Q2 2026 Siemens AG Earnings Call - Press Conference

May 13, 2026

Speaker #1: I'd like to welcome you together with our CEO, Roland Busch, and our new CFO, Veronika Bienert. Veronika Bienert is today taking part in this quarterly call for the very first time in her new function, a very warm welcome to you, Veronika.

Speaker #1: A few remarks ahead of time. This morning we published our Q2 results. The presentation as well as the presentations of our board members and any other documentation can be found at siemens.com/press.

Speaker #1: There you will also be able to find this conference call's recording. Very quickly on the rundown, after the presentations, Roland Busch and Veronika Bienert will be available for your questions.

Speaker #1: The conference call will end sharp at 9:15 at the latest. I would like to also point out the Safe Harbor statement, which you will be able to find at the beginning of the presentation.

Speaker #1: With that, over to Roland Busch.

Speaker #2: Yeah, thank you.

Speaker #3: Thank you, Simon, and good morning, everyone. And thank you for joining us to discuss our performance in Q2 of 2026. I'm very pleased that we're continuing our successful path to profitable growth despite the still very tense geopolitical environment.

Simon Krause: Good morning. Ladies and gentlemen, and welcome to today's conference call at Siemens AG. At the beginning, we would like to inform you about the fact that this conference will be recorded and made available as a webcast. After the presentations, you will be able to ask questions. If you would like to ask a question, please press star one on your phone. You will then be registered for questions. With that, I would like to hand over to Simon Krause, Head of Media Relations and Executive Communications. Mr. Krause, over to you. Good morning and a very warm welcome to today's conference call on Q2 of fiscal 2026. I would like to welcome you together with our CEO, Roland Busch, and our new CFO, Veronika Bienert. Veronika Bienert is today taking part in this quarterly call for the very first time in her new function.

Operator: Good morning. Ladies and gentlemen, and welcome to today's conference call at Siemens AG. At the beginning, we would like to inform you about the fact that this conference will be recorded and made available as a webcast. After the presentations, you will be able to ask questions. If you would like to ask a question, please press star one on your phone. You will then be registered for questions. With that, I would like to hand over to Simon Krause, Head of Media Relations and Executive Communications. Mr. Krause, over to you.

Speaker #1: Guten Morgen.

Speaker #2: Good morning, ladies and gentlemen, and welcome to today's conference call at Siemens AG. At the beginning, we would like to inform you about the fact that this conference will be recorded and made available as a webcast.

Speaker #3: In the crisis-hit region of the Middle East, the security of our colleagues has been our top priority over the last few weeks. From business perspective, we expect our revenue share from this region to be limited in the current year to 3% to 4%.

Speaker #2: After the presentations, you will be able to ask questions. If you would like to ask a question, please press star 1 on your phone.

Speaker #2: You will then be registered for questions. And with that, I would like to hand over to Simon Krause, Head of Media Relations and Executive Communications.

Speaker #3: The region accounts for only 1% of our procurement volume. Nonetheless, we've taken appropriate measures to limit these risks. We're closely monitoring developments as well as the possible impact on inflation, global supply chains, and investment sentiment.

Speaker #2: Mr. Krause, over to you. Good morning, and a very warm welcome to today's conference call on Q2 of fiscal 2026. I would like to welcome you together with our CEO, Roland Busch, and our new CFO, Veronica Bienert.

Simon Krause: Good morning and a very warm welcome to today's conference call on Q2 of fiscal 2026. I would like to welcome you together with our CEO, Roland Busch, and our new CFO, Veronika Bienert. Veronika Bienert is today taking part in this quarterly call for the very first time in her new function.

Speaker #3: However, we haven't yet observed any significant influence on customer buying behavior to date. Siemens is benefiting from its technological leadership and its strong position in key growth markets.

Speaker #2: Veronica Bienert is today taking part in this quarterly call for the very first time in her new function, a very warm welcome to you, Veronica.

Roland Busch: A very warm welcome to you, Veronika. A few remarks ahead of time. This morning, we published our Q2 results. The presentation, as well as the presentations of our board members and any other documentation, can be found at siemens.com/press. There, you will also be able to find this conference call's recording. Very quickly on the rundown. After the presentations, Roland Busch and Veronika Bienert will be available for your questions. The conference call will end sharp at 9:15 AM at the latest. I would like to also point out the Safe Harbor statement, which you will be able to find at the beginning of the presentation. With that, over to Roland Busch. Thank you, Simon, and good morning, everyone, and thank you for joining us to discuss our performance in Q2 of 2026.

Simon Krause: A very warm welcome to you, Veronika. A few remarks ahead of time. This morning, we published our Q2 results. The presentation, as well as the presentations of our board members and any other documentation, can be found at siemens.com/press. There, you will also be able to find this conference call's recording. Very quickly on the rundown. After the presentations, Roland Busch and Veronika Bienert will be available for your questions. The conference call will end sharp at 9:15AM at the latest. I would like to also point out the Safe Harbor statement, which you will be able to find at the beginning of the presentation. With that, over to Roland Busch.

Speaker #3: Let me walk you through the highlights of Q2. The book-to-bill ratio reached a strong 1.22, lifting our order backlog to a record high of 124 billion euros.

Speaker #2: A few remarks ahead of time. This morning, we published our Q2 results. The presentation, as well as the presentations of our board members and any other documentation, can be found at siemens.com/press.

Speaker #3: As anticipated, nominal revenue growth was again materially impacted by the strong euro. Orders at the group level reached 24.1 billion euros, an increase of 18% compared to Q2 of 2025, with double-digit growth at all three core businesses.

Speaker #2: There, you will also be able to find this conference call's recording. Very quickly on the rundown—after the presentations, Roland Busch and Veronica Bienert will be available for your questions.

Speaker #2: The conference call will end sharp at 9:15 at the latest. I would like to also point out the Safe Harbor statement, which you will be able to find at the beginning of the presentation.

Speaker #3: Smart infrastructure, SI for short, again delivered a quarterly order record. We're seeing strong demand across almost all markets. SI's data center vertical clearly stood out, with unprecedented triple-digit percentage order growth topping even the excellent Q1, which is absolutely exemplary.

Speaker #2: With that, over to Roland Busch.

Speaker #3: Yeah, thank you.

Roland Busch: Thank you, Simon, and good morning, everyone, and thank you for joining us to discuss our performance in Q2 of 2026.

Speaker #4: Thank you, Simon, and good morning, everyone. And thank you for joining us to discuss our performance in Q2 of 2026. I’m very pleased that we’re continuing our successful path to profitable growth, despite the still very tense geopolitical environment.

Simon Krause: I'm very pleased that we're continuing our successful path to profitable growth, despite the still very tense geopolitical environment. In the crisis-hit region of the Middle East, the security of our colleagues has been our top priority over the last few weeks. From business perspective, we expect our revenue share from this region to be limited in the current year to 3% to 4%. The region accounts for only 1% of our procurement volume. Nonetheless, we've taken appropriate measures to limit these risks. We're closely monitoring developments as well as the possible impact on inflation, global supply chains, and investment sentiment. However, we haven't yet observed any significant influence on customer buying behavior to date. Siemens is benefiting from its technological leadership and its strong position in key growth markets. Let me walk you through the highlights of Q2.

Roland Busch: I'm very pleased that we're continuing our successful path to profitable growth, despite the still very tense geopolitical environment. In the crisis-hit region of the Middle East, the security of our colleagues has been our top priority over the last few weeks. From business perspective, we expect our revenue share from this region to be limited in the current year to 3% to 4%. The region accounts for only 1% of our procurement volume. Nonetheless, we've taken appropriate measures to limit these risks. We're closely monitoring developments as well as the possible impact on inflation, global supply chains, and investment sentiment. However, we haven't yet observed any significant influence on customer buying behavior to date. Siemens is benefiting from its technological leadership and its strong position in key growth markets. Let me walk you through the highlights of Q2.

Speaker #3: Demand continues to be vibrant. Driven by the build-out of cloud and AI infrastructure, at digital industries, growth continued. The market environment had previously shown some early signs of improvement, but these are now being challenged by renewed geopolitical volatility.

Speaker #4: In the crisis-hit region of the Middle East, the security of our colleagues has been our top priority over the last few weeks. From a business perspective, we expect our revenue share from this region to be limited in the current year to 3% to 4%.

Speaker #4: The region accounts for only 1% of our procurement volume. Nonetheless, we've taken appropriate measures to limit these risks. We're closely monitoring developments as well as the possible impact on inflation.

Speaker #3: The automation business was strong across all regions. Our software business seized several major opportunities across the entire portfolio, and it successfully upselling within its customer base.

Speaker #4: Global supply chains and investment sentiment. However, we haven't yet observed any significant influence on customer buying behavior to date. Siemens is benefiting from its technological leadership and its strong position in key growth markets.

Speaker #3: Mobility won several significant large orders in Q2. Two weeks ago, we announced an important project, which we're booking in Q3. We're delivering up to 200 double-deck trains based on our desiro platform to Swiss railways SBB for Switzerland's commuter rail network.

Speaker #4: Let me walk you through the highlights of Q2. The book-to-bill ratio reached a strong 1.22, lifting our order backlog to a record high of 124 billion euros.

Simon Krause: The book-to-bill ratio reached a strong 1.22, lifting our order backlog to a record high of EUR 124 billion. As anticipated, nominal revenue growth was again materially impacted by the strong euro. Orders at the group level reached EUR 24.1 billion, an increase of 18% compared to Q2 of 2025, with double-digit growth at all three core businesses. Smart Infrastructure, SI for short, again delivered a quarterly order record. We're seeing strong demand across almost all markets. SI's data center vertical clearly stood out with unprecedented triple-digit percentage order growth, topping even the excellent Q1, which is absolutely exemplary.

Roland Busch: The book-to-bill ratio reached a strong 1.22, lifting our order backlog to a record high of EUR 124 billion. As anticipated, nominal revenue growth was again materially impacted by the strong euro. Orders at the group level reached EUR 24.1 billion, an increase of 18% compared to Q2 of 2025, with double-digit growth at all three core businesses. Smart Infrastructure, SI for short, again delivered a quarterly order record. We're seeing strong demand across almost all markets. SI's data center vertical clearly stood out with unprecedented triple-digit percentage order growth, topping even the excellent Q1, which is absolutely exemplary.

Speaker #3: The order value is around 12 billion Swiss francs. Overall revenue growth total 6%, driven by digital industries and smart infrastructure. A very strong contribution came from SI's electrification business, which posted an 18% increase.

Speaker #4: As anticipated, nominal revenue growth was again materially impacted by the strong euro. Orders at the group level reached €24.1 billion, an increase of 18% compared to Q2 of 2025, with double-digit growth at all three core businesses.

Speaker #3: Digital industries software business delivered compelling growth of 14%. It's been very gratifying to see that revenue was up in all regions. The Americas led the way with an increase of 10% fueled by strong momentum in the US.

Speaker #4: Smart Infrastructure, SI for short, again delivered a quarterly order record. We're seeing strong demand across almost all markets. SI's data center vertical clearly stood out, with unprecedented triple-digit percentage order growth topping even the excellent Q1, which is absolutely exemplary.

Speaker #3: EMEA grew 2%, while Asia, Australia, was up 8%, driven by India which grew 21%. 3 billion euros. Corresponding to a profit margin of 15.4%.

Speaker #4: Demand continues to be vibrant. Driven by the buildout of cloud and AI infrastructure, at Digital Industries, growth continued. The market environment had previously shown some early signs of improvement, but these are now being challenged by renewed geopolitical volatility.

Roland Busch: Demand continues to be vibrant, driven by the build-out of cloud and AI infrastructure. At Digital Industries, growth continued. The market environment had previously shown some early signs of improvement, but these are now being challenged by renewed geopolitical volatility. The automation business was strong across all regions. Our software business seized several major opportunities across the entire portfolio and is successfully upselling within its customer base. Mobility won several significant large orders in Q2. Two weeks ago, we announced an important project which we're booking in Q3. We're delivering up to 200 double-deck trains based on our Desiro platform to Swiss Railways SBB for Switzerland's commuter rail network. The order value is around CHF 12 billion. Overall, revenue growth totaled 6%, driven by Digital Industries and Smart Infrastructure. A very strong contribution came from SI's electrification business, which posted an 18% increase.

Speaker #3: We saw operational strength at digital industries and smart infrastructure while mobility was burdened by US tariffs. Currency headwinds reduced the profit margin by 80 basis points, but are expected to ease in the second half of fiscal 2026.

Speaker #4: The automation business was strong across all regions. Our software business seized several major opportunities across the entire portfolio and is successfully upselling within its customer base.

Speaker #3: These results translated into basic earnings per share before purchase price allocation accounting, or EPS pre-PPA for short, of 2.81 euros, which included as previously reported a gain from the divestment of our airport logistics business in the US.

Speaker #4: Mobility, won several significant large orders in Q2. Two weeks ago, we announced an important project, which we're booking in Q3. We're delivering up to 200 double-deck trains based on our desirable platform to Swiss railways SBB for Switzerland's commuter rail network.

Speaker #3: After a somewhat weaker first quarter of 2026, free cash flow increased to 1.7 billion euros. We confirm our outlook for fiscal 2026 at the group level.

Speaker #3: With some adjustments at individual businesses, however, Veronika will provide you with more details on this later on. Let's now take a look at the portfolio as planned.

Speaker #4: The order value is around 12 billion Swiss francs. Overall revenue growth totaled 6%, driven by Digital Industries and Smart Infrastructure. A very strong contribution came from SI's Electrification business, which posted an 18% increase.

Speaker #3: We've concretized this timeline for the spin-off of Siemens Heffnir's shares. A shareholder decision is now planned for our next ordinary annual shareholders' meeting in February of 2027.

Speaker #4: Digital Industries software business delivered compelling growth of 14%. It's been very gratifying to see that revenue was up in all regions: the Americas led the way with an increase of 10%, fueled by strong momentum in the US.

Roland Busch: Digital Industries software business delivered compelling growth of 14%. It's been very gratifying to see that revenue was up in all regions. The Americas led the way with an increase of 10%, fueled by strong momentum in the US. EMEA grew 2%, while Asia-Australia was up 8%, driven by India, which grew 21%. Profit in the industrial business reached EUR 3 billion, corresponding to a profit margin of 15.4%. We saw operational strength at Digital Industries and Smart Infrastructure, while Mobility was burdened by US tariffs. Currency headwinds reduced the profit margin by 80 basis points but are expected to ease in H2 of fiscal 2026.

Speaker #1: Let's take a look now at the four key levers that are driving our growth as one tech company. First, grow digital. In the first half of fiscal 2026, we grew our digital business by 19%, well above the ambition level of 15%, which we announced last November.

Speaker #4: EMEA grew 2%, while Asia, Australia was up 8%, driven by India, which grew 21%. Profit in the industrial business reached €3 billion, corresponding to a profit margin of 15.4%.

Speaker #1: What are the drivers? We're generating organic growth from our expanded Siemens accelerator software and digital services offerings, coupled with strong growth from our latest software acquisitions.

Speaker #4: We saw operational strength at Digital Industries and Smart Infrastructure, while Mobility was burdened by U.S. tariffs. Currency headwinds reduced the profit margin by 80 basis points, but are expected to ease in the second half of fiscal 2026.

Speaker #1: Second, growth regions. The lionheart project is a prime example of Siemens' strength as one tech company. Europe's first integrated lithium project lionheart combines sustainability and critical raw materials.

Speaker #1: The Australian company Vulcan Energy is building a geothermal plant in Germany's Upper Rhine Valley to extract lithium, a key component of batteries for electric vehicles.

Speaker #4: These results translated into basic earnings per share before purchase price allocation accounting, or EPS pre-PPA for short, of €2.81, which included, as previously reported, a gain from the divestment of our airport logistics business in the US after a somewhat weaker first quarter of 2026.

Roland Busch: These results translated into basic earnings per PPA for short, of EUR 2.81, which included, as previously reported, a gain from the divestment of our airport logistics business in the US. After a somewhat weaker Q1 of 2026, free cash flow increased to EUR 1.7 billion. We confirm our outlook for fiscal 2026 at the group level with some adjustments at individual businesses, however. Veronica will provide you with more details on this later on. Let's now take a look at the portfolio. As planned, we've concretized the timeline for the spin-off of Siemens Healthineers' shares. A shareholder decision is now planned for our next ordinary annual shareholders' meeting in February 2027. Let's take a look now at the four key levers that are driving our growth as ONE Tech Company.

Speaker #1: The project will strengthen Germany's competitiveness and, in turn, its growth. Our technologies automation and digitalization systems and smart building solutions are the backbone of the project.

Speaker #4: Free cash flow increased to €1.7 billion. We confirm our outlook for fiscal 2026 at the Group level. With some adjustments at individual businesses, however—Veronica will provide you with more details on this later on.

Speaker #1: We're combining these technologies and helping ramp up production faster. One tech company also includes Siemens Financial Services, which will be a minority investor in the project, and has supported the structuring and arrangement of its debt financing.

Speaker #4: Let's now take a look at the portfolio. As planned, we've concretized this timeline for the spin-off of Siemens Heffnir's shares. A shareholder decision is now planned for our next ordinary annual shareholders' meeting in February of 2027.

Speaker #1: Third, growth verticals. Data center demand has been soaring. Our team grew revenue in the first half of fiscal 2026 by more than 45% to 1.8 billion euros.

Speaker #4: Let's take a look now at the four key levers that are driving our growth as one tech company. First, grow digital. In the first half of fiscal 2026, we grew our digital business by 19%, well above the ambition level of 15%, which we announced last November.

Speaker #1: We're confident that we'll be able to keep up this stunning pace throughout fiscal 2026. To meet accelerating demand, we're further expanding low and medium voltage production capacities in the US at several locations, in North and South Carolina, and we're further expanding our data center partner ecosystem to scale next-generation AI infrastructure.

Roland Busch: First, grow digital. In H1 of fiscal 2026, we grew our digital business by 19%, well above the ambition level of 15%, which we announced last November. What are the drivers? We're generating organic growth from our expanded Siemens Xcelerator software and digital services offerings, coupled with strong growth from our latest software acquisitions. Second, growth regions. The Lionheart Project is a prime example of Siemens' strength as ONE Tech Company. Europe's first integrated lithium project, Lionheart combines sustainability and critical raw materials. The Australian company, Vulcan Energy, is building a geothermal plant in Germany's Upper Rhine Valley to extract lithium, a key component of batteries for electric vehicles. The project will strengthen Germany's competitiveness and, in turn, its growth. Our technologies, automation and digitalization systems, and smart building solutions are the backbone of the project.

Speaker #4: What are the drivers? We're generating organic growth from our expanded Siemens Xcelerator software and digital services offerings, coupled with strong growth from our latest software acquisitions.

Speaker #1: The goal is to create more flexibility across computing, energy, and the necessary infrastructure systems. Our customers will be able to connect their data centers to the grid faster, scale more efficiently, and operate more reliably even in a power-constrained world.

Speaker #4: Second, growth regions. The Lionheart project is a prime example of Siemens' strength as one tech company. Europe's first integrated lithium project, Lionheart, combines sustainability and critical raw materials.

Speaker #4: The Australian company Vulcan Energy is building a geothermal plant in Germany's Upper Rhine Valley to extract lithium, a key component of batteries for electric vehicles.

Speaker #1: Fourth, growing with AI. Bringing industrial AI to the real world was the focus of our first real meets digital, or RXD for short, summit in Beijing an event attended by more than 2,700 customers and partners.

Speaker #4: The project will strengthen Germany's competitiveness and, in turn, its growth. Our technologies—automation and digitalization systems and smart building solutions—are the backbone of the project.

Speaker #1: While there, I spoke with Joe Tsai, the CEO of Alibaba. We expanded our partnership to bring our industrial software together with Alibaba's cloud and AI capabilities.

Speaker #4: We're combining these technologies and helping ramp up production faster. One tech company also includes Siemens Financial Services, which will be a minority investor in the project and has supported the structuring and arrangement of its debt financing.

Roland Busch: We're combining these technologies and helping ramp up production faster. One Tech Company also includes Siemens Financial Services, which will be a minority investor in the project and has supported the structuring and arrangement of its debt financing. Third, growth verticals. Data center demand has been soaring. Our team grew revenue in H1 of fiscal 2026 by more than 45% to EUR 1.8 billion. We're confident that we'll be able to keep up this stunning pace throughout fiscal 2026. To meet accelerating demand, we're further expanding low and medium voltage production capacities in the US at several locations in North and South Carolina, and we're further expanding our data center partner ecosystem to scale next-generation AI infrastructure. The goal is to create more flexibility across computing, energy, and the necessary infrastructure systems.

Speaker #1: Now, experts at our customers in China can run complex simulations more flexibly and more efficiently. At the event, we also introduced 26 new products for edge automation and control to support industrial AI in industry and in infrastructure.

Speaker #4: Third, growth verticals. Data center demand has been soaring. Our team grew revenue in the first half of fiscal 2026 by more than 45%, to €1.8 billion.

Speaker #1: We developed these products locally and, as we always say, at China speed for the Chinese market and beyond. Those of you who visited our booth at the Hanover Messe trade show could see firsthand how, together with our partners, we're scaling industrial AI in production facilities.

Speaker #4: We're confident that we'll be able to keep up this stunning pace throughout fiscal 2026. To meet accelerating demand, we're expanding medium voltage production capacities in the US at several locations in North and South Carolina.

Speaker #1: Let me highlight just a few examples. First, we launched our Eigen engineering agent a milestone that's enabling us to move from an AI that only provides assistance to industrial AI, which plans and executes engineering tasks end to end in even complex projects.

Speaker #4: And we're further expanding our data center partner ecosystem to scale next-generation AI infrastructure. The goal is to create more flexibility across computing, energy, and the necessary infrastructure systems.

Speaker #4: Our customers will be able to connect their data centers to the grid faster, scale more efficiently, and operate more reliably, even in a power-constrained world.

Roland Busch: Our customers will be able to connect their data centers to the grid faster, scale more efficiently, and operate more reliably, even in a power-constrained world. Fourth, growing with AI. Bringing Industrial AI to the real world was the focus of our first Real Meets Digital, or RXD for short, summit in Beijing, an event attended by more than 2,700 customers and partners. While there, I spoke with Joseph Tsai, the CEO of Alibaba. We expanded our partnership to bring our industrial software together with Alibaba's cloud and AI capabilities. Now, experts at our customers in China can run complex simulations more flexibly and more efficiently. At the event, we also introduced 26 new products for edge, automation, and control to support Industrial AI in industry and in infrastructure. We developed these products locally and, as we always say, at China speed for the Chinese market and beyond.

Speaker #1: The impact is impressive with up to 50% greater efficiency and up to 80% higher solution quality proven in more than 100 global pilot deployments.

Speaker #4: Fourth, growing with AI. Bringing industrial AI to the real world was the focus of our first Real Meets Digital, or RXD for short, summit in Beijing.

Speaker #1: Since market launch, customer interest has been high. Second, we're applying physical AI in our own factories. We're automating complex and unpredictable logistics tasks with AI-powered robots.

Speaker #4: An event attended by more than 2,700 customers and partners. While there, I spoke with Joe Tsai, the CEO of Alibaba. We expanded our partnership to bring our industrial software together with Alibaba's cloud and AI capabilities.

Speaker #1: After receiving a task, these robots figure out by themselves how to solve challenges and optimize the required actions, a huge opportunity to address the scarcity of skilled labor.

