Siemens Energy : Annual Report 2023 including Consolidated Financial Statements for the Siemens Energy Group, together with the Combined Management Report of Siemens Energy AG and the Siemens Energy Group, as of September 30, 2023 (IFRS)

Siemens Energy

Annual Report 2023

siemens-energy.com

Siemens Energy Group at a glance

Revenue distribution (location of customer) (in billions of €)

EMEA

14.8

therein Germany 2.5

Americas

10.0

therein U.S. 5.8

Profit margin before Special items

(8.9)%

Order Backlog (in billions of €)

112

Free cash flow pre tax (in millions of €)

784

31.1

Asia, Australia

6.4

therein China 1.5

Profit before Special items	Net loss
(in millions of €)	(in millions of €)
(2,776)	(4,588)

Orders	Book-to-bill ratio
(in billions of €)
50.4	1.6

Basic EPS	Employees ∅
(in €)	(in thousands)
(5.47)	94

Content	1	Introduction to the Annual Report
		2	Siemens Energy Group at a glance
		5	Letter from the Executive Board
		6	Our leadership team
		7	About this Report
	2	Combined Management Report

9 Business description

12 Financial performance system

1. Business performance in fiscal year 2023

1. Results of operation

1. Net assets, liabilities and equity

1. Financial position

1. Report on expected developments

1. Report on the internal control and risk management system and material risks and opportunities

1. Explanations to the Financial Statements of Siemens Energy AG (Holding)

1. Group non-financial statement

1. Takeover-relevantinformation

1. Further information

3 Consolidated Financial Statements

1. Consolidated Statements of Income
2. Consolidated Statements of Comprehensive Income
3. Consolidated Statements of Financial Position
4. Consolidated Statements of Cash Flows
5. Consolidated Statements of Changes in Equity
6. Notes to Consolidated Financial Statements

4 Additional information

1. Responsibility Statement
2. Independent Auditor's Report

152 Independent auditor's report on a limited assurance engagement

154 Report of the Supervisory Board

160 Corporate Governance pursuant to Sections 289f and 315d of the German Commercial Code

174 Compensation Report of Siemens Energy AG for fiscal year 2023 pursuant to Section 162 of the German Stock

Corporation Act

1. Independent auditor's report on the audit of the compensation report prepared to comply with Sec. 162
   AktG ["Aktiengesetz": German Stock Corporation Act]
2. TCFD Index

Introduction to the Annual Report

Siemens Energy Group at a glance	2
Letter from the Executive Board	5
Our leadership team	6
About this Report	7

5

Letter from the Executive Board

2023 was a year of light and shadow for Siemens Energy. Despite numerous successes, the year was marked above all by an unsatisfactory share price. The Gas Services, Grid Technologies and Transformation of Industry Business Areas met or exceeded their targets. Strong orders, reflecting the increased demand for energy transition technologies, was accompanied by a significant increase in revenue, supported by the consistent execution of the high order backlog. As a result of our operational improvements, we have significantly improved the margin in these businesses. The quality of our products, our global reach and the commitment of our employees are the basis to capitalize on the opportunities in the energy market together with our customers.

On the other hand, we clearly fell short of our goal of returning the wind business to profitability by integrating it into Siemens Energy. Our company suffered an unexpected and severe setback in the past fiscal year at Siemens Gamesa. This had a serious impact on our overall results and thus also on our share price. The transaction had started as planned. In May 2022, we announced a voluntary cash tender offer to acquire the outstanding shares of Siemens Gamesa to delist the company and gradually integrate it into Siemens Energy. Siemens Gamesa's shareholders approved the offer at an Extraordinary General Meeting on January 25, 2023. The delisting became effective on February 14, 2023. Today, Siemens Energy is the sole owner of Siemens Gamesa. However, in the summer of 2023, serious quality problems emerged in parts of the onshore fleet coupled with higher product costs and challenges in ramping up the offshore business, that led to a material negative impact on the company's earnings. To address the quality issues with the 4.X and 5.X onshore platforms, we set up a task force staffed with experts, both internal and external to Siemens Energy. The task force has developed a corrective action plan, which is now being systematically implemented. We remain convinced that wind energy will be an attractive business in the medium term.

Our business opportunities as an energy technology company are excellent. After all, the world's energy infrastructure needs to undergo a fundamental transformation. Only then will humanity be able to meet the growing challenges of climate change and rising energy demand. We firmly believe that Siemens Energy can and will benefit from this transformation. An important prerequisite is that each business contributes to our mid-term profitability target.

