Good afternoon. Thank you for joining the call today at this somehow inconvenient time, which is due to a Board meeting held earlier today. We appreciate your dialing in and we will endeavor not to delay your weekend plans too much. I’m joined as always by our CFO, Beatriz Puente. We will provide you with an overview of our full results for fiscal year 2021 and our guidance for fiscal year ‘22 and beyond. We will then be happy to take your questions. Fiscal Year 21 was a complex one with the effects of COVID-19 lasting longer than expected with shortages of certain components and sharp increases in commodity prices, transportation costs, especially in the second half of the year. So let’s look at the key points for this financial year 2021. First to the facts. Revenue of 10.198 billion with an EBIT margin of 0.9%, both in line with the low end of our guidance announced in July ‘21 for the full year. Fiscal year ‘21 results were clearly impacted by the challenging conditions of the supply chain, and the higher ramp up cost of the Siemens Gamesa 5.X turbine that we already saw in our Q3 results but we continued to deliver an extremely strong execution, both in offshore and service. Point two, all the action taken for ‘22 and beyond. We have put in place different actions to tackle the supply chain challenges and drive the recovery like all of these included in the LEAP program. We are reaching the final stages of restructuring in India, and are also making extremely good progress consolidating our capacity in EMEA. We have launched different measures from cost-out programs to enhance procurement and pricing practices to address the challenges in the supply chain on the cost inflation pressure. And we’ve also put in place specific actions on cost-out and supply chain development regarding our Siemens Gamesa 5.X turbine. I would like to insist also in the strong momentum in renewable, as we are currently seeing, these days, especially during the COP26 in Glasgow. Only in offshore, there will be an added capacity of 32 gigawatts coming from auctions in ‘21 and ‘22. And we are well-positioned to benefit from that growth, as you can see, if you look at our order backlog of more than 30 billion and more than 12 billion in order intake in fiscal year ‘21. And that brings me to the key message three for today, our guidance for ‘22 and beyond. Whereas the short-term dynamics will have an impact on our results in fiscal year ‘22, the prospects to achieve our long-term vision are good. In detail, we expect a financial year ‘22 revenue guidance between minus 7% and minus 2% growth rate, fiscal year ‘22 EBIT margin guidance between 1% and 4%, and despite of the short-term challenges, we maintain our 8% to 10% long-term vision, but reaching it under current circumstances is likely to take longer than originally expected. I will explain more in the outlook section of our presentation. Now, I will go quickly through some good examples of our strong execution and technology. We recently announced the rating increase of our 5.X turbine to 6.6 megawatt, which means that it’s the largest turbine in the industry. We have also, I would say, close to perfect execution in the installation of our more than 10 gigawatts offshore direct drive turbines and more than 98% availability of our offshore direct drive in fiscal year ‘22 for the fleet that is maintained by Siemens Gamesa. Our LEAP program has also seen very positive progress since it was launched in ‘21 -- sorry since it was launched in 2020. It has supported the innovation in our newest onshore and offshore platforms. It has improved our productivity and asset management with different measures like a simplified onshore organization, a capacity in EMEA that is not driven by demand, cost-out measures to gain productivity, and the working capital of minus 24% of revenue. LEAP has boosted operation excellence by rolling out a standard project management book by making our Vagos plant the global lead factory for onshore blades and by improving supplier quality management. Fiscal year ‘21 has also seen the near completion of our Indian restructuring with a successful introduction of the 3.4-145 turbine, among other actions. Fiscal year ‘21 has also been outstanding in terms of ESG performance. We’ve achieved top ratings in the sector by the main ESG agencies. We are first in the FTSE Russell in ISS, ESG and second in Vigeo Eiris. And we’ve also reached top percentiles in almost 100 different ratings with a very high score of 84 in the case of Standard & Poor’s Global, and we continue to work to become a global sustainability leader. We have already achieved ambitious targets like the launch of the first recyclable blade, being carbon neutral or being powered 100% from renewable sources. We have recently set new targets for 2040 like net zero emissions, including our suppliers, a completely recyclable wind turbine and 30% women in leadership positions by 2030 among other actions. Let us now take a more detailed look at the commercial activity of the fourth quarter of this year. We maintain a high order backlog of more than 32 billion, 7% higher year-on-year. Order intake of 12.2 billion in fiscal year ‘21, a reflection of the company’s commercial strategy focused on controlling risk and prioritizing profits in the projects. Order intake of 2.8 billion in Q4 with strong performance by service and offshore. The chart on the right shows that the EMEA region continues to drive the order backlog with the growth of more than 2.5 billion in the fiscal year ‘21. Thanks to the high order and coverage of fiscal year ‘22 revenue guidance. More than 80% of this order backlog is related to markets where execution is strong with growth prospects above average. In onshore, we have seen a low activity and lower order intake volume due to our selective commercial activity with the focus on profitability over volume. Q4 order intake was impacted by a slowdown in the Siemens Gamesa 5.X sales and an impasse in the US and Spain. Americas and EMEA remain the main drivers of our onshore commercial activity in the last year, with the largest contributors being Sweden, Brazil, US, and Canada and India represented 46% of the order volume in Q4. Turbines of 4 megawatt or greater account for nearly 70% of all orders in the last year, a year-on-year increase of 23 percentage points with the Siemens Gamesa 5.X platform accounting for 30% or a total of 2.2 gigawatts. Pricing continues to be stable with increases in the second half of the fiscal year. The ASP was negatively impacted by the currency effect the smaller scope of projects and the dilution from larger ratings. The positive impact came from taller towers, regional mix, and price increases. Although the impact of price increases cannot be seen in the ASP, we continue to make progress on this front. This can be seen in Q4. In Q4, prices were impacted by the large contribution of nearly 60% from India. Excluding this Indian share of our ASP would have increased our ASP to 0.71 million per megawatt, which is a 10% higher than the Q4 ‘20 ASP, also excluding India. This is not to say that we’re implementing a double-digit price increase in all our contracts, but we are clearly passing through inflation progressively. In offshore, we maintained our leadership with 7.5 gigawatts in order backlog and another 7 gigawatts in a very diversified pipeline, as you can see on this map. Order intake of nearly 3.5 gigawatts in fiscal year ‘21 is slightly lower than in fiscal year ‘20. But in fiscal year ‘21, we landed two new preferred supplier agreements in Taiwan, 230 megawatts in Hai Long B and 500 megawatts in Hai Long 3, both equipped with the Siemens Gamesa 14-222 turbine. The order intake and the pipeline for our latest SG 14-222 in total accounts now for 5.1 gigawatts. As you will surely have seen today as well, we’ve also signed a new MOU to license offshore technology to a new partner United Power in China. And lastly to service, which accounts for half of the total group backlog with around 16, nearly 17 billion, 11% higher than a year ago, with EMEA consolidating its leading position, with a growth of almost 1.2 billion. Almost 80 gigawatts under maintenance at the end of fiscal year ‘21, an increase of 7% with 11 gigawatts in third-party technology. An order intake of nearly 3.5 billion, with the year-on-year comparison impacted by the strong service activity in fiscal year ‘20 related to, at that time, large offshore orders. But the extension of East Anglia ONE from 5 to 15 years had a significant contribution on the order intake in Q4 ‘21. With that, I now hand over to Beatriz to give you a closer look at the financials.

