Standby. We are about to begin. Good morning, ladies and gentlemen, and welcome to Siemens Energy's 2021 second quarter conference call. As a reminder, this call is being recorded. Before we begin, I would like to draw your attention to the safe harbor statement on page two of the Siemens Energy presentation. This conference call may include forward-looking statements. These statements are based on the company's current expectations and certain assumptions, and are therefore subject to certain risks and uncertainties. At this time, I would like to turn the call over to your host today, Mr. Michael Hagmann, Head of Investor Relations. Please go ahead, sir.
Thank you, Nadia. A warm welcome to everyone to the Siemens Energy call today. All documents, as you know, were released at 7:00 on our website. Hopefully, you will have had some time to look through them. With me here are Christian Bruch, our President and CEO, and Maria Ferraro, our Chief Financial Officer. They will review the Q2 results and take you through the key messages. The call will take approximately 60 minutes. There will be time after Christian and Maria speak for Q&A. With that, I hand over to Christian.
Thank you very much, Michael. Also good morning, everybody, from my side. I hope you and your families are safe and healthy. We're more than one year now in COVID crisis. I really, really look forward to see all of you at one point in time in person. Thank you very much for joining Maria and myself on our today's quarter two 2021 call. We completed another quarter where the team at Siemens Energy did an outstanding job to deliver a solid operational performance in a still challenging market environment. After being now one year with the company, I'm very proud really what our people deliver day after day and how they continue to develop the company and keeping the balance between improving the profitability on the one hand, but also driving the energy transformation and developing new solutions with our customers together.
I really would like to thank everybody from our employees for their contribution and commitment. Let me get to some key numbers of quarter two to underline the solid operational performance. The orders rose for Siemens Energy substantially by 39% year-on-year to EUR 10.5 billion, driven by Siemens Gamesa Renewable Energy. Revenue moderately decreased by 4.4% to EUR 6.5 billion. On a comparable basis, revenue was on prior year's level. Adjusted EBITDA before special items sharply increased to EUR 288 million. The free cash flow pre-tax well back in a positive range of EUR 433 million as both segments, Siemens Gamesa Renewable Energy and GP, showed sharp improvements year-on-year. Let me also address a couple of highlights and milestones from the last quarter.
We had our first Siemens Energy Annual General Meeting on February 10th, which also has proven a great support of our shareholders on all AGM agenda items. I believe it was a good first experience, even so held completely virtually, but we were very pleased by the support also we received there. We also had, and I hope that a lot of you participated in the Siemens Energy Hydrogen Day on March 19th. We had over 500 webcast participants following our overview on our hydrogen business, not only obviously on green hydrogen, but also on all the other areas where we tackle hydrogen. We are very proud that by March 22nd, we were included in the DAX and the DAX 30, the last issuer to be included in the DAX 30.
It's a great success for all of us three months after the inclusion in the MDAX and six months after our listing. It's a great motivation really for the team to continue on the further increase of the value of our company. We got an excellent ratings with Sustainalytics. I will separately talk about ESG and our ESG activities. As I said always in the last call, it's for us every quarter, one step after the other. I was pleased to see that we came out number seven out of 177 companies, with Sustainalytics. We are in a market environment, which is obviously, as I said, still demanding. We expect, on the one hand, large scale investments triggered by all the global stimulus programs we see.
As you have seen also by all the communications, the core of many programs is really decarbonization, climate neutrality, how can we build up the infrastructure, then grids? How can we include more renewables into this? Also really on how do we cope with the increasing demand on electricity. This is really something which we want to bank on. U.S. is back on stage in the fight against climate change. I really welcome this, I have to say, and also the 2030 targets of the Biden administration. China has the 2030 targets out, so the 2030 carbon peak at latest and the 2060 climate neutrality, including now the 14th Five-Year Plan. Obviously, we have the European Green Deal, with a tightening of the climate target by 55% by 2030. This is something which now obviously has to come into reality and projects and orders.
This is not yet reflected in our numbers, but this is really forward-looking, where these stimulus programs have to convert really to order intake. We have seen generally negative currency effects, and we see also still continuing COVID-19 impacts on the business activities. We will talk about this, I think, more in the course of the numbers also, and hopefully also with the Q&A. We have reviewed our guidance and the nominal revenue growth rates expectation for fiscal year 2021 is now in a range of 3%-8% for Siemens Energy, previously 2%-12% for Siemens Energy. You may have heard the Siemens Gamesa Renewable Energy guidance amendments on Friday. Two comments to this.
It's reflecting that we are further down the year, that there was when we gave out the first guidance, it was not clear when some big deal is going to materialize or if so at all. We have a better visibility on this now, but at the same time, it's still a relatively wide guidance because we obviously always have to remind it's nominal. We have seen currency effects in the first half year, and obviously we all have to consider that COVID is a little bit an uncertainty in the market. Obviously this is, I would say, conservative guidance on how I look on it. The profitability outlook of 3%-5% is confirmed for the fiscal year 2021 for Siemens Energy. With this, I would like to move to the current situation on COVID and obviously more than one year in COVID now.