In fiscal year 2023, the excellent performance of the majority of Siemens Energy's businesses was overshadowed by the unsatisfactory performance in the wind business. Gas Services, Grid Technologies and Transformation of Industry showed an excellent performance throughout the fiscal year, characterized by strong orders, successful project execution and operational improvements leading to increased profitability in these business areas. All businesses, except for Siemens Gamesa, either met or exceeded their full year guidance as announced at the beginning of the year.

Siemens Energy met its full-year guidance for fiscal 2023, which was adjusted in the third quarter. Orders exceeded the high level of the prior fiscal year by 33.8% on a comparable basis and rose to €50.4 billion (2022: €38.3 billion). The order backlog at the end of the year was at a record level of €112 billion (2022: €97 billion). Revenue of €31.1 billion was up by 9.9% on a comparable basis. Siemens Energy's Profit before special items decreased to negative €2,776 million (2022: positive €225 million) due to the loss at Siemens Gamesa. Special items amounted to negative €184 million (2022: negative €413 million) largely related to restructuring costs at Siemens Gamesa and costs in connection with the integration of Siemens Gamesa. Profit for Siemens Energy came in at negative €2,960 million (2022: negative €188 million). Net loss of Siemens Energy was €4,588 million (2022: €712 million). Corresponding EPS were negative at €5.47

(2022: negative €0.65). Free cash flow pre tax decreased to

€784 million (2022: €1,503 million).

For Siemens Energy in fiscal year 2024, we expect comparable revenue growth in a range of 3% to 7% and a Profit margin before special items between negative 2% and positive 1%. Furthermore, we expect a Net income of up to €1bn including impacts from disposals and the acceleration of the portfolio transformation. Free cash flow pre tax is expected to be around negative €1.0 billion. We expect proceeds in a range of positive €2.5 billion to €3.0 billion from disposals and the acceleration of the portfolio transformation.

A difficult geopolitical environment and the resulting increase in volatility will remain the new "normal" in the future. Siemens Energy must prepare for this by further focusing its portfolio, innovating new products, diversifying its supply chains, streamlining processes, and focusing on data and digitalization. The global energy transition is just beginning. We have a lot of work ahead of us. We are in an excellent position, thanks in large part to our 94,000 employees in more than 90 countries, who are dedicated and passionate about the challenges of transformation. They are all working hard to ensure that we at Siemens Energy will see far more light than shadow in the future. I am delighted that you are with us on this journey and thank you for your trust.

President and Chief Executive Officer

Christian Bruch

Siemens Energy - Annual Report 2023

Our leadership team 6

Tim Holt	Maria Ferraro		Karim Amin		Vinod Philip
	Member of the	Anne-Laure
Member of the	Chief Financial Officer	Christian Bruch
Member of the
Executive Board		President and	Executive Board	Parrical de Chammard
	Executive Board
		Chief Executive Officer		Member of the
				Executive Board

Our leadership team

Siemens Energy - Annual Report 2023

7

About this Report

This Annual Report contains the Consolidated Financial Statements and the Combined Management Report of Siemens Energy AG and its subsidiaries ('Siemens Energy', 'the Group', 'the Company', or 'we') for the year ended 30. September 2023 including the Group non-financialstatement in chapter 2.10 Group non-financial statement of the Combined Management Report, as well as further information. It complies with the annual financial reporting requirements of Section 114 of the German Securities Trading Act ("Wertpapierhandelsgesetz"). The Combined Management Report includes the management report for Siemens Energy AG in addition to the information on the Group. This Annual Report also contains the 4.5 Corporate Governance pursuant to Sections 289f and 315d of the German Commercial Code as well as the 4.6 Compensation Report of Siemens Energy AG for fiscal year 2023 pursuant to Section 162 of the German Stock Corporation Act. Independently of this, as part of our focused corporate communications activities, we will also be reporting on sustainability matters within a dedicated sustainability report (available under www.siemens-energy.com).

The Siemens Energy's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU) as well as with the additional requirements set forth in Section 315 e para. 1 German Commercial Code. Ernst & Young GmbH Wirtschaftsprüfungsgesell- schaft has audited the Consolidated Financial Statements and the Combined Management Report. The unqualified independent auditor's report can be found under 4.2 Independent Auditor's Report. The Independent Auditor's Report also includes a "Report on the assurance in accordance with Section 317 (3a) HGB on the electronic reproduction of the Consolidated Financial Statements and the Group management report prepared for publication purposes" ("ESEF Report"). The audit subject underlying the ESEF Report (ESEF documents to be audited) is not attached. The audited ESEF documents can be viewed or accessed at www.siemens-energy.com.