Speaker #4: Now, experts at our customers in China can run complex simulations more flexibly and more efficiently. At the event, we also introduced 26 new products for edge automation and control to support industrial AI in industry and in infrastructure.

Speaker #1: We've entered a strategic partnership with Kion, to jointly shape the supply chains of the future using digital twins and our digital twin composer we turn warehouses from a physical hub into the digital nerve center for the supply chain.

Speaker #1: A key point in our collaboration is that we're exchanging selected areas of industrial data and domain know-how to better scale industrial AI. As we all know, AI factories will increase the demand for electricity.

Speaker #4: We developed these products locally and, as we always say, at China speed for the Chinese market and beyond. Those of you who visited our booth at the Hannover Messe trade show could see firsthand how, together with our partners, we're scaling industrial AI in production facilities.

Roland Busch: Those of you who visited our booth at the Hanover Messe trade show could see firsthand how, together with our partners, we're scaling Industrial AI in production facilities. Let me highlight just a few examples. First, we launched our Eigen Engineering Agent, a milestone that's enabling us to move from an AI that only provides assistance to Industrial AI, which plans and executes engineering tasks end-to-end in even complex projects. The impact is impressive, with up to 50% greater efficiency and up to 80% higher solution quality, proven in more than 100 global pilot deployments. Since market launch, customer interest has been high. Second, we're applying physical AI in our own factories. We're automating complex and unpredictable logistics tasks with AI-powered robots. After receiving a task, these robots figure out by themselves how to solve challenges and optimize the required actions.

Speaker #1: We already have a solution to help meet this demand. A new comprehensive direct current, or DC, protection and switching portfolio the basis for the more efficient and sustainable operation of AI factories with DC solutions.

Speaker #4: Let me highlight just a few examples. First, we launched our Eigen engineering agent, a milestone that's enabling us to move from an AI that only provides assistance to industrial AI, which plans and executes engineering tasks end to end, even in complex projects.

Speaker #1: I'm very pleased with the momentum and performance of our DI software business, organic annual recurring revenue, AIR, grew a very healthy 11% compared to the second quarter of 2025.

Speaker #1: The integration of our Altair and Dot Matrix acquisitions is progressing very well. We've taken a key step by implementing targeted cost synergy measures of 150 US million US following the Altair integration.

Speaker #4: The impact is impressive. With up to 50% greater efficiency and up to 80% higher solution quality, proven in more than 100 global pilot deployments.

Speaker #4: Since market launch, customer interest has been high. Second, we're applying physical AI in our own factories. We're automating complex and unpredictable logistics tasks with AI-powered robots.

Speaker #1: The bottom line impact will now follow. As AI capabilities continue their rapid evolution, we're far ahead. We're using AI in our own operations, massively, I must add, to enhance productivity by leveraging, for example, the full potential of AI-powered coding for our software engineers.

Speaker #4: After receiving a task, these robots figure out by themselves how to solve challenges and optimize the required actions, a huge opportunity to address the scarcity of skilled labor.

Roland Busch: A huge opportunity to address the scarcity of skilled labor. We've entered a strategic partnership with Kion to jointly shape the supply chains of the future. Using digital twins and our Digital Twin Composer, we turn warehouses from a physical hub into the digital nerve center for the supply chain. A key point in our collaboration is that we're exchanging selected areas of industrial data and domain know-how to better scale Industrial AI. As we all know, AI factories will increase the demand for electricity. We already have a solution to help meet this demand. A new comprehensive direct current or DC protection and switching portfolio, the basis for the more efficient and sustainable operation of AI factories with DC solutions. I'm very pleased with the momentum and performance of our DI software business.

Speaker #1: We at Siemens are uniquely positioned to support our customers with precisely targeted AI-powered industrial software. Let me explain what I mean in more detail.

Speaker #4: We've entered a strategic partnership with Kion to jointly shape the supply chains of the future using digital twins and our Digital Twin Composer. We turn warehouses from a physical hub into the digital nerve center for the supply chain.

Speaker #1: There are four key focus areas. First, deterministic. Our customers' plans and systems follow physical laws. Predictable, deterministic. Unlike AI that's based on probabilities, our industrial AI provides physics-based solutions that deliver fast, high-quality, deterministic intelligence that can both be trusted and verified.

Speaker #4: A key point in our collaboration is that we're exchanging selected areas of industrial data and domain know-how to better scale industrial AI. As we all know, AI factories will increase the demand for electricity.

Speaker #4: We already have a solution to help meet this demand: a new comprehensive direct current, or DC, protection and switching portfolio that forms the basis for the more efficient and sustainable operation of AI factories with DC solutions.

Speaker #1: This intelligence isn't a given in the AI world, but for our customers, it's indispensable. Second, contextualized. Industrial-grade AI requires precise data, contextualization. Our industrial software understands design intent and all of the product's possible configurations and it takes into account all the rules and all the relationships relevant for a product.

Speaker #4: I'm very pleased with the momentum and performance of our DI software business. Organic annual recurring revenue, AIR, grew a very healthy 11% compared to 2025.

Roland Busch: Organic annual recurring revenue, ARR, grew a very healthy 11% compared to Q2 of 2025. The integration of our Altair and Dotmatics acquisitions is progressing very well. We've taken a key step by implementing targeted cost synergy measures of $150 million following the Altair integration. The bottom line impact will now follow. AI capabilities continue their rapid evolution, we're far ahead. We're using AI in our own operations massively, I must add, to enhance productivity by leveraging, for example, the full potential of AI-powered coding for our software engineers. We at Siemens are uniquely positioned to support our customers with precisely targeted AI-powered industrial software. Let me explain what I mean in more detail. There are four key focus areas. First, deterministic. Our customers' plans and systems follow physical laws, predictable, deterministic.

Speaker #4: The integration of our Altair and Dot Matrix acquisitions is progressing very well. We've taken a key step by implementing targeted cost synergy measures of $150 million following the Altair integration.

Speaker #1: Third, multi-domain. The complexity of innovation is rapidly increasing in a world of more personalized and increasingly software-defined products. Our customers require fully integrated AI that understands a design across all the domains in their enterprises.

Speaker #4: The bottom-line impact will now follow. As AI capabilities continue their rapid evolution, we're far ahead. We're using AI in our own operations—massively, I must add—to enhance productivity by leveraging, for example, the full potential of AI-powered coding for our software engineers.

Speaker #1: Siemens is the only company that can deliver this technology; everything from product life cycle management to electronic design automation to simulation and shop floor execution from a single source, and fourth, live intelligence.

Speaker #4: We at Siemens are uniquely positioned to support our customers with precisely targeted, AI-powered industrial software. Let me explain what I mean in more detail.

Speaker #1: Real-time intelligence that will drive action, requires a digital twin that's infused with real-world physical data live digital twin. Siemens is the industry leader in combining the real and digital worlds to drive better faster real-time intelligence and governed action.

Speaker #4: There are four key focus areas. First, deterministic. Our customers' plans and systems follow physical laws—predictable, deterministic. Unlike AI that's based on probabilities, our industrial AI provides physics-based solutions that deliver fast, high-quality, deterministic intelligence that can both be trusted and verified.

Roland Busch: Unlike AI that's based on probabilities, our industrial AI provides physics-based solutions that deliver fast, high quality, and deterministic intelligence that can both be trusted and verified. This intelligence isn't a given in the AI world, but for our customers, it's indispensable. Second, contextualized. Industrial-grade AI requires precise data contextualization. Our industrial software understands design intent and all of the product's possible configurations, and it takes into account all the rules, and all the relationships relevant for a product. Third, multi-domain. The complexity of innovation is rapidly increasing in a world of more personalized and increasingly software-defined products. Our customers require fully integrated AI that understands a design across all the domains in their enterprises. Siemens is the only company that can deliver this technology. Everything from product life cycle management to electronic design automation to simulation and shop floor execution from a single source.

Speaker #1: We're implementing this objective in three concrete ways. First, faster engines. Our physics AI solution doesn't replace deterministic computer-aided engineering solutions for simulation, but it makes them more efficient.

Speaker #4: This intelligence isn't a given in the AI world, but for our customers, it's indispensable. Second, contextualized. Industrial-grade AI requires precise data and contextualization. Our industrial software understands design intent and all of the product's possible configurations, and it takes into account all the rules and all the relationships relevant for a product.

Speaker #1: Much more efficient. With full AI support and engineer can very rapidly screen thousands of design options and make deterministic calculations with only the top candidates.

Speaker #1: The result? Dramatically faster iterations for the optimal design and dramatically faster validation to get the customer to the market faster. Second, faster engineering. Another key innovation is our new agentic industrial-grade AI platform, which autonomously plans, executes, and validates.

Speaker #4: Third, multi-domain. The complexity of innovation is rapidly increasing in a world of more personalized and increasingly software-defined products. Our customers require fully integrated AI that understands a design across all the domains in their enterprises.

Speaker #4: Siemens is the only company that can deliver this technology. Everything from product lifecycle management to electronic design automation, to simulation and shop floor execution, from a single source.

Speaker #1: Where have we tested it? Well, we stress tested this platform where it takes our at their absolute highest in semiconductor design, our fuse EDA AI system orchestrates highly complex workflows across very specialized tools, securely and reliably.

Speaker #4: And fourth, live intelligence. Real-time intelligence that will drive action requires a digital twin that’s infused with real-world physical data—live digital twin. Siemens is the industry leader in combining the real and digital worlds to drive better, faster, real-time intelligence and governed action.

Roland Busch: Fourth, live intelligence. Real-time intelligence that will drive action requires a digital twin that is infused with real-world physical data, a live digital twin. Siemens is the industry leader in combining the real and digital world to drive better, faster real-time intelligence and governed action. We are implementing this objective in three concrete ways. First, faster engines. Our physics AI solution does not replace deterministic computer-aided engineering solutions for simulation, but it makes them more efficient, much more efficient. With full AI support, an engineer can very rapidly screen thousands of design options and make deterministic calculations with only the top candidates. The result, dramatically faster iterations for the optimal design and dramatically faster validation to get the customer to the market faster. Second, faster engineering. Another key innovation is our new agentic industrial-grade AI platform, which autonomously plans, executes, and validates. Where have we tested it?

Speaker #1: In addition, it delivers real productivity for engineering. The company's TSMC and NVIDIA already use it. The system is not a single tool. It's a platform approach.

Speaker #1: We'll extend this agentic intelligence to more than 20 agents across our entire software portfolio. Third, increased design intelligence. One of the key challenges in building and implementing comprehensive digital twins for factories is complexity because data is fragmented everywhere, in different systems, in different formats.

Speaker #4: We're implementing this objective in three concrete ways. First, faster engines. Our physics AI solution doesn't replace deterministic computer-aided engineering solutions for simulation, but it makes them more efficient.

Speaker #1: Siemens has resolved this issue by introducing the digital twin composer, which can merge all the data streams from the digital and the real worlds into one software product.

Speaker #4: Much more efficient. With full AI support, an engineer can very rapidly screen thousands of design options and make deterministic calculations with only the top candidates.

Speaker #1: We launched it at the consumer electronics show CES in January. Two examples from the Hanover trade show are PepsiCo and Kion. These companies have built an ever-evolving engineering mirror of a physical product or factory to constantly drive operational improvement.

Speaker #4: The result? Dramatically faster iterations for the optimal design and dramatically faster validation to get the customer to the market faster. Second, faster engineering. Another key innovation is our new agentic, industrial-grade AI platform, which autonomously plans, executes, and validates.

Speaker #1: Customer interest is huge since the CES we've received more than 300 inquiries from large enterprises to sum it up. Our foundation is very strong.

Speaker #1: It's built on team center, the industry's number one trust and secure PLM software for the centralized administration and development data and processes. On its basis, we're bringing to life the benefits of faster engines, faster engineering, and increased design intelligence.

Speaker #4: Where have we tested it? Well, we stress tested this platform where it takes our, at their absolute highest in semiconductor design. Our Fuse EDA AI system orchestrates highly complex workflows across very specialized tools.

Roland Busch: Well, we've stress-tested this platform where the stakes are at their absolute highest in semiconductor design. Our Fuse EDA AI system orchestrates highly complex workflows across very specialized tools securely and reliably. In addition, it delivers real productivity for engineering. The companies TSMC and NVIDIA already use it. The system is not a single tool, it's a platform approach. We'll extend this agentic intelligence to more than 20 agents across our entire software portfolio. Third, increased design intelligence. One of the key challenges in building and implementing comprehensive digital twins for factories is complexity, because data is fragmented everywhere in different systems, in different formats. Siemens has resolved this issue by introducing the Digital Twin Composer, which can merge all the data streams from the digital and the real world into one software product. We launched it at the Consumer Electronics Show, CES, in January.

Speaker #1: Our industrial AI is secure, trusted, and governed. We're building precisely what our customers need: the AI-driven operating system for industry. Now, with that, I'll hand over to you, Veronica, for your first quarterly press conference as CFO of Siemens.

Speaker #4: Securely and reliably. In addition, it delivers real productivity for engineering. The companies TSMC and NVIDIA already use it. The system is not a single tool.

Speaker #4: It's a platform approach. We'll extend this agentic intelligence to more than 20 agents across our entire software portfolio. Third, increased design intelligence. One of the key challenges in building and implementing comprehensive digital twins for factories is complexity, because data is fragmented everywhere—in different systems, in different formats.

Speaker #1: All the best.

Speaker #2: Danke, Roland.

Speaker #3: Thank you very much, Roland. Ladies and gentlemen, good morning, everyone, and a very warm welcome to our press conference call. I'm very pleased to engage in a dialogue with you today for the very first time in my new role and to participate in jointly providing insight into the latest developments at our company.

Speaker #3: Now, let me jump right into the details of our successful second quarter of fiscal 2026 and share our expectations for the rest of the fiscal year.

Speaker #4: Siemens has resolved this issue by introducing the Digital Twin Composer, which can merge all the data streams from the digital and the real worlds into one software product.

Speaker #3: We'll begin with digital industries, or DI. At 4.8 billion euros, orders for DI were 12% above the prior year quarter. With a book-to-bill ratio of 1.03.

Speaker #4: We launched it at the Consumer Electronics Show, CES, in January. Two examples from the Hanover trade show are PepsiCo and Kion. These companies have built an ever-evolving engineering mirror of a physical product or factory to constantly drive operational improvement.

Roland Busch: Two examples from the Hanover Trade Show are PepsiCo and Kion. These companies have built an ever-evolving engineering mirror of a physical product or factory to constantly drive operational improvement. Customer interest is huge. Since the CES, we've received more than 300 inquiries from large enterprises. To sum it up, our foundation is very strong. It's built on Teamcenter, the industry's number one trust and secure PLM software for the centralized administration and development data and processes. On its basis, we're bringing to life the benefits of faster engines, faster engineering, and increased design intelligence. Our Industrial AI is secure, trusted, and governed. We're building precisely what our customers need, the AI-driven operating system for industry. With that, I'll hand over to you, Veronika, for your first quarterly press conference as CFO of Siemens. All the best.

Speaker #3: Overall market dynamics in DI's automation business have been gradually improving. At this stage, however, we have limited visibility into the impact of the conflict in the Middle East.

Speaker #4: Customer interest is huge. Since the CES, we've received more than 300 inquiries from large enterprises, to sum it up. Our foundation is very strong.

Speaker #3: We'll have on investment sentiment in the future. DI's software business again remained on a strong growth trajectory over the prior year quarter with orders close to 1.8 billion euros.

Speaker #4: It's built on Teamcenter, the industry's number one trusted and secure PLM software for the centralized administration and development of data and processes. On this basis, we're bringing to life the benefits of faster engines, faster engineering, and increased design intelligence.

Speaker #3: The book-to-bill ratio was clearly above 1, driven by structural tailwinds from sustained AI momentum and by several large order winds in the electronic design automation, or EDA, business and in the product life cycle management, or PLM, business.

Speaker #4: Our industrial AI is secure, trusted, and governed. We're building precisely what our customers need. The AI-driven operating system for industry. Now, with that, I'll hand over to you, Veronica, for your first quarterly press conference as CFO of Siemens.

Speaker #3: Our order backlog at digital industries increased moderately to 10.2 billion euros with a gradually increasing share of software. Let's now turn to revenue for digital industries, which increased by 8%.

Speaker #3: Here, DI's software business was up strongly by 14% on broad-based double-digit growth across the PLM, simulation, and EDA businesses. Revenue in DI's automation business was up 6% to 3 billion euros, led by the short-cycle factory automation business.

Speaker #4: All the best.

Speaker #2: Danke, Roland.

Veronika Bienert: Thank you very much, Roland. Ladies and gentlemen. Good morning, everyone, and a very warm welcome to our press conference call. I'm very pleased to engage in a dialogue with you today for the very first time in my new role, and to participate in jointly providing insight into the latest developments at our company. Now, let me jump right into the details of our successful Q2 of fiscal 2026, and share our expectations for the rest of the fiscal year. We'll begin with Digital Industries, or DI. At EUR 4.8 billion, orders for DI were 12% above the prior-year quarter, with a book-to-bill ratio of 1.03. Overall market dynamics in DI's automation business have been gradually improving.

Speaker #3: Thank you very much, Roland. Ladies and gentlemen, good morning, everyone, and a very warm welcome to our press conference call. I’m very pleased to engage in a dialogue with you today for the very first time in my new role and to participate in jointly providing insight into the latest developments at our company.

Speaker #3: The process automation business was up modestly. Now, with a strong contribution from its software business, DI's profit margin was at 18.5%, higher than we expected.

Speaker #3: Now, let me jump right into the details of our successful second quarter of fiscal 2026 and share our expectations for the rest of the fiscal year.

Speaker #3: We'll begin with Digital Industries, or DI. At €4.8 billion, orders for DI were 12% above the prior-year quarter, with a book-to-bill ratio of 1.03.

Speaker #3: Digital industries is increasingly reaping benefits from the fact that the transition to software as a service, or SaaS for short, is nearing completion and from realizing cost synergies in connection with Altair.

Speaker #3: Overall, market dynamics in DI's automation business have been gradually improving. At this stage, however, we have limited visibility into the impact of the conflict in the Middle East.

Speaker #3: A favorable product mix with a high share of short-cycle business supported healthy profit conversion from the automation business as well. Sustained productivity gains remained the main engine for a clearly net positive economic equation in the second quarter.

Simon Krause: At this stage, however, we have limited visibility into the impact of the conflict in the Middle East will have on investment sentiment in the future. Digital Industries' software business again remained on a strong growth trajectory over the prior year quarter, with orders close to EUR 1.8 billion. The book-to-bill ratio was clearly above 1, driven by structural tailwinds from sustained AI momentum and by several large order wins in the Electronic Design Automation, or EDA, business, and in the Product Lifecycle Management, or PLM, business. Our order backlog at Digital Industries increased moderately to EUR 10.2 billion with a gradually increasing share of software. Let's now turn to revenue for Digital Industries, which increased by 8%. Here, Digital Industries' software business was up strongly by 14% on broad-based double-digit growth across the PLM, simulation, and EDA businesses.

Veronika Bienert: At this stage, however, we have limited visibility into the impact of the conflict in the Middle East will have on investment sentiment in the future. Digital Industries' software business again remained on a strong growth trajectory over the prior year quarter, with orders close to EUR 1.8 billion. The book-to-bill ratio was clearly above 1, driven by structural tailwinds from sustained AI momentum and by several large order wins in the Electronic Design Automation, or EDA, business, and in the Product Lifecycle Management, or PLM, business. Our order backlog at Digital Industries increased moderately to EUR 10.2 billion with a gradually increasing share of software. Let's now turn to revenue for Digital Industries, which increased by 8%. Here, Digital Industries' software business was up strongly by 14% on broad-based double-digit growth across the PLM, simulation, and EDA businesses.

Speaker #3: We'll have on investment sentiment in the future. DI's software business again remained on a strong growth trajectory over the prior year quarter, with orders close to €1.8 billion.

Speaker #3: Integration-related costs in connection with Altair and Dogmatics reduced the profit margin by a magnitude of 90 basis points in the second quarter in line, with expectations.

Speaker #3: The book-to-bill ratio was clearly above 1, driven by structural tailwinds from sustained AI momentum and by several large order wins in the electronic design automation, or EDA, business and in the product life cycle management, or PLM, business.

Speaker #3: We now expect this number to reach around 80 basis points for the full fiscal year 2026. And finally, as anticipated, negative currency effects weighed on DI's margin development with around 90 basis points.

Speaker #3: Our order backlog at Digital Industries increased moderately to €10.2 billion, with a gradually increasing share of software. Let's now turn to revenue for Digital Industries, which increased by 8%.

Speaker #3: I'm particularly pleased that digital industries improved its performance in free cash flow to 760 million euros. Looking at how the business developed from a regional perspective, DI's automation businesses grew across the board.

Speaker #3: Here, DI's software business was up strongly by 14%, on broad-based double-digit growth across the PLM, simulation, and EDA businesses. Revenue in DI's automation business was up 6% to €3 billion, led by the short-cycle factory automation business.

Speaker #3: After a strong first quarter, China was robust and clearly up in orders and revenue. The first quarter of fiscal 2026 had been supported by some pull-forward effects due to the expected price increases.

Simon Krause: Revenue in DI's automation business was up 6% to EUR 3 billion, led by the short-cycle factory automation business. The process automation business was up modestly. Now, with a strong contribution from its software business, DI's profit margin was at 18.5% higher than we expected. Digital Industries is increasingly reaping benefits from the fact that the transition to software-as-a-service, or SaaS for short, is nearing completion and from realizing cost synergies in connection with Altair. A favorable product mix with a high share of short-cycle business supported healthy profit conversion from the automation business as well. Sustained productivity gains remained the main engine for a clearly net positive economic equation in Q2. Integration-related costs in connection with Altair and Dotmatics reduced the profit margin by a magnitude of 90 basis points in Q2, in line with expectations.

Veronika Bienert: Revenue in DI's automation business was up 6% to EUR 3 billion, led by the short-cycle factory automation business. The process automation business was up modestly. Now, with a strong contribution from its software business, DI's profit margin was at 18.5% higher than we expected. Digital Industries is increasingly reaping benefits from the fact that the transition to software-as-a-service, or SaaS for short, is nearing completion and from realizing cost synergies in connection with Altair. A favorable product mix with a high share of short-cycle business supported healthy profit conversion from the automation business as well. Sustained productivity gains remained the main engine for a clearly net positive economic equation in Q2. Integration-related costs in connection with Altair and Dotmatics reduced the profit margin by a magnitude of on0 basis points in Q2, in line with expectations.

Speaker #3: The process automation business was up modestly. Now, with a strong contribution from its software business, DI's profit margin was at 18.5%, higher than we expected.

Speaker #3: In Q2, the book-to-bill ratio was above 1 in China, where motion control in particular drove revenue growth. Customers have received our local product portfolio in China very well, and it grew by a rate in the mid-20s.

Speaker #3: Digital Industries is increasingly reaping benefits from the fact that the transition to Software as a Service, or SaaS for short, is nearing completion, and from realizing cost synergies in connection with Altair.

Speaker #3: Germany showed 13% order growth compared to the weak prior year quarter, while revenue was up modestly. The US showed positive trends driven by brownfield modernization and greenfield activity in selected industries.

Speaker #3: Among them were, of course, semiconductors, data centers, power generation, and grid modernization, as well as aerospace and defense-related manufacturing. After a successful first half year, we raised our fiscal 2026 guidance for DI's revenue growth on a comparable basis to the middle of a narrowed range of 7% to 10%.