It is something where we have got used to work in a certain way. Obviously we are all looking forward for coming out of the COVID-19 crisis. The employee health and safety is our priority number one. We obviously do a lot really to make sure that we can continue to work. We do a lot of testing. We have a lot of office staff still working from home wherever possible. We are rolling out, at the moment, new work concepts, what we call Better Together, where we have obviously more flexibility between home office and office space, which is managed more flexible. In the long term, I expect this also having an effect on our office space, this is really now in the making and step after step on how to move through the next month and years.
All Siemens Energy plants are currently operating, some at slightly reduced capacity. Obviously, we see with concern the development in India. The factory there dropped down below 50% simply of the current situation. Most of it is really globally in a relatively normal operation, and I think we learned how to handle the crisis there. Most projects and service sites are also fully operational following the COVID-19 rules. It always depends a little bit on the country and the project itself. We, from time to time, do have temporary closures of project sites in some cases and then an opening up. This is something where the organization does an outstanding job really to keep the projects running despite that. We have no major supply chain disruptions. Obviously we still see lower discretionary costs due to restricted traveling and entertainment opportunities in the current situation.
Let me move to our strategy execution. This is something what you have seen over the last quarters and obviously where we work through the package what we have given ourselves in terms of improving the profitability and obviously at the same time building the ecosystem and the innovations to really lead the energy transformation. We are really well on track. As I said, I'm very proud on how the organization manages these two, let's say, different elements. Obviously, I'm very confident that we deliver what we promise. One thing obviously is a focus on improving the business base. We communicated in February our restructuring program and reduction of around 7,800 jobs worldwide by 2025. This is, let's say, advancing as planned, all in line. Obviously, in some areas of the world, we can execute it.
In some areas like Germany, we are still in negotiation with the works representatives. This works in a constructive environment. It's a difficult discussion, obviously. We are very confident also that we get to a joint agreement as we plan this. It's obviously a transformation for the company. We have started for Germany, in alignment with the works representative, a voluntary leaver program, which was offered mid of April to German employees. This is obviously a first phase. We're working through this. At the same time, it's important for us always that we continue to develop also really innovations. I communicated before that we are spending roughly EUR 1 billion a year in research and development and want to continue to do so. At the same time, the co-creation with partners and customers is for us really, really important.
I would like to give two examples here. The one example is with Vattenfall in Berlin. A large scale heat pump at the Potsdamer Platz, where today there is Berlin's largest air conditioning system installed and supplying around 12,000 offices and 1,000 apartments. Today, the waste heat was not used really, and we are integrating a new high temperature heat pump during the operation to optimize really heating, cooling, electricity in a more resource-efficient way. These are exactly the solutions, if you talk about decarbonizing the applications, what we also look forward to in the more, let's say, in the industry environment, where we really make sure that we balance heat and power, and with this, obviously can save CO2 in our solutions. We also have launched an innovation center in Shenzhen in China with a focus on smart energy systems, advanced gas turbines, and green hydrogen.
The innovation center supports the Greater Bay Area in China. This is obviously what is Guangdong, Hong Kong, Macau, Shenzhen. It's around 80 million people population, and it's integrated there in a close collaboration with local Chinese customers, to really also in this area, push for new innovative energy solutions following also the 14th Five-Year Plan, which obviously very much also looks on getting CO2 down, and this is obviously one of the elements we are driving. I would like to give two examples on the energy transformation portfolio. We did it always in the last calls, and I would like to give today two examples out of the transmission area, out of the infrastructure side and the grids. The one is around reactive power compensation. How do you stabilize a grid once you have more feed-in from renewable and more volatile power sources?
We have a joint project with the Los Angeles Department of Water and Power, where obviously, we are stabilizing the grid through this reactive power compensation. We see the grid and the transmission products and also the solutions we develop as one key element for the success of energy transition worldwide. We see ourselves really pioneering these solutions. In this regard, I think this is a super example on how to bring together the different parts of producing energy and distributing energy. Similar to the second example, which we launched on the Hannover Fair this year, the industry fair, where we presented new digital power transmission technologies based on edge technology, which means computing directly at the component itself, so at the transformer. Which obviously for grid components is relevant because particular of cybersecurity, which is then more efficient than sometimes cloud-based solutions.
We launched really a new complete suite of products there and will push also for the digitalization solutions in this area. Let me give you a couple of examples for awards and milestones in the quarter two of fiscal year 2021. Also demonstrating the energy transition towards decarbonization or CO2 reduction. Let me start on the upper left side with a project in Cyprus, where we are converting power production from heavy oil towards natural gas. The space for wind and solar is limited on the island, in this case, it's a good example where this transitional solution of natural gas is really critical and still to improve CO2. We provide the technology, the equipment, and the long-term service for the first private gas and steam power plants on Cyprus with 260 MW.
It's a combination of our very successful SGT-800 turbines and, obviously the steam turbines and the generators. The CO2 emissions going to be down 50% compared to before, and power cost going to be reduced. I think this is exactly these type of solutions which we would want to push. If I move to the right-hand side, on the upper side, there's an example for a transmission solution in China connecting an offshore wind park, which is the first really commercially operated offshore wind farm in China. This is in the Pearl Delta there, or close to the Pearl Delta. Storage capacity of around 300 MW, and also they're supplying around 240,000 households in China. If I move to the lower left side, Saudi Arabia, this combination of the Generation and Industrial Applications Division. This is something what we try to push more really, this cross-divisional collaboration.