This document contains statements related to our future business and financial performance and future events or developments involving Siemens Energy, that may constitute forward-looking statements. These statements may be identified by words such as "expect", "look forward to", "anticipate", "intend", "plan", "believe", "seek", "estimate", "will", "project" or words of similar meaning. We may also make forward-looking statements in other reports, prospectuses, presentations, material delivered to shareholders and press releases. In addition, our representatives may from time to time make verbal forward-looking statements.

Such statements are based on the current expectations and certain assumptions of Siemens Energy's management, of which many are beyond Siemens Energy's control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the chapters 2.7 Report on expected developments and 2.8 Report on the internal control and risk management and material risks and opportunities of the Annual Report. Should one or more of these risks or uncertainties materialize, should acts of force majeure, such as pandemics, occur, or should underlying expectations including future events occur at a later date or not at all, or should assumptions prove incorrect, Siemens Energy's actual results, performance, or achievements may (negatively or positively) vary materially from those described explicitly

Siemens Energy - Annual Report 2023

or implicitly in the relevant forward-looking statement. Siemens Energy neither intends, nor assumes any obligation to update or revise these forward-looking statements in light of developments, which differ from those anticipated.

This document includes in the applicable financial reporting standards not clearly defined supplemental financial measures, that are or may be alternative performance measures (non-GAAP-measures). These supplemental financial measures should not be viewed in isolation, or as alternatives to measures of Siemens Energy's net assets, financial position and results of operations as presented in accordance with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies, that report or describe similarly titled alternative performance measures, may calculate them differently.

The Consolidated Financial Statements have been prepared and published in millions of euro (€ million). Due to rounding, numbers presented throughout this and other documents, may not add up precisely to the totals provided, and percentages may not precisely reflect the absolute figures.

This document is an English language translation of the German document. In case of discrepancies, the German language document is the sole authoritative version.

For technical reasons, there may be differences between the accounting records appearing in this document and those published pursuant to legal requirements.

Combined Management Report

2.1	Business description	9
2.2	Financial performance system	12
2.3	Business performance in fiscal year 2023	14
2.4	Results of operation	21
2.5	Net assets, liabilities and equity	27
2.6	Financial position	29
2.7	Report on expected developments	33
2.8	Report on the internal control and risk	36
	management system and material risks and
	opportunities
2.9	Explanations to the Financial Statements of	47
	Siemens Energy AG (Holding)
2.10	Group non-financial statement	51
2.11	Takeover-relevant information	80
2.12	Further information	84

9 Combined Management Report

2.1 Business description

2.1.1 Organization and reporting structure

Siemens Energy AG, parent company of the Siemens Energy Group ('Siemens Energy', 'the Group', 'the Company', or 'we') and registered in Munich, is a Stock Corporation (Aktiengesellschaft) in accordance with German law.

The Executive Board of Siemens Energy AG is the body with overall responsibility for the management of the business in accordance with the German Stock Corporation Act (Aktiengesetz).

Siemens Energy introduced a new corporate and reporting structure at the beginning of fiscal year 2023. The divisions of the former reportable segment Gas and Power (GP) were reassigned into three Business Areas: Gas Services (GS), Grid Technologies (GT), and Transformation of Industry (TI). Siemens Gamesa was not impacted by these changes and is now the Group's fourth Business Area (see Continuing strategic development of Siemens Energy and integration of Siemens Gamesa in 2.3.2.2 Other events influencing the course of business for information about the acquisition of the outstanding shares in Siemens Gamesa Renewable Energy S.A.). GS, GT and Siemens Gamesa are reportable segments; TI will report voluntarily as if it were a reportable segment (all the aforementioned are hereinafter referred to as segments). The central items previously assigned to GP are now presented in Reconciliation to Consolidated Financial Statements.

Reconciliation to Consolidated Financial Statements includes items which management does not consider to be indicative of the segments' performance, mainly group management costs (management and corporate functions) and other central items, Treasury activities as well as eliminations. Other central items include Siemens brand fees, corporate services (e.g., management of the Group's real estate portfolio (except Siemens Gamesa), which was allocated to the GP segment in the prior year), corporate projects, centrally held equity interests and other items. For further information, see Note 25 Segment information in 3.6 Notes to Consolidated Financial Statements .

