soaring worldwide in part due to the increasing electrification of industry and the spread of electromobility. At present, some 770 million people worldwide have no access to electricity and will be aiming for reliable power supplies in the future. Because of these trends, by 2040, we expect an increase up to 50% of global power generation. At the same time, the demand for highly efficient climate-neutral generation solutions is growing. How can we succeed in meeting this growing demand for energy on a sustainable basis? There's a growing awareness that we can't waste any time if we want to fight climate change effectively. More and more companies and more countries and economic regions are setting ambitious climate targets. Nearly 70 countries have already committed to targeting net-zero emissions. The U.S. has rejoined the Paris Agreement on Climate Change and aims to convert its electricity supplies entirely to clean energies by 2035. Germany's phasing out of coal and the EU's 2050 target, and China's pledge to become climate-neutral by 2060 are further examples of the change in direction. The electricity market is changing rapidly towards renewables and solutions for decarbonization. In terms of energy source, it means good growth for wind and solar, and SGRE, will benefit from that. And we're also trying to benefit in areas where these technologies are integrated, which includes our generation business. We expect a flat development in the fields of natural gas, nuclear and hydropower and a decline in coal and oil. What do these changes mean for us? Well, first of all, good opportunities because, even today, we generate 50% of our revenue with our decarbonized portfolio such as renewable energies and division transmission technologies. On the other hand, these changes also built major structural challenges. Above all, for power generation of fossil fuels and, thus, the traditional business of our Generation and Industrial Applications divisions. I'm convinced that the energy sector will need interim solutions in the foreseeable future if the energy transition is to succeed worldwide. When replacing obsolete coal-fired power plants with highly efficient combined cycle plants, this is one example. And to seize these opportunities and to prevail in this challenging market, we must become more efficient, agile and flexible. We must transform ourselves. The Energy of Tomorrow strategy we presented at the Capital Market Day in September 2020, describes the 2 phases for shaping this transformation. It's, first of all, about improving the operational performance of Siemens Energy and thus securing the financial leeway for shaping the energy transition. For improving the fundamentals of various approaches, we want to align the portfolio with a focus on sustainability and growth. We've already made a number of decisions in this respect over the past few months. The business with aeroderivative gas turbines has already been mentioned. In addition, we announced last November that we would no longer be participating in new tenders for new exclusively coal-fired power plants. Last week, we presented other specific plans to improve earnings to the employee representatives. They affect all parts of the company: Headquarters, businesses and the regions. Our focus will be on reducing material costs such as in procurement and improving internal processes. Some of the measures will start in a further reduction of jobs. Globally, plans envisage about 7,800 jobs to be lost by 2025. The reasons for these reductions vary from one area to another. The job cuts will affect mainly jobs in the administration, management and sales. And we shall deal responsibly with this demanding situation because it involves employees who are committed to their work, who have a high level of competence and have supported the company with their dedication, in many cases, for many decades. But there's simply no alternative to improving profitability. It's a fundamental requirement for providing sustainable jobs for the future. We want to tackle these challenges together with the employee representatives. For our business location in Germany, the company management, together with the Metalworkers Union and the General Works Council, signed the future agreement 2030 a few days ago. It sets the framework for securing the competitiveness of Germany as a business location in the international arena. It also includes, even in these difficult times, increasing our training quota, in other words, the proportion of trainees and dual education trainees in the overall workforce; and ensuring that we define those competencies, which are decisive of the energy world of the future; and establish or expand these competencies at our locations. Ladies and gentlemen, at Siemens Energy, we shall concentrate in future on 3 areas. First of all, power generation with ever-lower or zero emissions using efficient gas turbines will remain an important solution, as you expect; secondly, the efficient transmission and storage of electricity; and thirdly, solutions that address the consumption side and reduce carbon dioxide emissions in industrial processes. The Service business plays a crucial role in here. Service means robust earnings, long-term