Speaker #3: Integration-related costs in connection with Altair and Dogmatics reduced the profit margin by a magnitude of 90 basis points in the second quarter, in line with expectations.

Simon Krause: We now expect this number to reach around 80 basis points for the full fiscal year 2026. Finally, as anticipated, negative currency effects weighed on DI's margin development with around 90 basis points. I'm particularly pleased that Digital Industries improved its performance in free cash flow to EUR 760 million. Looking at how the business developed from a regional perspective, DI's automation businesses grew across the board. After a strong Q1, China was robust and clearly up in orders and revenue. The Q1 of fiscal 2026 had been supported by some pull-forward effects due to the expected price increases. In Q2, the book-to-bill ratio was above 1 in China, where motion control, in particular, drove revenue growth. Customers have received our local product portfolio in China very well. It grew by a rate in the mid-20s.

Veronika Bienert: We now expect this number to reach around 80 basis points for the full fiscal year 2026. Finally, as anticipated, negative currency effects weighed on DI's margin development with around 90 basis points. I'm particularly pleased that Digital Industries improved its performance in free cash flow to EUR 760 million. Looking at how the business developed from a regional perspective, DI's automation businesses grew across the board. After a strong Q1, China was robust and clearly up in orders and revenue. The Q1 of fiscal 2026 had been supported by some pull-forward effects due to the expected price increases. In Q2, the book-to-bill ratio was above one in China, where motion control, in particular, drove revenue growth. Customers have received our local product portfolio in China very well. It grew by a rate in the mid-20s.

Speaker #3: In addition, we now expect DI's profit margin to come within a target range of 17% to 19%. The DI team continues to drive its growth trajectory and margin expansion by simplifying its setup, optimizing its sales approach, fostering innovation, and ensuring stringent integration of recent acquisitions.

Speaker #3: I'm particularly pleased that Digital Industries improved its performance in free cash flow to €760 million. Looking at how the business developed from a regional perspective, DI's automation businesses grew across the board.

Speaker #3: For the third quarter, we expect to see digital industries' orders clearly up over the prior year level, with a strong contribution from its automation business.

Speaker #3: We assume that DI's software business will grow moderately due to lower order volume from the EDA business year over year. The sales funnel for the EDA business is again skewed toward the fourth quarter.

Speaker #3: Germany showed 13% order growth compared to the prior-year quarter, while revenue was up modestly. The US showed positive trends driven by brownfield modernization and greenfield activity in selected industries.

Simon Krause: Germany showed 13% order growth compared to the weak prior year quarter, while revenue was up modestly. The US showed positive trends driven by brownfield modernization and greenfield activity in selected industries. Among them were, of course, semiconductors, data centers, power generation, and grid modernization, as well as aerospace and defense-related manufacturing. After a successful H1, we raised our fiscal 2026 guidance for DI's revenue growth on a comparable basis to the middle of a narrowed range of 7% to 10%. In addition, we now expect DI's profit margin to come within a target range of 17% to 19%. The DI team continues to drive its growth trajectory and margin expansion by simplifying its setup, optimizing its sales approach, fostering innovation, and ensuring stringent integration of recent acquisitions.

Veronika Bienert: Germany showed 13% order growth compared to the weak prior year quarter, while revenue was up modestly. The US showed positive trends driven by brownfield modernization and greenfield activity in selected industries. Among them were, of course, semiconductors, data centers, power generation, and grid modernization, as well as aerospace and defense-related manufacturing. After a successful H1, we raised our fiscal 2026 guidance for DI's revenue growth on a comparable basis to the middle of a narrowed range of 7% to 10%. In addition, we now expect DI's profit margin to come within a target range of 17% to 19%. The DI team continues to drive its growth trajectory and margin expansion by simplifying its setup, optimizing its sales approach, fostering innovation, and ensuring stringent integration of recent acquisitions.

Speaker #3: We anticipate that digital industries' revenue growth will see a high single-digit increase supported by growth in both the automation and software businesses. In addition, we expect a DI profit margin of around 18% for the third quarter.

Speaker #3: Among them were, of course, semiconductors, data centers, power generation, and grid modernization, as well as aerospace and defense-related manufacturing. After a successful first half-year, we raised our fiscal 2026 guidance for DI's revenue growth on a comparable basis to the middle of a narrowed range of 7% to 10%.

Speaker #3: Now, let's turn to smart infrastructure or SI. In the second quarter, the SI team continued its success story with an excellent performance across the board in all businesses and metrics.

Speaker #3: Overall, orders were up 35%, reaching a quarterly record of 7.5 billion euros. This increase was driven by massive growth of 62% in SI's electrification business and 38% in its electrical products business.

Speaker #3: Now, that being said, both businesses benefited from surging contract wins from hyperscalers and co-location providers, but also from leading semiconductor firms. SI's data centers orders amounted to a new record high 1.9 billion euros, with our customers globally building out their capacities for surging AI workloads.

Speaker #3: For the third quarter, we expect to see Digital Industries orders clearly up over the prior year level, with a strong contribution from its automation business.

Simon Krause: For Q3, we expect to see Digital Industries orders clearly up over the prior year level, with a strong contribution from its automation business. We assume that DI's software business will grow moderately due to lower order volume from the EDA business year-over-year. The sales funnel for the EDA business is again skewed toward Q4. We anticipate that Digital Industries revenue growth will see a high single-digit increase supported by growth in both the automation and software businesses. In addition, we expect a DI profit margin of around 18% for Q3. Now, let's turn to Smart Infrastructure or SI. In Q2, the SI team continued its success story with an excellent performance across the board in all businesses and metrics. Overall orders were up 35%, reaching a quarterly record of EUR 7.5 billion.

Veronika Bienert: For Q3, we expect to see Digital Industries orders clearly up over the prior year level, with a strong contribution from its automation business. We assume that DI's software business will grow moderately due to lower order volume from the EDA business year-over-year. The sales funnel for the EDA business is again skewed toward Q4. We anticipate that Digital Industries revenue growth will see a high single-digit increase supported by growth in both the automation and software businesses. In addition, we expect a DI profit margin of around 18% for Q3. Now, let's turn to Smart Infrastructure or SI. In Q2, the SI team continued its success story with an excellent performance across the board in all businesses and metrics. Overall orders were up 35%, reaching a quarterly record of EUR 7.5 billion.

Speaker #3: The book-to-bill ratio reached an outstanding 1.27. Smart infrastructure's order backlog reached a record level of 22 billion euros and now already provides visibility well into fiscal 2027.

Speaker #3: We anticipate that Digital Industries revenue growth will see a high single-digit increase, supported by growth in both the automation and software businesses. In addition, we expect a DI profit margin of around 18% for the third quarter.

Speaker #3: SI's revenue growth was broad-based and reached 10%. The largest contribution to this came from the electrification business, up 18%. Stringent backlog execution led to further expansion of SI's operational margin, which rose 10 basis points year over year to 18.6%.

Speaker #3: Now, let's turn to Smart Infrastructure, or SI. In the second quarter, the SI team continued its success story with an excellent performance across the board in all businesses and metrics.

Speaker #3: Smart infrastructure continued to benefit from economies of scale due to higher revenue and from sustainable productivity improvements. These effects offset a material currency headwind of about 110 basis points as well as higher commodity costs.

Speaker #3: Overall orders were up 35%, reaching a quarterly record of €7.5 billion. This increase was driven by massive growth of 62% in SI's Electrification business and 38% in its Electrical Products business.

Simon Krause: This increase was driven by massive growth of 62% in SI's electrification business and 38% in its electrical product business. Now, that being said, both businesses benefited from surging contract wins from hyperscalers and colocation providers, but also from leading semiconductor firms. SI's data centers orders amounted to a new record high EUR 1.9 billion, with our customers globally building out their capacities for surging AI workloads. The book-to-bill ratio reached an outstanding 1.27. Smart Infrastructure's order backlog reached a record level of EUR 22 billion and now already provides visibility well into fiscal 2027. SI's revenue growth was broad-based and reached 10%. The largest contribution to this came from the electrification business, up 18%. Stringent backlog execution led to further expansion of SI's operational margin, which rose 10 basis points year over year to 18.6%.

Veronika Bienert: This increase was driven by massive growth of 62% in SI's electrification business and 38% in its electrical product business. Now, that being said, both businesses benefited from surging contract wins from hyperscalers and colocation providers, but also from leading semiconductor firms. SI's data centers orders amounted to a new record high EUR 1.9 billion, with our customers globally building out their capacities for surging AI workloads. The book-to-bill ratio reached an outstanding 1.27. Smart Infrastructure's order backlog reached a record level of EUR 22 billion and now already provides visibility well into fiscal 2027. SI's revenue growth was broad-based and reached 10%. The largest contribution to this came from the electrification business, up 18%. Stringent backlog execution led to further expansion of SI's operational margin, which rose 10 basis points year-over-year to 18.6%.

Speaker #3: For the second half of fiscal 2026, we expect pricing measures in SI's product business to increasingly compensate for higher commodity prices. With regard to free cash flow, smart infrastructure achieved an excellent cash conversion rate of 1.02.

Speaker #3: Now, that being said, both businesses benefited from surging contract wins from hyperscalers and co-location providers, but also from leading semiconductor firms. SI's data center orders amounted to a new record high of €1.9 billion, with our customers globally building out their capacities for surging AI workloads.

Speaker #3: Despite the strong top-line growth, the SI team reduced operating working capital. Looking at the regional top-line development at smart infrastructure, there was healthy demand across the board.

Speaker #3: The book-to-bill ratio reached an outstanding 1.27. Smart Infrastructure's order backlog reached a record level of €22 billion and now already provides visibility well into fiscal 2027.

Speaker #3: Stringent backlog execution drove an increase in revenue. The US here stood out with exceptionally strong order momentum. Up 72% led by data center demand.

Speaker #3: SI's revenue growth was broad-based and reached 10%. The largest contribution to this came from the Electrification business, up 18%. Stringent backlog execution led to further expansion of SI's operational margin, which rose 10 basis points year over year to 18.6%.

Speaker #3: It was also good to see bookings in the buildings business up in the low teens or by the low teens, I should say. Germany recorded double-digit order growth in SI's buildings and electrical products businesses.

Speaker #3: The region comprising the rest of Europe plus the Middle East also benefited from large data center orders in the Nordics and from some power utilities wins.

Speaker #3: Smart Infrastructure continued to benefit from economies of scale due to higher revenue and from sustainable productivity improvements. These effects offset a material currency headwind of about 110 basis points, as well as higher commodity costs.

Simon Krause: Smart Infrastructure continued to benefit from economies of scale due to higher revenue and from sustainable productivity improvements. These effects offset a material currency headwind of about 110 basis points, as well as higher commodity costs. For the H2 of fiscal 2026, we expect pricing measures in SI's product business to increasingly compensate for higher commodity prices. With regard to free cash flow, Smart Infrastructure achieved an excellent cash conversion rate of 1.02. Despite the strong top-line growth, the SI team reduced operating working capital. Looking at the regional top-line development at Smart Infrastructure, there was healthy demand across the board. Stringent backlog execution drove an increase in revenue. The US here stood out with exceptionally strong order momentum, up 72%, led by data center demand.

Veronika Bienert: Smart Infrastructure continued to benefit from economies of scale due to higher revenue and from sustainable productivity improvements. These effects offset a material currency headwind of about 110 basis points, as well as higher commodity costs. For the H2 of fiscal 2026, we expect pricing measures in SI's product business to increasingly compensate for higher commodity prices. With regard to free cash flow, Smart Infrastructure achieved an excellent cash conversion rate of 1.02. Despite the strong top-line growth, the SI team reduced operating working capital. Looking at the regional top-line development at Smart Infrastructure, there was healthy demand across the board. Stringent backlog execution drove an increase in revenue. The US here stood out with exceptionally strong order momentum, up 72%, led by data center demand.

Speaker #3: Despite a continuously soft real estate market, SI's orders and revenue in China showed further improvement driven by its electrification and electrical products business. Smart infrastructure's service business delivered 7% growth, clearly up across all regions.

Speaker #3: For the second half of fiscal 2026, we expect pricing measures in SI's product business to increasingly compensate for higher commodity prices. With regard to free cash flow, Smart Infrastructure achieved an excellent cash conversion rate of 1.02.

Speaker #3: We expect SI's service business to accelerate further in the second half of the fiscal year. Now, our SI team continues to expect a very consistent end-market dynamics.

Speaker #3: Here, the build-out of data centers and power utilities is and will remain a key pillar for growth. After delivering 10% revenue growth in the first half of fiscal 2026 and given high visibility from the order backlog, we now raise our guidance for the full fiscal year for smart infrastructure's revenue growth.

Speaker #3: Despite the strong top-line growth, the SI team reduced operating working capital. Looking at the regional top-line development at Smart Infrastructure, there was healthy demand across the board.

Speaker #3: Stringent backlog execution drove an increase in revenue. The US here stood out with exceptionally strong order momentum, up 72%, led by data center demand.

Speaker #3: We now expect revenue in the range of 8 to 10 percent on a comparable basis. For full fiscal 2026, we continue to expect SI's profit margin to be up in the upper half of our guided range of 18 to 19 percent.

Speaker #3: It was also good to see bookings in the buildings business up in the low teens, or by the low teens, I should say. Germany recorded double-digit order growth in SI's buildings and electrical products businesses.

Simon Krause: It was also good to see bookings in the buildings business up in the low teens or by the low teens, I should say. Germany recorded double-digit order growth in SI's buildings and electrical product businesses. The region comprising the rest of Europe plus the Middle East also benefited from large data center orders in the Nordics and from some power utilities wins. Despite a continuously soft real estate market, SI's orders and revenue in China showed further improvement driven by its electrification and electrical products business. Smart Infrastructure service business delivered 7% growth, clearly up across all regions. We expect SI's service business to accelerate further in H2 of the fiscal year. Now, our SI team continues to expect a very consistent end market dynamics. Here, the build-out of data centers and power utilities is and will remain a key pillar for growth.

Veronika Bienert: It was also good to see bookings in the buildings business up in the low teens or by the low teens, I should say. Germany recorded double-digit order growth in SI's buildings and electrical product businesses. The region comprising the rest of Europe plus the Middle East also benefited from large data center orders in the Nordics and from some power utilities wins. Despite a continuously soft real estate market, SI's orders and revenue in China showed further improvement driven by its electrification and electrical products business. Smart Infrastructure service business delivered 7% growth, clearly up across all regions. We expect SI's service business to accelerate further in H2 of the fiscal year. Now, our SI team continues to expect a very consistent end market dynamics. Here, the build-out of data centers and power utilities is and will remain a key pillar for growth.

Speaker #3: For the third quarter, we anticipate that SI's revenue growth will be at the upper end of its target range and that the profit margin will be in line with our full-year expectations.

Speaker #3: The region comprising the rest of Europe plus the Middle East also benefited from large data center orders in the Nordics and from some power utility wins.

Speaker #3: Mobility recorded a mixed set of results. In the second quarter, strong orders and 5.3 billion euros were well above the prior-year level. The book-to-bill ratio was 1.76.

Speaker #3: Despite a continuously soft real estate market, SI's orders and revenue in China showed further improvement, driven by its electrification and electrical products business. The Smart Infrastructure service business delivered 7% growth, clearly up across all regions.

Speaker #3: Mobility's order backlog stands at 53.5 billion euros. With further improvement of the gross margin profile, around 30% of it represents attractive service business. Now, as Roland already mentioned, Mobility's sales pipeline for the second half of fiscal 2026 looks very promising.

Speaker #3: We expect SI's service business to accelerate further in the second half of the fiscal year. Now, our SI team continues to expect very consistent end-market dynamics.

Speaker #3: Here, the build-out of data centers and power utilities is—and will remain—a key pillar for growth. After delivering 10% revenue growth in the first half of fiscal 2026, and given high visibility from the order backlog, we now raise our guidance for the full fiscal year for Smart Infrastructure's revenue growth.

Speaker #3: Mobility's revenue in Q2 came in 2% below the high basis of comparison from the strong level in Q2 of fiscal 2025. It was held back by the impact of the US tariffs, mainly in the rolling stock business.

Simon Krause: After delivering 10% revenue growth in H1 of fiscal 2026, and given high visibility from the order backlog, we now raise our guidance for the full fiscal year for Smart Infrastructure's revenue growth. We now expect revenue in the range of 8% to 10% on a comparable basis. For full fiscal 2026, we continue to expect SI's profit margin to be up in the upper half of our guided range of 18% to 19%. For Q3, we anticipate that SI's revenue growth will be at the upper end of its target range, and that the profit margin will be in line with our full year expectations. Mobility recorded a mixed set of results in Q2. Strong orders at EUR 5.3 billion were well above the prior year level. The book-to-bill ratio was 1.76.

Veronika Bienert: After delivering 10% revenue growth in H1 of fiscal 2026, and given high visibility from the order backlog, we now raise our guidance for the full fiscal year for Smart Infrastructure's revenue growth. We now expect revenue in the range of 8% to 10% on a comparable basis. For full fiscal 2026, we continue to expect SI's profit margin to be up in the upper half of our guided range of 18% to 19%. For Q3, we anticipate that SI's revenue growth will be at the upper end of its target range, and that the profit margin will be in line with our full year expectations. Mobility recorded a mixed set of results in Q2. Strong orders at EUR 5.3 billion were well above the prior year level. The book-to-bill ratio was 1.76.

Speaker #3: In addition, in large-scale rail infrastructure projects, we saw conversion delays that were mainly due to the delayed call-offs from framework agreements especially in Europe.

Speaker #3: We now expect revenue in the range of 8 to 10 percent on a comparable basis. For full fiscal 2026, we continue to expect SI's profit margin to be in the upper half of our guided range of 18 to 19 percent.

Speaker #3: The US Supreme Court ruling on tariffs and the subsequent introduction of similar tariffs structures triggered an immediate reassessment of project calculations in the US.

Speaker #3: The results of this reassessment impacted the top and bottom lines equally. These effects reduce Mobility's profit margin of 6.9% by 170 basis points. In addition, severance charges, at 80 basis points, were somewhat higher due to some factory network optimization measures.

Speaker #3: For the third quarter, we anticipate that SI’s revenue growth will be at the upper end of its target range, and that the profit margin will be in line with our full-year expectations.

Speaker #3: Mobility recorded a mixed set of results. In the second quarter, strong orders and €5.3 billion were well above the prior-year level. The book-to-bill ratio was 1.76.

Speaker #3: Mobility's free cash flow was soft, as expected, because the timing of milestone payments led to a temporary buildup of operating working capital. Nevertheless, looking at the expected project payment profiles and the foreseeable order awards, we continue to expect a material catch-up in free cash flow in the second half of fiscal 2026 as we saw in the second half of fiscal 2025.

Simon Krause: Mobility's order backlog stands at EUR 53.5 billion, with further improvement of the gross margin profile. Around 30% of it represents attractive service business. Now, as Roland already mentioned, Mobility's sales pipeline for the H2 of fiscal 2026 looks very promising. Mobility's revenue in Q2 came in 2% below the high basis of comparison from the strong level in Q2 of fiscal 2025. It was held back by the impact of the U.S. tariffs, mainly in the rolling stock business. In addition, in large-scale rail infrastructure projects, we saw conversion delays that were mainly due to the delayed call-offs from framework agreement, especially in Europe. The U.S. Supreme Court ruling on tariffs and the subsequent introduction of similar tariff structures triggered an immediate reassessment of project calculations in the U.S. The results of this reassessment impacted the top and bottom lines equally.

Veronika Bienert: Mobility's order backlog stands at EUR 53.5 billion, with further improvement of the gross margin profile. Around 30% of it represents attractive service business. Now, as Roland already mentioned, Mobility's sales pipeline for the H2 of fiscal 2026 looks very promising. Mobility's revenue in Q2 came in 2% below the high basis of comparison from the strong level in Q2 of fiscal 2025. It was held back by the impact of the U.S. tariffs, mainly in the rolling stock business. In addition, in large-scale rail infrastructure projects, we saw conversion delays that were mainly due to the delayed call-offs from framework agreement, especially in Europe. The U.S. Supreme Court ruling on tariffs and the subsequent introduction of similar tariff structures triggered an immediate reassessment of project calculations in the U.S. The results of this reassessment impacted the top and bottom lines equally.

Speaker #3: Mobility's order backlog stands at €53.5 billion. With further improvement of the gross margin profile, around 30% of it represents attractive service business. Now, as Roland already mentioned, Mobility's sales pipeline for the second half of fiscal 2026 looks very promising.

Speaker #3: After the first half here, we're taking a prudent perspective on the current geopolitical challenges and we have taken into consideration the current situation regarding US tariffs.

Speaker #3: As a result, we lower our full-year outlook for revenue growth at Mobility to the range of 5% to 7%. Despite this change, we confirm our outlook for Mobility's profit margin for the full fiscal 2026 year in the range of 8% to 10%.

Speaker #3: In addition, in large-scale rail infrastructure projects, we saw conversion delays that were mainly due to the delayed call-offs from framework agreements, especially in Europe.

Speaker #3: Although we now expect it to come in toward the lower end of this particular range. For Q3, we assume that Mobility's revenue growth and profit margin will be within the full-year guidance range.

Speaker #3: The US Supreme Court ruling on tariffs, and the subsequent introduction of similar tariff structures, triggered an immediate reassessment of project calculations in the US.

Speaker #3: The result of this reassessment impacted the top and bottom lines equally. These effects reduce Mobility's profit margin of 6.9% by 170 basis points. In addition, severance charges at 80 basis points were somewhat higher due to some factory network optimization measures.

Speaker #3: Performance in activities below our industrial business, as shown on page 19 in the appendix, was as expected. These results included a gain of 172 million euros from the sale of our airport logistics business in the US.

Simon Krause: These effects reduce pro- Mobility's profit margin of 6.9% by 170 basis points. In addition, severance charges at 80 basis points were somewhat higher due to some factory network optimization measures. Mobility's free cash flow was soft, as expected, because the timing of milestone payments led to a temporary buildup of operating working capital. Nevertheless, looking at the expected project payment profiles and the foreseeable order awards, we continue to expect a material catch-up in free cash flow in the H2 of fiscal 2026, as we saw in the H2 of fiscal 2025. After the H1, we're taking a prudent perspective on the current geopolitical challenges, and we have taken into consideration the current situation regarding U.S. tariffs.

Veronika Bienert: These effects reduce pro- Mobility's profit margin of 6.9% by 170 basis points. In addition, severance charges at 80 basis points were somewhat higher due to some factory network optimization measures. Mobility's free cash flow was soft, as expected, because the timing of milestone payments led to a temporary buildup of operating working capital. Nevertheless, looking at the expected project payment profiles and the foreseeable order awards, we continue to expect a material catch-up in free cash flow in the H2 of fiscal 2026, as we saw in the H2 of fiscal 2025. After the H1, we're taking a prudent perspective on the current geopolitical challenges, and we have taken into consideration the current situation regarding US tariffs.

Speaker #3: Ladies and gentlemen, at one point, 7 billion euros free cash flow in our second quarter was well above the prior-year level. As previously discussed, we saw a significant catch-up in our industrial business as well as lower tax payments below our industrial business.

Speaker #3: Mobility's free cash flow was soft, as expected, because the timing of milestone payments led to a temporary build-up of operating working capital. Nevertheless, looking at the expected project payment profiles and the foreseeable order awards, we continue to expect a material catch-up in free cash flow in the second half of fiscal 2026, as we saw in the second half of fiscal 2025.