Orders from the largest oil company, Saudi Aramco. Very pleased that we got awarded 21 locally assembled compressor units for a natural gas storage project in the country. A combined equipment and service contract really there. This is obviously also helping to provide energy-efficient solutions. You may have heard already on Friday the success also in Siemens Gamesa Renewable Energy had, particular on the offshore side, the order for the 100 wind turbines of the 14 MW class, including a service and maintenance contract for the world's largest offshore wind farm, Sofia, off the coast of the U.K. Big success, I think, for the new product also, we are pleased also to see a record order intake in the quarter two at Siemens Gamesa Renewable Energy. Let me come to ESG.
As I said the last time, it's one element which we want to talk about really in every quarterly call. It is integrated really in our strategy. It is a journey for us because obviously we're turning around the company. I'm very pleased that also Science Based Targets initiative confirms the Siemens Energy CO2 saving targets in line with the Paris Agreement. That is something which really underlines our ambition and the hard work our people are doing. We communicated before that we convert our own electricity consumption to 100% green electricity by 2030, and want to have a carbon neutral own operation by 2030. At the same time, we are now addressing obviously what is called the Scope 3 emissions and working through this and managing also the CO2 emissions over the lifetime of our products.
I'm also pleased that we got the top rating by Sustainalytics, and we will continue really to work on it. You've seen maybe the inclusion in the S&P Global Clean Energy Index, and this is something what really motivates us every day to continue on our journey. With this, I will hand over to Maria to talk more about the financial numbers of quarter two. Please, Maria.
Thank you, Christian. Good morning. A warm welcome also from my side. I'm very pleased to share with you our quarter two results. Please, on slide 10, let me start where I finished at our Capital Market Day back in September. At the CMD, I talked about three things. One is our strong business foundation, which is built on our large order backlog and our resiliency in our service business, our path to margin improvement, talking about with respect to our ongoing cost programs, et cetera, and of course, asset excellence and the rigorous working capital management within Siemens Energy. I will always address these three areas and hopefully do so consistently to show you the progress we make in each quarter. Going to slide 11, we start with Siemens Energy Group at a glance.
On the left-hand side, orders at the Siemens Energy Group level were substantially up at EUR 10.5 billion or 39%, with the highest-ever quarterly order intake at SGRE at EUR 5.5 billion. We finished the quarter with a very strong order backlog of EUR 84 billion, which marked a new record high. Revenue for Siemens Energy was moderately down 4.4% on a reported basis. Excluding currency translation and portfolio effects, total revenue was in line with the prior quarter at -0.1%. SGRE achieved a clear increase of 6%, while GP posted a decline of 9.7%.
Book-to-bill for Siemens Energy was especially strong at 1.62. Adjusted EBITDA before special items increased sharply and reached EUR 288 million, with the prior quarter being at EUR 200 million. With a margin of 4.4%, this reflects a rise of 150 basis points. This improvement was primarily driven by SGRE, which came from 1% to 4.8%.
GP's margin was 20 basis points higher than in the prior quarter. Adjusted EBITDA before special items was EUR 12 million lower year-over-year. After an exceptionally strong Q1 in terms of profitability with many one-time effects, Q2 is also very solid and in line with our expectations. Free cash flow pre-tax came in at EUR 433 million, with both segments showing sharp improvements year-over-year, with a higher contribution coming from Gas and Power . Please, on the next page, we're looking now at the quarterly development. Orders again rose 43% on a comparable basis, driven by a sharp increase at SGRE. Orders at GP decreased slightly year-on-year on a comparable base, just shy of 2%, but continued to show a healthy and solid run rate at just over EUR 5 billion. Orders at SGRE rose by 150% versus prior quarter as a result of large order intake.
This increase was predominantly driven by EMEA, Europe, Middle East, and Africa region, where orders nearly quadrupled year-over-year, including three large orders worth approximately EUR 2.8 billion for offshore wind farms, including associated service in the U.K., the Netherlands, and France. Order intake in the recent quarter and the trend year-over-year does reflect the volatility, as you can see here in the quarterly results of the offshore market. We are very happy with the order intake at SGRE. Looking at revenue was flat year-over-year in the quarter on a comparable basis. At GP, we were down 9.7% nominally and 5.6% comparable against a very strong prior year quarter. In SGRE, revenue increased by 10.5% on a comparable base. This revenue increase was across the board, with the service business also contributing the highest in percentage growth.
EBITDA, before special items, was in line with our expectations. In GP, we benefited from operational improvements and savings from restructuring measures, but we also had net positive one-time effects, for example, from projects and other items. Such effects are partly COVID-driven, for example, lower discretionary spending, but also in the very nature of our project business. For example, customer settlements, project terminations, hedgings, et cetera. The profitability in SGRE was supported by a solid operational performance in the wind turbine generator business and the service businesses, and including reassessment of the marketability of inventories. The prior quarter, if you recall, was impacted by negative effects related to the COVID-19 pandemic. We previously said that Q1 was exceptional and that Q2 would be lower, and that given the nature of our business, it was more relevant to measure progress on the half-year as a whole.
