Ladies and gentlemen, welcome to Siemens Energy AG's Q&A session for the media on Q1 fiscal 2026. We'd like to draw your attention to the fact that all participants are in listening mode and that the call is being recorded. If you want to ask a question, please press star and one on your phone. If you need assistance during the call, assistance from an operator, please press star and zero. I'd now like to hand over to our facilitator, Tim Proll-Gerwe.
Good morning from Berlin, and welcome to today's conference call on the Q1 at Siemens Energy. In this fiscal year, we changed the format of our quarterly call. We will not be having a presentation from the executive board. Instead, we'll go directly to the Q&A. Our CEO, Christian Bruch, will be answering your question. We published our financial figures at 7:00 A.M. this morning.
You're familiar with them. So we can sum up the quarter as follows. We continue to see positive developments. And in order intakes, EUR 17.6 billion. That was the best quarter since Siemens Energy became an independent company. The growth driver was order intake at Gas Services. Our order backlog had a new record high at EUR 146 billion. And the earnings before special items amounted to EUR 1.159 billion, which is a margin of 12%. And net income amounted to EUR 746 million. Free cash flow before taxes was EUR 2.87 billion. Last week, we also announced the fact that we will be expanding our capacities in the U.S., where we will be investing more than $1 billion. So that was a strong start to the year at Siemens Energy. And a lot has happened.
If you want to ask our CEO, Christian Bruch, any questions on the questions or anything else, then, of course, you have a telephone line. You have the number, which I sent to you ahead of time if you're a journalist. If you want to ask a question, please press star plus one on your phone. In this call, we will be speaking primarily German, but you can ask questions in English, and the answer would then come in English. This call will be broadcast in two webcasts: the original line and an English line, where the interpreters will be interpreting into English. This webcast will also allow you to ask questions using the chat function. Please remember, and this happens again and again, but this is only for journalists. Analysts can ask questions later on during the analyst call.
Employees have the possibility to do so at town hall meetings. For shareholders, the annual shareholders' meeting will be next week. To avoid any interference, I please ask you to put your phones on silent, of course, if you ask a question. I'd also like to remind you of our safe harbor statement on forward-looking statements. This is something that you can see on the webcast. Now I'd like to hand over to Christian Bruch. For the question, star one, if you want to ask a question by phone. I see that there are a number of journalists that have wanted to ask questions. Mr. Steitz, good morning. Go ahead.
Good morning from Frankfurt. Mr. Bruch, I have two questions. Let me begin with investments. By 2028, you want to have $6 billion in investments. How much of this will be in Europe, approximately? That's my first question. And the second question is supply chains, rare earth metals, and gas turbines. Is that also an issue there? And lithium. And I also wanted to ask if scandium is also used. And with regard to both of these rare earth elements, what is the supply situation there? And do you have enough from China? And what is going to happen if you don't get enough of these rare earth metals because you are ramping up your gas turbine facilities? So maybe you could give us some information on that. That would be very interesting for us.
Thank you. Good morning, Mr. Steitz. Thank you for your questions.
Good morning to all of you. Thank you all for taking time for us. First of all, the investments, the CapEx, our investment plan. Not everything has been defined by region, but most of the investments will be in Europe. So again, this is the largest region. We've always said we will try to use our capital effectively. In particular, existing sites are to be expanded. That's also the case in the U.S. That's why the $1 billion. We have the largest footprint in Europe, however. This is going to continue to be the focus of our investments. Just to make that clear, in the last three years, we invested $1 billion in Germany alone. Of course, this gives you an idea. In the U.S., I said we're firing on all cylinders. That's the way it should be understood.
With supply chain, rare earth elements, that is an issue. Yttrium, you're familiar with that, not only with the coatings for the blades but also magnets. Scandium, I don't know about that, but maybe I'm not the expert on that point. But we have the same questions there. How can we get more resilience when it comes to supply chains? And let me put it this way. If the supply chain well, right now, we have good supplies. That's not an issue right now. And our suppliers let's just make this clear because we're talking here about powder. And right now, I don't see any problems there. But of course, we still have to be prepared to become more resilient for the work that we do. And again, we also have to consider this with the EU and also with the U.S. administration.
We need to discuss things with them as well. How can we participate in the overarching programs that are being established so that supply chains can be created or in order to increase our warehouses? So the next question comes from Sebastian Ash from Financial Times. Good morning, Sebastian.
Good morning, Christian. I saw that there was a clear increase in gas orders. What's that due to this quarter? Is there always such an increase? And why was this above expectations? And to what extent does the price play a role for gas turbines? Thank you. Right. Thank you very much, Christian.
I'd be happy to answer those questions. Well, I don't want to say that Q1 was particularly strong. This is now a phase where demand for gas turbines is extremely high. We're talking about the delivery dates 2029 and 2030. There are some slots for 2028. But the market is a very high-demand market. And also, the next question is how many data centers? Well, I think the largest order for gas was in Europe and was not for a data center. So I think that's something you have to keep in mind.
