Good morning, everyone. Good morning, ladies and gentlemen. Welcome to today's conference call from Siemens Energy AG on Q2 in fiscal 2024. We'd like to draw your attention to the fact that all participants are in the listening mode and that this conference will be recorded. Following the presentation, you will have the possibility to ask questions. If you want to ask a question, please press asterisk and one. If you need help from an operator during the conference call, please press asterisk and zero. I'm now going to hand over to the moderator, Tim Pröger. Good morning from me as well, and welcome to today's conference call. This is Q2, the Q2 press conference, and you received our press release at 7:00 A.M. this morning. I'm sure you have some questions for our executive board.
We have the CEO, Christian Bruch, and our CFO, Maria Ferraro, here in Berlin with us, and they will be giving us some very encouraging figures for Q2. They will also give you an update on the events at Siemens Gamesa. Following that, they will both be available to answer your questions. Mr. Bruch will be speaking in German. Ms. Ferraro will be speaking English, as you know. There'll be two webcasts, an original line, where you can hear the original language, and there will be an English line, where you can hear the English interpretation. Maria Ferraro will be then on the original language. In the Q&A session, journalists could register ahead of time on a separate telephone number. You received a link for this in the invitation of today's call, and you can dial in and register to dial in now.
We don't want any feedback, so please make sure that you put your line on mute during the presentations. The presentations that we'll be showing you today will be on our website. You can download them from our home page. Please remember that there is no text of the presentations. They will be both speaking freely. I'd also like to draw your attention to our safe harbor statement on forward-looking statements. This can be found on page two of our quarterly presentation. So with that, over to you, Christian Bruch, the CEO.
Thank you very much, Tim. Good morning. Thank you for dialing in today. As usual, I will give you a brief overview of what has happened during this second quarter before Maria then goes into the financial figures in greater detail. As Tim already said, the good start to the financial year continued in the second quarter. I'm very proud of the great commitment shown by our employees during this quarter. The market environment for gas services, grid technologies, and transformation of industry remains positive, and the market expectations are beyond what we originally expected. We are seeing a significant increase in demand on the electricity market, which is exceeding the previous forecasts from our most recent Capital Markets Day in November. This is partly due to the fact that many economies are recovering after the slowdown in recent years, but also to the increasing electrification of the energy supply.
In addition, use cases like data centers are further increasing the demand for electricity, so it drives the demand for our products. In many areas, we also see an increase of profitability, which is, on the one hand, due to the successful implementation of our efficiency programs and, on the other hand, to healthy growth in these areas. Cash flow in the past quarter was better than planned due to the good order intake and the associated advanced payments, and we already achieved our self-imposed target of EUR 3 billion in proceeds from transactions by the end of the financial year. An overview of the figures in all brevity. In the second quarter, the ratio of incoming orders to sales, what we usually call book to bill, was 1.14, which is higher than 1.
So it means our order volume continued to grow, now totaling a record EUR 119 billion. This is the eleventh consecutive quarter where order intake is bigger than sales, and that's impressive. But because of the temporary halt to sales of 4.X and 5.X at Siemens Gamesa, order intake fell as expected, compared to the high level of the previous year, went down by 21.8% on a comparable basis to EUR 9.5 billion in the quarter. Sales in the quarter increased by 3.7% to EUR 8.3 billion compared to the same quarter in the previous year. Grid technologies and transformation of industries made a particular contribution to this.
Profit before special items at Siemens Energy rose sharply to EUR 170 million, compared to the EUR 41 million in the same quarter of the previous year. Maria will provide detailed information on the reasons for this. As a result, Siemens Energy's profit amounted to EUR 501 million. Due to this strong business performance in the first half of the year, Siemens Energy has adjusted its outlook for fiscal year 2024. We now expect the Siemens Energy Group to achieve comparable sales growth of between 10% and 12%. Before that, we'd said between 3% and 7%, and we expect a profit margin before special items of between -1% and +1%. So we are therefore raising the lower end of the forecast by 100 basis points. Free cash flow before taxes is now expected to be positive at up to EUR 1 billion....
EUR, whereas we previously, previously assumed a negative cash flow of around EUR 1 billion. This is also driven by the strong order intake and profits from sales. The forecast for Siemens Energy profit after taxes remains unchanged. Now, let me turn to the status of the Siemens Gamesa Quality Task Force. The technical analyses and the definition of the respective measures are still being carried out. The management of the task force has now been transferred from AlixPartners to an experienced colleague from Siemens Energy. The external partners, such as TÜV and AlixPartners, will continue to be available in an advisory capacity. The work of the quality task force is now entering a more implementation-oriented phase. This will be carried out within the onshore organization, and I will talk about the structure of this in a moment when I talk about the future direction in wind business.