Speaker #3: We are very confident that we will achieve a double-digit cash return on revenue once again in fiscal 2026. With our capital structure metric of 1.2 for industrial net debt over EBITDA, and with strong investment-grade credit ratings we continue to act from a position of financial strength.

Speaker #3: After the first half here, we're taking a prudent perspective on the current geopolitical challenges, and we have taken into consideration the current situation regarding US tariffs.

Simon Krause: As a result, we lower our full year outlook for revenue growth at Mobility to the range of 5% to 7%. Despite this change, we confirm our outlook for Mobility's profit margin for the full fiscal 2026 year in the range of 8% to 10%. Although we now expect it to come in toward the lower end of this particular range. For Q3, we assume that Mobility's revenue growth and profit margin will be within the full year guidance range. Performance in activities below our industrial business, as shown on page 19 in the appendix, was as expected. These results included a gain of EUR 172 million from the sale of our airport logistics business in the US. Ladies and gentlemen, at EUR 1.7 billion, free cash flow in our Q2 was well above the prior year level.

Veronika Bienert: As a result, we lower our full year outlook for revenue growth at Mobility to the range of 5% to 7%. Despite this change, we confirm our outlook for Mobility's profit margin for the full fiscal 2026 year in the range of 8% to 10%. Although we now expect it to come in toward the lower end of this particular range. For Q3, we assume that Mobility's revenue growth and profit margin will be within the full year guidance range. Performance in activities below our industrial business, as shown on page 19 in the appendix, was as expected. These results included a gain of EUR 172 million from the sale of our airport logistics business in the US. Ladies and gentlemen, at EUR 1.7 billion, free cash flow in our Q2 was well above the prior year level.

Speaker #3: We also remain fully committed to delivering stringent capital allocation and strong shareholder return. Therefore, we retired 18 million treasury shares in March 2026 and have almost finished our current 6 billion euro share buyback program after less than two and a half years.

Speaker #3: Now, we will conclude this share buyback program fully in a few weeks and as a result, we already announced a new program today with a volume of up to 6 billion euro over a period of up to five years.

Speaker #3: Performance in activities below our industrial business, as shown on page 19 in the appendix, was as expected. These results included a gain of €172 million from the sale of our airport logistics business in the US.

Speaker #3: These parameters allow sufficient flexibility. We have built a track record of rigorously accelerating execution of our share buyback programs when doing so makes sense and is feasible.

Speaker #3: And with this, let me point out the updated assumptions on which our outlook for full fiscal 2026 are based. Additional investments in AI-based innovation will lead to research and development-intensity slightly above prior-year levels.

Speaker #3: Ladies and gentlemen, at one point, €7 billion free cash flow in our second quarter was well above the prior-year level. As previously discussed, we saw a significant catch-up in our industrial business, as well as lower tax payments below our industrial business.

Simon Krause: As previously discussed, we saw a significant catch-up in our industrial business, as well as lower tax payments below our industrial business. We are very confident that we will achieve a double-digit cash return on revenue once again in fiscal 2026. With our capital structure metric of 1.2 for industrial net debt over EBITDA, and with strong investment-grade credit ratings, we continue to act from a position of financial strength. We also remain fully committed to delivering stringent capital allocation and strong shareholder return. Therefore, we retired 18 million treasury shares in March 2026 and have almost finished our current EUR 6 billion share buyback program after less than two and a half years.

Veronika Bienert: As previously discussed, we saw a significant catch-up in our industrial business, as well as lower tax payments below our industrial business. We are very confident that we will achieve a double-digit cash return on revenue once again in fiscal 2026. With our capital structure metric of 1.2 for industrial net debt over EBITDA, and with strong investment-grade credit ratings, we continue to act from a position of financial strength. We also remain fully committed to delivering stringent capital allocation and strong shareholder return. Therefore, we retired 18 million treasury shares in March 2026 and have almost finished our current EUR 6 billion share buyback program after less than two and a half years.

Speaker #3: Selected investments in optimizing our sales channels will keep selling and general administrative expenses as a percentage of revenue on par with the prior-year level.

Speaker #3: We are very confident that we will achieve a double-digit cash return on revenue once again in fiscal 2026. With our capital structure metric of 1.2 for industrial net debt over EBITDA, and with strong investment-grade credit ratings, we continue to act from a position of financial strength.

Speaker #3: We will continue to support medium-term growth momentum by increasing investments in targeted growth fields to expand capacities. We now expect severance costs in the range of 300 million to 350 million.

Speaker #3: We also remain fully committed to delivering stringent capital allocation and strong shareholder return. Therefore, we retired 18 million treasury shares in March 2026 and have almost finished our current €6 billion share buyback program after less than two and a half years.

Speaker #3: We will continue to work rigorously on ensuring competitiveness across our businesses and functions primarily with regard to digital industries. As expected, foreign exchange effects were a strong burden on our results in the first half of fiscal 2026.

Speaker #3: However, based on current exchange rates, we expect the foreign exchange headwinds to ease over the second half year. Now, finally, ladies and gentlemen, let me conclude with our confirmed outlook for Siemens Group.

Simon Krause: Now, we will conclude this share buyback program fully in a few weeks, and as a result, we already announced a new program today with a volume of up to EUR 6 billion over a period of up to 5 years. These parameters allow sufficient flexibility. We have built a track record of rigorously accelerating execution of our share buyback programs when doing so makes sense and is feasible. With this, let me point out the updated assumptions on which our outlook for full fiscal 2026 are based. Additional investments in AI-based innovation will lead to research and development intensity slightly above prior year levels. Selected investments in optimizing our sales channels will keep selling and general administrative expenses as a percentage of revenue on par with the prior year level.

Veronika Bienert: Now, we will conclude this share buyback program fully in a few weeks, and as a result, we already announced a new program today with a volume of up to EUR 6 billion over a period of up to five years. These parameters allow sufficient flexibility. We have built a track record of rigorously accelerating execution of our share buyback programs when doing so makes sense and is feasible. With this, let me point out the updated assumptions on which our outlook for full fiscal 2026 are based. Additional investments in AI-based innovation will lead to research and development intensity slightly above prior year levels. Selected investments in optimizing our sales channels will keep selling and general administrative expenses as a percentage of revenue on par with the prior year level.

Speaker #3: Now, we will conclude this share buyback program fully in a few weeks and, as a result, we already announced a new program today with a volume of up to €6 billion over a period of up to five years.

Speaker #3: For fiscal 2026, we continue to expect comparable revenue growth to reach the upper half of our guidance range of 6% to 8%. And we anticipate that we will reach basic earnings per share before purchase price allocation accounting in a range of 10 euros and 70 cents to 11 euros and 10 cents.

Speaker #3: And with this, let me point out the updated assumptions on which our outlook for full fiscal 2026 is based. Additional investments in AI-based innovation will lead to research and development intensity slightly above prior-year levels.

Speaker #3: In a time of highly volatile geopolitics, we are delivering resilient performance with healthy growth and strong free cash flow. And with that, thank you very much for your attention and we're now looking forward to your questions.

Speaker #3: Selected investments in optimizing our sales channels will keep selling and general administrative expenses as a percentage of revenue on par with the prior-year level.

Speaker #3: And with this, I would like to hand back to Siemens Krause. Thank you very much, Roland and Veronika, we now have until 9:15 to answer your questions for technical reasons as always we cannot mix the German and English language questions we'll start with the German language questions.

Simon Krause: We will continue to support medium-term growth momentum by increasing investment in targeted growth fields to expand capacities. We now expect severance costs in the range of EUR 300 to 350 million. We will continue to work rigorously on ensuring competitiveness across our businesses and functions, primarily with regard to Digital Industries. As expected, foreign exchange effects were a strong burden on our results in H1 of fiscal 2026. However, based on current exchange rates, we expect the foreign exchange headwinds to ease over H2. Now finally, ladies and gentlemen, let me conclude with our confirmed outlook for Siemens Group. For fiscal 2026, we continue to expect comparable revenue growth to reach the upper half of our guidance range of 6% to 8%.

Veronika Bienert: We will continue to support medium-term growth momentum by increasing investment in targeted growth fields to expand capacities. We now expect severance costs in the range of EUR 300 to 350 million. We will continue to work rigorously on ensuring competitiveness across our businesses and functions, primarily with regard to Digital Industries. As expected, foreign exchange effects were a strong burden on our results in H1 of fiscal 2026. However, based on current exchange rates, we expect the foreign exchange headwinds to ease over H2. Now finally, ladies and gentlemen, let me conclude with our confirmed outlook for Siemens Group. For fiscal 2026, we continue to expect comparable revenue growth to reach the upper half of our guidance range of 6% to 8%.

Speaker #3: If you have logged onto the English conference call, please do ask your questions in English, we will answer your questions in the very same language.

Speaker #3: We will continue to work rigorously on ensuring competitiveness across our businesses and functions, primarily with regard to digital industries. As expected, foreign exchange effects were a strong burden on our results in the first half of fiscal 2026.

Speaker #3: And with that, back to the operator. Thank you very much, Mr. Krause. If you would like to ask a question, please press star one on your phone one moment until we have the first question, please.

Speaker #3: However, based on current exchange rates, we expect the foreign exchange headwinds to ease over the second half-year. Now, finally, ladies and gentlemen, let me conclude with our confirmed outlook for Siemens Group.

Speaker #3: The first question comes from Axel Höpner, Handelsblatt, please. One moment, bear with us, please. Mr. Höpner, your line is open, please.

Speaker #2: Thank you, sir.

Speaker #3: Thank you so much. I have two questions. The first one regards mobility, is there further need for action? Do you need to make any structural changes with respect to personal adjustments?

Simon Krause: We anticipate that we will reach basic earnings per share before purchase price allocation accounting in a range of EUR 10.70 to 11.10. In a time of highly volatile geopolitics, we are delivering a resilient performance with healthy growth and strong free cash flow. With that, thank you very much for your attention, and we're now looking forward to your questions. With this, I would like to hand back to Simon Krause. Thank you very much, Roland and Veronika. We now have until 9:15 AM to answer your questions for technical reasons. As always, we cannot mix the German and English language questions. We'll start with the German language questions. If you have logged on to the English conference call, please do ask your questions in English. We will answer your questions in the very same language.

Veronika Bienert: We anticipate that we will reach basic earnings per share before purchase price allocation accounting in a range of EUR 10.70 to 11.10. In a time of highly volatile geopolitics, we are delivering a resilient performance with healthy growth and strong free cash flow. With that, thank you very much for your attention, and we're now looking forward to your questions. With this, I would like to hand back to Simon Krause.

Speaker #3: Reallocation of projects and the like? And with respect to data centers, based on your assessment, are we talking about a boom of two to three years or is it simply a new business that will remain and continue to grow in the years ahead?

Speaker #3: Thank you. Good morning, Mr. Höpner. With respect to your first question, the short answer is no. Here, we don't believe that there is any need to change our strategy; of course, we continue to improve costs significantly in India.

Speaker #3: And with this, I would like to hand back to Siemens Krause. Thank you very much, Roland and Veronica. We now have until 9:15 to answer your questions for technical reasons, as always.

Simon Krause: Thank you very much, Roland and Veronika. We now have until 9:15AM to answer your questions for technical reasons. As always, we cannot mix the German and English language questions. We'll start with the German language questions. If you have logged on to the English conference call, please do ask your questions in English. We will answer your questions in the very same language. With that, back to the operator.

Speaker #3: We've won nice projects. We have thus built a supply chain that we intend to use on a global level. We have also built up a lot of engineering.

Speaker #3: We cannot mix the German and English language questions. We'll start with the German language questions. If you have logged onto the English conference call, please do ask your questions in English.

Speaker #3: We use AI to improve quality. We have a very competitive portfolio. So when it comes to mobility, we will hold the line. What does the revenue weakness come from?

Speaker #3: We will answer your questions in the very same language. And with that, back to the operator. Thank you very much, Mr. Krause. If you would like to ask a question, please press star one on your phone. One moment until we have the first question, please.

Operator: With that, back to the operator. Thank you very much, Mr. Krause. The first question comes from Axel Höpner, Handelsblatt. Please. Mr. Höpner, your line is open. Please.

Operator: Thank you very much, Mr. Krause. If you like to ask question please press star one on your phone. One moment until we answer your question. The first question comes from Axel Höpner, Handelsblatt. Please. Mr. Höpner, your line is open. Please.

Speaker #3: Well, tariffs is the one thing we've already mentioned. to the bottom. And on top of that, we had a weaker framework condition, especially in the DACH regions, so Germany, Austria, and Switzerland.

Speaker #3: The first question comes from Absel Hübner, Handelsblatt. Please, one moment. Bear with us, please. Mr. Hübner, your line is open, please.

Speaker #3: That doesn't make us nervous. We know it's not nice because, of course, weaker revenue translates into a lower margin, but we don't see any need for other action or to revise our strategy.

Speaker #3: We don't plan for that. With respect to the data centers, well, you asked about the two to three-year horizon. We don't identify any weakness in demand.

Axel Höpner: Thank you, sir. Thank you so much. I have two questions. The first one regards mobility. Is there further need for action? Do you need to make any structural changes with respect to personal adjustments, reallocation of projects and the like? With respect to data centers, based on your assessment, are we talking about a boom of 2 to 3 years, or is it simply a new business that will remain and continue to grow in the years ahead? Thank you. Good morning, Mr. Axel Höpner. With respect to your first question, the short answer is no. Here, we don't believe that there is any need to change our strategy. Of course, we continue to improve costs significantly. In India, we've won nice projects. We have thus built a supply chain that we intend to use on a global level. We have also built up a lot of engineering.

Axel Höpner: Thank you, sir. Thank you so much. I have two questions. The first one regards mobility. Is there further need for action? Do you need to make any structural changes with respect to personal adjustments, reallocation of projects and the like? With respect to data centers, based on your assessment, are we talking about a boom of two to three years, or is it simply a new business that will remain and continue to grow in the years ahead? Thank you. Good morning, Mr. Axel Höpner. With respect to your first question, the short answer is no. Here, we don't believe that there is any need to change our strategy. Of course, we continue to improve costs significantly. In India, we've won nice projects. We have thus built a supply chain that we intend to use on a global level. We have also built up a lot of engineering.

Speaker #2: Thank you so much. I have two questions. The first one regards mobility. Is there further need for action? Do you need to make any structural changes with respect to personal adjustments?

Speaker #3: For additional computing capacity, especially for GPUs, for AI, here demand remains extremely high. If we look at the companies that are building big models, they say that they actually have to prioritize between training new models and inferencing.

Speaker #2: Reallocation of projects and the like? And with respect to data centers, based on your assessment, are we talking about a boom of two to three years, or is it simply a new business that will remain and continue to grow in the years ahead?

Speaker #2: Thank you. Good morning, Mr. Hübner. With respect to your first question, the short answer is no. Here, we don't believe that there is any need to change our strategy.

Speaker #3: So basically, we're talking about an allocation to a certain degree. So this trend is continuing. Of course, growth may weaken as network capacity becomes tight or as energy supply becomes tight.

Speaker #2: Of course, we continue to improve costs significantly in India. We've won nice projects. We have thus built a supply chain that we intend to use on a global level.

Speaker #3: Electrification components can suffer from this in the low, medium, and high voltage areas, but we do see growth over the medium term. The question is rather how quickly we can transfer from training models to inferencing so that customers can actually use the models and monetize them.

Speaker #2: We have also built up a lot of engineering. We use AI to improve quality. We have a very competitive portfolio. So, when it comes to mobility, we will hold the line.

Roland Busch: We use AI to improve quality. We have a very competitive portfolio. When it comes to mobility, we will hold the line. What does the revenue weakness come from? Well, tariffs is the one thing we've already mentioned. They go from the top to the bottom. On top of that, we had a weaker framework condition, especially in the DACH regions, so Germany, Austria, and Switzerland. That doesn't make us nervous. We know it's not nice because, of course, weaker revenue translates into a lower margin, but we don't see any need for other action or to revise our strategy. We don't plan for that. With respect to the data centers, well, you asked about the 2 to 3-year horizon. We don't identify any weakness in demand for additional computing capacity, especially for GPUs, for AI. Here, demand remains extremely high.

Axel Höpner: We use AI to improve quality. We have a very competitive portfolio. When it comes to mobility, we will hold the line. What does the revenue weakness come from? Well, tariffs is the one thing we've already mentioned. They go from the top to the bottom. On top of that, we had a weaker framework condition, especially in the DACH regions, so Germany, Austria, and Switzerland. That doesn't make us nervous. We know it's not nice because, of course, weaker revenue translates into a lower margin, but we don't see any need for other action or to revise our strategy. We don't plan for that. With respect to the data centers, well, you asked about the two to three year horizon. We don't identify any weakness in demand for additional computing capacity, especially for GPUs, for AI. Here, demand remains extremely high.

Speaker #3: That's decisive. But I anthropically see for example that we're going strongly into the operational use of AI. There, revenue has grown substantially and we see that with other similar players as well.

Speaker #2: What does the revenue weakness come from? Well, tariffs are the one thing we've already mentioned. They go from the top to the bottom. And on top of that, we had a weaker framework condition, especially in the DACH regions—so Germany, Austria, and Switzerland.

Speaker #3: So bearing that in mind, this will continue for quite a number of years. But of course, we don't have a crystal ball to see into the future beyond that.

Speaker #2: That doesn't make us nervous. We know it's not nice because, of course, weaker revenue translates into a lower margin, but we don't see any need for other action or to revise our strategy.

Speaker #3: Thank you very much. Thank you. The next question comes from Alexander Huebner from Reuters. Please go ahead, sir. I don't know if you can hear me.

Speaker #2: We don't plan for that. With respect to the data centers—well, you asked about the two- to three-year horizon. We don't identify any weakness in demand.

Speaker #3: Yes, it sounds as if you're in the bathtub. No, no, I'm actually sitting in my office. Well, it does sound as if you were in the bathtub or in a bathroom, but we can understand you.

Speaker #2: For additional computing capacity, especially for GPUs for AI, demand here remains extremely high. If we look at the companies that are building big models, they say that they actually have to prioritize between training new models and inferencing.

Speaker #3: A couple of questions have cropped up in my mind. The 350 million that you want to invest into personnel, are you talking about what we're familiar with?

Roland Busch: If we look at the companies that are building big models, they say that they actually have to prioritize between training new models and inferencing. Basically, we're talking about an allocation to a certain degree. This trend is continuing. Growth may weaken as network capacity becomes tight or as energy supply becomes tight. Electrification components can suffer from this in the low, medium and high voltage areas, but we do see growth over the medium term. The question is rather how quickly we can transfer from training models to inferencing so that customers can actually use the models and monetize them. That's decisive. With Anthropic we see, for example, that we're going strongly into the operational use of AI. There, revenue has grown substantially, we see that with other similar players as well.

Axel Höpner: If we look at the companies that are building big models, they say that they actually have to prioritize between training new models and inferencing. Basically, we're talking about an allocation to a certain degree. This trend is continuing. Growth may weaken as network capacity becomes tight or as energy supply becomes tight. Electrification components can suffer from this in the low, medium and high voltage areas, but we do see growth over the medium term. The question is rather how quickly we can transfer from training models to inferencing so that customers can actually use the models and monetize them. That's decisive. With Anthropic we see, for example, that we're going strongly into the operational use of AI. There, revenue has grown substantially, we see that with other similar players as well.

Speaker #2: So, basically, we're talking about an allocation to a certain degree. So, this trend is continuing. Of course, growth may weaken as network capacity becomes tight or as energy supply becomes tight.

Speaker #3: Is something happening in mobility perhaps? What exactly does your personnel restructuring plan encompass? And Altair on dot Matrix, the integration synergies. Can you give us some more information on that?

Speaker #2: Electrification components can suffer from this in the low, medium, and high voltage areas, but we do see growth over the medium term. The question is rather, how quickly we can transfer from training models to inferencing so that customers can actually use the models and monetize them.

Speaker #3: And the revenue share of Altair and Dot Matrix, can you quantify that for the second quarter? And now a third question. To improve my understanding, when it comes to tariffs, if I understand you correctly, the rulings on US tariffs have been declared invalid?

Speaker #2: That's decisive. But Anthropic, we see, for example, that we're going strongly into the operational use of AI. There, revenue has grown substantially, and we see that with other similar players as well.

Alexander Hübner: Bearing that in mind, this will continue for quite a number of years, but of course, we don't have a crystal ball to see into the future beyond that. Thank you very much. Thank you. The next question comes from Alexander Hübner from Reuters. Please go ahead, sir. Yeah. I don't know if you can hear me. Yes, it sounds as if you're in the bathtub. No, no, I'm actually sitting in my office. Well, it does sound as if you were in the bathtub or in a bathroom, but we can understand you. A couple of questions have cropped up in my mind. The EUR 350 million that you want to invest into personnel, Are you talking about what we're familiar with? Is something happening in mobility for, perhaps? What exactly does your personnel restructuring plan encompass?

Axel Höpner: Bearing that in mind, this will continue for quite a number of years, but of course, we don't have a crystal ball to see into the future beyond that. Thank you very much. Thank you. The next question comes from Alexander Hübner from Reuters. Please go ahead, sir.

Speaker #2: So, bearing that in mind, this will continue for quite a number of years. But, of course, we don't have a crystal ball to see into the future beyond that.

Speaker #2: Thank you very much. Thank you. The next question comes from Alexander Hübner from Reuters. Please go ahead, sir. I don't know if you can hear me.

Speaker #3: Does that mean that your calculations were a bit premature or did I miss something? With respect to the first issue, restructuring, this is something I can deal with briefly.

Alexander Hübner: Yeah. I don't know if you can hear me. Yes, it sounds as if you're in the bathtub. No, no, I'm actually sitting in my office. Well, it does sound as if you were in the bathtub or in a bathroom, but we can understand you. A couple of questions have cropped up in my mind. The EUR 350 million that you want to invest into personnel, Are you talking about what we're familiar with? Is something happening in mobility for, perhaps? What exactly does your personnel restructuring plan encompass?

Speaker #3: That's nothing new. It's what you're familiar with and there's no news to report on from mobility. So there are no changes here. Now, with respect to Altair and Dot Matrix, when we acquired the two companies, we did announce that we have identified synergies in particular when it comes to infrastructure.

Speaker #2: Yes, it sounds as if you're in the bathtub. No, no, I'm actually sitting in my office. Well, it does sound as if you were in the bathtub or in the bathroom, but we can understand you.

Speaker #2: A couple of questions have cropped up in my mind. The $350 million that you want to invest into personnel, are you talking about what we're familiar with?

Speaker #3: Altair no longer has to do external reporting. So in support and service, there's a lot there. IT systems are also being merged. So we're saving costs there.

Speaker #3: And these 350 million euros are measures that we've already implemented and now we expect that to trickle down the bottom line. The revenue share isn't anything that we're going to report on individually because that's increasingly difficult to do.

Speaker #2: Is something happening in Mobility, perhaps? What exactly does your personnel restructuring plan encompass? And Altair and Matrix— the integration synergies. Can you give us some more information on that?

Speaker #3: We're talking about the platforms as well. The Siemens Accelerator, we're not going to report separate figures for the revenue share there. Now, we also have claims.