Thank you, Andreas. Good afternoon and thank you for joining our results presentation today. I will cover the key financial performance of the group during the fourth quarter and also fiscal year ‘21. As Andreas has mentioned, ‘21 has been a challenging year, especially during the second half of the year, due to the delivery constraints on a rising logistics and commodity costs that are expected to continue during ‘22. Saying that, the company focus has been to address the current supply chain and cost inflation issues, improve project execution and risk management, and all these measures are expected to bear fruit in the coming years. In this challenging environment, the company has been able to deliver revenue and EBIT margin in line with the low end of the guidance that we provided to the market in July. Group revenues came at 10.2 billion Euros, an increase of 8% year-on-year, in line, as I said, with the low-end of the guidance and Q4 revenues amounted to 2.9 billion Euros, mainly flat. Revenue growth for the year was supported by both offshore and service, while onshore revenues suffered from the delays in the commercial activity during the first half of the year, and also strong execution and supply chain challenges during the second half of the year. Fiscal ‘21 revenues has been also negatively impacted by currency, roughly ‘200 million Euros, mainly driven by the depreciation of the US dollar, also the Brazilian real and to a lesser extent the Indian Rupee. This has happened during the first, I would say, nine months of the year. ‘21 EBIT, pre PPA, and the integration and restructuring cost amounted to a negative amount of 96 million Euros equivalent to a negative EBIT margin of 0.9% of our sales with a fourth quarter negative EBIT of 177 million Euros, heavily impacted by the challenges that I have mentioned before. After its strong performance during the first half of the year, the second half of the year also has been impacted by the accrual of a provision for onerous contracts amounted on the second half of the year to 298 million Euros, out of which 69 million Euros were booked in the last quarter of the year. This provision, as we already covered on the nine month results, reflects the impact on the profitability on our WTG order backlog due to the longer time and higher ramp up cost on the 5.X and also the increase of escalation on the raw materials prices and also logistic cost. We cannot ignore that both has been also compounded, I would say, by the pandemic situation. We’ll go in more detail on page 18 but it’s worth highlighting that also the group, both in offshore and also service activities, continued to perform very strong despite current market conditions. Integration and restructuring cost for the group amounted to 197 million Euros in the year and 48 million Euros in the fourth quarter. We have executed less than planned -- that we originally planned but the effort will continue during ‘22. Our net interest expense amount to 41 million years and the 9 million Euros in the fourth quarter and I will highlight that the decline in the net interest expense has been possible, despite the higher leverage of the group, thanks to different cost management initiatives that were put in place throughout the year. The tax expense of the group amounted to negative 72 million Euros in the year as a consequence of losses in markets where the company couldn’t capitalize the deferred tax assets. As a result of that, the reported net income of the group amounted to a loss of 627 million Euros in the year and loss of 258 million Euros in the last quarter. Moving to the balance sheet and the key metrics, I will highlight that the company has invested 677 million Euros in the year, out of which 255 has been invested in the last quarter of the year and also roughly 30% between product development and manufacturing capacity tools and equipment. The more important thing to highlight on the CapEx, I will say is that 60% of that CapEx has been invested in offshore to really benefit from the future growth of the market. Andreas will cover that in the outlook, but I would like to emphasize that even increasing potential of offshore with strong structural growth drivers, and also more important, our leadership supported both by the stall capacity and also the proven technology and now, as you have seen in our presentation, with new investments on the 14 megawatts platform. To finance that growth, it is important that the company has a very strong performance in our asset management initiatives and programs with negative working capital of 2.4 billion Euros. And we will continue to maintain a very strict control of working capital and also achieving benchmark levels. If we move to the page 16 and I will focus on the revenues of the group. The revenues for the year grew 7.5% year-on-year, supported by both offshore and service, at constant FX, group revenues will have grown roughly 9.5% to roughly 10.4 billion Euros. If I go focus on service revenues reached 1.9 billion Euros, an increase of 9% year-on-year and also including the integration of