customer relations and the high-margin quality. We want -- continues to increase and strengthen service business, which already accounts for 40% of the revenue at Gas and Power, also with the aid of digital offers. The Transmission transformation of Siemens Energy is implemented step by step. And this, for us, means working closely together with our customers and partners, where we are stronger as a team. In the past year, we entered into cooperations with a large number of partners and customers. Some examples. We're working on solutions for decarbonizing in the petrochemical industry with Linde Engineering. With our Chinese plant, SPIC, we are building our first megawatt range plant for producing green hydrogen in China. In Abu Dhabi, we recently included partnerships with Mubadala, the investment company, wanting to drive the development of green hydrogen in Abu Dhabi; and with Masdar the partners, work on the development of clean hydrogen-based fuels. And the field of electricity in Siemens Energy and SGR, we're also relying on cooperation. A lead hydro project is H2Mare. We'd like to develop an electrolyzer that produces green hydrogen that be directly integrated into an offshore wind turbine developed by Siemens Gamesa. The idea is that green hydrogen will be produced on the high seas, transported to shore through pipelines used in transport and industry. The project is part of the H2Mare initiative, which is to be funded by the German Federal Ministry for Education and Research. With these and other collaborations, we are integrating Siemens Energy and sustainable global innovation networks, which means understanding market developments in good time and acting with foresight. Ladies and gentlemen, the challenges of the energy transition can only be mastered with innovative technologies and the skills for turning these technology and solutions. In the past fiscal year, we at Siemens Energy have invested EUR 1 billion in research and development, because it makes -- it's very important. The R&D intensity was 3.6%, which was a slight increase over the previous year. We want to maintain this focus on research and development in the future despite cost reduction to others of the company. For development projects, we are focusing on sustainability and service. Our goal is to shape the energy transition and target growth areas in the energy market to drive profitable growth for our company. Even though we still have a bit to do in our transformation, we've been able to prove our capabilities in the past, for example, in the electrification of industries and entire countries or in the great use of a database for developing digital products and services. On the base of our strategy, we are aiming at a step-by-step improvement in our profitability. In the past fiscal year, the adjusted EBITDA margin before special items was within forecast range of minus 1% to plus 1%. This year, we're aiming at 3% to 5%. In fiscal 2023, we want to reach 6.5% to 8.5%. And over the medium term, we want to -- adjust EBITDA margin with -- after special effects of at least 8%. A higher-margin level is a basic requirement for the further development of Siemens Energy because only in this way can we generate the funds we need to invest in future-orientated business models, technology and markets. We've now taken the first steps to this goal. Ladies and gentlemen, Siemens Energy business has changed and evolved steadily from the very beginning. In 1866, Werner von Siemens discovered the dynamo-electric principle and revolutionized the world of electricity. It marked the beginning of a new era. Since then, Siemens' recipe for success has always been to shape change. The energy market is, again, undergoing transformation and we are being transformed with it. As a new and independent company, Siemens Energy is tackling this transformation resolutely by implementing steps to increase profitability with a robust network of customers and partners and with a strong focus on future-oriented technologies and markets and with a highly committed and motivated team. We want to shape tomorrow's energy world. We want to energize society. We want to become the world's most valued energy technology company, and we're already creating conditions to achieve this. So we have big plans, and we'll be very happy if you will continue to accompany us along this journey. Thank you for your attention and your trust.

Thank you, Christian. I would like to express my sincere gratitude, both to you and to the entire Executive Board, for the outstanding work that you have done and was expressed in your report. Ladies and gentlemen, we shall now terminate the freely accessible transmission of this Annual Shareholders' Meeting. The shareholders and their proxies who would like to continue following the Annual Shareholders' Meeting must now switch to the Internet service to do so. In order to do so, you have to legitimize yourself by entering your access data. We would like to bid farewell to everyone else who cannot continue to follow this annual shareholders' meeting. Thank you very much for having shown interest in our company. I hope that we'll be able to see each other in person the next time around. Thank you so much.