Please stand by. We're about to begin. Good morning, ladies and gentlemen, and welcome to the Siemens 2020 First Quarter Conference Call. As a reminder, this conference is being recorded. Before we begin, I would like to draw your attention to the safe harbor statement on page two of the Siemens 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'd like to turn the call over to your host today, Mrs. Sabine Reichel, Head of Investor Relations. Please go ahead, madam.
Good morning, ladies and gentlemen, and also warm welcome from my side. The earnings release and Q1 presentation were released at 7:00 A.M. this morning. You can find everything on our website. I'm here with our CEO, Joe Kaeser, our CFO, Ralf Thomas, and our Deputy CEO, Roland Busch. Since this AGM starts right after this call, we will limit the time of the call to 45 minutes. Joe and Ralf will start with a brief presentation, and then Joe, Ralf, and also Roland will be here for Q&A. With that, I would like to hand over to Joe.
Thank you, Sabine. Good morning, everyone, and thank you for joining us this early to discuss our First Quarter Results ahead of our AGM here in Munich. Two weeks ago, I attended the World Economic Forum in Davos, where we've all met many customers, partners, investors, government representatives, and also, obviously, social societal stakeholders from across the globe. The theme this year, as many of you know, was centered around how to build a cohesive and a sustainable world. Needless to say that decarbonization was the key focus and the question, how to limit global warming and reach the target of the Paris Agreement. Obviously not surprising that NGOs and climate activists took center stage in the public debate. Although already five years ago, Siemens has been the first major industrial company which had itself set the target to be carbon neutral by 2030.
We have also come under activist scrutiny by delivering a signaling system to a transport company associated with coal mining Australia. While we do what we have to do, it still shows that the importance of adding ESG matters into strategic concepts and business plans along the value chain is a relevant topic. Siemens Energy, in particular, can and will play a significant role in supporting the global energy transition from conventional generation to renewable energy, and supplying technology to produce synthetic fuels for the hydrogen economy. That's why a strong, profitable, and innovative renewable energy business is a key element for the strategic direction for the equity story of the newly founded Siemens Energy. Therefore, we entered into constructive discussions with our fellow shareholder and customer, Iberdrola, and agreed to acquire Iberdrola's 8.1% stake in Siemens Gamesa Renewable Energy.
That will increase our stake to around 67% of the total company. We also agreed to unwind the existing shareholder agreement and enter into a partnership agreement to work together closely to further drive the energy transition in a mutually successful way. That also includes working together even closer in the area of smart transition and grid access. This step will enable SGRE to secure additional about EUR 100 million of savings starting by fiscal 2022. The net present value is around EUR 900 million altogether for SGRE, which obviously we have a 67% stake and benefit from. We have had a very intense shareholder dialogue with the SGRE management, the relative and relevant SGRE management, and they have committed to achieving those goals and put them into the mid and long-term business plan and commitment on their side.
As previously announced, Siemens AG will transfer all its SGRE shares, including the newly acquired ones, to Siemens Energy as a vital cornerstone of the company's long-term transformation strategy. Let me now give you my quick assessment of our fiscal Q1 performance. As expected, we saw a slow start after a powerful finish in 2019. Overall intake on orders was quite strong, with close to previous year's record levels. The book-to-bill subsequently translated in what we believe excellent 1.22 book-to-bill ratio, although obviously driven by large-scale orders in the project environment. Digital Industries, Smart Infrastructure, and Mobility as the components of the newly, what we call Industrial Siemens, performed as expected with some really nice pockets of strength, such as in software, especially in the bookings there, low voltage in China.
As for Siemens Gamesa and Siemens Healthineers, I'm sure that you are not the only disappointed shareholders. While we note that Healthineers management reiterate its guidance based on healthy top line growth, we believe with the new shareholding development at Siemens Gamesa Renewable Energy, this will help redirect internal focus to more relevant external factors, such as, for example, project execution. At Gas and Power, the clear focus is to deliver the numbers forecasted, including planned cost savings, and get the new setup ready for a proper listing as planned. If you look at the full year expectations, we do confirm our outlook for fiscal 2020. We also continue to expect the trough in our most relevant short-cycle verticals, not before mid-calendar year 2020. That does not change what we said at our original guidance.
Obviously, and needless to say, that at this point in time it's too early to assess the potential economic impact, both from the domestic as well as the global supply chain impact of the epidemic virus issue originating in China at this time. With that, Ralf will give you now a more detailed and brief overview of our fiscal Q1 performance by segment. Ralf, please.