Roland Busch: Altair on Dotmatics, the integration synergies, can you give us some more information on that? The revenue share of Altair and Dotmatics, can you quantify that for Q2? Now a third question to improve my understanding. When it comes to tariffs, if I understand you correctly, the rulings on US tariffs have been declared invalid. Does that mean that your calculations were a bit premature, or did I miss something? With respect to the first issue, restructuring, this is something I can deal with briefly. That's nothing new. It's what you're familiar with, and there's no news to report on from Mobility, so there are no changes here. Now, with respect to Altair and Dotmatics, when we acquired the two companies, we did announce that we have identified synergies, in particular when it comes to infrastructure.

Alexander Hübner: Altair on Dotmatics, the integration synergies, can you give us some more information on that? The revenue share of Altair and Dotmatics, can you quantify that for Q2? Now a third question to improve my understanding. When it comes to tariffs, if I understand you correctly, the rulings on US tariffs have been declared invalid. Does that mean that your calculations were a bit premature, or did I miss something? With respect to the first issue, restructuring, this is something I can deal with briefly. That's nothing new. It's what you're familiar with, and there's no news to report on from Mobility, so there are no changes here. Now, with respect to Altair and Dotmatics, when we acquired the two companies, we did announce that we have identified synergies, in particular when it comes to infrastructure.

Speaker #3: Now, speaking about the US tariffs, at Siemens, it's immaterial. At Healthineers, we're talking about sums that are slightly higher. But it remains to be seen how things pan out.

Speaker #2: And the revenue share of Altair and Matrix, can you quantify that for the second quarter? And now a third question. To improve my understanding, when it comes to tariffs, if I understand you correctly, the rulings on US tariffs have been declared invalid?

Speaker #3: But the impact at Siemens is immaterial. Of course, it's not nice to see the tariffs that have been imposed on mobility; they are going to be a burden.

Speaker #3: But we will take cost measures and sourcing measures to compensate for that. That's the status quo. We don't know what the situation will be like tomorrow, of course.

Speaker #3: If I may add, when it comes to tariffs, they are of two different kinds. Some tariffs were withdrawn. And there are possibilities to receive refunds.

Speaker #2: Does that mean that your calculations were a bit premature, or did I miss something? With respect to the first issue, restructuring, this is something I can deal with briefly.

Speaker #2: That's nothing new. It's what you're familiar with, and there's no news to report on from Mobility. So, there are no changes here. Now, with respect to Altair and Matrix, when we acquired the two companies, we did announce that we have identified synergies— in particular when it comes to infrastructure.

Speaker #3: And of course, we take our fiduciary responsibility seriously and will fully fulfill it. And then we also have new tariffs which have been imposed.

Speaker #3: These relate to Siemens Mobility; here we had to react. And we had to record this in our accounting and on our balance sheet. Whenever there are changes to the law, then similar to the other tariffs that were withdrawn, we will continue to pursue reimbursements but we have to wait and see how the legal framework changes.

Roland Busch: Altair no longer has to do external reporting, so in support and service, there's a lot there. IT systems are also being merged, so we're saving costs there. The EUR 350 million are measures that we've already implemented, and now we expect that to trickle down to the bottom line. The revenue share isn't anything that we're going to report on individually because that's increasingly difficult to do. We're talking about the platforms as well, the Siemens Xcelerator. We're not gonna report separate figures for the revenue share there. Now, we also have claims. Now, speaking about the US tariffs, at Siemens, it's immaterial. At Healthineers, we're talking about sums that are slightly higher, but it remains to be seen how things pan out. The impact at Siemens is immaterial. Of course, it's not nice to see the tariffs that have been imposed on Mobility.

Alexander Hübner: Altair no longer has to do external reporting, so in support and service, there's a lot there. IT systems are also being merged, so we're saving costs there. The EUR 350 million are measures that we've already implemented, and now we expect that to trickle down to the bottom line. The revenue share isn't anything that we're going to report on individually because that's increasingly difficult to do. We're talking about the platforms as well, the Siemens Xcelerator. We're not gonna report separate figures for the revenue share there. Now, we also have claims. Now, speaking about the US tariffs, at Siemens, it's immaterial. At Healthineers, we're talking about sums that are slightly higher, but it remains to be seen how things pan out. The impact at Siemens is immaterial. Of course, it's not nice to see the tariffs that have been imposed on Mobility.

Speaker #2: Altair no longer has to do external reporting. So in support and service, there's a lot there. IT systems are also being merged, so we're saving costs there.

Speaker #2: And these €350 million are measures that we've already implemented, and now we expect that to trickle down to the bottom line. The revenue share isn't anything that we're going to report on individually because that's increasingly difficult to do.

Speaker #2: We're talking about the platforms as well. The Siemens Accelerator—we're not going to report separate figures for the revenue share there. Now, we also have claims.

Speaker #3: But rest assured that we monitor these developments very closely on a daily basis. This brings us to Michael Fleming from Börsentitung with the next question.

Speaker #2: Now, speaking about the US tariffs, at Siemens, it's immaterial. At Healthineers, we're talking about sums that are slightly higher. But it remains to be seen how things pan out.

Speaker #3: Please go ahead, sir. Hello, Mrs. Bienert, and Mr. Bush. You said that the war and the conflict in the Middle East hasn't trickled down to customer behavior or customer spending.

Speaker #2: But the impact at Siemens is immaterial. Of course, it's not nice to see the tariffs that have been imposed on Mobility; they are going to be a burden.

Speaker #3: What about inflation? What is Siemens' assessment and how are you bracing yourself for effects on your own business? Another question with respect to mobility optimization of the production network was something that you mentioned and that is being curtailed.

Roland Busch: They are going to be a burden, but we will take cost measures and sourcing measures to compensate for that. That's the status quo. We don't know what the situation will be like tomorrow, of course. If I may add, when it comes to tariffs, they are of two different kinds. Some tariffs were withdrawn, and there are possibilities to receive refunds. Of course, we take our fiduciary responsibility seriously and will fully fulfill it. Then we also have new tariffs which have been imposed. These relate to Siemens Mobility. Here we had to react, and we had to record this in our accounting and on our balance sheet. Whenever there are changes to the law, then similar to the other tariffs that were withdrawn, we would continue to pursue reimbursements, but we have to wait and see how the legal framework changes.

Alexander Hübner: They are going to be a burden, but we will take cost measures and sourcing measures to compensate for that. That's the status quo. We don't know what the situation will be like tomorrow, of course. If I may add, when it comes to tariffs, they are of two different kinds. Some tariffs were withdrawn, and there are possibilities to receive refunds. Of course, we take our fiduciary responsibility seriously and will fully fulfill it. Then we also have new tariffs which have been imposed. These relate to Siemens Mobility. Here we had to react, and we had to record this in our accounting and on our balance sheet. Whenever there are changes to the law, then similar to the other tariffs that were withdrawn, we would continue to pursue reimbursements, but we have to wait and see how the legal framework changes.

Speaker #2: But we will take cost measures and sourcing measures to compensate for that. That's the status quo. We don't know what the situation will be like tomorrow, of course.

Speaker #2: If I may add, when it comes to tariffs, they are of two different kinds. Some tariffs were withdrawn, and there are possibilities to receive refunds.

Speaker #3: Could you perhaps chisel out in more detail what you're doing there? Third, with respect to restructuring costs, we're talking about a drop of 50 million euros on average since the beginning of the year.

Speaker #3: Why? Thank you. Okay, I'll begin with the purchase behavior. So we're talking about the purchase behavior of our customers, not consumers in general. Is that right?

Speaker #2: And of course, we take our fiduciary responsibility seriously and will fully fulfill it. And then, we also have new tariffs which have been imposed.

Speaker #3: Yes. Yes, I believe that that would probably have an impact on your business, right? Inflation. Are you talking about inflation? Yes. Well, I was going to talk about that.

Speaker #2: These relate to Siemens Mobility here. We had to react, and we had to record this in our accounting and on our balance sheet. Whenever there are changes to the law, then, similar to the other tariffs that were withdrawn, we will continue to pursue reimbursements, but we have to wait and see how the legal framework changes.

Speaker #3: 2.9 Germany 1.8 US, of course, higher inflation curbs growth on the markets. That's an indirect effect. And it remains to be seen how big the effect is.

Speaker #3: Of course, it's not helpful. And it goes without saying that that will affect the investor behavior. But we don't see anything yet. If we look at all the markets, we actually see a slight recovery in certain areas in the China region and in the US with respect to investing behavior, aerospace, defense, and to a certain degree life sciences.

Michael Flämig: Rest assured that we monitor these developments very closely on a daily basis. This brings us to Michael Flämig from Börsen-Zeitung with the next question. Please go ahead, sir. Hello, Mrs. Bienert and Mr. Busch. You said that the war and the conflict in the Middle East hasn't trickled down to customer behavior or customer spending. What about inflation? What is Siemens' assessment, and how are you bracing yourself for effects on your own business? Another question with respect to mobility. Optimization of the production network was something that you mentioned and that is being curtailed. Could you perhaps chisel out in more detail what you're doing there? Third, with respect to restructuring costs, we're talking about a drop of EUR 50 million on average since the beginning of the year. Why? Thank you. Okay. I will begin with the purchase behavior.

Alexander Hübner: Rest assured that we monitor these developments very closely on a daily basis. This brings us to Michael Flämig from Börsen-Zeitung with the next question. Please go ahead, sir.

Speaker #2: But rest assured that we monitor these developments very closely on a daily basis. This brings us to Michael Fleming from Börsen-Zeitung with the next question.

Speaker #2: Please go ahead, sir. Hello, Mrs. Bienert, and Mr. Busch, you said that the war and the conflict in the Middle East hasn't trickled down to customer behavior or customer spending.

Michael Flämig: Hello, Mrs. Bienert and Mr. Busch. You said that the war and the conflict in the Middle East hasn't trickled down to customer behavior or customer spending. What about inflation? What is Siemens' assessment, and how are you bracing yourself for effects on your own business? Another question with respect to mobility. Optimization of the production network was something that you mentioned and that is being curtailed. Could you perhaps chisel out in more detail what you're doing there? Third, with respect to restructuring costs, we're talking about a drop of EUR 50 million on average since the beginning of the year. Why? Thank you. Okay. I will begin with the purchase behavior.

Speaker #3: A lot of things are going on. And by the way, also in the automotive sector, because they have to shift around production and become more flexible.

Speaker #3: But the influence of higher inflation driven by higher energy prices and not just oil or gas, oil and gas, but also derivatives thereof, if that persists, will have an effect.

Speaker #2: What about inflation? What is Siemens' assessment, and how are you bracing yourself for effects on your own business? Another question with respect to mobility optimization of the production network was something that you mentioned, and that is being curtailed.

Speaker #3: This brings me to the key point, the answer. The question is, how long will the Strait of Hormuz remain blocked and to what extent will that weigh on things?

Speaker #2: Could you perhaps chisel out in more detail what you're doing there? Third, with respect to restructuring costs, we're talking about a drop of €50 million on average since the beginning of the year.

Speaker #3: The longer the blockade, the more difficult the situation will be. At present, we don't believe that the blockade will last so much longer. We have seen simulations and studies which show an impact on GDP and GDP growth.

Speaker #2: Why? Thank you. Okay, I'll begin with the purchase behavior. So we're talking about the purchase behavior of our customers, not consumers in general. Is that right?

Roland Busch: We're talking about the purchase behavior of our customers, not consumers in general. Is that right? Yes. Yes. Well, I believe that that would probably have an impact on your business, right? Inflation. You're talking about inflation? Yes. Well, I was going to talk about that. 2.9% Germany, 1.8% US. Of course, higher inflation curbs growth on the markets. That's an indirect effect, and it remains to be seen how big the effect is. Of course, it's not helpful, and it goes without saying that that will affect the investor behavior. We don't see anything yet. If we look at all the markets, we actually see a slight recovery in certain areas in the China region and in the US with respect to investing behavior, aerospace, defense, and to a certain degree, life sciences. A lot of things are going on.

Speaker #3: We hope that that won't happen, of course, with respect to Siemens Mobility, the production network was mentioned. Well, nothing has really changed. We are basically implementing what we announced already.

Michael Flämig: We're talking about the purchase behavior of our customers, not consumers in general. Is that right? Yes. Yes. Well, I believe that that would probably have an impact on your business, right? Inflation. You're talking about inflation? Yes. Well, I was going to talk about that. 2.9% Germany, 1.8% US. Of course, higher inflation curbs growth on the markets. That's an indirect effect, and it remains to be seen how big the effect is. Of course, it's not helpful, and it goes without saying that that will affect the investor behavior. We don't see anything yet. If we look at all the markets, we actually see a slight recovery in certain areas in the China region and in the US with respect to investing behavior, aerospace, defense, and to a certain degree, life sciences. A lot of things are going on.

Speaker #2: Yes. Yes, I believe that that would probably have an impact on your business, right? Inflation. Are you talking about inflation? Yes. Well, I was going to talk about that.

Speaker #3: As you know, in the United States, we have built up manufacturing capacities in Lexington. We are shifting volumes from Sacramento, for example. That was the idea behind that.

Speaker #2: 2.9% in Germany, 1.8% in the US. Of course, higher inflation curbs growth on the markets. That's an indirect effect. And it remains to be seen how big the effect is.

Speaker #3: Sacramento will go fully to Lexington as we speak. That's what we're doing. New orders are being received as well. In India, our production of components, bogies, and drive systems, drive systems has been ramped up and we're working together with partners with respect to assembly.

Speaker #2: Of course, it's not helpful. And it goes without saying that that will affect investor behavior. But we don't see anything yet. If we look at all the markets, we actually see a slight recovery in certain areas in the China region and in the US.

Speaker #3: For example, locomotives. And by the way, the first locomotives have already been delivered. They are already in operation by our customers. We're talking about a very big order here.

Speaker #2: With respect to investing behavior, aerospace, defense, and, to a certain degree, life sciences, a lot of things are going on. And, by the way, also in the automotive sector, because they have to shift around production and become more flexible.

Speaker #3: Which we are processing. All of our goals are being met. And what is exciting here? And this gives you a backdrop to my statement.

Roland Busch: By the way, also in the automotive sector, because they have to shift around production and become more flexible. The influence of higher inflation driven by higher energy prices and, not just oil and gas, but also derivatives thereof, if that persists, will have an effect. This brings me to the key point, the answer. The question is, how long will the Strait of Hormuz remain blocked, and to what extent will that weigh on things? The longer the blockade, the more difficult the situation will be. At present, we don't believe that the blockade will last so much longer. We have seen simulations and studies, which show an impact on GDP and GDP growth. We hope that that won't happen, of course. With respect to Siemens Mobility, the production network was mentioned. Well, nothing has really changed.

Michael Flämig: By the way, also in the automotive sector, because they have to shift around production and become more flexible. The influence of higher inflation driven by higher energy prices and, not just oil and gas, but also derivatives thereof, if that persists, will have an effect. This brings me to the key point, the answer. The question is, how long will the Strait of Hormuz remain blocked, and to what extent will that weigh on things? The longer the blockade, the more difficult the situation will be. At present, we don't believe that the blockade will last so much longer. We have seen simulations and studies, which show an impact on GDP and GDP growth. We hope that that won't happen, of course. With respect to Siemens Mobility, the production network was mentioned. Well, nothing has really changed.

Speaker #3: We have local manufacturing of these locomotives and therefore we have very high visibility on a supply chain basis in India. And we also have high levels of quality and we can leverage these things we're not going to change the production network if at all.

Speaker #2: But the influence of higher inflation driven by higher energy prices and not just oil or gas, oil and gas, but also derivatives thereof, if that persists, will have an effect.

Speaker #2: This brings me to the key point—the answer. The question is: how long will the Strait of Hormuz remain blocked, and to what extent will that weigh on things?

Speaker #3: We may make some acquisitions. Verona?

Speaker #2: Yeah, Mr. Fleming, thank you very much for your question. I would like to just add on to this on inflation. I did report briefly on the economic equation.

Speaker #2: The longer the blockade, the more difficult the situation will be. At present, we don't believe that the blockade will last much longer. We have seen simulations and studies which show an impact on GDP and GDP growth.

Speaker #2: In the different businesses and of course here, what comes into play as well is that we do see inflationary impacts, which of course translate into pricing effects.

Speaker #2: And we, of course, see those reflected in our pricing in the purchasing department. So we're keeping a keen eye on that and therefore can, of course, balance this.

Speaker #2: We hope that that won't happen, of course. With respect to Siemens Mobility, the production network was mentioned. Well, nothing has really changed. We are basically implementing what we announced already.

Roland Busch: We are basically implementing what we announced already. As you know, in the United States, we have built up manufacturing capacities in Lexington. We are shifting volumes from Sacramento, for example. That was the idea behind that. Sacramento will go fully to Lexington. As we speak, that's what we're doing. New orders are being received as well. In India, our production of components, bogies, and drive systems has been ramped up, and we're working together with partners with respect to assembly, for example, locomotives. By the way, the first locomotives have already been delivered. They are already in operation by our customers. We're talking about a very big order here, which we are processing. All of our goals are being met.

Michael Flämig: We are basically implementing what we announced already. As you know, in the United States, we have built up manufacturing capacities in Lexington. We are shifting volumes from Sacramento, for example. That was the idea behind that. Sacramento will go fully to Lexington. As we speak, that's what we're doing. New orders are being received as well. In India, our production of components, bogies, and drive systems has been ramped up, and we're working together with partners with respect to assembly, for example, locomotives. By the way, the first locomotives have already been delivered. They are already in operation by our customers. We're talking about a very big order here, which we are processing. All of our goals are being met.

Speaker #2: So I can only, of course, yeah, tell you that we continue to have a great economic equation. And no concerns here when it comes to the restructuring.

Speaker #2: As you know, in the United States, we have built up manufacturing capacities in Lexington. We are shifting volumes from Sacramento, for example. That was the idea behind that.

Speaker #2: Year to date, we are at restructuring cost of around 189 million year to date. Due to the ongoing process in Q3, Q4, and the outlook that we have, we changed the outlook to 300 to 350 million.

Speaker #2: Sacramento will go fully to Lexington as we speak. That's what we're doing. New orders are being received as well. In India, our production of components, bogies, and drive systems has been ramped up, and we're working together with partners with respect to assembly.

Speaker #2: So much for that. Thank you very much. Then moving on to the next question. Marcus Fruhauf, FAZ, please. Good morning, Mr. Bush. Ms. Bienert, I have a question on the Mermaid acquisition in Italy.

Speaker #2: For example, locomotives. And by the way, the first locomotives have already been delivered. They are already in operation by our customers. We're talking about a very big order here.

Speaker #2: Which we are processing. All of our goals are being met. And what is exciting here? And this gives you a backdrop to my statement.

Roland Busch: What is exciting here, and this gives you a backdrop to my statement. We have local manufacturing of these locomotives. Therefore we have very high visibility on a supply chain basis in India. We also have high levels of quality. We can leverage these things. We're not gonna change the production network. If at all, we may make some acquisitions. Veronika Bienert.

Michael Flämig: What is exciting here, and this gives you a backdrop to my statement. We have local manufacturing of these locomotives. Therefore we have very high visibility on a supply chain basis in India. We also have high levels of quality. We can leverage these things. We're not gonna change the production network. If at all, we may make some acquisitions. Veronika Bienert.

Speaker #2: Can you tell us anything more about that? We can make that brief? No. Okay. Thank you. Since you're already on the line, do you have a second question?

Speaker #2: We have local manufacturing of these locomotives, and therefore we have very high visibility on a supply chain basis in India, and we also have high levels of quality. We can leverage these things—we're not going to change the production network. If at all, we may make some acquisitions.

Speaker #2: Sure. The macroeconomic uncertainties that you spoke of in your presentation, how could they impact digital industries market environment? The geopolitical macroeconomic uncertainties. I'm sorry.

Speaker #2: Verona? Yeah, Mr. Fleming, thank you very much for your question. I would like to just add on to this on inflation. I did report briefly on the economic equation in the different businesses.

Veronika Bienert: Yeah, Mr. Flämig, thank you very much for your question. I would like to just add on to this on inflation. I did report briefly on the economic equation in the different businesses. Of course, here, what comes into play as well is that we do see inflationary impacts, which of course translate into pricing effects. We, of course, see those reflected in our pricing in the purchasing department. We're keeping a keen eye on that and therefore can of course balance this. I can only, of course, yeah, tell you that we continue to have a great economic equation and no concerns here. When it comes to the restructuring year-to-date, we are at restructuring costs of around EUR 189 million year-to-date due to the ongoing process in Q3, Q4.

Speaker #2: Well, of course, we're keeping a keen eye on that as well. One thing here is technology related questions and technology limitations in terms of what you can deliver to a country.

Speaker #2: And, of course, here what comes into play as well is that we do see inflationary impacts which, of course, translate into pricing effects. And we, of course, see those reflected in our pricing in the purchasing department.

Speaker #2: So we have that on our radar at the moment. That's not pressing concern. When it comes to trade, we're always local for local. We also don't really see that for DI.

Speaker #2: So we're keeping a keen eye on that, and therefore can, of course, balance this. So I can only, of course, yeah, tell you that we continue to have a great economic equation and no concerns here when it comes to the restructuring.

Speaker #2: So it's nothing which is currently majorly on our radar. Except for the war-related topics that we spoke of that you also just mentioned. But there is no specific pressing matters that we have on our radar.

Speaker #2: Year to date, we are at restructuring costs of around $189 million. Due to the ongoing process in Q3, Q4, and the outlook that we have, we changed the outlook to $300 to $350 million.

Speaker #2: Of course, tech restrictions can hit you very quickly. If certain restrictions are imposed. But at the moment, there's nothing really there. Nothing specific. Yeah, sorry.

Simon Krause: The outlook that we have, we changed the outlook to EUR 300 to 350 million. Much for that. Thank you very much. Moving on to the next question, Marcus Friehof, FAZ, please.

Veronika Bienert: The outlook that we have, we changed the outlook to EUR 300 to 350 million. Much for that. Thank you very much. Moving on to the next question, Marcus Fruhauf, FAZ, please.

Speaker #2: Maybe I can just add on to this, says Ms. Bienert. What we, of course, also see is this is about the Middle East crisis is potential secondary effects that could result from that.

Speaker #2: So much for that. Thank you very much. Then, moving on to the next question. Marcus Freauf, FAZ, please. Good morning, Mr. Busch. Ms. Bienert, I have a question on the Mermaid acquisition in Italy.

Marcus Friehof: Good morning, Mr. Busch, Ms. Bienert. I have a question on the Miomax acquisition in Italy. Can you tell us anything more about that?

Marcus Fruhauf: Good morning, Mr. Busch, Ms. Bienert. I have a question on the Miomax acquisition in Italy. Can you tell us anything more about that?

Speaker #2: So supply chain impacts. And such, of course, we also are monitoring that very closely on a daily basis. But we believe in the current environment.

Speaker #2: Can you tell us anything more about that? We can make that brief? No. Okay. Thank you. Since you're already on the line, do you have a second question?

Simon Krause: We can make that brief.

Marcus Fruhauf: We can make that brief.

Roland Busch: No.

Marcus Fruhauf: No.

Marcus Friehof: Okay. Thank you.

Marcus Fruhauf: Okay. Thank you.

Simon Krause: Since you're already on the line, do you have a second question?

Operator: Since you're already on the line, do you have a second question?

Speaker #2: We are positioned very well. And of course, have also initiated the different surveillance activities across the different business units in order to make sure that we are able to react at short notice if there are any potential impacts on our business.