The assumptions for quality costs remain valid. We're now making the necessary preparations to resume sales activities for the 4.X turbine in Europe by the end of the financial year. The start of sales activities for the 5.X platform are planned for financial year 2025, and in the offshore sector, we're continuing to work consistently on ramping up our capacities, especially in Europe, Cuxhaven, Aalborg, and Le Havre. The ramp-up is proceeding as planned. We already said last time we haven't yet reached the production volume that we want to achieve in the big plant in Hull, but things are moving in the right direction. Everything is going step by step. Now, how are we moving forward now?
We've had many quarters now where we focused on operational improvements, where we worked a lot, and now it is about doing what we communicated clearly at the Capital Markets Day on November 21st. Namely, break even in the financial year 2026 in order to grow profitably thereafter. We looked at the way we approached the wind market. We prepared and sharpened our focus for the future. Jochen and team did a lot of work here. We now defined a long-term strategic plan to bring the business back to the desired double-digit operating margin. The most important thing is we will remain active in the onshore business. We will focus on being successful in this business. We continue to believe that onshore can be an interesting and profitable business.
We have annual growth rates in this business of, up to 8% for new installations outside of China. But it also means that we will clearly sharpen the focus, that we have in onshore. On the one hand, reducing the number of product variants and standardization of products. A lot has already happened, a lot is happening, and we have to consistently advance this, and secondly, a stronger regional focus. At the Capital Markets Day, we had already announced that in future, we want to concentrate on those markets where we have a stable regulatory framework, that we can optimally serve with our product ranges, and from which we expect satisfactory profitability.
For us, this is the European domestic market, and we see similar characteristics in the North American market, where we will continue to be active with our existing product range, and at a later date, we will also develop a revised turbine for the U.S. market. But again, this is going to happen step by step. And we will also serve other interesting local markets if it makes economic sense. We will not try to defend markets in which there is no money to be made in the medium term as far as margins are concerned. We'll continue to run our worldwide service business for our installed onshore fleet. You know we have a big fleet in the field and will continue to service it.
In order to further expand the strong presence in the service of onshore business, the responsibilities for the new turbine and service business will be combined in future. We want to achieve this for our customers, this holistic approach. This is important when we talk about continuity in quality in many different areas. The organizational model, the hierarchical levels, and the responsibilities will be adjusted and regulated more clearly, and many of the measures that we're tackling were successfully implemented in other Siemens Energy businesses in 2022. These measures will not bring volumes back immediately. We had a long break, but we are convinced that in the coming years, we will be able to rebuild a strong market position.
With our 14-megawatt offshore turbine, we have a competitive product that we want to use until at least the end of the decade. As far as the gigawatts are concerned, we already have more orders that we received for this turbine than for any previous model, and we want to build on that. This year alone, offshore auctions are planned for a capacity of around 40 gigawatts, and for us, or this shows that there is a market potential for the coming years. Now, as I already said, the more focused orientation means that we will adjust our structures and production capacities in the onshore area. At the same time, offshore is growing, which means that we expect the total number of employees to remain stable.
We will finalize the corresponding detailed plans and, let me say, then enter into a discussion on implementation, in coordination with the employees' representations. I think it is time to look ahead now, tackling this. There cannot be a better time than now, and at the same time, we continue the integration of Siemens Gamesa into Siemens Energy. As of June 1st, key central areas such as IT, HR, and logistics will be merged. So to summarize, I can say Jochen and his team over the past two years have initiated many fundamental measures for operational business, for, operational improvement and integration into Siemens Energy. And we are now initiating many things that will determine the long-term margin improvement for years to come.
In this context, you may have read it today, to ensure a smooth generational change in management, and we discussed this at length with Jochen, Vinod Philip, who co-managed the integration into Siemens Energy, was involved in this. We decided that Jochen Eickholt will hand over the management of the wind business to Vinod Philip on August 1st, because we have a lot of long-term topics. But what's clear, the program that Jochen Eickholt initiated is the right one. We're all supporting it as one team with the entire team of Siemens Gamesa, and this now needs to be implemented and done quickly. With his operational experience, Vinod, also as the former strategy head of Siemens Energy, Vinod can continue to advance this merger.
Jochen will continue to be available to ensure this, seamless, smooth transition. So this is very positive. It was a lot of hard work over the past 2 years, and it's now time to look ahead and step by step, bring things back on the path of profitability. It's going to take time. I say this again and again, we need to be aware of this, and continuity is essential now. I'm, as I said, very grateful for the hard and good work over the past 12 months. For everybody, that was very, hard. Now, as usual, I want to quickly focus on a few examples from around the world, to show what energy transition means in practice. You can see one example for, each of the, business segments. Let me start, with Poland.
You know that Poland might-- or you might know that Poland currently still produces 60% of its electricity from coal. At the same time, the country is committed to phasing out of coal by 2049. How can they achieve this? Well, by converting existing coal-fired power plants into gas, among other things, and the technology for this comes from Siemens Energy. Past quarter, we won the third order of this type in Poland. The power plant in Adamów, to the southeast of Warsaw, will be converted from coal to gas, and it will be saving 50% of its CO2 emissions compared to today. In the offshore business, we started the logistics in the second quarter to equip the Moray West Wind Farm in Scotland with a total of sixty-four 14-megawatt turbines.