Poland this year was a very strong country for us in this quarter. This is just for power supply. One thing that we do see is that the long lead times, this is a challenge for the customers. That's why they reserve early or we want the awards early. This has increased. This is what you can see with the high order intake in Q1 with more than 100 gas turbines. Just to give you an idea here, last year, for the whole year, we sold 200. In the Q1 , we've sold half as much already. That shows how strong it is. Did I forget anything? Any part of your question? Price. Okay. The orders that we are now taking on are still a positive margin potential compared to the orders that we have in the books.
We still see a price increase on average. It's regionally different, but the price is very good for us.
Thank you very much. The next question comes from FAZ, Markus Frühauf. Good morning.
Good morning. I would like to know something more about data centers and more than 100 million orders. Maybe you could give us how many that is. And what about customer payments? And what about AI data centers? And Gamesa, you maintain your target to have break-even this year. Thank you very much.
Good morning, Mr. Frühauf. Data centers, we always have to consider two things here. This is grid technology, the transformer that we have in the data center and all the connections, and the gas turbines. And if I consider the grid aspects, then we see mid- to high triple-digit EUR millions for the quarter, just as far as the grid is concerned. Last year, we had about $2 billion for grids. As I said, we are now considering that it will be higher, somewhat higher on the grid side. For gas, if I recall correctly, it's about 22 gigawatts in generation. That is orders and firm reservations. Payments have already been made. These are four data centers. So the 22 gigawatts can be compared with 80 overall. You could say that about 25% of this package for gas turbines is for data centers. As I said, I don't see any change there. We still see a very high demand for. We are maintaining our goal. The results this quarter show what a wonderful job our team is doing.
The next one is Axel Höpner from the Handelsblatt. Go ahead, Mr. Höpner. Good morning.
I think this is a good format just to go directly to the Q&A. Capacities for gas business. This was a long cycle in the past. And then you had some overcapacity. Have these times changed? Or do you see an inflection point here? What about CapEx in the U.S.? And this is a tactical element involved here as well that you want to show that you are investing in the United States to keep the U.S. administration happy? Or is it by capacity, for reasons of capacity?
Well, capacities. As I said last week, up until 2030, everything that goes beyond that is just speculation. And we believe that at some point in time, demand will not be as high as it is today. And that's how we plan our capacities. In other words, this all has to make sense.
That's why for gas, I wouldn't build a completely new plant if I didn't always going to have the capacity utilization beyond 2030. We don't know that. Investments in the U.S., well, this is where our blades are produced. And if I only do surface or new units. So this is something that we are very much aware of. And up until 2030, we do have prospects until then. Anything after 2030 is speculation. That's the way I see it. Investments in the U.S., these are indeed driven by the electricity market. You shouldn't forget one thing. What we have, we call this book-to-bill order, income over revenue is now 3.3 times the number of contracts compared to our revenue. So you can see that this was a real increase in demand. And for CapEx, we will also continue to need this in the U.S.
This is not going to be replaced, but this will strengthen our local capacity, which is really needed. The capacities that we're expanding there can be planned. The utilization is full in the long term. These are necessary investments due to the situation on the market.
A question from chat, Thomas Loy from the Tagesspiegel. This is also the question of the relationship between the U.S. and Germany. What prospects do you have for plants in Berlin and Brandenburg? And also, another question we've heard before, and the fact that in the U.S., we are manufacturing gas turbines. Does that mean they won't be manufactured in Berlin?
No. We continue to invest a lot in Berlin. I can look at the gas turbine plant if I look out the window. I have one right in front of me.
What we're trying to do here is to do everything that is possible here. This is a major challenge for our colleagues because of the plant we're investing here. We continue to invest in this site to make maximum use of it. That is why, no, this is not an issue that the issue is what can we get from the structures? What is the maximum number of delivering the maximum number of gas turbines quickly? What about the prospects for the Berlin plant? They're good. I live here, basically. No, we have a lot of good things here that we're working on. We also hope that we can continue to take further steps. Right now, we're planning to have another new larger building here so that we can get people together here at the site. I think it's very good there.
Thank you very much. Now, the next question comes from Christian Wermke from DPA. Good morning, Mr. Wermke.
Hello. I would be interested in Gamesa. What about the book-to-bill ratio, 2/3? Was there a bit of a problem there? Or should we be concerned that maybe wind is going against us or in the wrong direction, I should say? Are you going to change your statement about break-even for Gamesa?
Because you're just referring now to one quarter. This is just one quarter that we're talking about today where you've talked about the break-even.
Right. Well, let's begin with the current situation with wind. Well, with a lower book-to-bill or lower order intake in Q1, I'm not worried about that because this is a business where an offshore, in particular, I would say it's very bumpy. It's volatile from one quarter to the next.