the acquired European Service Operations of Senvion well on track, as expected. And in Q4 revenues reached 571 million Euros, an increase of 5% year-on-year. Offshore achieved 3.3 billion Euros in the year, an increase of 16% and is the main driver of the group -- of the share of the growth for the group this year, both because of the high level of manufacturing activity and also because of the high level of installations. In the fourth quarter, offshore revenue growth was flat with 829 million Euros. As we explained at the beginning of the year, it was planned an introduction of the manufacturing of the 11 megawatt platform and the ramp up has been smoothly and has been completed successfully and also online with our cost estimates. The group will start execution of projects of our 11 megawatt platform next year. Given the challenging market conditions, we are working in more than eight projects in Europe and Asia during the year and meeting the delivery deadlines with the ramping up of the manufacturing of our new turbine, it is a very good example of offshore strong execution and also operational excellence. Moving to onshore, revenues reached 5 billion Euros, a decrease -- 2% year-on-year increase. And onshore revenues have been driven by increasing both manufacturing activity volumes and also installed volumes. Saying that, onshore has been by far the market with the strongest impact from supply chain bottlenecks, late deliveries on a specific component, and also the increase of the freight cost, and the lack of capacity. This has been reflected also on the top line, especially in the fourth quarter of the year, with revenues down 2% and sales volume than 8.6%. Moving to page 17 and focus on the EBIT performance of the group. As I mentioned before, EBIT margin for the full year stand at negative 0.9%, in line with the low end that we provide to the market. As explained before, our performance on the ‘21 year has been impacted by the owners’ provision that was allocated by the group on the second half, amounted to 298 million Euros. Again for the fourth quarter close to 70 million Euros but the impact of the owners’ provisions also has been partially compensated by efficiency measures, as Andreas covered through our LEAP program. Also we have lower failure rates and therefore the release of also ordinary warranty provisions and also the reassessment of market availability of signed inventories on the WTG segment, both impacts inputs that was covered also during the first half of the year, nothing significant in the fourth quarter. On the service division, I will highlight that continues to deliver a very strong performance with a margin on the Q4 of 21.2% and for the full year, roughly 21.8%. Moving to the leverage of the group on slide 18, I want to highlight that the cash flow generation, financial discipline and also of course, strong control of the leverage of the group continues to be the top priority of the group. Net debt position is a negative amount of 207 million Euros at the end of September, an increase of 150 million Euros but I will highlight the significant decrease on the fourth quarter, more than 600 million Euros. The net debt increase is related to the CapEx investments, of course the profitability of the group, CapEx investments and increase on lease liabilities. As I mentioned CapEx has been 677 million Euros, and the total lease liabilities for the group by the end of September amounted to 829 million Euros. The impact of CapEx on the increase of the lease liabilities has been compensated by a strong working capital level with a positive cash valuation of 560 million Euros in ‘21, thanks to the execution of the asset management program under strict control of the working capital. The company also generated as you see on this slide 881 million Euros in gross operating cash flow in ‘21. The increase in gross debt of roughly 497 million Euros were due to the full withdrawal of the European Investment Bank loan that we have signed in February and also that has allowed us to replace more expensive bilateral lines and also reduced our interest cost. Moving into ‘22, I want also to emphasize that cost will remain a priority for the group. We will continue with a very strict control of the working capital levels, maintaining also a benchmark capital levels, as I mentioned before, and also as Andreas will cover, explore selective asset disposals. And last but not least, I also -- the group maintains a very solid funding position with 4.4 billion Euros in credit lines, out of which, if you see on this slide, 1.4 billion Euros has been drawn and we have at the end of September close to 2 billion Euros of cash. The company therefore has available liquidity of roughly 5.1 billion Euros. And also it is very important, as you see on the graph, that there are no significant maturities in the short-term to face. More important, we have secured the liquidity on the long term for the group. And now with this, let me hand over to Andreas to cover the outlook of the group. I’m very happy to answer any questions that you might have.