The first turbine was successfully installed two weeks ago, and once fully completed, the wind farm will have a volume of 882 MW, which will ensure the supply of electricity to 1.3 million households. In the third pillar from the left, you see the next link that we are building in Europe to connect north and south Italy. You see these examples on a regular basis to successfully link by link strengthen the European grid, improve power supply, and distribute renewable energies in a better way. On the right-hand side, you see an example for a hydrogen project with our close partner, Air Liquide, that we are implementing in Oberhausen. This is a nice example.
We haven't achieved what we want to achieve with hydrogen yet, so we're happy that we have a strong partner by our side. With this, I would like to give the floor to Maria for the figures.
Thank you, Christian, and a good morning from my side. Let me go right into our financial performance in the second quarter, starting at the group level. As Christian already mentioned, the strong development from Q1 continued into the second quarter, and we see positive momentum across all businesses. Orders came in at EUR 9.5 billion for the quarter. This was an expected decrease, just shy of 22%, mainly due to sharply lower volume from large orders at Siemens Gamesa and to a high basis of comparison and timing shifts, predominantly in our gas services business. The book-to-bill ratio was again above 1 at 1.14, and our order backlog also rose again and hit an all-time high of EUR 119 billion. Revenue grew by 3.7% on a comparable basis to EUR 8.3 billion.
Strong growth at our Transformation of Industries group, just over 11%, and Grid Technologies, just shy of 26%. Those businesses more than offset the declines at Gas Services and Siemens Gamesa. Once again, we experienced a very strong service season, and service revenue grew greater than the new unit business, resulting in an overall favorable business mix also in the second quarter. Our profit before special items improved sharply to positive EUR 170 million. This is due to the underlying performance in the businesses, specifically Grid Technologies and Gas Services, and also in part, we benefited from a positive currency effect associated with the devaluation of the Egyptian pound in March. Just quickly to explain this, in March, the Central Bank of Egypt allowed the Egyptian pound to float. This caused the currency to depreciate by around 60%.
Because of this, the currency devaluation led to foreign currency gains in our local financial statements, which are prepared in Egyptian pounds. Therefore, we benefited from a foreign currency-related gain of just over EUR 90 million in the second quarter, booked above the profit line. Again, this is mainly in GS and GT due to their activities in Egypt. Special items for the quarter included a pre-tax gain from the sale of businesses, and this demonstrates our ongoing progress in our divestment program. Our free cash flow pre-tax strongly improved to EUR 483 million, with very good performance across all businesses, with gas services here being the strongest contributor, with an excellent cash flow and cash conversion. Moving on to our order backlog. As mentioned already, our backlog reached another record high of EUR 119 billion.
This represents approximately 4 times our total annual revenue, but more importantly, provides transparency for that revenue and cash and profit into the years to come. Our order backlog quality continues to support our midterm targets and over a 40% growth since 2021. Just shy of 50% of the backlog is service. This means predictable, recurring, resilient, high margin, and cash-generating business, as I just said, for years to come, and we're also seeing strong backlog growth in our new units business. This is very important as new units help us to grow the installed base for additional service revenue in the future. Next slide, looking at our liquidity and cash.
Please let me just provide a quick update on our divestment program that I just mentioned, where we once again made very strong progress in the second quarter after closing the sale of the 18% stake in Siemens Limited India to Siemens AG in the first quarter. Just as a reminder, that transaction resulted in a cash inflow of approximately EUR 2.1 billion and a one-time P&L gain of close to EUR 1.7 billion. For this quarter, we closed another three transactions, which you already know about. We mentioned this in our first quarter presentation. One, the sale of Trench Group to Triton. Secondly, the sale of our 32% investment in Windar and another smaller transaction. The result of this is cash inflow of close to EUR 700 million and around EUR 350 million in gains.
Therefore, after the first six months, we now have more than EUR 2.9 billion in cash proceeds from our divestment program. Just as a reminder, we were guiding around the EUR 2.5 billion-EUR 3 billion mark here. Therefore, we revise our original guidance to now be around EUR 3 billion in cash proceeds from our ongoing divestment program for this fiscal year. Again, going back to cash, our proactive measures to strengthen our balance sheet are progressing, and in the second quarter, we managed to further increase our net cash position. Overall, our liquidity position remains strong. Our cash and cash equivalents at the end of the quarter increased to EUR 5.8 billion, while our financial debt remains stable.
This brings us to a net cash position of EUR 1.9 billion versus a net cash position of EUR 1.4 billion at the end of Q1. This is in line with our clear target to maintain a net cash position throughout the year and shows our commitment to a conservative financial risk profile, as well as an investment-grade rating profile. So now let's turn to the performance of our business areas, starting with gas services. Again, a very solid quarter for our gas services business against a very strong prior year quarter and a continuation of its super strong track record and profitability. Orders decreased sharply on a comparable basis, again, as just mentioned, due to a high base of comparison from last year. This is combined with just lower volumes from large orders, just timing related, just shifts, especially in our new units business.