During the half-year, EBITDA, before special items, rose from EUR 126 million to EUR 654 million. This reflects a rise in the margin from 1% to 5%, driven by improvements at both GP and SGRE. Please go into the next slide 13, looking at special items now. For Siemens Energy in total, we ended up at EUR 91 million in special items for Q2. The EUR 47 million restructuring you see here in integration costs at GP takes into account the further progress we made on our restructuring measures. This is anticipated to increase in the second half, as expected, and as we roll out the Accelerate Impact program. Stand-alone costs, expenses that are associated with the setup of the stand-alone company, stood at EUR 17 million in the quarter versus EUR 53 million in Q1.
Q1, if you recall, was burdened by non-recurring costs for the spin-off incentive, and we indicated that this number will come down in the following quarters accordingly. In strategic portfolio decisions line, we show a positive special item in the amount of EUR 47 million. In the course of the silent wind-down of the AGT business, which we announced last year, inventory positions which held valuation allowances could be sold above carrying value. In summary, in Q2 fiscal year 2021, Siemens Energy was able to win a customer project for the delivery of 7 new unit turbines for A45, which led to an inventory write-off reversal. The net impact, as you can see here in special items, was EUR 47 million in the quarter for this matter. We continue to drive and execute our competitiveness program in relation to our transformation.
This is expected to have impacts on adjusted EBITDA in the second half, and this will be predominantly reported within special items, for example, personnel restructuring cost. Now, going next please, to the net income transition on slide 14. As you know, we don't stop at EBITDA. It goes to net income. Let me take you through. Looking at the major items here, PPA is slightly lower, driven by the impairments associated with the strategic portfolio decisions we made in the prior year in our Gas and Power segment. The financial result from operations, for example, interest income related to receivables from customers, from cash allocated to the segments, and interest expense on payables to suppliers, is mainly driven by FX effects and is part of our adjusted EBITDA. The financial result in Q2 came in at EUR 32 million, slightly lower than in the prior year quarter.
The financial result is impacted by interest expenses, slightly lower than prior year, and currency effects. We had an effective tax rate of 36% in the first half-year, which is slightly higher than the expected medium-term rate of 25%-30%. At SGRE, for example, the effective tax rate is burdened by a negative EBT that does not allow for capitalization of deferred tax assets, for example. Lastly, looking at our net income, this rose to EUR 31 million in Q2, driven by GP. Next, going on to the cash flow statement, please. CapEx rose by EUR 17 million in the current quarter. For GP, CapEx was down, and the increase here is driven by SGRE. Free cash flow pre-tax for Siemens Energy showed sharp improvements year-over-year, from EUR -254 million in Q2 to EUR +433 million in the current quarter. This is almost a EUR 700 million change.
The sharp year-over-year increase in GP was due to higher project-related cash inflow, improvements in payables, and contract asset, contract liabilities. The improvement in SGRE was mainly supported by stringent asset management. As a result, for the first half, we broke even as a group on cash flow, which is an improvement over the half of last year when we had cash outflow of EUR 159 million. In particular, in GP, we had a very healthy cash flow performance in the first half, reaching EUR 582 million versus EUR 106 million during the first half the year before. Also to note, we've finalized our share buyback program in the second quarter. This effect is shown here in the cash flow from financing activities, purchase of treasury shares. In total, 16.9 million shares were bought back at an average share price of EUR 23.21.
In the first six months ended March 31st, 2021, around 4.9 million treasury shares were transferred to employees accordingly. Going to our next slide, please. Talking about net cash. As you can see on the left-hand side of the slide, we have EUR 4.57 billion in cash and cash equivalents and EUR 79 million receivables from the Siemens Group for a total liquidity of EUR 4.65 billion. This is EUR 110 million higher than at the end of the first quarter. We also have EUR 2.9 billion of financial debt, and of that, EUR 2 billion is long-term in nature. This is just over EUR 550 million higher than at year-end. This reflects a rise of EUR 617 million to EUR 2.3 billion at SGRE. We have a liability to Siemens of approximately EUR 136 million for a net cash position of EUR 1.6 billion.
Lastly, during the quarter, Siemens Energy provision for pension and similar obligations decreased from EUR 1,026 million as of December 30 to EUR 906 million as of March 31. This is mainly due to a lower defined benefit obligation as a result of applying a higher discount rate. This all results to our net cash after pensions of EUR 670 million. Now, please, going to the next slide 17. Let's take a look at Gas and Power. In our Gas and Power segment, we showed a solid development in orders, we're moderately down comparable versus a very strong prior year. We see and we do confirm that the run rate is solid. Revenue was down 9.7% nominally year-over-year and 5.6% comparable. Service revenue was down 8.3%. On a comparable basis, this is approximately 4%, while new units revenue was down 10.2%.