Thank you, Beatriz. And let me give you an outlook and conclusion of today’s presentation, including our guidance and more details to the guidance and beyond for ‘22. In the last year, we’ve seen higher renewable targets across the globe, as we can see in that slide, slide 21. With the de-carbonization commitments and the green recovery programs encouraging clearly the wind industry in general, globally, we see 1 trillion annual market opportunity for renewables with a significant boost by offshore wind auctions in the coming years. In the European Union, the Fit for 55 package includes a target increase for renewables share of total energy of 40% by 2030. Looking at Germany, it is having an onshore target of 70 gigawatts by 2030, and an offshore target of 40 gigawatts by 2040. Another country to give an example, the UK aims to reduce its emissions by 78% by 2035, the world’s most ambitious climate change target. With 40 gigawatts in offshore and the US aims at somewhere around 50% emissions reductions by 2030. While in Asia, Japan, South Korea, and Taiwan will significantly increase their will wind energy capacity, especially in offshore. This strong commitment and ambitious targets all around the planet show the strong potential for wind demand in the long term. As you can see in this slide page 22, the annual installations are expected to grow by 33% in the second half of this decade, with offshore more than doubling reaching 20 gigawatts in 2025 and close to 40 gigawatts by 2030. But especially, if you look at the net zero targets of the IA, the last bar chart, a significant number about the potential of wind energy. The current level of annual wind installations will need to grow by 4.5 times by 2030 to reach net zero by 2050. But if we look at the short-term dynamics, we see many challenges with low visibility regarding the supply chain normalization. As you can see, in the charts on the right side, the increase of steel, copper and maritime freight over the last year have been very significant, having a great impact on the wind turbine cost. The market outlook for the period ‘21 to 23, as you’ve seen on the previous page, has changed and affected by these disruptions in the supply chain, the increase of raw material prices, the freight cost, also the high electricity prices and manufacturing activity shutdowns in China. And that combined with trade tensions and inflationary risks. The market is expecting the situation will change and will go back to normal but we surely don’t know exactly when this will happen. These short term dynamics will have an impact on our results in fiscal year ‘22 but the prospects to achieve the long-term vision remains good, as they’re also said in my key point three. Fiscal year revenue guidance between minus 7% and minus 2% growth are a consequence of market regulation, delays on customer investment decisions, and the current disruptions of supply chain. The fiscal year ‘22 EBIT margin guidance between 1% and 4% is impacted by the supply chain capacity constraints, raw materials, and freight cost increases and trade tensions as well as lower fixed cost absorption on the back of lower revenue. On the positive side, we will have savings from the LEAP program and restructuring. In ‘22, our CapEx to revenue ratio will be around 8% due to the offshore investments that also Beatriz has already mentioned. Despite the short-term challenges, we maintain our long-term vision, but reaching it under current circumstances is, as I said earlier, likely to take longer than expected. Nevertheless, our long-term vision achievable in the years ‘24 or ‘25 is based on the onshore turnaround, the sustainable profitable growth in offshore, and service. This will lead to a revenue growth above the market and an EBIT margin of 8% to 10%. More specifically, all the measures to support this guidance are included in the LEAP program. Strengthened mechanisms to protect profitability from raw material prices and transport costs, volatility, cost our programs, and new technical features on our wind turbines portfolio, especially on our 5.X turbine, aiming at LCoE competitiveness and an investment plan. We expect to achieve a positive progress between fiscal year ‘22 and our long term vision. And this progress will depend on market regulation and its impact on onshore demand and also, as mentioned, on a number of times on the supply chain that normalization with raw materials and freight cost. Let me finish by quickly going through our three business units and how the three of them support this long-term vision. Our Siemens Gamesa 5.X will be key to consolidate our onshore operations. The two prototypes have now been successfully installed and tested in Spain and Denmark and reached a nominal output of 6.6 megawatt already. And I can confirm and we have also confirmed that again by numerous facts, it is the right product. It offers a higher power to deliver lower LCoE. It has an optimized performance under various wind conditions, greater AEP and optimized CapEx through modular and flexible design. We’ve also launched programs to tackle those challenges of this platform. The cost inflation impact on bill of materials has been addressed, including a multi-year cost-out roadmap to allow the competitive introduction of new features via that cost-our program. We have also increased the investment in the development of the supply chain and the pre-series production, whereas the first commercial units are installed as we speak in Sweden and task forces are in place to manage the project execution. We are also getting ready for the strong demand and demand increase expected in offshore from fiscal year ‘25. We have already 15 gigawatts in our backlog and pipeline, but the opportunity is huge with 146 gigawatts in this decade. To make sure we benefit from this growth, we are investing in our footprint, upgrading our factories for new products like the extension of Hull in the UK, we opened new facilities in Le Havre, France, where we will start to produce early next year. And also in Virginia and the US securing supply volume and finding the right balance between local content and low-cost production. We are also investing in leading products that allow us for continuous cost out and significant AEP improvements with reduced risk and time to market. And this brings me to the SG 14-236 direct drive offshore turbine with up to 15 Megawatt with power boost and the rotor diameter of 236 meters. And this turbine, I’m convinced, will consolidate our leadership in offshore. We are preferred supplier for the Norfolk projects with Vattenfall in the UK with a capacity of 3.6 gigawatts and I think this is a clear proof of customer confidence in that machine and in Siemens Gamesa. We’re also confident that service will continue to outperform the market and deliver profitable and strong growth with an EBIT increase of over 20%. Our service has a growing backlog and a global presence in around 60 countries with a great potential to grow and achieve synergies. Our service offering is competitive, as shown by the renewal rate of more than 80% in fiscal year ‘21. And we have an excellent operations team with great capabilities that can maximize the performance for our customers, as you can also see in the loss production factor below 2% for all the direct drive turbines maintained by Siemens Gamesa. And this puts service in a very good position to benefit from the expected market growth. I’ll finish with the program I started with, the LEAP program, the restructuring and other actions we are implementing. In the area of innovation, we are developing new features for the 5.X to address key markets and enhanced 14-236 direct drive, and we are developing a decentralized solution integrating Siemens Energy electrolyzer into the wind turbine. We also optimizing our productivity through cost-out and product upgrades, and we are coordinating procurement and sales to protect our profitability. We also focus on product cost out and staff cost improvements. Regarding asset management, we maintain benchmark working capital levels and explore selective asset disposals. And finally, we work to achieve operational excellence to continuous focus on quality and health and safety. By adapting also our onshore footprint to supply chain bottlenecks with hubs in America, EMEA and APAC and through the globalization, as I explained on the offshore growth -- of our offshore footprint. With that, thank you very much for your attention and we are now of course ready to take all your questions. Thanks.