Thank you, Joe, and also good morning from my side. As Joe mentioned, Digital Industries still operates in a weak industrial environment, especially in our core verticals, automotive and machine building. This resulted in clear revenue decline in discrete automation, while process automation was flat. On the positive side, our software business continued its strong growth path. It contributed substantial double-digit order growth due to major wins in the semiconductor and other high-tech industries. Software revenue was up 5%. Looking at regional revenue growth of our automation business, the cyclical industrial weakness and structural challenges in Europe are clearly visible. High-margin automation businesses were down 18% in Germany and 10% in Italy. Automation revenue in the U.S. decreased by 3%. China held up reasonably well, with only - 1% despite tough comps. There are some green shoots of hope.
In recent weeks, we have observed some initial positive signals in China. Trade growth rebounded in December on a stabilizing global economy and easing U.S.-China trade tensions. Against this backdrop, Digital Industries continued to execute on its cost optimization program as planned. We recorded severance charges of EUR 115 million, equaling 300 basis points of margin. As we already highlighted in November, Digital Industries is prepared to act further on the cost side if markets are not developing along our assumptions. The impact from cloud investment and Mentor integration costs total to around 210 basis points in the quarter. Our expectation for fiscal 2020 is to sustain profitability in the target margin range at 17%-18%. Smart Infrastructure delivered a solid performance with revenue up in most of its businesses. Building and utility markets continue to grow around 3%, while the industrial market segment weakened further.
This cool down resulted in a slight revenue decline of the product business, while distribution systems, software solutions, and service have been driving growth. Adjusted EBITA margin was up year-over-year, mainly on better execution in Digital Grid. The Smart Infrastructure team makes good progress on implementing its competitiveness program, as announced. We expect to achieve agreements with the workers' council in the course of the second quarter. Hence, we assume severance charges of around EUR 100 million in fiscal Q2. Furthermore, Smart Infrastructure announced the acquisition of C&S Electric a few days ago. This fits perfectly into our strategic priorities to grow the product business in Asia, which we addressed at the Capital Market Day last year. With this transaction, we will strengthen our position as a key supplier for low-voltage power distribution and electrical installation technology in India.
In addition, this will enable us to create another export hub to expand our business all over Asia. Gas and Power delivered a mixed performance. A clear positive was solid order volume of EUR 5.6 billion on tough comps. This led to a healthy book-to-bill of 1.23 times on flat revenue development. We booked three large gas turbines, 20 small and medium gas turbines, as well as four aeroderivative gas turbine units globally. Our expectation for the large gas turbine market in fiscal 2020 is around 70- 80 units. The somewhat disappointing Gas and Power margin of only 1.4% was 240 basis points below prior year level. Main reasons were a less favorable revenue mix and additional expenses for the ramp-up of the standalone setup of Siemens Energy, as indicated before. The service business again delivered a very solid profit contribution.
As expected, free cash flow bounded back after a strong fourth quarter, year-end finish. The Energy team continues to work on further working capital improvements. As already indicated, Siemens Mobility had a soft start into the first quarter. The sales funnel is strongly weighted towards the second half of fiscal 2020. Revenue and margin performance were below prior year, mainly due to a lower volume of smaller rail infrastructure projects. We expect a clear acceleration across all metrics throughout fiscal year 2020, starting with the second quarter. Our strategic companies, Siemens Healthineers and Siemens Gamesa Renewable Energy, already reported their first quarter results, both unfortunately below our end market expectations. They have clear plans and management commitments in place to improve performance going forward. Let me now point out a few topics below industrial business.
We had a very positive effect from a EUR mid-double-digit million divestment gain in financial services. Siemens Real Estate recorded a gain of EUR 219 million from the transfer of an investment to the Siemens Pension-Trust. As a result of largely tax-free gains, the first quarter tax rate came in at only 18%. To sum it all up, we confirm our guidance for fiscal 2020, and with that, Joe and myself and Roland are happy to answer your questions, and I'm passing back to Sabine.
Thank you, everyone. Now let's start Q&A. First question, please.
Thank you. Ladies and gentlemen, we'll start the question-and-answer session. If you wish to ask a question, please press the star or asterisk key, followed by the digit one on your telephone keypad. Again, ladies and gentlemen, please press star one on your telephone keypad. Our first question comes from Andreas Willi from JP Morgan. Please go ahead.