The order backlog rose to EUR 43 billion. Revenue decreased by 6% on a comparable basis, with growth in the service business more than offsetting a slight decrease in the new unit business, so therefore, having a very positive mix effect. Profit before special items came in higher than last year's already high level at EUR 381 million, with a margin of 14.4%. Here, as just mentioned, we benefit from a very strong service business, as well as also, as mentioned, a positive one-off effect, mostly related to the Egypt currency devaluation of EUR 56 million. As a reminder, the seasonality of our gas services business is such that the mix in the second half shifts more towards new units and less in terms of the service business, which then has an effect on the margin.
Moving on to Grid Technologies on the next slide. Here we see really strong momentum in Grid Technologies, delivered significant improvements across all KPIs on the back of a continuously positive market environment and strong underlying execution. Orders in the second quarter rose by just shy of 28%, comparable to EUR 3.7 billion, a higher level of grid solution orders, as well as just mentioned by Christian, a large HVDC order in Italy contributed here. Book-to-bill was 1.7, with the order backlog rising to a new record of EUR 30 billion. Revenue grew substantially, with a 25.5% on a comparable basis growth, and came in at EUR 2.2 billion. Profit before special items more than doubled and came in strong at EUR 250 million, leading to a profit margin of just over 11%.
This is a really strong quarter for our GT business. I want to thank the team there. Very well done. Moving to transformation of industry, which is diligently executing towards its plan for your call for its turnaround. Here, we booked EUR 1.6 billion in orders in the first quarter. This is a 16.2% comparable increase from last year. Book-to-bill came in at 1.24, and order backlog also rose in TI to EUR 8 billion. Revenue grew by 11.3% on a comparable basis. This is driven by the highest growth rates in its compression business and electrification, automation, and digitalization, or EAD. Revenue growth was supported by execution of strong order backlog, and also in TI, we benefited from the continued strong service momentum.
Profit before special items increased to 8.7% on a comparable basis to EUR 79 million, with, as mentioned, increased volume in the service business and a better pricing, more than offsetting a few one-time effects. Moving on to Siemens Gamesa. Christian already provided you with a very, with, an update on the situation and with respect to the various, quality matters and onshore and offshore ramp-up, and also clarity on future plans. But here, let's just dive deeper, excuse me, into the numbers. Orders were, as expected, sharply down from a strong prior quarter, came in at EUR 0.9 billion. In our onshore business, as you know, this is mainly due to the temporary suspension of the sales activities for 4.X and 5.X. On the offshore and service business, here, that's the, let's say, timing shifts.
We did not receive any large orders comparable to the same quarter of prior year, which concluded a very large EUR 1.7 billion order in the UK. In addition, we see revenue decline moderately by 4.6%. This is due to the declines in onshore and service business, which had offset an increase in our offshore revenue. Profit came in at -EUR 448 million. Profit continues, as you know, to be impacted by project margins burdened by higher planned costs due to the known quality issues in onshore, as well as the increased product costs and ramp-up challenges in the offshore area. So with that, let me summarize the quarter very briefly. Across Siemens Energy, we did better than expected on all KPIs and continued our positive trend into the fiscal year.
We had a solid quarter in the former gas and power businesses and, of course, stability at the Siemens Gamesa. Very importantly, our balance sheet remains strong, and we once again improved our net cash position with strong cash conversion and supported by the strong progress in our ongoing divestment program of non-core assets. So now that brings me to our outlook. Due to the business performance in the first half of the year, we're raising the outlook for fiscal year 2024 for Siemens Energy for several KPIs. The new forecast is based on higher revenue growth assumptions for all segments and higher profit assumptions for Grid Technologies. In terms of free cash flow pre-tax, we expect all segments, excluding Siemens Gamesa, to exceed original expectations.
This is particularly applicable for Gas Services and Grid Technologies, where both are experiencing strong cash inflows due to customer prepayments as we benefit from the growing and continuing order momentum. We now expect Siemens Energy to achieve a comparable revenue growth, excluding currency translation and portfolio effects, in the range of 10%-12%. This was previously 3%-7%. Profit margin before special items is now expected between -1% and +1%. Previously, this was -2% and +1%. We continue to expect a net income of up to EUR 1 billion, including impacts from disposals and the acceleration of our portfolio transformation program. We now expect a positive free cash flow pre-tax up to EUR 1 billion. Previously, this was a negative free cash flow pre-tax of around EUR 1 billion.
We also now expect proceeds for the whole fiscal year around EUR 3 billion, as I mentioned earlier, rather than our previous range of EUR 2.5 billion-EUR 3 billion. So with that, thank you very much for your attention, and I'd like to hand it back over to Christian. Over to you.