Siemens Energy supports its customers around the globe. The regional breakdown used for reporting purposes by Siemens Energy is EMEA (Europe, Commonwealth of Independent States (C.I.S), the Middle East and Africa), Americas (Canada, the United States as well as Central and South America), and Asia, Australia (the remaining countries of the Asian continent, as well as Australia and New Zealand).

2.1.2 Business model

Siemens Energy is active along the entire energy technology and service value chain with comprehensive and differentiated products, solutions and service offerings.

Our broad product portfolio, comprising efficient conventional as well as renewable energies, enables us to meet the increasing demand for energy and support efforts to reduce greenhouse gas emissions at the same time. We also offer digital business and intelligent service models to our customers. Therefore, we consider ourselves well positioned to shape the energy transition toward decarbonized energy technologies

Siemens Energy - Annual Report 2023

and promptly react to customer needs worldwide thanks to our global footprint.

As already communicated in November 2020, Siemens Energy no longer participates in new tenders for pure coal-fired power plants. Siemens Energy will still fulfill existing commitments for coal-fired power plant projects, including binding offers submitted at the time of this decision. Also continued are the carbon-reducing service and solutions businesses, as well as combined heat and power (CHP) projects.

A significant share of our business is executed via high-volume projects and characterized by multi-year customer orders, especially in our service and solutions businesses. While orders for large projects may lead to volatility in order intake from one reporting period to the next, revenue is generally less affected by such volatility. Large projects typically have longer development and construction phases. This, coupled with our often long-term service contracts, leads to stable and recurring revenue recognition over several reporting periods. Hence, our order backlog gives us a high degree of transparency regarding future revenues.

Our profitability level differs among our portfolio elements. Therefore, our results of operations are affected by the portfolio mix sold in each segment. Our service business typically has higher margins than the product and solutions businesses. Hence, our results of operations and margins depend on our ability to generate revenue from servicing our large installed fleet as it becomes subject to wear and tear, in particular the rotating equipment. We aim to maintain and expand the long lifespan of our installed fleet to secure orders for service contracts, primarily focusing on long-term service programs.

Therefore, we see the service business as a major pillar of the sustainable business success of Siemens Energy and are seeking to enlarge and leverage this further in the future.

Gas Services

The Gas Services Business Area consolidates all the business activities relating to gas and large steam turbines, large generators, and heat pumps, as well as the associated control technology. The GS portfolio includes products, solutions, and services for central and distributed power generation. The business is focused on servicing the installed fleet of gas and steam turbines. The wide-ranging service portfolio includes maintenance, performance enhancements, operation services, digitalization, and professional consulting.

GS supports a broad spectrum of customers: utilities, independent power producers, municipal energy producers, EPC (engineering, procure- ment, and construction) companies, industrial customers, and customers in the oil and gas industry.

Reliable, efficient, and low-emission turbines enable the integration of renewable energy into grids by delivering the base load and/or supplementing the fluctuating supplies from renewable energy sources. GS is contributing to the decarbonization of power generation, thus supportting the achievement of its customers' net zero targets. To this end, individual gas turbines are being equipped with greater capabilities to use hydrogen and green fuels simultaneously (current levels already as high as 75%). Moreover, the portfolio includes further measures for reducing emissions from gas turbines and power plants by as much as 100%, e.g., through partnerships for carbon separation solutions. Heat

pumps represent another key lever for reducing emissions, contributing to the decarbonization of district heating and industrial heat generation.

Competitors to GS include a small number of multinational original equipment manufacturers (OEMs), some of which hold strong market positions in their home markets.

Grid Technologies

The activities of the Grid Technologies Business Area are focused on the key market trends of demand growth, electrification, decarboniza- tion, and digitalization.

The products, systems, solutions, and services offered by GT overcome the challenges arising from the increasing complexity of the grid infrastructure as a result of integrating renewable energy and the trend toward distributed energy generation. Included in the product portfolio are high-voltage direct current (HVDC) transmission systems, offshore wind farm grid connections, flexible alternating current transmission systems (FACTS), high-voltage substations, air- and gas-insulated switchgear, transformers, digital grid solutions and components, as well as storage solutions.