Marcus Friehof: Sure. The macroeconomic uncertainties that you spoke of in your presentation, how could they impact Digital Industries', market environment?

Marcus Fruhauf: Sure. The macroeconomic uncertainties that you spoke of in your presentation, how could they impact Digital Industries', market environment?

Speaker #2: Sure. The macroeconomic uncertainties that you spoke of in your presentation—how could they impact the digital industries market environment? The geopolitical macroeconomic uncertainties—I'm sorry.

Roland Busch: The geopolitical macroeconomic uncertainties. I'm sorry.

Marcus Fruhauf: The geopolitical macroeconomic uncertainties. I'm sorry.

Veronika Bienert: Well, of course, we're keeping a keen eye on that as well. One thing here is technology-related questions and Technology limitations in terms of what you can deliver to a country. We have that on our radar at the moment. That's not a pressing concern. When it comes to trade, we're always local for local. We also don't really see that for DI. It's nothing which is currently majorly on our radar except for, you know, the war-related topics that we spoke of that you also just mentioned. There's no specific pressing matters that we have on our radar. Of course, tech restrictions can hit you very quickly if, you know, certain restrictions are imposed, but at the moment there's nothing really there. Nothing specific. Yeah. Sorry. Maybe I can just add on to this, said Veronika Bienert.

Marcus Fruhauf: Well, of course, we're keeping a keen eye on that as well. One thing here is technology-related questions and Technology limitations in terms of what you can deliver to a country. We have that on our radar at the moment. That's not a pressing concern. When it comes to trade, we're always local for local. We also don't really see that for DI. It's nothing which is currently majorly on our radar except for, you know, the war-related topics that we spoke of that you also just mentioned. There's no specific pressing matters that we have on our radar. Of course, tech restrictions can hit you very quickly if, you know, certain restrictions are imposed, but at the moment there's nothing really there. Nothing specific. Yeah. Sorry. Maybe I can just add on to this, said Veronika Bienert.

Speaker #2: Right. I currently see no more questions in German. As a reminder, if you would like to ask a question, please press star one. We have one other question from Stephan Großmann.

Speaker #2: Well, of course, we're keeping a keen eye on that as well. One thing here is technology-related questions and technology limitations in terms of what you can deliver to a country.

Speaker #2: So, we have that on our radar at the moment. That's not a pressing concern. When it comes to trade, we're always local for local. We also don't really see that for DI.

Speaker #2: Frankischer Tag, please, over to you. Good morning. I have two short questions. One on the deconsolidation of Siemens Health Engineers. On the timeline, why are you waiting until the next AGM?

Speaker #2: So, it's nothing which is currently majorly on our radar except for the war-related topics that we spoke of, that you also just mentioned. But there are no specific pressing matters that we have on our radar.

Speaker #2: Could you not have had a earlier opportunity? And why did you not take that opportunity? And digital industries is recovering, I heard. What does that mean for the restructuring, especially for the metropolitan region in Nuremberg, but also Germany as a whole?

Speaker #2: Of course, tech restrictions can hit you very quickly if certain restrictions are imposed. But at the moment, there's nothing really there—nothing specific. Yeah, sorry.

Speaker #2: Because Ms. Bienert also said that competitiveness is supposed to be strengthened further, especially in DI. Which presumably also entails restructuring. So how will this continue?

Speaker #2: Thank you. Well, on to health engineers. We did cover that in great detail here. It's about simply figuring out certain topics regarding services, regarding loans, simply financial topics that have to be moved from A to B.

Speaker #2: Maybe I can just add on to this, says Ms. Bienert. What we, of course, also see is—this is about the Middle East crisis—is potential secondary effects that could result from that.

Veronika Bienert: What we of course also see is, this is about the Middle East crisis, potential secondary effects that could result from that. Supply chain impacts and such. Of course, we also are monitoring that very closely on a daily basis, but we believe in the current environment, we are positioned very well and of course, have also initiated the different surveillance activities across the different business units in order to make sure that we are able to react at short notice if there are any potential impacts on our business. Right. I currently see no more questions in German. As a reminder, if you would like to ask a question, please press star one. We have one other question from Stephan Großmann, Fränkischer Tag. Please, over to you. Good morning. I have two short questions. One on the deconsolidation of Siemens Healthineers on the timeline.

Marcus Fruhauf: What we of course also see is, this is about the Middle East crisis, potential secondary effects that could result from that. Supply chain impacts and such. Of course, we also are monitoring that very closely on a daily basis, but we believe in the current environment, we are positioned very well and of course, have also initiated the different surveillance activities across the different business units in order to make sure that we are able to react at short notice if there are any potential impacts on our business. Right. I currently see no more questions in German. As a reminder, if you would like to ask a question, please press star one. We have one other question from Stephan Großmann, Fränkischer Tag. Please, over to you.

Speaker #2: So, supply chain impacts—and such, of course—we also are monitoring that very closely on a daily basis. But we believe, in the current environment,

Speaker #2: But I think the biggest point is the tax impact. We need a reliable statement from the authorities, which we have not received so far.

Speaker #2: And before we have that, we cannot initiate even an extraordinary annual general meeting. And that's timeline has been breached. We've given the timeline. So all of that has to be prepared.

Speaker #2: We are positioned very well. And, of course, we have also initiated the different surveillance activities across the different business units in order to make sure that we are able to react at short notice if there are any potential impacts on our business.

Speaker #2: All the necessary reports and so on. And so, yeah, that is now two, three weeks ago, would have been the perfect deadline. We still don't have a firm reliable statement.

Speaker #2: Right. I currently see no more questions in German. As a reminder, if you would like to ask a question, please press star one. We have one other question from Stefan Grossman.

Speaker #2: But the good news is the conversations between health engineers and Siemens are going very well when it comes to divvying up the businesses. The conversations with the tax authorities are also very constructive.

Speaker #2: So we are optimistic. But once we have it, we can get started. And of course, that move does to say, okay, we will just continue with the regular process.

Speaker #2: Frankische Tag. Please, over to you. Good morning. I have two short questions. One on the deconsolidation of Siemens Healthineers—on the timeline, why are you waiting until the next AGM?

Stephan Großmann: Good morning. I have two short questions. One on the deconsolidation of Siemens Healthineers on the timeline.

Speaker #2: By the way, this is just the regular process regarding such spin-offs, right? That you do it via the AGM. And that's exactly what we will be doing as announced in the regular way.

Stephan Großmann: Why are you waiting until the next AGM? Could you not have had a earlier opportunity, and why did you not take that opportunity? Digital Industries is recovering, I heard. What does that mean for the restructuring, especially for the metropolitan region in Nuremberg, but also Germany as a whole? Because Veronika Bienert also said that competitiveness is supposed to be strengthened further, especially in DI, which presumably also entails restructuring. How will this continue? Thank you. Well, onto Siemens Healthineers. We did cover that in great detail here. It's about simply figuring out certain topics regarding services, regarding loans, you know, simply financial topics that have to be moved from A to B. I think the biggest point is the tax impact. We need a reliable statement from the authorities, which we have not received so far.

Speaker #2: And DI is recovering. Yes, we are happy about that. Now, what we do in structural changes, again, is nothing new. You know what everybody knows.

Speaker #2: Could you not have had an earlier opportunity? And why did you not take that opportunity? And Digital Industries is recovering, I heard. What does that mean for the restructuring, especially for the metropolitan region in Nuremberg, but also Germany as a whole?

Speaker #2: This doesn't only have to do with a particular quarter. It has to do about wanting to increase the competitiveness in a particular business in automation, in software.

Speaker #2: Because Ms. Bienert also said that competitiveness is supposed to be strengthened further, especially in DI, which presumably also entails restructuring. So, how will this continue?

Speaker #2: So those are simply measures that we have to take in order to maintain our competitiveness. That's, of course, also the cost position on the one hand.

Speaker #2: Thank you. Well, onto Healthineers. We did cover that in great detail here. It's about simply figuring out certain topics regarding services, regarding loans, simply financial topics that have to be moved from A to B.

Speaker #2: But then on the other hand, also making sure that you have leeway for innovation and investment in innovation. And we do this across the board.

Speaker #2: You can see it. We're investing in China. We're investing in new products. That now have really translated into a huge success. The UKI, UAI for also our customers, also in Germany, in Europe, we've shown what we can do in the software space there.

Speaker #2: But I think the biggest point is the tax impact. We need a reliable statement from the authorities, which we have not received so far.

Speaker #2: And so we're simply carrying out a plan which hopefully is going to catapult us to the top of industrial AI, which, of of course, we are going to drive further with our customers and partners.

Roland Busch: Before we have that, we cannot, you know, initiate even an extraordinary annual general meeting. That timeline has been breached. We've given the timeline. All of that has to be prepared, you know, all the necessary reports and so on. That is now 2, 3 weeks ago would have been the perfect deadline. We still don't have a firm, reliable statement. The good news is the conversations between Healthineers and Siemens are going very well when it comes to divvying up the businesses. The conversations with the tax authorities are also very constructive. We are optimistic. Once we have it, we can get started. That moved us to say, Okay, we will just continue with the regular process. This is just a regular process regarding such spin-offs, right?

Stephan Großmann: Before we have that, we cannot, you know, initiate even an extraordinary annual general meeting. That timeline has been breached. We've given the timeline. All of that has to be prepared, you know, all the necessary reports and so on. That is now two, three weeks ago would have been the perfect deadline. We still don't have a firm, reliable statement. The good news is the conversations between Healthineers and Siemens are going very well when it comes to divvying up the businesses. The conversations with the tax authorities are also very constructive. We are optimistic. Once we have it, we can get started. That moved us to say, Okay, we will just continue with the regular process. This is just a regular process regarding such spin-offs, right?

Speaker #2: And before we have that, we cannot initiate even an extraordinary annual general meeting. And that timeline has been breached. We've given the timeline, so all of that has to be prepared.

Speaker #2: Thank you very much. Right. Thank you very much. We now have no more questions in the German line. So we're going to switch into the English line.

Speaker #2: All the necessary reports and so on. And so, yeah, that is now two, three weeks ago—would have been the perfect deadline. We still don't have a firm, reliable statement.

Speaker #2: The operator is going to switch into the English line. So please bear with us. This is going to take a second. Ladies and gentlemen, we will now begin the questions for the English part.

Speaker #2: But the good news is the conversations between Healthineers and Siemens are going very well when it comes to divvying up the businesses. The conversations with the tax authorities are also very constructive.

Speaker #2: Please press the star key, followed by one on your phone to register for a question. One moment for the next question, please. And the next question comes from John Revill from Thomson Reuters.

Speaker #2: So we are optimistic. But once we have it, we can get started. And of course, that move does, to say, okay, we will just continue with the regular process.

Speaker #2: By the way, this is just the regular process regarding such spin-offs, right? That you do it via the AGM. And that's exactly what we will be doing, as announced, in the regular way.

Roland Busch: That you do it via the AGM, and that's exactly what we will be doing as announced in the regular way. DI is recovering. Yes, we are happy about that. Now, what we do in structural changes, again, is nothing new. You know what everybody knows. This doesn't only have to do with a particular quarter, it has to do about wanting to increase the competitiveness in a particular business, in automation, in software. Those are simply measures that we have to take in order to maintain our competitiveness. That's of course also the cost positions on the one hand, but then on the other hand, also making sure that you have leeway for innovation and investment in innovation. We do this across the board. You can see it. We're investing in China.

Stephan Großmann: That you do it via the AGM, and that's exactly what we will be doing as announced in the regular way. DI is recovering. Yes, we are happy about that. Now, what we do in structural changes, again, is nothing new. You know what everybody knows. This doesn't only have to do with a particular quarter, it has to do about wanting to increase the competitiveness in a particular business, in automation, in software. Those are simply measures that we have to take in order to maintain our competitiveness. That's of course also the cost positions on the one hand, but then on the other hand, also making sure that you have leeway for innovation and investment in innovation. We do this across the board. You can see it. We're investing in China.

Speaker #2: Please go ahead. Mr. Revill, your line is open.

Speaker #2: And DI is recovering. Yes, we are happy about that. Now, what we do in structural changes, again, is nothing new. You know what everybody knows.

Speaker #1: Maybe let's jump to the next one. And yeah.

Speaker #2: Yes. Then we try the next one for this the next question then comes from Marilyn Martin from Bloomberg News. Please go ahead.

Speaker #2: This doesn't only have to do with a particular quarter. It has to do with wanting to increase the competitiveness in a particular business—in automation, in software.

Speaker #3: Hi. Good morning. I somehow landed in the English line. So asking a question in English now. I have a question on China and the value for my products that you mentioned.

Speaker #2: So those are simply measures that we have to take in order to maintain our competitiveness. That's, of course, also the cost position on the one hand.

Speaker #3: So is that impacting the margins in China as well? And then as well, related to that, which segments, which products are you most under pressure already from local competitors like Innovance?

Speaker #2: But then, on the other hand, also making sure that you have leeway for innovation, and investment in innovation. We do this across the board.

Speaker #2: You can see it. We're investing in China. We're investing in new products that now have really translated into a huge success. The UKI, UAI, for also our customers, also in Germany, in Europe, we've shown what we can do in the software space there.

Simon Krause: We're investing in new products that now have really translated into a huge success, Industrial AI for also our customers also in Germany. In Europe, we've shown what we can do in the software space there. We're simply carrying out a plan which hopefully is going to catapult us to the top of Industrial AI, which of course, we are going to drive further with our customers and partners. Thank you very much. Right. Thank you very much. We now have no more questions in the German line, we're going to switch into the English line. The operator is going to switch into the English line, please bear with us. This is going to take a second.

Stephan Großmann: We're investing in new products that now have really translated into a huge success, Industrial AI for also our customers also in Germany. In Europe, we've shown what we can do in the software space there. We're simply carrying out a plan which hopefully is going to catapult us to the top of Industrial AI, which of course, we are going to drive further with our customers and partners. Thank you very much. Right. Thank you very much. We now have no more questions in the German line, we're going to switch into the English line. The operator is going to switch into the English line, please bear with us. This is going to take a second.

Speaker #3: And then also do you plan to roll out your value for money products in other markets as well? Or will you mainly keep them in China?

Speaker #3: Thank you.

Speaker #4: Yeah. Thank you, super relevant questions. Starting with the margins. In Q1, we saw our competitors increasing the prices. So did we. We didn't do that again in Q2.

Speaker #2: And so we're simply carrying out a plan which, hopefully, is going to catapult us to the top of industrial AI—which, of course, we are going to drive further with our customers and partners.

Speaker #4: So you see that also the competitors, which are super aggressive, they have to look into their bottom line as well. The key point is that to your answer, the we don't see an impact in margins.

Speaker #2: Thank you very much. Right. Thank you very much. We now have no more questions in the German line, so we're going to switch into the English line.

Speaker #2: The operator is going to switch into the English line, so please bear with us. This is going to take a second. Ladies and gentlemen, we will now begin the questions for the English part.

Speaker #4: We develop products super competitive in China which are fitting into our expectations with the margins are asked for. This goes only if you specify the product locally.

Operator: Ladies and gentlemen, we will now begin the questions for the English part. Please press the star key followed by 1 on your phone to register for a question. 1 moment for the next question, please. The next question comes from John Revill from Thomson Reuters. Please go ahead. Mr. Revill, your line is open.

Operator: Ladies and gentlemen, we will now begin the questions for the English part. Please press the star key followed by one on your phone to register for a question. One moment for the next question, please. The next question comes from John Revill from Thomson Reuters. Please go ahead. Mr. Revill, your line is open.

Speaker #4: If you source locally, design locally, source locally, and manufacture locally. So then you have a very strong position. And we do that. On top comes that we are leveraging our technology, which we have gives us a competitive advantage I mean, technology with scales globally.

Speaker #4: So which is really scaling. Which gives us another advantage. So we are very happy with these products. They land extremely well on the market, both the 21st, 16th, and the other 26th products which are which we launched.

Speaker #2: Please go ahead. Mr. Reville, your line is open. Maybe let's jump to the next one. And yes. Then we'll try the next one for this. The next question then comes from Marilyn Martin from Bloomberg News.

Speaker #4: Which brings me to the next question, which is which kind of products are there? We see I mean, Innovance, for example, they come from the drives now.

Speaker #4: They work into controls. And this is basically the focus which we have: drives and controls. We work on both. But also including some switching technology where we also launch new products, which is successfully hit the market.

Simon Krause: Maybe let's jump to the next one and, yeah.

Operator: Yes. We try the next one for this. The next question then comes from Marilen Martin from Bloomberg News. Please go ahead.

Speaker #2: Please go ahead.

Marilen Martin: Hi. Good morning. I somehow landed in the English line, asking a question in English now. I have a question on China and the value for money products that you mentioned. Is that impacting your margins in China as well? As well, like, related to that, which segments, which products are you most under pressure already from local competitors like Inovance? Also, like, do you plan to roll out your value for money products in other markets as well, or will you mainly keep them in China? Thank you.

Speaker #4: And we are very proud to also talk about our smart PLC controller, which is really setting a new benchmark in price performance in the market.

Speaker #3: Hi. Good morning. I somehow landed in the English line, so I'm asking a question in English now. I have a question on China, and the value for my products that you mentioned.

Speaker #3: So, is that impacting the margins in China as well? And then, as well, related to that, which segments, which products are you most under pressure already from local competitors like Innovance?

Speaker #4: And this is where we really have a good chance to defend our market and market share the clear idea is not only to defend, but to win market share.

Speaker #4: And we could win customers back with our strong products, which we launched. And which brings me to the last one. Selectively, some of these products go also on global markets.

Speaker #3: And then, also, do you plan to roll out your value-for-money products in other markets as well, or will you mainly keep them in China?

Speaker #3: Thank you.

Roland Busch: Yeah. Thank you. Super relevant questions. Starting with the margins. In Q1, we saw our competitors increasing the prices, so did we. We didn't do that again in Q2. You see that also the competitors, which are super aggressive, they have to look into their bottom line as well. The key point is that, to your answer, we don't see an impact in margins. We develop products super competitive in China, which are fitting into our expectations what the margins are asked for. This goes only if you specify the product locally, if you source locally, design locally, source locally, and manufacture locally. You have a very strong position, and we do that. On top comes that we are leveraging our technology, which we have. It gives us a competitive advantage.

Speaker #4: And we have you see already a demand coming, for example, from India and other places. Where these products we will see these products on these markets too.

Speaker #4: Yeah. Thank you. Starting with the margins— in Q1, we saw our competitors increasing the prices. So did we. We didn't do that again in Q2.

Speaker #4: And Veronica has another point.

Speaker #4: So you see that also the competitors, which are super aggressive, they have to look into their bottom line as well. The key point is that, to your answer, we don't see an impact in margins.

Speaker #2: Maybe as well about our sentiment for the third quarter. So building really on March's very strong performance April sustained its very positive trajectory. In particular, with the discrete business and this really serving as a growth driver.

Speaker #4: We develop products super competitive in China which are fitting into our expectations with the margins are asked for. This goes only if you specify the product locally.

Speaker #2: And supported by very good momentum in China. I think that's very important to know.

Speaker #4: If you source locally, design locally, source locally, and manufacture locally, then you have a very strong position. And we do that. On top comes that we are leveraging our technology, which we have—gives us a competitive advantage. I mean, technology which scales globally.

Speaker #1: So it looks like there are no further questions in English. So as a reminder, if you would like to ask a question in English, please press the star key, followed by one on your touchscreen phone now.

Speaker #1: So OK. We can see Mr. John Revill has signed up for a question. Mr. John Revill from Thomson Reuters. Please go ahead.

Roland Busch: I mean technology which scales globally, which is really scaling, which gives them another advantage. We are very happy with these products. They land extremely well on the market, both the 16 and the other 26 products which we launched. Which brings me to the next question, which is which kind of products are there? We see, I mean, Inovance, for example, they come from the drives. Now they work into controls. This is basically the focus which we have, drives and controls. We work on both, also including some switching technology where we also launch new products which have successfully hit the market. We are very proud to also talk about our smart PLC controller, which is really setting a new benchmark in price performance in the market.

Speaker #4: So which is really scaling. Which gives them another advantage. So we are very happy with these products. They land extremely well on the market, both the 21st, 16th, and the other 26th products, which we launched.

Speaker #5: Hello. Can you hear me now? Oh, super. Sorry about that. I'm a bit rubbish with technology. There we go. And welcome from Bienert. So I've got a couple of questions, if I may.

Speaker #4: Which brings me to the next question, which is which kind of products are there? We see I mean, Innovance, for example, they come from the drives.

Speaker #5: Could you please explain a little bit about the margins in the quarter? A little bit more about why they declined this quarter compared with the year ago?

Speaker #4: Now, they work into controls. And this is basically the focus which we have: drives and controls. We work on both. But also including some switching technology where we also launch new products, which is successfully hit the market.

Speaker #5: And how much of this is to do with forex and the tariffs? Could you explain what's going on with the what's been where the forex has come from, the forex impact there?

Speaker #5: And also the tariffs thing there. Because I thought tariffs now would obviously it's a bit lower. It's like 10%, isn't it, for everybody from Europe or everybody all over the world now, isn't it, from the Americans?

Speaker #4: And we are very proud to also talk about our smart PLC controller, which is really setting a new benchmark in price performance in the market.

Speaker #5: So that's my first question. And then the second one is just on your outlook. You're saying you see no impact thus far. From the Middle East.

Roland Busch: This is where we really have a good chance to defend our market and market share. The clear idea is not only to defend, but to win market share. We could win customers back with our strong products which we launched. Which brings me to the last one. Selectively, some of these products go also on global markets. We see already a demand coming, for example, from India and other places where these products, we will see these products on these markets too. Roniga has another point.

Speaker #4: And this is where we really have a good chance to defend our market and market share the clear idea is not only to defend, but to win market share.

Speaker #5: But I was wondering just as a general it is a global economic slowdown. I mean, I mean, the IMF slowed their forecasts for the year.

Speaker #4: And we could win customers back with our strong products, which we launched. And which brings me to the last one. Selectively, some of these products go also on global markets.

Speaker #5: So do you see any kind of economic slowdown globally affecting you guys? Or if not, why not? Then what gives you kind of confidence to keep things going?

Speaker #4: And we have you see already a demand coming, for example, from India and other places. Where these products we will see these products on these markets too.

Speaker #5: Thank you.

Speaker #4: So let me you come later with the margins. I talk a little bit about the tariffs. So the tariffs this is an impact which hits our mobility business with 170 base points top and bottom line.

Speaker #4: And I don't think I have another point.

Veronika Bienert: Maybe as well about our sentiment for Q3. Building really on March, very strong performance. April sustained its very positive trajectory, in particular with the discrete business, and this really serving as a growth driver and supported by very good momentum in China. I think that's very important to know.

Speaker #3: Maybe as well about our sentiment for the third quarter. So building really on March's very strong performance, April sustained its very positive trajectory. In particular, with the discrete business and this really serving as a growth driver.

Speaker #4: And this basically material I mean, which is they're working on aluminum and other components which are affected. So this is something what we and this was through the recent changes.

Speaker #3: And supported by very good momentum in China. I think that's very important to know.

Speaker #4: They don't know the change. Sometimes they include the material within components like they did for machine builders. This is the point. The outlook so I mean, the point is, as I said before, the assumption which we do is that the war doesn't drag on for much longer.

Operator: It looks like there are no further questions in English. As a reminder, if you would like to ask a question in English, please press the star key followed by one on your touchtone phone now. Okay. We can see Mr. John Revill has signed up for a question. Mr. John Revill from Thomson Reuters, please go ahead.