Good morning, everybody. I have two questions, please. First, on Gas and Power, if you could comment on the underlying performance, also in terms of the backlog, whether you see some stability here now in gross margins. GE recently said that backlog margins started to improve, whether you still think the 8% margin target for 2021 is feasible here, because it's quite a step up from the current run rate. The second question on the deal with Iberdrola, what assurances do you have from the regulator that you don't have to offer the same price to minorities? Do you expect to be taken to court by investors looking for the same price? Also, if you could elaborate on the EUR 100 million cost synergies from this. It's a pretty big number, kind of exactly where that is coming from. Thank you very much.
Thank you, Andreas. Let me start with the GP question. You have been referring to the underlying and also to the backlog quality. First of all, as we have been indicating before, we have been busy completing the German carve-out in the first quarter, which is the biggest of all the challenges that we had on our way to setting up a subgroup for the new legal entity of Siemens Energy. There was a hell lot of work and details that the team has been working with. At the same time, we have been building up the infrastructure for the new standalone listed company, means extra departments that didn't exist before, like investor relations, treasury, are in the process of being built up. There was an expected ramp-up of cost.
At the same time, we have been seeing that the business mix, as I mentioned that before, had a bit less service impact compared to the long-term average. We do see from the backlog, however, that this is going to stabilize back to normal in the quarters to come. The indication we gave with the target margin range of 2%-5% is still intact. We see the team busy working on the savings and the implementation of the programs that we indicated. On the way forward, the EUR 700 million of cost savings, which are supposed to be implemented by fiscal 2021, has been confirmed by the management team, also by the new management team, by the way. We have been busy discussing these measures with them just recently. We are very much in touch and up to date with following up on those cost savings.
To the extent of guiding for the margin ranges for the years to come, you need to be patient with us because at the moment we are busy building up the equity story and also the business plan. I can only report on the ingredients, so to speak, and the EUR 700 million savings, as indicated to you in the Capital Market Day, is intact and on its way. Also the business mix from the backlog that we do see with two-thirds of service business is also well on its way. We have been talking a couple of times about whether or not there are incremental changes in early cancellations or renewals. There is nothing of materiality that we have been seeing so far in that field.
Thank you. Maybe just a couple of additions. The underlying miss, which we saw in our internal Gas and Power discussion, was mostly attached to the mix between service and new business, although service is still comfortable in its margin development. Now over to you on the Siemens Gamesa regulatory matters. You can be rest assured that this topic was one of our centerpieces for our attention associated with the project. There's not much else I can say to it, but it was one of the centerpieces, and that's why we feel comfortable in what we do, and to keep control over what else happens or doesn't happen.
The second part of the Siemens Gamesa question around the cost synergies. Of course, the management team of Siemens Gamesa, and also the future management team of Siemens Energy, they have been looking into matters very thoroughly and have been reporting back to the managing board via the relevant board members of Siemens Gamesa Renewable Energy board. There's two major buckets of those EUR 100 million of cost synergies. One is obviously coming from the procurement channel, where we do see substantial opportunities for better pricing power. It's mainly around topics like cabinets, bearings, towers. The other bucket of course, is around the expectation that the cooperation agreement with Iberdrola to jointly address the energy transition in several different areas around the globe, that is also providing incremental business opportunities for Siemens Gamesa.
Therefore, we feel very comfortable with the NPV of EUR 900 million that we have been addressing, and which has been underlying the investment case that has been presented like each and every other investment case to the managing board. We have been thoroughly going through the five strategic imperatives that we typically are discussing when we make major investment decisions. You do know them. I don't want to bore you with that, but there were green ticks in all those five boxes.
Thank you very much.
Thank you, Andreas.
Thank you. We'll go to our next question now from Ben Uglow, from Morgan Stanley. Please go ahead.
Good morning, everyone, and thank you for taking the question. I guess what I'm interested in is the big picture in China. If we look at the orders, it looks as though there's been a pretty nice step up in orders. I don't know if there's a comp effect, but nearly 20% to EUR 2.7 billion. Can you give us a sense of how broad-based that is? Are there long-term, the big one-off contracts in there? What's the sense there? Specifically on Digital Industries, Ralf, I think you said that there were signs of hope. What signs in particular in China are you seeing? My question is, I guess that we normally see a pretty big restock ahead of the Lunar New Year. This happens every time. The question is this just a restock, or do you see more positive underlying demand?