Thank you, Maria, and I would like to close by drawing your attention to our We Stand for Values initiative that we launched together with other companies, and that around thirty German companies have now joined. DAX companies, family businesses, startups, and small and medium-sized companies, trade unions have joined forces in this initiative, and they call for joint participation in the upcoming European elections and the state elections in Germany. Thank you to my team that has put a lot of passion into this. This is primarily an internal campaign aimed at the company's own employees to take part in the elections. It's not a question of making an election recommendation. It's more about emphasizing the value of democracy in Germany and Europe for the national economy and, therefore, also for our company and companies in general.
As an alliance of German companies, we stand for diversity, openness, and tolerance, advocating a common Europe. And the membership in the European Union has made us strong. A Germany firmly anchored in the EU, and the euro is the basis for our economic success and prosperity. We must not jeopardize this under any circumstances, so it is important to point out again and again what the direct consequence of this will be for each and every one. If you'd like to find out more about this initiative, please contact our press department. I believe this is a very good initiative, and I also see the media as having a good role to emphasize the added value of democracy, and with this, back to you, Tim.
Thank you very much, Christian. Dear journalists, you can now ask questions. Let me give you some technical information. You can ask questions if you have dialed into the telephone line, and if you want to ask a question, please press asterisk and one on your keyboard. You can also put questions in the chat as well. Once you have been dialed in, then leave the webcast so that we won't have any feedback there. And you can ask your questions either in English or in German, and they will be answered then in the same language. So asterisk one for a question. We have a first question in the chat, which I'll read out to you from Spain, Lara Olmo. Mr. Bruch, it's for you from El Español. I'm afraid... I don't think you can answer too much on this.
You ask about the plans in Spain with regard to restructuring. How are the Spanish plans to be strengthened or improved? You also asked for questions and figures on restructuring because you said it's premature for that right now, but maybe you could give us some information in general on the situation in Spain. Thank you for your question. No, it is too early. We're having this internal discussion right now. We're concluding on all the detailed plans. One thing needs to be kept in mind, and I mentioned that for onshore. First of all, we're going to remain active in onshore. I think that's important for the employees to know, and Europe plays a central role here for us. The third message is, of course, that it will take time to build it up again.
This is, we've had a long break, and we're trying to bring all these things back together, but please bear with us. The discussion will be held when we have coordinated everything internally, and then we will make it available to the outside world. The next question by phone is from DPA, Christoph Rummeyer. Good morning, Mr. Rummeyer. Your question, please, go ahead.
Thank you. Good morning, Mr. Bruch. You just talked about the initiative, and do you have any reactions to this? Have you received any reactions to your initiative? Have there been any negative impacts? Do you see any possible as well?
No, I think we're just in the process of rolling out this whole initiative. We have a town hall meeting today, which we always have with the quarterly results, and we discussed this with the works council, and they agree with us 100% on this. That's very good, and that's why no negative reactions yet, and I would like to see how things develop. And at this point, I think it's too early to really say anything more on that right now. And now there's a question from Christoph Steitz from Reuters. Good morning, Mr. Steitz. Good morning. I have a couple of questions, and I'd like to know about the good performance and the increase in the guidance with regard to warranties. Is this something that's going to strengthen your balance sheet?
So can you exit earlier when it comes to the guarantees, and there is a certain burden that you've been subjected to, and I think it would be in your and, in your interest to exit these guarantees as soon as possible or at least to improve the terms and conditions. That's my first question, and this is a measure here that you have. The second question is, you talk about capacity adjustments. Could you tell me what that means? Are you talking about closing down sites, or are you talking about shutting down production lines? And then, above all, in Asia, what is the option that you're talking about there? And-
Another question on for Maria. The disposal proceeds, you've pretty much hit the outlook now or the forecast that you were aiming for, so EUR 3 billion. What I'm not really getting is that, is there potential to do even more in the current year, or are you pretty much done in terms of disposal proceeds? Is that the end of it? And is that why you're now at EUR 3 billion? If you could just clarify that, that'd be great. Thank you very much.
Thank you very much. I will answer briefly on the guarantees. Maria can go into more detail on that, but for us, it's a question of to continuously deliver good performance. That's the basis of all of these guarantees and the exit. We need to work on all of this, but I think Maria can maybe give us some more details on that in just a minute. Now, with regard to the program, as I said, I'm not going to give you any details on that right now. Of course, we will change different areas. We want to focus more on onshore, and as I said, standardized products, fewer variants, clear-cut structures. This is related to management levels, how we're going to make this very clear, and we will also see that the break that we had in onshore, there'll be a lower utilization in the factories.
Of course, in certain areas, we can see worldwide that things have been initiated there. This is a step-by-step process, and as I said, this is being done in a phase, and this is good news where other areas are growing very fast. This won't help everywhere, we can make that very clear, but this does give us certain possibilities. I do believe that we will balance things out very nicely. Of course, structures will have to be looked at, and we had much higher growth was planned in onshore, and it will be much later, it will be different, and in fewer regions, we'll have fewer products. This is what we're trying to balance things out now and work out on the details. It's too early to talk about all the details on that right now. As I said, step by step. Thank you.