The first question comes from Vivek Midha from Citi. Please go ahead.

Thanks very much and good afternoon. Can I ask a question, sticking to one question on the revenue assumptions within the fiscal year 2022 guidance? So could you maybe talk around the assumptions around onshore versus offshore revenues embedded within the guidance? Thank you very much.

Thank you for your question. Of course, within our guidance on revenue, we have take into account the challenging environment but to state to your question, what we foresee is that the decline will take place on the onshore activity segment because of all the challenges on decision by customers delayed that that might take because of changes on regulation, also supply chain constraints and of course higher logistic cost. Offshore revenues are expected more to be stable. And in the case of service, I will say that we are expecting to continue to growing at high-single digit, so that will be the imply assumptions in the revenue guidance.

Okay, understood. And then do you expect any -- I mean, I guess the visibility on this is very limited but in terms of that customer sentiment in your conversations with customers, do you expect that to improve next year? Thank you.

Sorry, you mean whether we continue to sign orders in onshore despite of the raw material issues? Sorry, I didn’t get the question fully, could you kindly repeat that?

I am sorry, I will repeat. So, in terms of the effects of raw material increases and logistics challenges and the like, how you think that impacting customer demand or rather how concerned should we be that these issues are going to start causing demand destruction? Thank you very much.

I think what you can clearly see also in our older intake, that negotiations take longer, because the customers have their own business cases, and with the effect of raw materials, or pass through clauses, escalation clauses, of course, that has an influence on the customer business case and customer decisions. Nevertheless, I believe that the overall demand that we see, and that is what I highlighted also in some of my pages, in onshore will continue, and by the general demand that is there for wind and that this will even out.

Next question.

Thank you very much. The next question comes from Gael De-Bray from Deutsche Bank. Please go ahead.

Good afternoon, everybody. My first question is about the margin bridge. Could you help us understand what the EBIT margin would have been excluding the impact of the manufacturing ramp up of the 11 megawatt turbine in offshore? I know, it’s a pure theoretical question here but the idea is to try and better appreciate the ramp to the 2022 margin target.

As I said, we’re referring to the change of the what platform in offshore, as I said it was done successfully and be in line with our expectations on the fourth quarter, and the impact on the margin. You can count of maybe circa 60 million Euros, 70 million Euros on the fourth quarter impact because of that change. That will be it.

Sorry, you said 60, 70?

Yeah.

Okay. All right. And in terms of the assumption you’ve used in the guidance in terms of the higher cost for steel in particular, could you help us understand what the impact of steel is going to be on next year’s margins, all else being equal?

Of course, this is very, I would say, confidential. I will answer in a different way to give you some comfort. With 422, of course, as we said, during the presentation of all the effort that the group has been focused on enhancing our procurement strategy, of course, also trying to pass on to our clients, enhancing also on the new contracts indexation clauses and of course, making sure that whenever we’ll get the new product in place, we have the cost others to cover potentially increase. Regarding steel, what we can -- for the tower steel, we can give you some coverage in 422 but the group has already coverage for that roughly 70% of the volume and of course, we cannot cover all because, of course, for the new project on the copper, we have already covered roughly 80% of the volume on ‘22, saying that, of course there are other materials that you cannot physically cover or just hedge but on the steel tower, those are the numbers and for the copper is the one I mentioned.

