Combined Management Report 7. Overall assessment of the economic position Overall, global economic development in fiscal 2023 was mixed and characterized by a number of headwinds. In this environment, Siemens delivered a very strong performance in all its businesses due to its strategic positioning relative to long-term trends such as automation, electrification and digitalization. With our offerings, we help increase resource efficiency and the decarbonization of industry, transport and building infrastructures and make manufacturing more resilient and flexible. We expect these trends to continue to drive our growth in the coming years. During fiscal 2023, we made further progress in focusing our business portfolio by selling our Commercial Vehicles business. Furthermore, we began forming a new motors and large drives company under the name Innomotics by combining our existing business activities in the areas of low- to high-voltage motors, geared motors, medium-voltage converters and motor spindles. Also, we further reduced our stake in Siemens Energy AG to 25.1% and transferred shares to Siemens Pension-Trust e.V. To boost future growth and drive innovation, we announced a €2 billion investment strategy mainly for new manufacturing capacity as well as innovation labs and education centers. We also expanded our open digital business platform, Siemens Xcelerator, by introducing Industrial Operations X, which includes a broad range of interoperable offerings for more adaptive production, and by adding new cloud-based applications for Building X, our suite for smart and sustainable buildings. Fiscal 2023 was another very successful year for Siemens. We achieved excellent financial results in a volatile market environment, which on the one hand included destocking by customers and distributors following previously proactive purchasing, particularly in our short- cycle businesses, and on the other hand included improved supply chain conditions, which accelerated revenue conversion from our high order backlog. We raised our outlook during the fiscal year after the first and the second quarters. We then reached or exceeded all the targets set for our primary measures for fiscal 2023. We achieved revenue growth of 11% net of currency translation and portfolio effects and delivered EPS pre PPA of €10.77. Excluding Siemens Energy Investment, EPS pre PPA was €9.93. ROCE increased to 18.6%, our capital structure ratio came in at 0.6, and the cash conversion rate was 1.17. Orders rose 7% year-over-year to €92.3 billion, for a book-to-bill ratio of 1.19, thus fulfilling our expectation of a ratio above 1. Order growth was driven by sharply higher volume from large orders at Mobility, including an order worth €2.9 billion for locomotives and associated maintenance in India and a €2.5 billion order for the first line of a turnkey rail system in Egypt, and by clear growth in Smart Infrastructure led by the electrification business. Orders in Digital Industries came in lower as the destocking trend mentioned above had a significant effect on its automation businesses. Revenue was higher in nearly all our industrial businesses and rose to €77.8 billion, up 8% year-over-year. Smart Infrastructure and Digital Industries contributed double-digit growth with all businesses posting increases. Revenue growth at Smart Infrastructure was led by the electrification and the electrical products businesses, while at Digital Industries the factory automation and the process automation businesses contributed the strongest growth. Revenue growth at Mobility was led by a significant increase in the rolling stock business. Revenue at Siemens Healthineers remained on the prior-year level as growth particularly in the imaging and Varian businesses was offset by a decline in the diagnostics business. Excluding currency translation and portfolio effects, revenue for Siemens rose 11%. We thus exceeded the forecast provided in our Combined Management Report for fiscal 2022, which was to achieve comparable revenue growth in the range of 6% to 9%, and reached the upper end of our subsequently raised outlook, which was to achieve 9% to 11% in comparable revenue growth. Profit Industrial Business exceeded the record high of a year earlier and rose 11% to €11.4 billion. All industrial businesses except Siemens Healthineers increased their profit year-over-year. The strongest increase came from Smart Infrastructure on improvements in all its businesses, led by the electrical products and the electrification businesses. Growth at Digital Industries was driven by the automation businesses, only partly offset by a decline in profit in the software business due mainly to higher expenses related to cloud-based activities. Profit at Mobility increased in nearly all businesses and included positive trailing effects related to the winding down of business activities in Russia a year earlier. Profit at Siemens Healthineers came in lower on declines in the diagnostics business, due primarily to sharply lower revenue from rapid coronavirus antigen tests as well as charges related to its transformation program and charges related to refocusing certain activities in the advanced therapies business. The profit margin of our Industrial Business rose to 15.4%, up from 15.1% a year earlier, reaching its highest level ever. Digital Industries and Smart Infrastructure achieved the strongest increases and also contributed the highest margins: 22.6% and 15.4%, respectively. The profit margin for Mobility rose slightly to 8.4%, while the profit margin at Siemens Healthineers declined to 11.7%. Earnings before taxes at SFS increased significantly due mainly to higher earnings before taxes in the debt business, which in the prior fiscal year included a €0.2 billion impact in connection with the sale of the financing and leasing business in Russia. Return on equity after tax for SFS increased to 16.3%. Profit at Portfolio Companies included a €0.1 billion gain from the sale of the Commercial Vehicles business but came in sharply lower compared to the prior fiscal year which had included a €1.1 billion gain from the sale of the mail and parcel- handling business of Siemens Logistics and a €0.3 billion revaluation gain in connection with the sale of our stake in Valeo Siemens eAutomotive GmbH. Results within Reconciliation to Consolidated Financial Statements benefited from positive effects related to Siemens Energy Investment, including €1.6 billion from a partial reversal of the prior-year €2.7 billion impairment on Siemens' stake in Siemens Energy AG. These positive effects were partly offset by Siemens’ share of Siemens Energy’s after-tax loss. Net income nearly doubled year-over-year to a historic high of €8.5 billion and corresponding basic EPS more than doubled to €10.04. EPS pre PPA increased to €10.77. Excluding a positive €0.84 per share related to Siemens Energy Investment, EPS pre PPA was €9.93. We thus exceeded the forecast provided in our Combined Management Report for fiscal 2022, which was to achieve EPS pre PPA in a range of €8.70 to €9.20, and exceeded our forecast made after the third quarter of fiscal 2023, which was for EPS pre PPA excluding Siemens Energy Investment in the range of €9.60 to €9.90. ROCE for fiscal 2023 rose to 18.6%, up from 10.0% in fiscal 2022. This increase was due to sharply higher income before interest after tax year-over-year. We thus exceeded the forecast for ROCE provided in our Combined Management Report 2022, which was to come close to or reach the lower end of our target range of 15% to 20%. We evaluate our capital structure using the ratio of Industrial net debt to EBITDA. Due to a combination of a decrease in Industrial net debt and higher EBITDA year-over-year, this ratio declined to 0.6. We thus achieved the forecast provided in our Combined Management Report 2022, which was to achieve a ratio of up to 1.5. 20