Hello, good morning. Thank you, Christoph, for the questions as well from my side. Let me answer the disposal proceeds first. You're, you're right. I mean, we're at a point where a lot of the larger transactions have either been concluded or in the, the very final stages of being concluded. But this is something that is part of an ongoing disposal program. We are consistently looking at our portfolio and making adjustments where, where we see fit in terms of our future strategy. There's one more smaller transaction that could potentially be closed in this year, and that's why I'm saying, yes, we're at the upper end, but it's around EUR 3 billion. So we're very comfortable with that guidance of around EUR 3 billion at this point in time.
With respect to the Bund guarantees and the guarantee facility, so that has been concluded in the quarter, of course, so the facility is in place. We're utilizing it to the extent necessary. We've always indicated, and also are guiding, that the cost for that facility is not only the guarantee cost, but also the cost of the back coverage from the Bund. So it is costly. It is designed for us to get off of it as soon as possible, and of course, our good performance is leading to that next steps of us, how do we optimize that facility? But so far, as you said, we want to exit it as soon as possible. So far, so good.
And again, this is not only having discussions with the banks, it's also discussing with our customers on how do we handle, the continued momentum in our, our market, and how do we, together, support the energy transition? This is what we've said for years now, that with such growth, you know, we need to really look at how guarantees are issued, how do we optimize that, and this is the ongoing discussions that are happening as we speak.
Thank you. I also want to point out that we see, that we see questions, in the chat. This is a, press call, so analyst questions will not be included. Now, at ten o'clock, we have the analyst call. Axel Höpner, Handelsblatt, is the next person to ask a question. Mr. Höptner, good morning.
Good morning. I have three questions. When does the marketing of 4.X and 5.X, the onshore and on, shore turbines start again? Second question, if it's Mr. Eickholt's strategy, why is he not part of this press call today? And third question, everybody can ask a question about the, figures. When, when we look at jobs at Siemens, it's mostly four-digit numbers, so- Mr. Höptner, these are big questions, not small questions.
Now, 4.X, well, we will return into the sales process over the course of this financial year, 4.X in Europe, 5.X is planned for next year, so later. Strategy, let me say, it is a strategy of the entire wind team, Jochen and myself. Well, Maria and I are doing this press call. Jochen is meeting the entire Siemens Gamesa team to discuss these long-term decisions, and you can imagine that we have internal town halls to explain to the team what is happening that is more important at this point in time. But you can rest assured that this is greatly coordinated with a view to the future. So this is up and running. The third question was jobs. I can only repeat what I already said.
We are discussing this internally, and at the end of the day, it will be a balanced decision. And also, as we have always done in the past, there are measures where we might need to give certain elements to partners, hand them over to partners. These are things that we've seen in the past, for certain objects. The Windar participation was sold, as Maria just mentioned. That can be a measure to increase the focus. Too early now to talk about it. Give us a little bit of time, first internally, then externally. We have a question in the chat by Markus Frühauf with Frankfurter Allgemeine Zeitung.
He wants to know whether Siemens Gamesa has gone through the worst now, and the second question, referring to the terrible disaster in northern Italy, and whether this will lead to special costs for us. I can probably already say no, but maybe you want to answer as well. Okay, first, for Siemens Gamesa, we've achieved a point where we say exactly that. We now have to implement the quality issues, go through those, and secondly, we say, "Let's focus on the future." This is exactly why we had this discussion. When is a good moment to kick off this generational change? Will we do it 12 months later? Will we do it now? I think now is a good moment. This is a good point in time. So for the next years, we will go through these quality issues.
We'll hear and see more about this. This will not disappear. But nonetheless, we can now say we can define the way into the future, and this is what we're doing. As far as Northern Italy is concerned, this was a terrible accident. A subcontractor of Siemens Energy had three people who died. One was injured. We don't yet know exactly what happened. This is still being investigated by the local authorities, but as Mr. Frühauf said, it's more the situation of the affected people and the families. We're in close contact with them, but we were very affected by this. Those were long-term subcontractors that we consider to be our employees. Yes, and there was one colleague who had worked with us for 40 years, so this is very tragic.
From Angela Maier.
The next question is Angela Maier from Wirtschaftswoche.
Good morning. I have a couple of questions. You said that you will remain active in onshore. My question is why? Maybe you could give us some explanation why you are so active there, because you've just had loss-making businesses there. And my second question is, you're leaving India, I assume? This was always a strong market for you in India, for Siemens Gamesa. And then I also wanted to know, these turbines are going to be sold again. They were off the market for over a year, so developments continue. Maybe they're a bit obsolete by now. Do you have to give discounts for this? Could you explain to us how you expect to sell these markets? Maybe they don't have the best reputation after all that has happened. And what about the new turbines, the next turbine?