Thank you. Your next question comes from Akash Gupta from JP Morgan. Please go ahead.

Yes, hi, good afternoon, Andreas and Beatriz. And I have a follow up on guidance and one question on cash flow and working capital. So coming back on the guidance, I mean, thanks for providing color between segments, but if I just come back on margin guidance, you have 300 basis points wider guidance than 200 basis points that we have seen in the past. And is it fair to say that this entire range is driven by onshore or is it also because of offshore that you have some uncertainties that is leading to higher range?

That higher range, as you said, is of course due to the market environment that we have. If we have to split that, it is more concentrating on onshore that the spread on guidance. As I said, also the revenue drop is on the assumption that we have will be more focused on onshore than stable offshore saying that also, of course, execution -- sorry, higher costs on logistics also might have an impact on the offshore projects as well, but more on the onshore.

And then coming back on cash flow and working capital, and maybe if you can help us with the cash flow bridge. I mean, at the midpoint you are guiding 2.5% EBIT margin and then, if I look at restructuring that would be cash out, provisions from last year would be cash out, and then your CapEx would be significantly ahead of depreciation for another year as you invest in offshore. And then finally, on working capital, it is 24% of revenues, which is very high level compared to what we have seen both before as well as competition . So, any comment on cash flow bridge for fiscal year 2022? Thank you.

Thank you, Akash. As, as you said, of course, some impact on restructuring also will come in ‘22. It’s important for the group to continue optimizing the footprint of the group and also reducing the structural cost. Regarding the cash flow assumptions, what we can tell you is that we are committed to financial discipline, we are committed to maintain the investment grade of this company and of course, for doing that it’s important that the leverage of the group will not be higher. How we will achieve that with that CapEx is a combination of maintaining strict control of our working capital, and you have seen that we have been able to do so on ‘21. And also as Andreas has mentioned, we are analyzing different strategic alternatives of selective assets also to contribute to finance that, let’s say, CapEx as well.

Akash, if you allow one specific investment that we’re looking at is development pipeline that we worked on over the years and we are currently seeing to monetize that.

Okay.

Thank you. The next question comes from Mark Freshney from Credit Suisse. Please go ahead.

Hi, hello, thank you for taking my question. Regarding you spoke on the last call, Andreas, about going through contracts and putting escalation clauses in. So it seems like most contracts are now protected in that or they have a much higher degree of protection. Can you talk and confirm that that’s still the case? And look, if commodity prices do roll over, as I think you allude to or normalizes as you allude to somewhere or even rollover, I guess, then presumably there would be a benefit would use Siemens Gamesa be able to capture any of that benefit, i.e. charging clients for steel that you actually procure at a lower cost on the downside? Thank you.

Thank you, Mark, for the question. And I don’t think there’s a general answer to that. Your assumption that in all the new contracts, we have a much better coverage by various means, and we explained that, Beatriz and I in Q3 as well, we have different means to cover that. Escalation clauses or pas through clauses, hatching with suppliers or taking higher risk contingencies in the project, so there’s a mix of measures to cover for that. And we also must not forget that ‘22 will be a mix of backlogged contracts without that and also new contracts with these additional measures are fully in place and therefore it’s very difficult to say. To the second part of your question whether we can benefit, if the prices fall, that depends exactly on which type of clauses we have implemented in the individual contracts. And if we have normal escalation clauses in the customer, the benefit is then shared, then we wouldn’t fully benefit. If we have fixed prices established, which is not the case in many contracts, and then the cost goes down, then we would benefit. But it’s very hard to say in which portion and how many contracts and also, as I said, and as Beatriz also mentioned, we still have to wait and see how the commodity prices develop in the next year.

Thank you.

Thank you. Your next question comes from Ajay Patel from Goldman Sachs. Please go ahead.

Thanks. Good afternoon. So my question is around assumptions as well, but on guidance. So yes, steel prices elevated, copper elevated, maritime freighter elevated, is that guidance on these, the current situation lasting throughout 2022 or is there an assumption of it backwardating, just to give us a feel of what drives the 1.4% margin target here. Any clarity there would be really helpful.

Thank you. I mean, regarding that question, of course, we have considered higher cost of steel on copper and also freight for the ‘22. Of course, what we have not considered is that what we have seen in the last weeks that has been quite intense and very, very high freight cost will continue throughout the year. What we have considered, of course, that is going to hit us on the first quarter and second quarter is going to be -- continue to be pressure on cost inflation but we have not considered that throughout the year, the whole year, we are going to see what we have seen in the last two, three weeks, I will say, or, last month.

So that’s specifically on freight, right. So steel and copper, you’re making the assumption that it stays elevated and in maritime freight, you’re assuming you get hit in Q1 and Q2, and then there’s some form of backwardation or fall. Is that right way of thinking about it?