Operator: It looks like there are no further questions in English. As a reminder, if you would like to ask a question in English, please press the star key followed by one, on your touchtone phone now. Okay. We can see Mr. John Revill has signed up for a question. Mr. John Revill from Thomson Reuters, please go ahead.

Speaker #4: So it looks like there are no further questions in English. So as a reminder, if you would like to ask a question in English, please press the star key, followed by one on your touchscreen phone now.

Speaker #4: So OK. We can see Mr. John Reville has signed up for a question. Mr. John Reville from Thomson Reuters, please go ahead.

Speaker #4: If it goes for longer, then you may have a higher impact. Also on supply chains. Is it oil and gas or derivatives of that?

John Revill: Hello. Can you hear me now?

Speaker #5: Hello. Can you hear me now?

Operator: Yes, we can hear you loud and clear.

John Revill: Oh, super. Sorry about that. I'm a bit rubbish with technology. There we go. Welcome for all being here. I've got a couple of questions, if I may. Could you please explain a little bit about the margins in the quarter, a little bit more about why they declined this quarter compared with a year ago? How much of this is to do with Forex and the tariffs? Could you explain where the Forex has come from, the Forex impact there, and also the tariffs thing there? I thought tariffs now would obviously, it's a bit lower. It's like 10%, isn't it, for everybody from Europe or everybody all over the world now, isn't it, from the Americans? That's my first question.

Speaker #4: Yes, we can hear you loud.

Speaker #5: Oh, super. Sorry about that. I'm a bit rubbish with technology. There we go. And welcome. I'll be in it. So, I've got a couple of questions, if I may.

Speaker #4: This is not baked into, I guess, any numbers. Because you cannot really make a judgment. So far, our let me start with our revenue coming from the Middle East.

Speaker #5: Could you please explain a little bit about the margins in the quarter, and a little bit more about why they declined this quarter compared with a year ago?

Speaker #4: It's 3% to 4%. So quite low. We have 1% of the purchasing volume coming from there. For the later one, we have measures for the former one.

Speaker #5: And how much of this is to do with Forex and the tariffs? Could you explain what's gone on with the what's been the where the Forex has come from, the Forex impact there?

Speaker #4: It's a minor impact. It's more investment related. So therefore, in the indirect impact, we talked about. So if inflation would go up further further, for the rest of the year, then we would see that our markets.

Speaker #5: And also the tariffs thing there, because I thought tariffs now would obviously it's a bit lower. It's like 10%, isn't it, for everybody from Europe?

Speaker #5: Everybody all over the world now, isn't it, from the Americans? So that's my first question. And then the second one is just on your outlook.

Speaker #4: But the base assumption is, as I said before, that it will not drag on for the rest of the year.

John Revill: The second one is just on your outlook. You're saying you see no impact thus far from the Middle East. I was wondering, just as a general, if the global economic slowdown, I mean, the IMF lowered their forecast for the year. Do you see any kind of economic slowdown globally affecting you guys? Or if not, why not? What gives you kind of confidence to keep things going? Thank you.

Speaker #5: But do you expect like a broader impact moving forward just because of I don't know. We haven't seen the economic impact. It's sort of in Europe and in North America.

Speaker #5: You're saying you see no impact thus far from the Middle East. But I was wondering just as a general it is a global economic slowdown.

Speaker #5: Outside the Middle East yet. But because of I mean, the oil prices are still kind of rising. That's still coming. So you don't see that as a kind of particular headwind moving forward?

Speaker #5: I mean, do you—I mean, the IMF slowed their forecast for the year. So do you see any kind of economic slowdown globally affecting you guys?

Speaker #4: Again, it's hard to say. It's indirect now. How much does an increased inflation now impact on the investment behavior? I mean, let me go for one point.

Speaker #5: Or if not, why not? Then what gives you kind of confidence to keep things going? Thank you.

Roland Busch: You come later with the margins. I talk a little bit about the tariffs. The tariffs, this is an impact which hits our Mobility business with 170 basis points top and bottom line. It's basically material, I mean, which is they're working on aluminum and other components which are affected.

Speaker #4: So let me come back later with the margins. I'll talk a little bit about the tariffs. So, the tariffs—this is an impact which hits our Mobility business with 170 basis points, top and bottom line.

Speaker #4: Let's assume you're a car builder and you see an impact in your sales of cars because the inflation goes up. That does not prevent you from investing in your plant because you need to release a new car.

Speaker #4: So this is not fully directly coupled. To some extent, it is. And if it drags on for longer, it would. But some investments, they go despite a short-term impact on, let's say, buying behavior of customers.

Speaker #4: And this basically material, I mean, which is—they're working on aluminum and other components which are affected. So this is something what we—and this was through the recent changes.

Roland Busch: So this was through the recent changes. They don't know the change. Sometimes they include the material within components like they did for machine builders. This is the point. The outlook. I mean, the point is, as I said before, the assumption which we do is that the war doesn't drag on for much longer. If it goes for longer, then you might have a higher impact also on supply chains. Is it oil and gas or derivatives of that? This is not baked into, I guess, any numbers because you cannot really make a judgment. So far, let me start with our revenue coming from the Middle East. It's 3% to 4%, so quite low. We have 1% of the purchasing volume coming from there.

Speaker #4: It's a little different for food and beverage. If people are then stopped buying more expensive food or whatever, then they have an impact. But again, since we're an investment cycle, it's a second derivative on this eventual continued increase in inflation.

Speaker #4: They had another change. Sometimes they include the material within components, like they did for machine builders. This is the point. The outlook so I mean, the point is, as I said before, the assumption which we do is that the war doesn't drag on for much longer.

Speaker #5: OK, OK. Thank you.

Speaker #4: And the cost question I hand over to Veronica.

Speaker #2: So yeah, with regards to margins, I think it's very important to highlight that the ethics impacts in Q2 I mentioned the 80 basis points.

Speaker #4: If it goes for longer, then you may have a higher impact. Also on supply chains, is it oil and gas or derivatives of that?

Speaker #4: This is not baked into, I guess, any numbers because you cannot really make a judgment. So far, our let me start with our revenue coming from the Middle East.

Speaker #2: And this goes really along the different businesses. So we had in digital industries, you could see an impact of 90 basis points or in smart infrastructure, 110 basis points negative.

Speaker #4: It's 3% to 4%. So quite low. We have 1% of the purchasing volume coming from there. For the later one, we have measures for the former one.

Roland Busch: For the later one, we have measures. For the former one, it's a minor impact. It's more investment related. Therefore, in the indirect impact we talked about, if inflation would go up further for the rest of the year, then we would see that on our markets. The base assumption is, as I said before, that that will not drag on for the rest of the year.

Speaker #2: So this is really something we see there. And with regards to tariffs in our businesses, it's only Siemens Mobility, which has been impacted. And then overall for Siemens Healthy News.

Speaker #4: It's a minor impact. It's more investment related. So therefore, in the indirect impact, we talked about. So if inflation would go up further, further, for the rest of the year, then we would see that our markets.

Speaker #4: But the base assumption is, as I said before, that it will not drag on for the rest of the year.

Speaker #2: But the other businesses DI and SI were not impacted by tariffs. So this is really something which we can see on our margins. But as you might recall, I mentioned as well the ethics impact in particular out of the US dollar.

John Revill: Do you expect like a broader impact moving forward just because of I know we haven't seen the economic impact sort of in Europe and in North America, outside the Middle East yet? Because, I mean, the oil prices are still kind of rising, and that's still coming, you don't see that as a kind of particular headwind moving forward?

Speaker #5: But do you expect like a broader impact moving forward just because of I don't know. We haven't seen the economic impact. It's sort of in Europe and in North America, outside the Middle East yet.

Speaker #5: But because of I mean, the oil prices are still kind of rising. That's still coming. So you don't see that as a kind of particular headwind moving forward?

Speaker #2: So we expect that for the second half of this fiscal year, we see a lower impact going forward in comparison to the previous year quarters.

Roland Busch: Again, it's hard to say and it's indirect. Now, how much does an increased inflation now impact on the investment behavior?

Speaker #4: Again, it's hard to say. It's indirect now. How much does an increased inflation now impact on the investment behavior? I mean, let me go for one point.

John Revill: Yeah

John Revill: Yeah.

Roland Busch: Let me go for one point. Let's assume you're a car builder and you see an impact in your sales of cars because the inflation goes up. That does not prevent you from investing in your plant because you need to release a new car.

Speaker #4: Let's assume you're a car builder. And you see an impact in yourselves of cars because the inflation goes up. That does not prevent you from investing in your plant because you need to release a new car.

Speaker #2: So therefore, this is our assessment in terms of margins. And you mentioned global economies. So rightfully, the inflation we see that according to the latest information we see it in the US or in Germany inflation going up.

Roland Busch: This is not fully directly coupled. To some extent it is, and if it drags on for longer, it would. Some investments, they go despite a short-term impact on, let's say, buying behavior of customers. It's a bit different for food and beverage. If people are then stop buying more expensive food or whatever, then they have an impact. Again, since we're in an investment cycle, it's a second derivative on this, on this, eventual continued increase in inflation.

Speaker #2: That is something we are monitoring very carefully. But we really run our efficiencies and productivity activities really in with a very stringent follow-up in terms of our economic equation.

Speaker #4: It's a bit different for food and beverage. If people are then stopped buying more expensive food or whatever, then they have an impact. But again, since we're an investment cycle, it's a second derivative on this eventual continued increase in inflation.

Speaker #2: How we really run that. And then we set on a high diversified approach across global on a global perspective. And see where we really can make a difference with our offering there.

John Revill: Okay. Okay.

Roland Busch: Yeah.

John Revill: Thank you.

Speaker #5: OK, OK. Thank you.

Speaker #4: And the first question I hand over to Veronica.

Roland Busch: And on the-

Roland Busch: Go on.

Roland Busch: The fourth question, I hand over to Veronika.

Veronika Bienert: With regards to margins, I think it's very important to highlight that the FX impact in Q2, I mentioned the 80 basis points, and this goes really along the different businesses. We had in Siemens Digital Industries, you could see an impact of 90 basis points or in Siemens Smart Infrastructure, 110 basis points negative. This is really something we see there. With regards to tariffs in our businesses, it's only Siemens Mobility which has been impacted. Overall for Siemens, healthy news, but the other businesses, DI and SI, were not impacted by tariffs. This is really something which we can see on our margins.

Speaker #3: So yeah, with regards to margins, I think it's very important to highlight that the ethics impacts in Q2 I mentioned the 80 basis points.

Speaker #2: So therefore, we are still in a very opaque environment confident that we can reach our outlook.

Speaker #3: And this goes really along the different businesses. So we had in digital industries, you could see an impact of 90 basis points. Or in smart infrastructure, 110 basis points negative.

Speaker #5: Could you explain just the mechanics of the ethics thing, though, please? I'm not clear because I thought basically you made things say in the US for the US.

Speaker #5: So how does ethics affect your margins then? Can you explain just the mechanics of that? Sorry.

Speaker #2: The mechanics so that what you can see there and so maybe what is very important for us is really that we ensure there's a very diversified approach, which we are running.

Speaker #3: So this is really something we see there. And with regards to tariffs in our businesses, it's only Siemens Mobility, which has been impacted. And then overall for Siemens Healthy News.

Speaker #2: If you look at production facilities and the like, that we ensure that we have natural hedges. So therefore, that's what Roland outlined before. That we increase our production facilities.

Speaker #3: But the other businesses DI and SI were not impacted by tariffs. So this is really something which we can see on our margins. But as you might recall, I mentioned as well the ethics impact in particular out of the US dollar.

Veronika Bienert: As you might recall, I mentioned as well the FX impact in particular out of the US dollar. We expect that for the H2 of this fiscal year, we see a lower impact going forward in comparison to the previous year quarters. Therefore, this is our assessment in terms of margins. You mentioned global economies. Rightfully, the inflation, we see that according to the latest information, we see it in the US or in Germany, inflation going up. That is something we are monitoring very carefully.

Speaker #2: For instance, in the US, so that we can net that. And similarly, we do that, for instance, in Asia, where we can see as well a volatility from an ethics perspective.

Speaker #3: So we expect that for the second half of this fiscal year, we see a lower impact going forward in comparison to the previous year quarters.

Speaker #2: Yeah.

Speaker #5: As in like how did the ethics affect your margins if you are producing stuff in the US for the US? How did you margins decline because of that then?

Speaker #3: So therefore, this is our assessment in terms of margins. And you mentioned global economies. So rightfully, the inflation we see that according to the latest information we see it in the US or in Germany inflation going up.

Speaker #5: Because of the weakness of the dollar? How did that reduce your margins overall then?

Speaker #2: No. So then maybe there was a misunderstanding really on a comparable basis. If you look at our margin quality on a comparable basis, then of course, the relevant ethics margin impact is deducted.

Speaker #3: That is something we are monitoring very carefully. But we really run our efficiencies and productivity activities really in with a very stringent follow-up in terms of our economic equation.

Veronika Bienert: We really run our efficiencies and productivity activities really and with a very stringent follow-up in terms of our economic equation, how we really run that. We set on a high diversified approach across global on a global perspective and see where we really can make a difference with our offering there. Therefore, we are still in a very opaque environment, confident that we can reach our outlook.

Speaker #2: So therefore, that's what I highlighted that if you really deduct the margin impact on the different businesses, then you can see that this we have a very favorable performance in the different businesses.

Speaker #3: How we really run that. And then we set on a high diversified approach across global on a global perspective. And see where we really can make a difference with our offering there.

Speaker #2: So if you have it on a comparable basis, then we run for instance, for digital industries, we are ethics comparable at 19.4%. For smart infrastructure, at 19.7%.

Speaker #3: So therefore, we are still in a very opaque environment confident that we can reach our outlook.

Speaker #2: Yeah. If you deduct the ethics impact.

John Revill: Could you explain to us the mechanics of the FX thing, though, please? I'm not clear because I thought basically you made things, say, in the US for the US. How does FX affect your margins then? Can you explain just the mechanics of that? Sorry.

Speaker #5: No, I'll just have to an explanation. Sorry how it actually worked in terms of why do your margins go down, though? Because of what?

Speaker #5: Could you explain just the mechanics of the ethics thing, though, please? I'm not clear because I thought basically you made things say in the US for the US.

Speaker #5: Because you're just getting less euros then. And you're getting less euros now as a result. It's just when the translation effect.

Speaker #5: So how does ethics affect your margins then? Can you explain just the mechanics of that? Sorry.

Veronika Bienert: The mechanics. That's what you can see there. Maybe what is very important for us is really that we ensure with a very diversified approach, which we are running, if you look at production facilities and the like, that we ensure that we have natural hedges.

Speaker #4: You still have traffic of flows between Europe and the United States, for example. I mean, it's our local for local content is 85% level.

Speaker #3: The mechanics so that what you can see there and so maybe what is very important for us is really that we ensure there's a very diversified approach which we are running.

Speaker #4: So obviously, the rest is also not local for local. But maybe one more point on the margin remember that last year, we had a gain from buying accessories.

Speaker #3: If we look at production facilities and the like, then we ensure that we have natural hedges. So, therefore, that's what Roland outlined before—that we increase our production facilities.

Speaker #4: And a sale of a stake in Bangalore. This year, we had in the counterbalance, we had a disposal of our airport business, which we disclosed.

Veronika Bienert: Therefore, that's what Roland outlined before, that we increase our production facilities, for instance, in the US so that we can net that. Similar we do that, for instance, in Asia, where we can see as well a volatility from an FX perspective. Yeah.

Speaker #4: There's a net net effect, so to speak. Which doesn't repeat this year. So therefore, this explains our basically the drop in absolute terms of our profitability.

Speaker #3: For instance, in the US, so that we can match that. And similarly, we do that, for instance, in Asia. Where we can see as well a volatility from an ethics perspective.

Speaker #2: But maybe just to add from my side, so we really need to differentiate translation effects and transaction effects and our hedging process. So Siemens is exposed to certain currency effects.

John Revill: No, could you explain the mechanics of how it actually works? As in like, how did the FX affect your margins if you are producing stuff in the US for the US? How did you, how did your margins decline because of that then? Because of the weakness of the dollar, how did that reduce your margins overall then?

Speaker #3: Yeah.

Speaker #5: No, but could you explain the mechanics of how it actually works? As in, like, how did the ethics affect your margins if you are producing stuff in the US for the US?

Speaker #5: How did you margins decline because of that then? Because of the weakness of the dollar? How did that reduce your margins overall then?

Veronika Bienert: No. Yeah. Maybe there was a misunderstanding really. On a comparable basis, if you look at our margin quality on a comparable basis-

Veronika Bienert: No. Yeah. Maybe there was a misunderstanding really. On a comparable basis, if you look at our margin quality on a comparable basis.

Speaker #3: No, so then maybe there was a misunderstanding really on a comparable basis. If you look at our margin quality on a comparable basis, then, of course, the relevant ethics margin impact is deducted.

Speaker #2: So mainly involving in the US dollar area, British pound, and currencies from other emerging markets, particularly the Chinese yuan. But Siemens is still as well a net exporter from the eurozone to the rest of the world.

Veronika Bienert: Of course, the relevant FX margin impact is deducted.

Speaker #2: And so as a result of a weak euro, this principle is favorable for our business. And the strong euro is principle unfavorable. So therefore, we mitigate a significant portion of our currency risk through natural hedging, what I just tried to explain.

Veronika Bienert: Therefore, that's what I highlighted, that if you really deduct the margin impact on the different businesses, then you can see that this. We have a very favorable performance in the different businesses, if you have it on a comparable basis.

Speaker #3: So therefore, that's what I highlighted—that if you really deduct the margin impact on the different businesses, then you can see that we have a very favorable performance in the different businesses.

Speaker #2: For instance, factory production sites, which we are diversifying, we do this similar thing. For instance, for R&D, activities that we are diversifying that as well on a global basis.

Speaker #3: So if you have it on a comparable basis, then we run, for instance, for Digital Industries, we are at EBITA comparable at 19.4%. For Smart Infrastructure, at 19.7%.

Veronika Bienert: We run, for instance, for Digital Industries, we are FX comparable at 19.4%. For Smart Infrastructure at 19.7%.

Speaker #2: So therefore, we are looking for a global distribution of production facilities. And then in addition to this natural hedging strategy, which I mentioned, we also hedge currency transaction risks.

Speaker #3: Yeah. If you deduct the ethics impact.

John Revill: Yeah

Veronika Bienert: the FX impact.

Veronika Bienert: The FX impact.

John Revill: No, no, I just fancy an explanation, sorry, of how it actually worked in terms of why do your margins go down, though, because of. Well, because you're just getting less euros.

Speaker #5: No, I'll just have to an explanation so I have how it actually worked in terms of why do your margins go down though? Because of what?

Speaker #5: Because you're just getting less euros and you're getting less euros now as a result. It's just a translation effect.

Speaker #2: So using derivative financial instruments. But of course, if we have a continuous trend, for example, a long-term depreciation of the US dollar, then they really only on a temporary basis limit the currency effects, especially in the product business.

Simon Krause: When this.

Simon Krause: It’s a translation effect.

John Revill: It’s a translation effect.

Simon Krause: You still have traffic of flows between Europe and United States, for example. I mean, it's.

Speaker #4: You still have traffic or flows between Europe and the United States, for example. I mean, our local-for-local content is at an 85% level.

Simon Krause: Yeah

Simon Krause: Yeah.

Simon Krause: It's our local for local content is at 85% level. Obviously the rest is also not local for local. Maybe one more point on the margin. Remember that last year we had a gain from buying accessories and a sale of a stake in Bangalore. This year we had in the counterbalance, we had a disposal of our airport business, which we disclosed. There's a net effect, so to speak, which just doesn't repeat this year. Therefore, this explains basically the drop in absolute terms of our profitability.

Speaker #4: So, obviously, the rest is also not local for local. But maybe one more point on the margin. Remember that last year, we had a gain from buying accessories and a sale of a stake in Bangalore.

Speaker #2: So here, we minimize the currency risk through rolling hedges. At least for three months in advance. Yeah. And for the project business, it's a different approach.

Speaker #2: Here, we are hedging foreign currency risks on a custom and supplier side. They are hedged 100%. So that those currency impacts are minimized over the project term.

Speaker #4: This year, in the counterbalance, we had a disposal of our airport business, which we disclosed. There's a net-net effect, so to speak, which doesn't repeat this year.

Speaker #4: So therefore, this explains, basically, the drop in absolute terms of our profitability.

Speaker #2: And the translation risk are rising over the conversion of the company financial statements into the group currency plan. Yeah.

John Revill: Okay.

Veronika Bienert: Maybe, just to add from my side. We really need to differentiate translation effects, transaction effects and our hedging process. Siemens is exposed to certain currency effects, mainly involving in the US dollar area, British pound and currencies from other emerging markets, particularly the Chinese yuan. Siemens is still as well a net exporter from the Eurozone to the rest of the world. As a result of a weak euro, this principle is favorable for our business, and a strong euro is principle unfavorable. Therefore.

Speaker #3: But maybe just to add from my side, so we really need to differentiate translation effects and transaction effects and our hedging process. So Siemens is exposed to certain currency effects.

Speaker #5: Excellent. So it's a twofold thing then. It's mainly translation, the effect is sorry, close our shop. OK.

Speaker #4: John, we are running out of time. So maybe we can take this offline.

Speaker #5: OK, we'll do. OK.

Speaker #4: Yeah, exactly. So thank you very much, for your time today. We do not see any other further questions here. So we can close the conference call.

Speaker #3: So mainly involving in the US dollar area, British pound, and currencies from other emerging markets, particularly the Chinese yuan. But Siemens is still as well a net exporter from the eurozone to the rest of the world.

Speaker #4: And we will take this offline, John. Thank you very much for your interest. And our conference call for the analysts with Roland and Veronica will begin shortly at 9:30.

Speaker #4: And the analyst call will be broadcast live at siemens.com/analystcall. And you'll hear from us again at the latest on August 6, 2026, when we will release our third quarter results.

Speaker #3: And so as a result of a weak euro, this principle is favorable for our business and the strong euro is principle unfavorable. So therefore, we mitigate a significant portion of our currency risk through natural hedging, what I just tried to explain.

Veronika Bienert: we mitigate a significant portion of our currency risk through natural hedging. What I just try to explain.

Veronika Bienert: We mitigate a significant portion of our currency risk through natural hedging. What I just try to explain.

John Revill: Yeah.

Veronika Bienert: For instance, factory production sites, which we are diversifying. We do this similar thing, for instance, for R&D activities that we are diversifying that as well on a global basis. Therefore we are looking for a global distribution of production facilities. In addition to this natural hedging strategy, which I mentioned, we also hedge currency transaction risks using derivative financial instruments. Of course, if we have a continuous trend, for example, a long-term depreciation of the US dollar, then they really only on a temporary basis limit the currency effect, especially in the product business. Here we minimize the currency risk through rolling hedges at least for 3 months in advance, yeah?

Speaker #3: For instance, factory production sites, which we are diversifying, we do this similar thing. For instance, for R&D activities that we are diversifying, that as well, on a global basis.

Speaker #3: So therefore, we are looking for a global distribution of production facilities. And then in addition to this natural hedging strategy, which I mentioned, we also hedge currency transaction risks.

Speaker #3: So, using derivative financial instruments—but of course, if we have a continuous trend, for example, a long-term depreciation of the US dollar—then they really only, on a temporary basis, limit the currency effects, especially in the product business.