Then maybe something on the Bund guarantees. Maybe you could tell us how much it cost you in Q2, and we'd also like to know about the Bund has given agreement, but you also had negotiations with Denmark and Spain. So maybe I missed something there, but have you just ticked those off or what? One more question. How long will Mr. Eickholt's contract last? When does it come to an end? Well, that was a whole list of questions, Ms. Meyer. Good morning. Well, onshore is an area where in the next few years, we expect to grow by 8% ex- outside of China and in Europe, such as regions such as Europe and the United States. We have the foundation there to have successful business there. And from the past, why did we lose money? Well, you would say, is this an interesting market?
Service there in this area, and here we have about 60,000 turbines in onshore that we service. They are not in the 4.X, 5.X catalog. So this is good service business, and our focus is on this and product stability. With all of this, we will be able to do successful business there. We are convinced of that, and to have an attractive margin. Double-digit margins is what we need. This is something that answers another question with regard to when will we have the next turbine? No, you don't always say that, and you can see this with the competitors as well. It's not always the newest one. What is going on in the market is we're talking about robust turbines, and that's important.
In other words, certain things can have a longer service life, and you can ensure that you can get rid of all of the bugs. And a lot of the problems that we have that are successful on the market, we can see that these are turbines that have a long service life. And that means that the frames and these products, the product class 4.X and 5.X, have a good basis, and this can be seen in our discussions with our customers. We say we want you to start selling them again. These are revised versions. You have to mention that as well. But I also see this as we can't simply say, "No, we have to have the brand, a new one right away." So that's exactly the wrong way of seeing things.
No, what's important here is how can we come back to having things constant here? India is something that we're looking at right now. It's a market which is undergoing major upheavals right now, and Asian competitors are also ramping up. And that is exactly where we've said, in the long term, can we generate the profit pools we want? Is that the right focus for us or not? This is what we're working on right now. But as I said, if we see that this is not the case, then of course, these are markets that we will no longer continue to serve. But we're right in the middle of this whole process right now. As far as the guarantees are concerned, I'll hand over to Maria on that one. When it comes to Jochen Eickholt, he has a totally different contractual structure in Spain.
So it's really a question of the plans and how can we ensure that in two years' time, we're in the middle of a ramp-up, that right at that point in time, we would have to have a change, simply because things are now being completed, we don't want to have to work on again in the next two, three years. We want to have continuity. That is what we have in mind here, and that is what we say when we talk about a change in the generation. That's exactly what we mean.
...Over to me. Hello, Angela, good morning. So with respect to your cost, on the guarantee facility and guarantees as such, I think it's important to know that the actual cost, of course, is transactional in nature, so it really does depend on the timing and utilization of the facility as such. And we haven't said, "Here's how much it would cost on a quarterly basis." However, what we have given is an overall estimate, for what we expect for the year. This is recorded in financial income, and it's approximately around EUR 100 million. That's the cost for the bond facility that we estimate for this year. With respect to the other countries, just in terms of status, you're correct. Those discussions are ongoing. Nothing to report right now, but progressing nicely. Thank you.
Thank you. Michael Fleming with Börsen-Zeitung. Good morning, Mr. Fleming.
Good morning, Mr. Bruch, Ms. Ferraro, Mr. Proll-Gerwe . I've three questions. On onshore, we just talked about it. Why stay in onshore? Was it checked whether this is a business that could be sold, and if so, why wasn't it done? Second question, referring to sites and jobs: how many sites, i.e., factories and jobs, exist outside of the future core markets, i.e., outside of the United States and Europe? And the third question on the business. Mr. Bruch, you said it's better than expected. What are the drivers on the customer side? So, the situation isn't easy, so there have to be other motives.
Thank you very much, Mr. Fleming. Well, we looked at all options, everything regarding onshore, all versions, what can be done, what does it mean?
You need to take into consideration what our commitments are regarding the market, contracts, et cetera. If you look at all of this, the decision we now made is the most reasonable one, the best one. But we've looked at everything with an open discussion. That's why it took its time. Now, your question was very nice, but I'd like to repeat the answer. We are discussing this internally at the moment, so please, show a little bit of patience. It's not going to take long, to be frank, we have already progressed considerably here. It will become clearer over the next couple of weeks, but let's do it step by step. The market drivers, that's quite interesting at the moment. There continues to be...
I mean, when I see something like, grids, it's the energy transition, preparation for that. Europe is very strong when it comes to grid expansion and what needs to be done here. This is one area that was underinvested for many decades, is now catching up, and you can see this in other areas of the world as well. The Middle East, for example, good example. They massively ramp up their energy supply, and you can see that certain regions have a clear need for data centers, artificial intelligence, et cetera. For the past 12 months, we've been seeing an increase in demand requests for reservations.