Individual orders are all in the billions. So per quarter, Q1, I think that we had a large order intake because orders were received. That was not the case in this quarter. I'm not really worried about that. When we talk about the outlook for the future, it's very good. And it's a question now of 2029 and 2030. So I am quite relaxed when I consider that. It was good. What good thing about this quarter was that what we now have 7.0, that was the 5.X onshore platform and the successor model. And the first have been sold. And that means what I can say is everything is going according to plan. And as I said, break-even in 2026.
The next question also on wind, and this comes from the chat from Ms. Erickson in English.
Siemens Gamesa had secured two deals in Germany with the SG 7.0, that's the 5.X turbine, with more to come. Please note, Philipp, informed. How are orders for the turbine looking today? And how confident are you of development in the onshore business?
Yeah. I mean, first of all, I'm glad that obviously these orders came in. And I'm positive on the way forward for both platforms, which we do onshore, so 5 and 7, which was before 4 and 5. I always have to put it into perspective. And we see in different countries of the world a need for it. In that regard, I would say pipeline looks good step after step. But also, we always said we do it carefully. I'm not taking extra risk. I'm not taking difficult terms and conditions. If the customers do not like our terms and conditions, I would rather not take an order than taking an order. But it is really developing as planned.
The next question in the telephone line, Marilen Martin, new correspondent at Bloomberg. Welcome. Go ahead, Ms. Martin.
Thank you. I have a question on turbines. If you've sold 100 in the Q1 , will these actually be built and delivered? And you also mentioned the reservations as well.
Thank you. Well, we don't see any cancellations right now. And there are two questions. We've got reservations, and then we have firm contracts. The reservations, they've paid reservation fees for them. And in the last quarter, we saw the 12-gigawatt reservations were turned into 12-gigawatt contracts. So right now, we don't see any cancellations when it comes to the orders. I don't see any reason where I would have any reason to be concerned. Go ahead.
Once again, if you want to ask a question, then it's star one. Or you can ask a question via the webcast. The next question comes from Clara Thier from the WirtschaftsWoche. Good morning, Ms. Thier.
Good morning. I have two follow-up questions on Gamesa, on the break-even. Can you tell us which quarter it will be achieved?
We saw some very positive developments. Maybe it would be Q2 already. And the second question, if I understood you correctly, in Q1, there were onshore turbines.
Could you say more on that? Where were these orders? Who did they come from?
Well, I'll try. I have to think about what I have off the cuff. Break-even expectations. We've always said we have to see this in six-month basis rather than quarterly basis. And the second half will be stronger than the first half of the year. And this is how it will go. I would be surprised if we were there in Q2 already.
I don't think so. It will be the second half of the year. The orders, some of them were in Europe with Germany and Spain. That's a country, if I recall correctly. I think we also have New Zealand and Japan on our list in onshore. As far as onshore is concerned right now, I think I recall this correctly, I think we are involved in 12 countries, certain European countries. We're very selective. Some non-European countries, including Australia, New Zealand, and Japan, where the products fit the market very well. That's the rationale behind it.
Let's come back to Ms. Thier. We will look into that and give you an exact answer. This is just what Bruch has in mind. The question is a follow-up question from Mr. Steitz from Reuters. You have the floor, sir. Mr. Steitz? Then something was indicated incorrectly.
Or maybe, well, we don't see any more questions in the chat. Let me just have a look. One more question in the chat from Han Du. Strong margin expansion in Grid Technologies this quarter.
This is naturally English. Oh, sorry. Yeah. Okay. That's obviously driven by also the strong backlog on which we sit on. This is obviously the execution of a history over the last 2-3 years where we could achieve a margin expansion also in the backlog. And that is well executed now. So the team does a great job really to bring these better backlog margins also to the bottom line. And that is what you're seeing now. And obviously, it's my expectation that this journey also continues.
Thank you very much. We have also the narrative for Frau Thier.
The answer for Ms. Thier. The orders for onshore in Spain and Germany, New Zealand, and Japan, just as Mr. Bruch said. Not only does he live here, he's got all the information right at hand. No further questions.
Per telephone. Then we'll end the.
Okay. No more questions. No questions from the chat or by phone. Thank you for participating, for attending, and your interest. Thank you for additional questions. I think this format is great. If you have any additional questions, my press team and I are happy to answer them by phone. The conference call for analysts with Christian Bruch and our CFO, Maria Ferraro, begins today at 10:30 A.M. Journalists can also attend the analysts call but not ask questions. You can find the link on our website. The next regular event is the press call for the Q2 on 12th of May. Christian Bruch and our CFO, Maria Ferraro, will be ready to answer your questions there. There is the annual general meeting on 26th of February, first time as an in-person meeting in Berlin.
Journalists can follow the presentations and discussions by live stream or in person in the press area on site. So have a nice day. Goodbye. Okay. There's one additional question from my team. Okay. Too late. Ladies and gentlemen, the quarterly conference has ended. Thank you for participating. And have a good day. Bye-bye.