Nominally showing that service revenue, as I've indicated, is more resilient than new units, certainly in this quarter. The decline in services is mainly driven by deferred outages due to COVID, and in particular, with respect to transactional services in our IA business. In Q2, we saw some minor project delays into next quarters. Some are attributable to COVID-19, but some are simply the nature of our project business, where projects are moved back and forth. Orders exceeded revenue, resulting in a positive book-to-bill of 1.2 and leading to an order backlog of EUR 51 billion, which is well above our prior quarter end. Adjusted EBITDA before special items was nearly on prior year's quarters level, which, given the lower revenue, reflected a rise in the margin from 4.3% to 4.5%. As indicated earlier, the free cash flow pre-tax of EUR 481 million for GP came in very strong.
Looking at it from a quarterly perspective, please. We see a solid order intake of EUR 5 billion in orders, moderately down comparable versus the strong prior year quarter. The decline was due to lower volume of large orders in the EMEA region. We also have FX headwinds in our orders of over 4.6 percentage points. We do have or did have growing orders in the transmission business, but this could not offset the decline in generation in our Industrial Applications business. Looking at our rotating equipment new unit business, we were in Q2 at a low level for our large gas turbines. Those greater than 100 MW with three booked units. For our industrial-sized gas turbine business, we were able to confirm again our strong competitiveness with 19 gas turbines sold in the range between 8 MW and 100 MW.
Looking at revenue, this was down to EUR 4.2 billion compared to a very strong prior year quarter. Last quarter was a prior-year pre-COVID quarter with strong revenue across all businesses. Negative currency translation effects impacted our top line with 4.1 percentage points. This is mainly due to our long position in USD. If you exclude negative currency translation effects, GP was down by 5.6%. Adjusted EBITDA before special items came in at EUR 187 million. Here we see operational improvements and savings from restructuring measures, as well as net positive one-time effects from projects and other items. Again, partly COVID-related, and partly project-driven. The net impact from one-time effects from projects and other items in Q2 is smaller than what we have seen in our Q1. If you recall, that was a high double-digit amount.
When you compare Q2 this year with Q2 of prior year, the net impact from one-time impacts is about the same. On the negative side, lower volume has an impact, of course, on the profitability. In any case, GP adjusted EBITDA before special items rose in the half year from EUR 267 million to EUR 454 million. This reflects a rise in the margin from 3% to 5.4%. This has been helped, as indicated, by some positive one-time effects, but here the strong message is that EBITDA rose despite the underlying decline in revenue. Our cost out measures are working. This is also in line with the EUR 200 million commitment we made for savings in fiscal year 2021. We are on track and can again say this in our most recent quarter.
Overall, I once again would like to point out that this was a second solid quarter. This is another signal that we deliver on what we promise, even with the backdrop of a market environment that continues to remain challenging. With that concludes my part of the presentation. I hand it back to you, Christian. Thank you.
Thank you very much, Maria. I would like to conclude with the key messages for the quarter. As mentioned before, we adjusted our revenue growth rates, nominal revenue growth rate expectation for 2021 in the range of 3%-8%, previously 2%-12%. GP nominal revenue growth rates expectation now 2%-6%, previously 2%-11%. I mentioned before the view, obviously that keep in mind, this is nominal, so with currency out, Maria had commented on the impact. Obviously also, we expect also COVID still raising some uncertainty. Even so, we're confident that it, in some areas, also brings us now back in the second half with regard to the orders. Profitability outlook remains unchanged for Siemens Energy, 3%-5% adjusted EBITA margin before special items. In GP, 3.5%-5.5% adjusted EBITA margin before special items.
We will obviously, going forward, continue to execute our Accelerate Impact program. We are on good track there. We continue to manage the COVID-19 crisis. At the moment, we assume that we are on the way out of this now, but obviously we all don't know what's coming, and we are committed to keep the lights on. With this, I would conclude the session and look forward to your questions.
Thank you, Christian. Thank you, Maria. We've now got about 20 minutes for Q&A, so to be fair to everyone, please limit yourself to one question and maybe a short second question. If you want to add yourself to the queue, as you know, you need to hit star one. If you want to remove yourself, you have to hit the hash or pound button. With that, I would hand over to Ben Uglow at Morgan Stanley for the first question. Go ahead, Ben.
Morning, everyone. I hope that everybody is well. Thank you for a fairly detailed opening presentation. A couple of questions. Christian, can you just give us a feeling for the tendering environment, particularly in the, let's call it larger gas turbine area, 100 MW and up. When we think about bigger prospects, say EUR 200 million-EUR 500 million for the sake of argument, or even some of these white elephants, how is that tender pipeline stacking up? Obviously, as COVID goes down, is the funnel looking any better? That's my first question. The second question was kind of related to that. Can you just give us an update on pricing conditions, particularly in the larger thermal unit area? How does it compare with, say, 18, 24 months ago, please?
Good morning, Ben. Good to hear you. First of all, with regards to the tendering environment, obviously the bigger projects you mentioned above 100 MW, it's stabilizing or it's solidifying, let me call it this way. The visibility gets better. There is some bigger prospects in the market in Americas and EMEA. I'm always careful because we celebrate them once we have them, not before. There is some. The white elephants is not so much in the market at the moment, it's really some bigger projects out there which could materialize still in 2021. I see it, as I would say, solidifying pipeline now. I also clearly have to say, looking back on the first half of 2021, I'm really satisfied on what our generation team did. You have seen, the last quarter was a generally low quarter in the large gas turbine.