So it's not just about energy transformation, it's also about energy and power growth, and this is stronger than what we expected and said a year ago, and this drives the demand for our products, especially in grid, but also gas services. They also have a strong order intake. Mr. Fleming, and I also understood that you wanted to have an overview of the sites. We can give you that later. Thomas Magenheim with Redaktionsnetzwerk Deutschland. You asked questions both in the chat and on the telephone. I would suggest that you ask your question directly.
Good morning, everybody. I would be interested what is the share of your onshore business that you want to retreat from in percentage points?
If you look at order intake in the past and what you will have in the future, will you... Did it do to a quarter of your market or 50%? Do you have a ballpark figure here? And then there were repeated questions regarding sites, and you're not ready to answer that yet, but can you at least say, will it work without closures of sites, or is it not possible because of the regional aspect? And that's the third question: If the site in Cuxhaven offshore is developing, but Portugal or elsewhere isn't and is actually going down onshore, can you exchange personnel? Is this even possible in theory because of the locations? Thank you very much. To put it into perspective again, what we're doing onshore, and that's why it's difficult to put that into percentage figures.
What we will be seeing, what you will be seeing, is that the onshore sales are going to pick up. They went through a slump now. We had no sales for 12 months now, so it's going to take some time to ramp this up again and you will see that the revenue will go down also in the next quarters, and this will have an impact on sites and utilization. Sure. And we then say we want to gradually focus on two key regions, Europe and the United States, and successively find our way back into the market, and we will position ourselves correspondingly, and this is going to cost time.
If we start sales now, you need to keep in mind, you know, contracts need to be made, then you need to ramp up the plants, and it's going to take time until sales are generated. But and the majority of what's happening in the market will be found in these two markets. This has changed as opposed to the past. The onshore market is more regional than we would have wished for maybe ten years ago, where we were active everywhere in the world. So it is difficult to explain this on a volume basis. But coming back to sites and locations, you're right. It will not be possible to simply take somebody from Taiwan and transfer them to Cuxhaven. That's not going to be possible, but it'll always be possible to think about: Where do I manufacture?
How do I balance this? Where do I focus which activities? Sometimes it's not always about sites immediately and plans. Don't forget that, that we also have sales and, administration and, back offices, and those are things that are a lot more flexible when it comes to, sites, and we need to have a look at this. But not everything immediately means that sites will be closed. It can be a cooperation with a partner, and there are many things that are currently being discussed, and it would be premature and would lead you in the wrong direction if I were going to say something now. Be patient, I do understand that you're interested, but, we will first discuss this internally, finalize it, and then communicate it externally.
One positive message I would like to highlight, we will stay in onshore, and we are present in Europe, and this is what everybody should hear.
Okay. If you want to ask a question, asterisk and one. Eckl-Dorna from Bloomberg has just done so.
Good morning. You have the floor. Yeah. Good morning.
Good morning to everyone. I have two brief questions. What about repair plans for defective Gamesa turbines? What about the schedule? What is the timeline? When will this be completed? And which wind farms are going to be worked on, and how is this repair going to be carried out? And what about the costs for all of this? I'd also like to ask you about sites and job cuts. And even though you've mentioned this, I'd like to have a clear-cut statement on this. Will there be adjustments, and if so, to what extent? How many jobs will be lost? Thank you. Well, repair plans.
Well, think of it like this: We have projects that we have to work on. This is not something that will be one plan where everything is all set up. It includes the customers, the suppliers, the on-site planning. This is what we are now working on now. In other words, we're determining how this can be done step by step. And that's why, in my presentation, I said that we will be entering into the implementation phase. That's exactly what that means. And this is related to an existing service organization which is active out in the field and which we will be doing together with our customers. Now, when it comes to the headcount, I can just repeat what I said before, and let's put it this way. As I said, don't underestimate everything that has been done at Siemens Energy in the last few years.
Of course, things will be changed. We are undergoing massive transformations, and that means we might shift one thing from another. And if you take a look at the headcount developments at Siemens Energy overall, then you will see that they have gone up, even though a lot of headcount was involved, and we're very good at this. And that's why I think that this is something that is indeed feasible. And as I said, the details will be determined internally and then announced publicly. Okay, I think that brings us to the end of the conference call. That we're right on time. Thank you all for attending and for your interest in our company. Should you have any follow-up questions, then, of course, my press team and I are available to help you out.
And once again, I'd like to say thank you very much to the team. This is a one-hour call, but you have no idea how much goes into preparing it. The press department, IT department, et cetera, is an excellent job. We all would have preferred to watch the soccer game, so thank you very much to the team. One more thing for the conference call for analysts with Christian Bruch and Maria Ferraro will begin today at 10:00 A.M. You, as journalists, can log in, but you can't ask questions. You can find the link to this on our home site. The next official date is the financial figures for the third quarter, which will be published on the eighth of August. I'll see some of you next week at the press trip. I'm looking forward to that.
And then I would like to bid you farewell for today, and stay healthy. Bye-bye.