The GT Business Area serves a broad range of customers including independent power producers, transmission and distribution system operators, and industrial and infrastructure customers in industries such as oil and gas, chemicals, mining, and operators of data centers, airports, and railway companies. Due to its extensive technological expertise, a global manufacturing network, its own marketing organization, and marketing partners, GT is supporting its customers on their path to decarbonization.

Competitors of GT consist mainly of a small number of large multinational companies, increasingly joined by smaller, fast-growing manufacturers in countries such as China, India, and South Korea.

Transformation of Industry

The Transformation of Industry Business Area comprises four operating but non-reportable segments (Sustainable Energy Systems (SES); Electrification, Automation, Digitalization (EAD); Industrial Steam Turbines & Generators (STG); and Compression (CP)), which are presented voluntarily as if they were a single reportable segment. The Business Area's activities are focused primarily on reducing energy consumption and greenhouse gas emissions in industrial processes. TI is therefore supporting industrial customers in reducing their carbon footprint and achieving their individual decarbonization targets. Its portfolio includes integrated systems and solutions for various process industries (e.g., oil and gas, chemicals, petrochemicals, and fibers), as well as for the shipping industry.

TI concentrates on industrializing novel decarbonization technologies and has consolidated these activities with a view to achieving industrial scaling, especially in respect of hydrogen, Power-to-X, and photo- voltaics. Another key focus is the delivery of integrated industrial decarbonization solutions based on electrification and process optimization (automation and digitalization).

The TI portfolio includes electrolyzers, industrial steam turbines with an output of up to 250 MW, industrial generators, turbo and reciprocating compressors, compressor trains, systems and solutions, as well as service offerings for the entire portfolio aimed at extending the lifespan and availability of products and increasing efficiency, especially of steam turbines and compressors. TI develops and supplies products in new fields of technology spanning the entire product life cycle, for example, heat recovery solutions, compressed air storage, special

Combined Management Report 10

hydrogen compressors, and CO₂ compressors for separating, using, and storing carbon.

Overall, TI is benefiting from the rising demand for carbon-optimized energy technologies, the transition toward a hydrogen-based economy, as well as the electrification, automation, and digitalization of industry. Reducing industrial emissions requires investment in decarbonization solutions, including electrification and efficiency enhancement, in the optimization, improvement, and modification of processes, as well as in the reduction and use of volatile emissions.

TI's main competitors are a number of OEMs, some of which have a very strong position in their home markets, EPC suppliers, as well as entities of industrial enterprises and start-ups that focus on clean technologies and hydrogen.

Siemens Gamesa

The Siemens Gamesa Business Area focuses on the design, development, manufacturing, and installation of products, as well as on the provision of technologically advanced services in the renewable energy sector, with a focus on onshore and offshore wind turbines for various wind conditions. Depending on customer requirements, Siemens Gamesa's scope of involvement may include delivering either a full EPC project or, in some cases, just the supply of components for wind turbines. Siemens Gamesa comprises the Wind Turbines (Onshore and Offshore) as well as Operation and Maintenance (Service) business fields.

For global onshore markets, Siemens Gamesa delivers wind turbine design, engineering, manufacturing, and installation solutions focused mainly on geared technology, which can be adapted to regional and local needs. Global offshore markets are provided with customer- specific wind turbine equipment design, manufacturing, and installation based on direct drive technology.

In addition, Siemens Gamesa provides services for the operation and maintenance of wind farms, including a comprehensive and flexible portfolio for the maintenance and optimization of wind turbines, thus delivering holistic lifetime care. Complete asset management as well as technical assistance is provided for Siemens Gamesa's wind turbines and is also being expanded for third-party platforms.

Siemens Gamesa's primary customers are large utilities and independent power producers, as well as project developers. Competition in wind power differs in the two major market segments. In the markets for onshore wind farms, competition is leading to ongoing concentration - starting from a relatively dispersed supply side with no single company currently holding a dominant market share. By contrast, the markets for offshore wind farms are already served by just a few experienced players. Consolidation is constantly moving forward in both onshore and offshore markets, driven mainly by scale as well as technology and market access challenges.

The share of renewable energy in the global energy mix is widely expected to increase continuously. However, the growing number of auctions for wind power development represent a constant challenge for both developers and turbine suppliers. Moreover, competition with other power sources is putting additional pressure on life-cycle costs. To master this challenge, Siemens Gamesa is focusing on innovation, productivity, asset management, operational excellence, sustainability, and employee development. It is also investing in digitalization, which is seen as a key differentiator.

Siemens Energy - Annual Report 2023