We have secured three out of 11 in the market. We're confident that gradually we also get our market share back up again. I said at the end of last year, that is our ambition. In this regard, positive. I also would like to briefly comment. You said large gas turbines. We always also look on the 10 MW-100 MW , which is, for us, really a success route, right? We are a strong number one. We had another good quarter in there, secured around 14 units there. This is, let's say, all in line. On the pricing itself, large gas turbine, I would call it stabilizing on a lower level. I said it before. We expect it to remain strong competition, I also expect the price level to remain stable.
We have, in the, let's say, mid-sized ones, seen even some slight improvements, if I talk about the SGT-800s. This is roughly where we are at the moment.
That's very helpful. In the interest of time, I will pass it on.
Thanks, Ben.
Thank you, Ben. Next question goes to Simon Toennessen at Jefferies. Simon, if you go ahead, please.
Yeah. Good morning, everyone. I hope everybody is well. Maria, correct me if I'm wrong, but if I take the free cash flow in H1 for the group at EUR -175 and I add back the SGRE free cash flow that they disclosed, so probably taking reconciliation into account, I get to GP cash flow, probably including reconciliation of around EUR 260 odd million in H1. Consensus, I think, for SGRE looks at sort of EUR 280 for the full year, which implies around EUR 20 million free cash flow in the second half. Can you comment a bit on what you expect in the second half for particularly the GP business versus H1? Is it fair to assume that Q4 will probably seasonally be one of your stronger quarters throughout the year?
I have a quick follow-up, if I may.
Okay. Maybe let me take the, make a comment on the tax rate to start with. The Q2 ETR, as you can see, you're right, it's high at approximately 60%. I think it reflects the increase of the year-to-date ETR from 22% in Q1 to now 36% in Q2. This increase in the effective tax rate basically comes from the income situation, SGRE, which you've pointed out, where we have a high negative effective tax rate. In Q2, SGRE had a negative income in contrast to a small profit. If we look at the quarter-to-date figures, this negative income impacts SE Group's income to a greater degree than in the year-to-date figures. I know that's pretty, long-winded, but again, we still confirm our fiscal year 2021 anticipated effective tax rate of 25%-30%.
With respect to the free cash flow and how that looks as it proceeds throughout the year, you're correct that generally we do see, let's say, an uptake in Q4. I should perhaps bring it back and reflect this from a full year perspective. We had a very strong half year on free cash flow, and we do expect that in the next six months, there will be uses of cash. We have indicated that over and over, that the last six months of the year will be, let's say, a heavier one on our balance sheet with respect to our contract assets and liabilities as we execute through our very large order backlog. Did I answer the questions correctly?
Yes.
Okay.
Thank you, Maria. Then, secondly, if I may, just quickly on GP margins. First half, 5.4%, sort of at the top end of the guidance. If you were to achieve the midpoint of your guidance, the second half would be rather 3.5%, i.e., quite a significant deterioration, H2 versus H1. I know there's been some one-offs, obviously, in the first quarter, but how do you think about generally H2 versus H1, also taking some of the one-offs into account? Thank you.
No, thank you. Yes, as we said, we had a very strong Q1, an exceptionally strong Q1. We had, let's say, all tailwinds. We went through that in quite some detail in Q1. As also mentioned, Q2, we had some one-offs, both ways, both positive and negative. We do expect things to taper off as we go throughout the year. We are continuing to execute on programs, as mentioned. Also, we are a project-based business where there is volatility quarter by quarter.
Thank you.
Thank you, Simon. The next question comes from Vivek Midha at Citi. Vivek?
Hi. Thanks very much for taking my questions. I'll stick to one. I just wanted to follow up on the comments on stimulus packages. To what extent do you see any risks from faster decarbonization, particularly to your service fleet and generation? Thanks very much.
Hi, Vivek. Thanks for the question. No, I do not see this. We said it before, we are confident in our service development going forward. We always have to see, obviously, while we're transitioning to a more, let's say, climate-friendly world. We will obviously need backbone assets who continue to operate, and we are obviously doing refurbishment and efficiency increases. I do believe that this is a consistent situation. We also see, as I said, still, despite all discussion around stimulus programs, we should never forget that we also have a coal to gas transition still ahead of us. I do see this discussion in China. I do see it in some parts of Europe. Poland sits on 80% coal-fired still, and all this has to come. In this regard, the stimulus program rather supports our thinking and strategy than raising a concern.
I feel confident on where we are at the moment.
Thanks very much.
Thanks. Thank you, Christian. Our next question comes from Gael de-Bray at Deutsche Bank. Gael, please go ahead.
Thanks very much. Good morning, everybody. The first question I have is on the revenue guidance for GP. If I take the midpoint of your guidance for the full year, it implies a revenue growth of more than 20% in H2 versus H1, and it's probably also equivalent to 14% revenue growth on a year-on-year basis. After the relatively weak performance in the first half, what's driving your confidence that you're going to see such a strong pickup in revenues in the second half of the year? Maybe if you could give us a little bit more comment or color around which segments in particular should drive the pickup. The second question is around raw mats. SGRE management already indicated that they no longer expect to be able to fully offset the negative impact from the rise in raw material cost in the coming quarters.