Yeah, right. Of course, as I mentioned before, it’s important for the raw materials. When we speak of raw materials, we are saying we have our potential to cover steel tower, we also have for copper, we don’t have all the coverage for the rest of the components. And what I was saying before is what we have seen the last in a month is like shortage of specific components that has also on the constraints on the supply chains that has hit us on the execution, as you have seen on the fourth quarter. And that effect has been compounded and we have now taken the assumption that throughout ‘22 that will continue.

Now Ajay, if you allow just to add and what Beatriz highlighted now what we’ve seen in the last quarter is not only are the cost assumptions that you can take for raw materials or freight to be considered but the -- and logistics cost but simply getting the parts from A to B and getting the parts in time into the factories and into the project. And that is what we mean when we say supply chain capacity constraints. It’s not only a capacity, but simply due to the logistics, you see the harbor congestions that parts, that even though we have them, we know where they are, they don’t arrive as planned and that is simply also putting quite some stress and burden and simply uncertainty on our ‘22 situation.

Yeah, it is clear. There’s one bit that just didn’t make sense from earlier, but I’m sure it’s obvious. I think you said that 70% of the volume of steel is covered and 80% of the copper. I am just wondering how do I think about that in regards to next year. So do I take where steel and copper is now and then anything lower than this could filter through as a benefit, equally anything higher than this is a negative or is it a number that is much lower than where we are now with this as a prices at the end of Q3 or end of Q2, I’m just trying to understand how to frame that, I expect you can help.

I think I would like to refer it to my previous answer. There is no general answer to that. The remaining percentages of steel and tower steel that Beatriz mentioned and copper, it all depends how the associated customer contract looks like whether it has a positive, negative or neutral influence on the results. So that depends really on the individual situation of each project.

Okay, okay. Thank you very much. That’s very clear.

Thank you. You next question comes from from Bank of America. Please go ahead.

Yeah. Good evening, guys. Thank you for the questions. And the first question is on onshore profitability. So you said in the past, you were targeting breakeven by the end of ‘22. Obviously, that got pushed out, can you let us know, kind of your updated view on when the onshore business can be breakeven? And then secondly, I think in the presentation, you said, the medium term margin guide of 8 to 10 that’s obviously being pushed out. Can you give us an update on when you actually think that this is an achievable target? Thank you.

Nathan , I would like to start then with the second question, connecting them back to the onshore question. And as we say, in the long term vision update and we expect that we can get into the 8% to 10% corridor in ‘24, ‘25 and with all the uncertainty that we see in the short to mid-term, that is simply not possible to say exactly when that will be. And that also brings me back to the onshore turn around. The onshore turn around to bring onshore back into profitability is one major ingredient or major success factor into that. We are clearly improving the onshore profitability from last year over the next year in the coming years but when exactly we reach breakeven, with all the uncertainty is hard to say. The 8% to 10% is then based on the onshore turnaround being successful, offshore growth coming, and then the relatively stable, more than 20% of service to continue at good growth.

Okay. And then just a quick follow up just on that, that last question. It sounds as though it’s going to be very second halfway to the year in 2022, because of the logistics issues that you’re obviously facing. Is that how we should think about things, so kind of losses in the first half of the year, recovering in the second half of the year? Thank you.

You may now -- going back to the guidance that we have provided, which is the EBIT, yes, of course, we are providing you a guidance between 1% to 4%, it is going to -- profitability of the group is going to be back-loaded on that because of the issues that we see on the current environment.

Okay, okay. Thank you very much.

Thank you. The next question comes from Sean McLoughlin from HSBC. Please go ahead.

About your onerous contracts you had reassured us at the Q3 stage that you’ve covered all the 5.X projects, so I’m just wondering, this extra 69 million, are they related to the same project? Has there been an increase in provisions on the same projects or is this a new set of projects?

Thank you. As we highlighted on the activity report, those increase on the close to 69 million Euros on the fourth quarter, this has been related to the same, let’s say, issues, mainly higher freight costs, highly – also delays on execution and this is more concentrated on two projects.

And can you give reassurance that we won’t see any more onerous contracts related to the 5.X plant?

Whether we can get you reassurance, it is very important, as Andreas said, that the 5.X technology has been proven with the two prototypes up that the company has put in place a significant plan to track down the cost out of the 5.X, but also that we enhanced the procurement processes to avoid the situation that we face in Brazil and therefore all the focus of the company has to settle to cost out the cost on the 5.X and avoid that situation and also focus of the company has been also risk management improvement as well.

Thank you.

Sean, just to give you a very practical example from the Q3 numbers – yeah, from Q3 where the main impact came from the Brazilian project. We do now weekly reviews of the Brazilian project. It’s every Friday. We did that today again. And whereas most of the elements of the Brazilian project are at the moment stable like a production and also the progress, the starting progress at site. We of course still see and then it’s always back to the same, the logistics that also in Brazil and for the remaining part of the project will still be a challenge, do we get the parts and everything to the site as planned. At the moment, it looks like, but that remains to be seen and depends on how this whole logistics situation develops over the next few months. But otherwise, I think we stabilize the project. I’m quite satisfied with the development, still with the uncertainty that is there.

Thank you.