Thank you, Ben. This is of course a very relevant question that we have been asking ourselves around restocking. Let me first talk about China more from the big picture that you have been asking for. What we do of course see is that China pretty much is standing at the lowest growth rates of the economy since decades, and therefore we do have a lot of respect for maneuvering through those challenging times. When it comes to the manufacturing output, that seems to be stabilizing with a slight growth in very selected industries. We are of course, using these opportunities to win market share, and we are very strong positioned in China with our combined offering of automation and industrial software, as you do know.
When it comes to machine building and automotive industries, we have been seeing, just like a couple of our competitors also have been commenting, that there are first positive, even though weak signals, based on low levels for the machine building and automotive industries. We are carefully watching that. As mentioned before, the DI team is fully committed to make sure that they will be in a position to respond swiftly if the underlying assumptions of their production and business plan would change materially. They have been learning their lessons well. With regard to restocking, honestly speaking, this is extremely hard to tell this time because Chinese New Year has been earlier than in the prior years. From that what we see, there is no pattern that there would be extraordinary stocking levels in the channels, but we are carefully watching that.
From that what we do see, we do not expect a backswing from that in the next quarter or in January. As far as we have been looking into matters from this one-month perspective already, there is no artifact that had been building up, which would materially have influence on the way forward. We have a lot of respect, of course, also to the potential impact of the virus. We are busy checking the supply chains to identify as early as possible potential bottlenecks of the supply chain. Too early to make any statements on that, of course, because there's also the fact that Chinese New Year and holidays have been extended so far.
Yeah, maybe to add to that since it's so crucial. First of all, obviously this whole matter of the coronavirus, we need to go see how far the pandemic goes, what it does to the China economy, but also how the supply chain is going to develop for the international business where we need the components from China. We have very early on built a crisis team on purchasing and the likes, and also see on alternate suppliers for components. That's what we are currently very focused on, which is obviously relevant. That's why it's too early to.
The second topic is also something I want to throw your mind to. The more we get an ease of minds on the China-U.S. trade deals, the more comfortable we are on our software business. As you may know, most of our software deliveries, like associated with Mentor Graphics or the PLM side, comes from the United States.
There have been quite some restriction on the software side. The more that eases going forward, the more we may be able to compensate for some turbulences on the component side. That's what we are very closely looking at, and this is where we stand. Q1 was really encouraging. As such, obviously we would have hoped for, let's say, a less turbulent topic, but we take what we have to take, and I think we are well underway on how to manage and how to assess the opportunities and the risk associated with that.
One more remark from my end, Ben, with regard to China and the growth momentum. The new orders, which have been up 19%, were also supported by strong software business, which has been growing double-digitally. On a global basis, we mentioned that in the press conference before, new orders for software have been up 33%.
That's great. Thank you. Thank you very much indeed.
Welcome. Welcome, Ben.
Thank you. Our next question today comes from Alexander Virgo from Bank of America. Please go ahead.
Thanks very much. Good morning, gentlemen. Good morning, Sabine. It was just a quick sort of follow-up, I suppose, on the DI margins. Just trying to understand a little bit of the trajectory as we look through the year. Is it fair to assume coronavirus impact notwithstanding that the spend as we see, obviously severance charges front-loaded, so severance charges will fall away through the year. Just thinking about the headwinds from Mentor integration and MindSphere investment, I'm wondering how linear, I suppose, we can see that trajectory of margin development through the year. Maybe as a follow-on from that, could you talk a little bit about operating cash flow seasonality? Clearly, as you guided to, Q1 was a slow start off a very strong Q4. I'm just wondering if we can think about a little bit more stable free cash flow conversion and generation through the year. Thank you.
Thanks, Alex. Let me start with the latter one. The operating cash flow after a really very strong fourth quarter, was a bit of a question mark for us, too. I have to say that I'm quite satisfied with the development I saw so far. I am looking upon that topic, however, more from a execution perspective of the asset management programs of the different companies. We have been looking into that extremely diligently throughout the last two weeks. They all have been reporting that they are on track. I do see measures on the value lever level that are very encouraging. The bounce back from the fourth quarter to the first quarter was by far less dramatically as we saw that in prior years. Does that satisfy me completely? Of course not. We will continue looking into the measures and their degree of implementation.