My question is obviously for GP now, how do you see the price cost spread going into the remainder of 2021 and 2022?
Hi, Gael. Thanks for the questions. Maybe let me start. Maria will more detailed on the revenue piece. Absolutely, your analysis is right. We obviously expect some recovery there. Maria can go through the logics there a little bit. On the raw material, just let me do one comment for GP. This is something where we do not see such an impact in 2021. We have long-term sourcing contracts which we feel comfortable with. I wouldn't have the same concern on the GP segment side. I think it's all important to underline, because I've seen this relatively intensively discussed on the market. Maria, would you like to comment on the revenue element?
Yes, absolutely. No, thank you, Gael. I think, again, your observation is correct. We do expect a recovery in the second half with respect to revenue, both on the new unit side and on the service side, but specifically looking at service. We indicated some lightness there in quarter-over-quarter. We are now entering the service outage season. We do expect not only from a generation standpoint, but also industrial application standpoint for this to pick up in the last six months of the year accordingly.
Okay, it's primarily service-related, so I guess it should be rather positive on the mix.
I said both new units and service. Yeah, I should really reflect that. As you know, we also have our project business, as I mentioned earlier, executing in the last six months of the year, also impacting our free cash flow.
Thank you. Let's move on to the next question.
Thank you very much.
Iris Zheng at Credit Suisse. Iris.
Thank you for taking my questions. Can you hear me?
Yes, we can. Thank you.
Great. Yeah. I've got one question on the transmission business. Now, obviously, the order intake grew very well for the business, and I wonder how much of it, if it's relevant, is because of the synergies with SGRE. Also more looking forward, thinking that SGRE should continue to benefit from renewables growth and therefore with order intake growth. How much do you think that the transmission business could benefit from that?
Yeah. Hi, Iris, and thanks for the question. It's not so much SGRE, it's wind in principle or renewables in principle. What transmission growth drives is particular also the HVDC connections and really how to distribute big chunks of power. This is what is continuously and has been driving up the order intake. In this regard, we are benefiting from all the installation, not only SGRE. Obviously, it's good to have the joint customer inroads and customer contact and having, particular on the offshore side, the strong reputation also from SGRE. This is, let's say, principle now to the industry change. This is what I would say. It's not only the connection of things like offshore wind farms.
We, at the moment, obviously also involved in the in-country links, like the big direct current transmission lines, where we are well-positioned, and everywhere where infrastructure investment is done, I hope, obviously, that transmission can benefit from.
Great.
Thank you, Christian.
I was wondering if there's any indications on maybe how much of the transmission business is going to the customers together with SGRE.
Oof. This is not only transmission. This is all type of products. This is hydrogen, this is even, obviously, sometimes Gen, if you combine it. On the overlap of the customer from the top of my head, I couldn't even tell you. It's a fair amount of customers because at the end, it's the energy industry. It's the RWE, it's the BP, it's the TotalEnergies. It's all the same companies, which at the same time all are really energy companies.
Sure. Thank you.
Thank you, Iris. The next question comes from Sean McLoughlin at HSBC. Sean, please go ahead.
Good morning. Thank you for taking my questions. Just firstly on services, just understanding a little bit how you expect the mix to develop through the year. Given, I think some of the headwinds we're seeing on the new unit growth, how are you thinking about the defensibility of that service going forward? Secondly, just thinking more broadly about portfolio adjustments. Are you happy with the pace of change, how are you thinking potentially about more exits or adjustments to help further improve profitability?
Thanks for the question. In terms of service, it's particularly if I look to industrial applications, this is where we obviously expect a service uptake, and I think we echo what also some competitors say, we see a second half there improving. Generally, in terms of the service to new units share, not necessarily see a big change there. Obviously industrial applications, which had a low service business in the first half, is expected to pick it up. As Maria said before, for the second half of the year, we are now entering the turnaround season, which will have obviously also some uptake there, is at least what we expect. As you know, we have around 60% in IA service business, around 50% in Gen, and this is something what we still would expect also going forward in the short term.
In terms of portfolio adjustments, something what we continuously look at. It could always be that there is smaller here and there, let's say, changes. This is something which we would work through, as we walk along, to really make sure also that we spend the focus where it needs to be. This is, as I said, work in progress. We will update you once we take a decision.
Thank you. The next question comes from Jonathan Mounsey at Exane. Jonathan, please.
Hi. Thank you. Good morning. First question, maybe just an update on your relationships in China, particularly the extent of technology transfer, where you are with that. Also what the revenue opportunity is, say on a three-year view. Then maybe staying on the IP topic. There was obviously the issues with GE a few months ago. Just wanted to get an update on that. It is all clear now? The dispute is over? An update there as well, please.
Yeah, thank you very much. On China, in terms of technology transfer, first of all, maybe to China, we had it also on the prospectus, we still have to complete the transaction on Shanghai Electric, the steam turbine business. This is still also there, this untanglement from Siemens. This is ongoing. This is impacted by COVID and let's say we are still in the midst of it. In terms of further discussion in China, let's say we are on the discussion on how to best capture it and how to best do it. We had, let's say, a couple of wins also on the gas turbine side in China, which makes us confident that we have really good products for the market. We have, obviously, a close partnership with companies like SPIC. What you have seen from the announcement, the UGTC activity, this is progressing as planned.