Thank you. Your next question comes from Supriya Subramanian from UBS. Please go ahead.

Yes. Hi, good evening and thank you for taking my question. I had one on medium-term guidance, more on the top line where you say that you expect to go faster than the market. Just wanted to check over the next three to five years, given that you are likely to have more selectivity in the onshore business and potential market share losses in offshore, being the market leader, but still maybe around 45% to 50%, how do you plan to achieve above market growth? And secondly, maybe a little bit more theoretical, as new raw material prices go up and potentially – eventually, let’s say, it get passed on to the customers and in offshore, of course, you do have pass through clauses as well, how does these material price increases impact the LCoE for wind? And do you think that could be potentially a dampener for the volume growth, at least in the near to medium term? Thank you.

If I start with the second question, whether the raw material price and therefore let’s say the resulting effects in LCoE will have a dampening factor. Overall, I don’t see that at the moment because the requirements for wind or the demand for wind in the long term are clearly growing and growing rapidly, especially in offshore. And we’ve achieved now LCoE levels in onshore and in offshore that are lower than any other generation costs. So while the LCoE might increase a little and still to be seen how much that is because we can also compensate by technology improvements and I don’t see that in general that will slow down the demand side. And also, when you look at all the top -- at the reports that currently issued by consultants, you don’t see that as an effect that is major. That is of course different than the short term, as I said, if there’s already a customer business case, a tariff, an auction, where our customers are locked in, and they cannot pass that on into a tariff or into an PPA that is of course a slightly different situation. Then you asked us about market growth, I would like to start there with offshore clearly and we maintain our target to have more than 50%. And the growth there is clearly driven by the demand growth. And as I showed also, even though onshore is flat in the next few years, in offshore, we still -- we clearly see a market growth and I think it’s around 32 gigawatts in auctions that will be auctioned out in the next two years and we expect a strong growth in that and also in onshore and maybe even not next year, the year after, but also then growth will come back. And then on top of that you have our increased installed fleet and the service revenue growth that is also extremely satisfying and promising.

Great. Thank you very much.

Thank you. The next question -- the last question comes from Deepa Venkateswaran from Bernstein. Please go ahead.

Thank you. I had a question about offshore versus onshore. So you talked about all these supply chain bottlenecks and so have your competitors. It seems like offshore doesn’t seem to be hit by these. Is this just a timing issue and would we see things like this happening next year or has it got something to do with the footprint of how components are made for offshore wind? Maybe it’s more oxy-focus. Is that driving a difference? Would you comment on that and a small clarification on the long-term guidance, so the 8% to 10% by FY ‘24, ‘25. I mean, that clearly would imply that onshore should not only have broken even but should be contributing, so presumably, by implication, the breakeven should at least be a year early. So, maybe just a clarification on that. Thank you.

Maybe if I start with the implications in offshore and onshore, whether they’re the same and Beatriz, you could take the very last question then for this evening. In offshore, onshore; the situation is slightly different in offshore and onshore mainly due to the, I would call it, project cycle times that are different in onshore and offshore. In offshore we quite often produce way ahead of time and therefore, we are not that impacted by the shortages and especially the project are not impacted by it. Whereas in onshore, we are much shorter project execution times and any delays in components in some cases or in many more cases hits even the delivery and the project. And that is simply a major difference between on and offshore. And also in offshore, we have -- to always be on the safe side, we’ve also normally started production relatively early to make sure that we have the components, blades, sailed in time when the installation starts and that is I think the main difference. But on the other hand, as Beatriz has also said, the logistics shortages or logistic cost increase also hit offshore. We also need to transport offshore equipment and that is hit in an equal way once we transport the equipment. And then I think the breakeven question for onshore.

Yes, I mean, you make kind of a good assumption. Of course, we are providing a long-term guidance range 8% to 10% on the low end, 8%, onshore will be contributing with a small amount, let’s put it this way and on the upper range the contribution will be higher and of course, depending on the timeframe that we do so. Depending if we achieve that range on ‘24 is because, of course, the profitability and the breakeven point is there on onshore and if we achieved that on ‘25 that range is because it comes a bit later.

Okay. Thank you so much.

Thank you, Beatriz. And with that, I would like to finish the evening from many of us, the evening, with a few concluding remarks. First, many things and for all your good questions and we of course more than happy and look forward to answering these questions more in the upcoming roadshows. And after such a challenging year and also with a new guidance, I’m sure there will be lots of discussions and many good questions and hopefully equally good answers from our side. But I would also like to say I think for all of us, in this industry, this has been a very interesting week and Friday evening at seven, whereas the world meets in Glasgow, and as I also shared with you enormously exciting outlook for this industry. At the same time, you have short term effects, like the share price development this week and this only shows how, on the one hand interesting, on the other hand, challenging this industry is, but especially, I think, everyone here at Siemens Gamesa, we are firmly committed, and we believe in the long term outlook. And therefore, I think one has to be a little patient here, and especially this week. But many thanks for your attention and look forward to meeting many of you then, in the near future. Thank you very much.

Thank you.