Seasonality from first quarter's perspective is definitely better than we saw that last year. That's also something we need to, of course, take into consideration. The fact that we had outstanding strong large project orders in the prior year's first quarter is also a fact that we need to take into consideration. It hasn't been repeating itself, in particular on the Mobility side, you saw that. Mobility, due to the new order pattern that we see in the funnel, will definitely not be in a position to catch up in the first half of fiscal year 2020. There will be some backload, whether we like it or not, from the project business in the second half of the year.
Talking the DI margin development, I think it's important to understand the EUR 115 million, which is the majority of the program that we have been indicating and the DI management has been unveiling in the Capital Market Day last year. Those EUR 115 million are pulled in at an earlier point in time as the management team has been promising to accelerate the program. That implicitly means also that the savings will come earlier. We indicated that in the analyst conference of the fourth quarter of last fiscal year already. We had been expecting EUR 160 million of savings for fiscal 2021 originally. This is now EUR 250 million out of the EUR 320 million of the whole program.
The acceleration is getting tangible, and we are quite satisfied with that effect. The other component, the cloud investment and Mentor Graphics integration, which has been contributing 210 basis points to the first quarter.
They will not linearly, but steadily go down over the course of the fiscal year. We will keep you updated then also what we do expect for the next fiscal. It, of course, is also related to the impact of the savings program to a certain extent, and therefore, there is no linearity over the quarters, but it will continuously ramp down, in particular, also with the one-time investments for MindSphere, as we indicated that before.
That's very helpful, Ralf. Thanks very much. Just to clarify, the 33% order increase in software, is that China software or the overall software? I think it's just China.
No, that was the global figure. The Chinese growth rate has been double digits, however, as well.
The major growth comes from projects associated with big U.S. companies, which we have agreed not to specifically mention the name as well as the order volume. Think about the most prominent West Coast companies associated with PLM and chip design, then you probably have a glimpse that this is really, really big for us. We are very proud, I have to say, on that one, because at the end of the day, the whole Mentor PLM, electrical, mechanical integration simulation comes together now, not just in a great strategic concept, but also in big orders and the understanding of our customer that this helps them to be a better company.
Very helpful. Thank you very much.
Sure.
Thank you. Our next question...
Next question, please.
... Comes from James Moore from Redburn. Please go ahead.
Yes. Good morning, everyone. I have two questions, if I could. On the savings, perhaps you could help us a little bit on the timing. You previously helped us that Vision 2020+ will be EUR 2.2 billion of saving in 2023 and EUR 1.4 billion in 2021, with roughly half in Gas and Power. My question is really that when we look at the savings that you expect this year in FY 2020 versus next year, FY 2021, how should we phase the EUR 1.4 billion? Would it be a straight line, 50/50, EUR 700/EUR 700 or, as I suspect, much more skewed to 2021? If so, could you perhaps scale that?
My second question relates to the Gas and Power business. You mentioned that there are some carve-out costs in there. I wondered if you could perhaps scale that. Are we talking 50 basis points or 200 basis points impact on the margin? Maybe you could also say what's in the Group Central cost relating to that topic as well, as I believe there are cost impacts on both sides. Thanks.
James, thank you. With regard to the savings, it will not be 50/50, obviously. What I tried to express with my earlier statements is that for DI, we have been accelerating the program, and what originally had been planned for fiscal 2021 was EUR 160 million. We have been accelerating that and increasing that target level for 2021 to EUR 250 million. There was already savings in the low double-digit million area on that DI initiative, the acceleration of that initiative. The indication I gave in the press conference and also in the call here is that for SI, you may expect that we also are pulling all levers to get the program implemented as quickly as possible.
We are very positive that we get a final agreement with the workers' council for the second quarter, and then there will be bookings on severance in the area of EUR 100 million, which also would help to push the program forward. We have been confirming the savings pattern as we indicated, as Roland said, also in the press conference for 2021 as planned. There will not be a material accelerated impact in fiscal 2020 on that one. It will not be 50/50, but rather maybe 2/3, 1/3 in that area. Too early to tell. As I said, the negotiations on the Smart Infrastructure side are still ongoing, and as always, we talk about figures once we get agreements in place. Can you repeat quickly the focus of the Gas and Power question?
Carve-out cost.
Yes. I get the sense that there are.
Go ahead.
Go ahead.
Just to repeat, I get the sense that there are some costs for the carve-out in both GP...
Okay. The carve-out. Yes.
... In the central line. I just wondered if you could scale the impact on the GP margin. Is it 50 basis points, 200 basis points?