This is really the working teams on it. As I said before the presentation, we also now drive to develop more integrated solution. How you combine a gas turbine with, let's say, energy management, with then the next step to inject hydrogen into the gas turbine and so forth. This is ongoing. We do expect a positive impact from the 14th Five-Year Plan. We are confident on this year's performance in China, we expect a good year in China. This is something what we work through this. GE. Thank you. GE. Still ongoing discussions, I cannot really comment on it because this is still ongoing. How you say in English, the injunctions?
That's right.
injunctions, right?
Perfect.
Let's say, off now, and where, let's say, have been agreed between the parties, not to pursue. Now we're waiting for the normal classical trial, and I think this week we will see further dates coming out, but this is work in progress.
Thank you.
Thank you. The next question comes from Sebastian Growe at Commerzbank.
Good morning, everybody. Quickly from my side on orders. The first question is on if you could provide more color around the book-to-bill rate within the GP segment. You gave a couple of comments on Gen and transmission in particular. Would it be fair to assume that all segments were clearly above one in the quarter? More generally speaking, on the pipeline, your comments would have suggested EUR 5 billion run rate is what you would be confident with when it comes to the second half. Is that understanding correct? Lastly, and that links it to that EUR 5 billion run rate, you haven't touched really the midterm targets yet, the flat to 3% on the top line. Obviously, the world is gradually leaving corona behind. Siemens Gamesa is growing 10%+ the EUR 5 billion potentially order run rate at GP. When should we expect an update?
Yeah, go ahead. Please. No.
Yeah. Maybe with the, let's say, further breakdown. Obviously, we don't give it in detail, but I can confirm your assessment in terms of really all divisions above one in terms of book-to-bill, which is something which is obviously very positive and seeing also the strong order backlog. Really, also, let's say second half of the year Corona impact, yes, but this is all speculation, right? We don't know, and I got a little bit cautious on predicting something with Corona. We are, let's say, giving a wide range. It's conservative on our side, clearly, but we are hoping for a rebound in the second half. I don't know how many waves more we have to see until it's really behind us. Midterm target.
Okay, good.
No. I think we, let's say, as Maria indicated. Sorry, Sebastian. We have difficult voice quality here. The 3%-5%, no, this is why we also left it there. Once again, step after step, our business is not quarter-driven, it's long-term driven. We're working through the program. We want to deliver on what we say, and this is the track we keep on.
Thank you. The last question of the day comes from Andreas Willi at JP Morgan. Andreas, if you go ahead, please.
Good morning, everybody. Thanks for fitting me in. I have a question on following up from some of the earlier questions on the second half margin development in Gas and Power. You talked about the sequential increase in revenues, the improvement in the service business. Your cost savings are ramping up. If we ignore one-time items, kind of in both the first half and the second half, it would normally make sense to assume the second half should have a reasonably meaningfully stronger margin than the first half. Is that correct in a normal year with those backdrops?
Yeah. Hello, Andreas. Good morning. Thank you for the question. One thing I do want to clarify, as I don't believe it was just as clear as I would have liked it to have been. In terms of the revenue mix going into the last six months, we do, as Christian mentioned, and as I mentioned, we do expect as we go into the outage season and with the COVID deferrals that we referred to also in this quarter, we expect an uptake in service for the last six months. That is correct. We also expect the mix to also be predominantly in the new unit business. Therefore, all things remaining equal, Andreas, like you said, as we then convert our legacy order backlog on the new unit side, you know we will have a mixed impact in the last six months.
I really want to make sure that that's not misunderstood from my earlier comment.
Yeah. That clarifies it. Thank you. The second question on sourcing, obviously, you mentioned the contracts. I forgot exactly which year it was, but somewhere around 2007, 2008, we had a situation where we also got the comment, yeah, we have contracts, but then customers or suppliers basically faced huge pressures on their side, and Siemens back then could either bail out suppliers or the suppliers would go bankrupt if you enforce your contract. Are we anywhere near situations like that, where, yes, you have a contract with the supplier for materials and components, but if you enforce them at the existing prices, the supplier just basically doesn't make it?
Maybe I take it, Andreas. For GP, I do not see that.
Does that mean that the risk for SGRE then?
I cannot judge the 2007 situation, but I can only say I don't see this at the moment.
Yeah. What about SGRE then, if you said you don't see it for GP or?
Yeah, there I would hint really to the SGRE colleagues, really making sure that you get it really hot off the press from them directly. I would hint you to Andreas and the colleagues.
Yeah. Thank you very much.
Thank you.
Thank you, Andreas.
Thank you, everybody. Thanks for taking the time to participate in the call. Of course, if you have follow-up questions, don't hesitate to get in touch. Obviously, the IR team is very happy to answer any of your questions throughout the rest of the day and, of course, throughout the rest of the week and whenever. Anyway, have a good day. All the best. Bye.
That will conclude today's conference call. Thank you for your participating. Ladies and gentlemen, a recording of this conference call will be available in investor relations section of the Siemens Energy website. The website address is www.siemens-energy.com/investorrelations. Thank you.