Speaker #3: So here we minimize the currency risk through rolling hedges. At least for three months in advance. Yeah. And for the project business, it's a different approach.

John Revill: Yeah.

Veronika Bienert: For the project business, it's a different approach. Here, we are hedging foreign currency risks on a customer and supplier side. They are hedged 100%, so that those currency impacts are minimized over the project term.

Speaker #3: Here, we are hedging foreign currency risks on both the customer and supplier sides. They are hedged 100%, so that those currency impacts are minimized over the project term.

John Revill: Excellent

Veronika Bienert: The translation risks are arising over the conversion of the company financial statements into the group currency plan.

Speaker #3: And the translation risk are arising over the conversion of the company financial statements into the group currency plan. Yeah.

John Revill: Excellent. It's a twofold thing then. It's translation.

Speaker #5: Excellent. So, it's a twofold thing then. It's mainly translation. The effect is—sorry, OK.

Veronika Bienert: Yes.

John Revill: It's main translation.

Simon Krause: John.

Simon Krause: Sorry. Sorry, Saul. Sure. Okay.

Simon Krause: John, we are running out of time. Maybe we can take this offline.

Speaker #4: John, we are running out of time, so maybe we can take this offline.

John Revill: Okay, will do. Okay.

Speaker #5: OK, we'll do. OK.

Simon Krause: Yeah, exactly. Thank you very much for your time today. We do not see any other further questions here, so we can close the conference call. We will take this offline, John. Thank you very much for your interest. Our conference call for the analysts with Roland and Veronica will begin shortly at 9:30 AM. The analyst call will be broadcast live at Siemens.com/analystcall. You'll hear from us again at the latest on 06 August 2026, when we will release our Q3 results. With that, thank you and goodbye. Ladies and gentlemen, this concludes our conference call. A recording will be posted at Siemens.com/conferencecall. We say thank you and auf Wiedersehen. Goodbye.

Simon Krause: Yeah, exactly. Thank you very much for your time today. We do not see any other further questions here, so we can close the conference call. We will take this offline, John. Thank you very much for your interest. Our conference call for the analysts with Roland and Veronica will begin shortly at 9:30 . The analyst call will be broadcast live at Siemens.com/analystcall. You'll hear from us again at the latest on 6 August 2026, when we will release our Q3 results. With that, thank you and goodbye.

Speaker #4: Yeah, exactly. So thank you very much for your time today. We do not see any further questions here, so we can close the conference call, and we will take this offline, John.

Speaker #4: Thank you very much for your interest. And our conference call for the analysts with Roland and Veronica will begin shortly at 9:30. The analyst call will be broadcast live at siemens.com/analystcall.

Speaker #4: And you'll hear from us again at the latest on August 6, 2026, when we will release our third quarter results. And with that, thank you and goodbye.

Operator: Ladies and gentlemen, this concludes our conference call. A recording will be posted at Siemens.com/conferencecall. We say thank you and auf Wiedersehen. Goodbye.

Speaker #1: Goodbye. Good morning, and a very warm welcome to today's conference call on Q2 of fiscal 2026. I would like to welcome you together with our CEO, Roland Busch, and our new CFO, Veronica Bienert.

Simon Krause: Good morning, a very warm welcome to today's conference call on Q2 of fiscal 2026. I would like to welcome you together with our CEO, Roland Busch, and our new CFO, Veronika Bienert. Veronika Bienert is today taking part in this quarterly call for the very first time in her new function. A very warm welcome to you, Veronika. A few remarks ahead of time. This morning, we published our Q2 results. The presentation, as well as the presentations of our board members, and any of the documentation, can be found at siemens.com/press. There, you will also be able to find this conference call's recording. Very quickly on the rundown. After the presentations, Roland Busch and Veronika Bienert will be available for your questions. The conference call will end sharp at 9:15AM at the latest.

Speaker #1: Veronica Bienert is today taking part in this quarterly call for the very first time in her new function, a very warm welcome to you, Veronica.

Speaker #1: A few remarks ahead of time. This morning, we published our Q2 results. The presentation as well as the presentations of our board members and any other documentation can be found at siemens.com/press.

Speaker #1: There, you will also be able to find this conference call's recording. Very quickly on the rundown: After the presentations, Roland Busch and Veronica Bienert will be available for your questions.

Simon Krause: I would like to also point out the safe harbor statement, which you will be able to find at the beginning of the presentation. With that, over to Roland Busch.

Speaker #1: With that, over to Roland Busch.

Roland Busch: Yeah, thank you, Simon, and good morning, everyone, and thank you for joining us to discuss our performance in Q2 2026. I'm very pleased that we're continuing our successful path to profitable growth despite the still very tense geopolitical environment. In the crisis-hit region of the Middle East, the security of our colleagues has been our top priority over the last few weeks. From business perspective, we expect our revenue share from this region to be limited in the current year to 3% to 4%. The region accounts for only 1% of our procurement volume. Nonetheless, we've taken appropriate measures to limit these risks. We're closely monitoring developments as well as the possible impact on inflation, global supply chains, and investment sentiment. However, we haven't yet observed any significant influence on customer buying behavior to date.

Speaker #2: Yeah, thank you.

Speaker #3: In the crisis-hit region of the Middle East, the security of our colleagues has been our top priority over the last few weeks. From a business perspective, we expect our revenue share from this region to be limited in the current year to 3% to 4%.

Roland Busch: Siemens is benefiting from its technological leadership and its strong position in key growth markets. Let me walk you through the highlights of Q2. The book-to-bill ratio reached a strong 1.22, lifting our order backlog to a record high of EUR 124 billion. As anticipated, nominal revenue growth was again materially impacted by the strong euro. Orders at the group level reached EUR 24.1 billion, an increase of 18% compared to Q2 of 2025, with double-digit growth at all three core businesses. Smart Infrastructure, SI for short, again delivered a quarterly order record. We're seeing strong demand across almost all markets. SI's data center vertical clearly stood out with unprecedented triple-digit percentage order growth, topping even the excellent Q1, which is absolutely exemplary.

Speaker #3: Let me walk you through the highlights of Q2. The book-to-bill ratio reached a strong 1.22, lifting our order backlog to a record high of €124 billion.

Speaker #3: As anticipated, nominal revenue growth was again materially impacted by the strong euro. Orders at the group level reached €24.1 billion, an increase of 18% compared to Q2 of 2025, with double-digit growth at all three core businesses. Smart Infrastructure, SI for short, again delivered a quarterly order record.

Speaker #3: We're seeing strong demand across almost all markets. SI's data center vertical clearly stood out with unprecedented triple-digit percentage order growth, topping even the excellent Q1, which is absolutely exemplary.

Roland Busch: Demand continues to be vibrant, driven by the build-out of cloud and AI infrastructure. At Digital Industries, growth continued. The market environment had previously shown some early signs of improvement, but these are now being challenged by renewed geopolitical volatility. The automation business was strong across all regions. Our software business seized several major opportunities across the entire portfolio and is successfully upselling within its customer base. Mobility won several significant large orders in Q2. Two weeks ago, we announced an important project which we're booking in Q3. We're delivering up to 200 double-deck trains based on our Desiro platform to Swiss Railways SBB for Switzerland's commuter rail network. The order value is around CHF 12 billion. Overall revenue growth totaled 6%, driven by Digital Industries and Smart Infrastructure. A very strong contribution came from SI's electrification business, which posted an 18% increase.

Speaker #3: Demand continues to be vibrant. Driven by the buildout of cloud and AI infrastructure, at digital industries, growth continued. The market environment had previously shown some early signs of improvement, but these are now being challenged by renewed geopolitical volatility.

Speaker #3: The automation business was strong across all regions. Our software business seized several major opportunities across the entire portfolio and is successfully upselling within its customer base.

Speaker #3: Mobility won several significant large orders in Q2. Two weeks ago, we announced an important project, which we're booking in Q3. We're delivering up to 200 double-deck trains based on our desirable platform to Swiss Railways SBB for Switzerland's commuter rail network.

Speaker #3: The order value is around 12 billion Swiss francs. Overall revenue growth totaled 6%, driven by Digital Industries and Smart Infrastructure. A very strong contribution came from SI's electrification business, which posted an 18% increase.

Roland Busch: Digital Industries software business delivered compelling growth of 14%. It's been very gratifying to see that revenue was up in all regions. The Americas led the way with an increase of 10%, fueled by strong momentum in the US. EMEA grew 2%, while Asia Pacific was up 8%, driven by India, which grew 21%. Profit in the industrial business reached EUR 3 billion, corresponding to a profit margin of 15.4%. We saw operational strength at Digital Industries and Smart Infrastructure, while Mobility was burdened by US tariffs. Currency headwinds reduced the profit margin by 80 basis points, but are expected to ease in the H2 of fiscal 2026.

Speaker #3: Digital Industries software business delivered compelling growth of 14%. It's been very gratifying to see that revenue was up in all regions: the Americas led the way with an increase of 10%, fueled by strong momentum in the U.S.

Speaker #3: EMEA grew 2%, while Asia, Australia was up 8%, driven by India, which grew 21%. Profit in the industrial business reached €3 billion, corresponding to a profit margin of 15.4%.

Speaker #3: We saw operational strength at digital industries and smart infrastructure while mobility was burdened by US tariffs. Currency headwinds reduced the profit margin by 80 basis points but are expected to ease in the second half of fiscal 2026.

Roland Busch: These results translated into basic earnings per share before purchase price allocation accounting, or EPS pre PPA for short, of EUR 2.81, which included, as previously reported, a gain from the divestment of our airport logistics business in the US. After a somewhat weaker Q1 of 2026, free cash flow increased to EUR 1.7 billion. We confirm our outlook for fiscal 2026 at the group level with some adjustments at individual businesses, however. Veronika will provide you with more details on this later on. Let's now take a look at the portfolio. As planned, we've concretized the timeline for the spin-off of Siemens Healthineers' shares. A shareholder decision is now planned for our next ordinary annual shareholders meeting in February of 2027. Let's take a look now at the four key levers that are driving our growth as ONE Tech Company.

Speaker #3: These results translated into basic earnings per share before purchase price allocation accounting, or EPS pre-PPA for short, of €2.81, which included, as previously reported, a gain from the divestment of our airport logistics business in the US after a somewhat weaker first quarter of 2026.

Speaker #3: Free cash flow increased to €1.7 billion. We confirm our outlook for fiscal 2026 at the group level. With some adjustments at individual businesses, however, Veronica will provide you with more details on this later on.

Speaker #3: Let's now take a look at the portfolio. As planned, we've concretized this timeline for the spin-off of Siemens Heffnir's shares. A shareholder decision is now planned for our next ordinary annual shareholders' meeting in February of 2027.

Speaker #3: Let's take a look now at the four key levers that are driving our growth as one tech company. First, grow digital. In the first half of fiscal 2026, we grew our digital business by 19%, well above the ambition level of 15%, which we announced last November.

Roland Busch: First, grow digital. In H1 of fiscal 2026, we grew our digital business by 19%, well above the ambition level of 15%, which we announced last November. What are the drivers? We're generating organic growth from our expanded Siemens Xcelerator software and digital services offerings, coupled with strong growth from our latest software acquisitions. Second, growth regions. The Lionheart Project is a prime example of Siemens' strength as ONE Tech Company. Europe's first integrated lithium project, Lionheart combines sustainability and critical raw materials. The Australian company, Vulcan Energy, is building a geothermal plant in Germany's Upper Rhine Valley to extract lithium, a key component of batteries for electric vehicles. The project will strengthen Germany's competitiveness and in turn, its growth. Our technologies, automation and digitalization systems, and smart building solutions are the backbone of the project.

Speaker #3: What are the drivers? We're generating organic growth from our expanded Siemens Xcelerator software and digital services offerings, coupled with strong growth from our latest software acquisitions.

Speaker #3: Second, growth regions. The lionheart project is a prime example of Siemens' strength as one tech company. Europe's first integrated lithium project lionheart combines sustainability and critical raw materials.

Speaker #3: The Australian company Vulcan Energy is building a geothermal plant in Germany's Upper Rhine Valley to extract lithium, a key component of batteries for electric vehicles.

Speaker #3: The project will strengthen Germany's competitiveness and, in turn, its growth. Our technologies, automation and digitalization systems, and smart building solutions are the backbone of the project.

Roland Busch: We're combining these technologies and helping ramp up production faster. ONE Tech Company also includes Siemens Financial Services, which will be a minority investor in the project and has supported the structuring and arrangement of its debt financing. Third, growth verticals. Data center demand has been soaring. Our team grew revenue in H1 of fiscal 2026 by more than 45% to EUR 1.8 billion. We're confident that we'll be able to keep up this stunning pace throughout fiscal 2026. To meet accelerating demand, we're further expanding low and medium voltage production capacities in the US at several locations in North and South Carolina. We're further expanding our data center partner ecosystem to scale next-generation AI infrastructure. The goal is to create more flexibility across computing, energy, and the necessary infrastructure systems.

Speaker #3: We're combining these technologies and helping ramp up production faster. One tech company also includes Siemens Financial Services, which will be a minority investor in the project and has supported the structuring and arrangement of its debt financing.

Speaker #3: Third, growth verticals. Data center demand has been soaring. Our team grew revenue in the first half of fiscal 2026 by more than 45% to 1.8 billion euros.

Speaker #3: We're confident that we'll be able to keep up this stunning pace throughout fiscal 2026. To meet accelerating demand, we're further expanding low- and medium-voltage production capacities in the U.S. at several locations in North and South Carolina.

Speaker #3: And we're further expanding our data center partner ecosystem to scale next-generation AI infrastructure. The goal is to create more flexibility across computing, energy, and the necessary infrastructure systems.

Roland Busch: Our customers will be able to connect their data centers to the grid faster, scale more efficiently, and operate more reliably, even in a power-constrained world. Fourth, growing with AI. Bringing Industrial AI to the real world was the focus of our first Real Meets Digital, or RXD for short, summit in Beijing, an event attended by more than 2,700 customers, and partners. While there, I spoke with Joe Tsai, the CEO of Alibaba. We expanded our partnership to bring our industrial software together with Alibaba's cloud and AI capabilities. Now, experts at our customers in China can run complex simulations more flexibly and more efficiently. At the event, we also introduced 26 new products for edge, automation, and control to support Industrial AI in industry and in infrastructure.

Speaker #3: Our customers will be able to connect their data centers to the grid faster, scale more efficiently, and operate more reliably—even in a power-constrained world.

Speaker #3: Fourth, growing with AI. Bringing industrial AI to the real world was the focus of our first Real meets Digital, or RXD for short, summit in Beijing—an event attended by more than 2,700 customers and partners.

Speaker #3: While there, I spoke with Joe Tsai, the CEO of Alibaba. We expanded our partnership to bring our industrial software together with Alibaba's cloud and AI capabilities.

Speaker #3: Now, experts at our customers in China can run complex simulations more flexibly and more efficiently. At the event, we also introduced 26 new products for edge automation and control to support industrial AI in industry and in infrastructure.

Roland Busch: We developed these products locally and, as we always say, at China speed for the Chinese market and beyond. Those of you who visited our booth at the Hanover Messe trade show could see firsthand how, together with our partners, we're scaling Industrial AI in production facilities. Let me highlight just a few examples. First, we launched our Eigen Engineering Agent, a milestone that's enabling us to move from an AI that only provides assistance to Industrial AI, which plans and executes engineering tasks end-to-end in even complex projects. The impact is impressive, with up to 50% greater efficiency and up to 80% higher solution quality proven in more than 100 global pilot deployments. Since market launch, customer interest has been high. Second, we're applying physical AI in our own factories. We're automating complex and unpredictable logistics tasks with AI-powered robots.

Speaker #3: We developed these products locally and, as we always say, at China speed for the Chinese market and beyond. Those of you who visited our booth at the Hannover Messe trade show could see firsthand how, together with our partners, we're scaling industrial AI in production facilities.

Speaker #3: Let me highlight just a few examples. First, we launched our Eigen engineering agent, a milestone that's enabling us to move from an AI that only provides assistance to industrial AI, which plans and executes engineering tasks end-to-end in even complex projects.

Speaker #3: The impact is impressive with up to 50% greater efficiency and up to 80% higher solution quality proven in more than 100 global pilot deployments.

Speaker #3: Since market launch, customer interest has been high. Second, we're applying physical AI in our own factories. We're automating complex and unpredictable logistics tasks with AI-powered robots.

Roland Busch: After receiving a task, these robots figure out by themselves how to solve challenges and optimize the required actions. A huge opportunity to address the scarcity of skilled labor. We've entered a strategic partnership with Kion to jointly shape the supply chains of the future. Using digital twins and our Digital Twin Composer, we turn warehouses from a physical hub into the digital nerve center for the supply chain. A key point in our collaboration is that we're exchanging selected areas of industrial data and domain know-how to better scale Industrial AI. As we all know, AI factories will increase the demand for electricity. We already have a solution to help meet this demand. A new comprehensive direct current or DC protection and switching portfolio, the basis for the more efficient and sustainable operation of AI factories with DC solutions.

Speaker #3: After receiving a task, these robots figure out by themselves how to solve challenges and optimize the required actions, a huge opportunity to address the scarcity of skilled labor.

Speaker #3: We've entered a strategic partnership with Kion, to jointly shape the supply chains of the future using digital twins and our digital twin composer, we turn warehouses from a physical hub into the digital nerve center for the supply chain.

Speaker #3: A key point in our collaboration is that we're exchanging selected areas of industrial data and domain know-how to better scale industrial AI. As we all know, AI factories will increase the demand for electricity.

Speaker #3: We already have a solution to help meet this demand: a new, comprehensive direct current—or DC—protection and switching portfolio. This forms the basis for the more efficient and sustainable operation of AI factories with DC solutions.

Roland Busch: I'm very pleased with the momentum and performance of our DI software business. Organic annual recurring revenue, ARR, grew a very healthy 11% compared to Q2 2025. The integration of our Altair and Dotmatics acquisitions is progressing very well. We've taken a key step by implementing targeted cost synergy measures of $150 million following the Altair integration. The bottom line impact will now follow. As AI capabilities continue their rapid evolution, we're far ahead. We're using AI in our own operations massively, I must add, to enhance productivity by leveraging, for example, the full potential of AI-powered coding for our software engineers. We at Siemens are uniquely positioned to support our customers with precisely targeted AI-powered industrial software. Let me explain what I mean in more detail. There are four key focus areas. First, deterministic.

Speaker #3: I'm very pleased with the momentum and performance of our DI software business. Organic annual recurring revenue AIR grew a very healthy 11% compared to the second quarter of 2025.

Speaker #3: The integration of our Altair and Dotmatics acquisitions is progressing very well. We've taken a key step by implementing targeted cost synergy measures of 150 US 150 million US following the Altair integration.

Speaker #3: The bottom line impact will now follow. As AI capabilities continue their rapid evolution, we're far ahead. We're using AI in our own operations massively, I must add, to enhance productivity by leveraging, for example, the full potential of AI-powered coding for our software engineers.

Speaker #3: We at Siemens are uniquely positioned to support our customers with precisely targeted AI-powered industrial software. Let me explain what I mean in more detail.

Speaker #3: There are four key focus areas. First, deterministic. Our customers' plans and systems follow physical laws. Predictable deterministic. Unlike AI that's based on probabilities, our industrial AI provides physics-based solutions that deliver fast, high-quality deterministic intelligence that can both be trusted and verified.

Roland Busch: Our customers' plans and systems follow physical laws, predictable, deterministic. Unlike AI that's based on probabilities, our Industrial AI provides physics-based solutions that deliver fast, high-quality, deterministic intelligence that can both be trusted and verified. This intelligence isn't a given in the AI world, but for our customers, it's indispensable. Second, contextualized. Industrial-grade AI requires precise data contextualization. Our industrial software understands design intent and all of the product's possible configurations, it takes into account all the rules and all the relationships relevant for a product. Third, multi-domain. The complexity of innovation is rapidly increasing in a world of more personalized and increasingly software-defined products. Our customers require fully integrated AI that understands a design across all the domains in their enterprises. Siemens is the only company that can deliver this technology.

Speaker #3: This intelligence isn't a given in the AI world, but for our customers, it's indispensable. Second, contextualized. Industrial-grade AI requires precise data contextualization. Our industrial software understands design intent and all of the product's possible configurations, and it takes into account all the rules and all the relationships relevant for a product.

Speaker #3: Third, multi-domain. The complexity of innovation is rapidly increasing in a world of more personalized and increasingly software-defined products. Our customers require fully integrated AI that understands a design across all the domains in their enterprises.

Speaker #3: Siemens is the only company that can deliver this technology. Everything from product life cycle management to electronic design automation to simulation and shop floor execution, from a single source.

Roland Busch: Everything from product life cycle management to electronic design automation to simulation and shop floor execution from a single source. Fourth, live intelligence. Real-time intelligence that will drive action requires a digital twin that's infused with real-world physical data, a live digital twin. Siemens is the industry leader in combining the real and digital worlds to drive better, faster, real-time intelligence and governed action. We're implementing this objective in three concrete ways. First, faster engines. Our physics AI solution doesn't replace deterministic computer-aided engineering solutions for simulation, but it makes them more efficient, much more efficient. With full AI support, an engineer can very rapidly screen thousands of design options and make deterministic calculations with only the top candidates. The result, dramatically faster iterations for the optimal design and dramatically faster validation to get the customer to the market faster. Second, faster engineering.

Speaker #3: And fourth, live intelligence. Real-time intelligence that will drive action requires a digital twin that's infused with real-world physical data live digital twin. Siemens is the industry leader in combining the real and digital worlds to drive better faster real-time intelligence and governed action.

Speaker #3: We're implementing this objective in three concrete ways. First, faster engines. Our physics AI solution doesn't replace deterministic computer-aided engineering. Solutions for simulation, but it makes them more efficient, much more efficient.

Speaker #3: With full AI support and engineer can very rapidly screen thousands of design options and make deterministic calculations with only the top candidates. The result?

Speaker #3: Dramatically faster iterations for the optimal design and dramatically faster validation to get the customer to the market faster. Second, faster engineering. Another key innovation is our new agentic industrial-grade AI platform, which autonomously plans executes and validates.

Roland Busch: Another key innovation is our new agentic industrial-grade AI platform, which autonomously plans, executes, and validates. Where we tested it? Well, we stress-tested this platform where the stakes are at their absolute highest in semiconductor design. Our Fuse EDA AI system orchestrates highly complex workflows across very specialized tools securely and reliably. In addition, it delivers real productivity for engineering. The companies TSMC and NVIDIA already use it. The system is not a single tool. It's a platform approach. We'll extend this agentic intelligence to more than 20 agents across our entire software portfolio. Third, increased design intelligence. One of the key challenges in building and implementing comprehensive digital twins for factories is complexity, because data is fragmented everywhere in different systems, in different formats.

Speaker #3: Where did we test it? Well, we stress tested this platform where it takes our—at their absolute highest in semiconductor design—our Fuse EDA AI system orchestrates highly complex workflows across very specialized tools, securely and reliably.

Speaker #3: In addition, it delivers real productivity for engineering. The company's TSMC and NVIDIA already use it. The system is not a single tool. It's a agentic intelligence to more than 20 agents across our entire software portfolio.

Speaker #3: Third, increased design intelligence. One of the key challenges in building and implementing comprehensive digital twins for factories is complexity because data is fragmented everywhere, in different systems, in different formats.