First of all, as I said before, the ramp-up of the infrastructure needed for a separately managed and listed company is ongoing. We have been carving out Germany now, which was the biggest step to take and also on the critical path. It has been done completely.
On top of that, of course, there is carve-out costs in the countries. Since we touched on each and every country around the globe, that may well be between 50 basis point and 100 basis points, but it's very hard to assess that properly because there are also many minor steps to be taken in all these different countries, and therefore we would appreciate to first complete the carve-out, and then we will give you the details of the cost associated, which of them will be one time and which will be recurring, because obviously the setup for the listed vehicle will be recurring. A big part of the activities that have been impacting the first quarters with regard to the carve-out itself will, of course, not repeat themselves.
Thank you.
We still have a few questions in the line. Let's be quick now. Maybe one or two more questions, but only limited to one question with then also a short answer. Thank you. Next question, please.
Thank you. We have a question from Daniela Costa. Please go ahead.
Thank you for taking my question. Just one, which relates to the strategic companies, the strategic industries. You've laid out what you're doing with Gamesa, and the overall stake helps you address some of the performance issues in Gamesa. I was wondering if sort of the recent performance on Siemens Healthineers or Mobility influenced somehow how you're thinking about those in the future. You have the Mobility update coming up. Can you just update us on whether there's any sort of influence on how you're thinking about those, and what should we expect, particularly for the Mobility update? Thank you.
Thank you, Daniela. From a shareholder's perspective, for the strategic companies, of course, we are not satisfied with the profitability of the first quarter. I think there's quite a difference that we need to make when we look into matters for Siemens Gamesa compared to the Siemens Healthineers. The Siemens Healthineers management has been clearly confirming their outlook and has been also describing the details of why the first quarter was not satisfying from a profitability perspective. From that point of view, we are looking forward to a significant improvement, in particular in the imaging business in the second quarter. That's what management team has been telling the market, and we are following up on that as shareholders consistently, of course. With regards to Siemens Gamesa, the fact that there was a particular set of projects related, we have been, from the board's perspective, carefully looking into those matters.
The management team has been beefing up the control procedures in that regard. We do not expect a similar surprise according to that, what Markus Tacke and his team have been sharing with the market.
Daniela, from my side, Mobility, you saw that our order intake was based on a tough comp. We saw that it is starting slow, but we see an improvement in the second half year. Revenue is, due to the phasing in of the projects, is coming as planned, profitability is stable, a little bit lower than expected due to the lower revenue, in particular in signaling. From that perspective, no trigger for any other news than that what we said before, that we would come back in Q2 with little details.
Let's take the last question then.
Thank you. Our last question today comes from Jonathan Mounsey from Exane BNP Paribas. Please go ahead.
Hello. Hi. Thanks for taking my question. Well, maybe a quick one. I think in Digital Industries, there was a Bentley gain last year. If I remember rightly, that was about EUR 50 million. I think there was also one this year. Obviously, the net impact, I think I was modeling a full EUR 50 million not to reoccur. I think probably consensus was, too. If there was a gain this year, could you tell us how big it was? If it was EUR 30 million, that would obviously imply a more significant underlying miss than it first appears. Can you possibly give us a feeling on what the number was this year for Bentley?
No, what I can tell you is that the number wasn't as big as last year. For your model, maybe you may consider half of the amount of the prior year to be in the ballpark, but let me give you my math quickly on what the underlying was. As I said, excluding severance, the margin was at 17.4%. If you then take out the impact of cloud investment and Mentor integration, that takes you in the ballpark of around 19%, and all the other impacts, compared to that what we saw in prior year, were rather negative. You are on the safe side with an assessment that the underlying is slightly below 19%.
Great. Thanks very much.
Very much. Thank you.
Thank you also, everyone from my side here, and also for participating in the call. You can watch the live webcast of the Siemens AGM via the investor relations homepage. As always, the team and I will be also available for further questions. Thank you, everyone. Bye.
Thank you.
Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. Once again, let me repeat the instant replay numbers. Participants in Germany, please call the replay number +496920001800. Access code 6531519, followed by the pound key. Participants in Europe, please call the replay number +442076600134. Access code 6531519, followed by the pound key. Participants from the U.S., please call the replay number +17194570820. Access code 6531519, followed by the pound key. This replay service will be available until tomorrow night. A recording of this conference call will also be available on the investor relations section of the Siemens website. The website address is www.siemens.com/investorrelations. Thank you.