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Speaker 1: One of the big companies in Germany, that's Zeeman's Energy.

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Speaker 1: It has reported its earnings this morning. It's scrutinizing its

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Speaker 1: wind business for a strategic reset after heavy cost related

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Speaker 1: to ongoing problems with turbines. Now the company has said

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Speaker 1: this morning its annual losses are expected to nearly quadruple

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Speaker 1: to four point five billion euros and we can discuss

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Speaker 1: those results now with the CEO, Christian Bruch. Thanks very

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Speaker 1: much for being with me, Christian. What's the main thing

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Speaker 1: you want investors to take away from these results this morning?

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Speaker 2: Yeah, good morning. No, it has been a very very

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Speaker 2: demanding quarter for Semen's Energy and obviously it's a very

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Speaker 2: diverse picture which we have. We have had to take

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Speaker 2: charges of one point six billion for quality related costs

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Speaker 2: in the onshore business of wind related to two platforms.

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Speaker 2: These were issues which occurred after a certain runtime of

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Speaker 2: the turbines and if we had additional six hundred million

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Speaker 2: charges at Semens Gomeza to take because of the rambup

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Speaker 2: of the offshore busines. There is a high demand, that's good,

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Speaker 2: but we are ramping up around four factories at the

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Speaker 2: Mormon in parallel and these are affected by obviously shortage

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Speaker 2: in construction workers, completing the factories, ramping up materials and

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Speaker 2: so forth. The other thing is, obviously it really overshadows

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Speaker 2: an outstanding performance of the conventional energy business. It was

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Speaker 2: around at one point four billion profit to date and

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Speaker 2: obviously really with a fantastic order book, and that is

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Speaker 2: really really painful. But the other thing is we have

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Speaker 2: already since the our talk on twenty second of June,

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Speaker 2: established mitigation measures, including establishing a task force at Siemens

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Speaker 2: Gamesa and fixing the quality problems and addressing it now

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Speaker 2: step to step, but definitely, I mean this is a

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Speaker 2: situation where we are reviewing the different elements in terms

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Speaker 2: of how can we as fast as possible really stabilize

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Speaker 2: the wind business because it is strategically an interesting growth business.

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Speaker 2: But obviously we have to be able to operate rate

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Speaker 2: in this field profitably.

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Speaker 1: So what do you know about the causes of the

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Speaker 1: flaws in the newer on shore turbines and what are

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Speaker 1: you doing to fix those issues?

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Speaker 2: Yeah? And as I said, I mean these are related

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Speaker 2: to a certain operational time and this is a relatively

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Speaker 2: diverse picture across the different turbines. First of all, I

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Speaker 2: think it's important to understand that these are issues which

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Speaker 2: currently do not affect the operation of the turbines, so

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Speaker 2: the turbines are producing power for our customers. However, we

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Speaker 2: have relatively early on identified issues around the blades and

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Speaker 2: the bearings, so two main components in the turbine which

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Speaker 2: need a rectification. For some of the turbines in the fleet,

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Speaker 2: it is always a mixture between specific suppliers which have

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Speaker 2: provided these parts and obviously also conditions at sight, so

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Speaker 2: this is not a black and white picture. But I

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Speaker 2: think what is important is that these are eccruals for

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Speaker 2: the future to fix over the next couple of years

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Speaker 2: these issues and potentially we're obviously always trying to do

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Speaker 2: this in line with our customers normal service interventions. So

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Speaker 2: this will unfold.

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Speaker 1: How long will it how long will it delay profitability

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Speaker 1: for Gameta?

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Speaker 2: Yeah, allow us to do exact statements towards that really

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Speaker 2: on the capital market day, because as I said, what

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Speaker 2: we're at the same time doing is looking really on

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Speaker 2: the overall portfolio as products and regions to say how

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Speaker 2: do we phase it out over the next years to come.

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Speaker 2: So it's not just these quality issues, it also to

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Speaker 2: say what is really the best path through that, and

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Speaker 2: that will influence obviously the exact timing also on the profitability,

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Speaker 2: but definitely one thing is clear. It delays our path

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Speaker 2: to profitability in the wind business, which we have stated before. However,

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Speaker 2: obviously there's more than just fixing the quality problem. We

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Speaker 2: will look on the overall package and say this is

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Speaker 2: how we're going to do it, and this will be

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Speaker 2: in November.

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Speaker 1: How exactly does Zeeman's Energy profit from the transition to

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Speaker 1: renewable energy more broadly, just very briefly.

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Speaker 2: Yeah, no, thank you very much. I mean, you've seen

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Speaker 2: a fantastic record order intake in the grid technologies business,

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Speaker 2: and obviously electrification at the end needs to transport electricity.

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Speaker 2: We are benefiting from this. We're seeing an increasing margin

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Speaker 2: in the backlog on the grid side. That's a very

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Speaker 2: good We see the ramp up now in hydrogen. We

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Speaker 2: will see in quarter four, let's say, an interesting order

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Speaker 2: book for the hydrogen side. So there are let's say,

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Speaker 2: good elements where we profit from and at the end,

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Speaker 2: we also want to profit from the wind business, but

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Speaker 2: that is obviously some work which we have to be doing.

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Speaker 1: Okay, thank you very much, Christian Rook, CEO of Zeeman's

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Speaker 1: Energy