Infineon Technologies AG (IFX) Earnings Call Transcript & Summary

[Presentation] My dear shareholders, ladies and gentlemen, I hereby open the Ordinary General Meeting of Infineon Technologies AG and welcome you, the owners of our company, to this meeting. Furthermore, I would also like to welcome the shareholder representatives, the media representatives and our guests here to the ICM. At today's Annual General Meeting, all members of the Executive and Supervisory Board will participate. In accordance with our articles of incorporation, I will moderate today's Annual General Meeting as the Chairman of the Supervisory Board. Let me start with some housekeeping and formal remarks. This Annual General Meeting was convened through the announcement in the German Federal Gazette on the 13th of January 2020. As in the previous years, Dr. Götte, the Notary Public, has been entrusted with taking the minutes of the AGM. Anyone who would like to get in touch with the Notary during the meeting can approach the speakers' desk to do so. It is to the right of the stage from your perspective. The list of participants can be viewed from the start of the meeting at the entrance area of the ICM at the terminals. With the exception of the intermediaries, in particular, banks and shareholder associations, everyone has received an admission and voting card, as a shareholder, either in the conventional paper form or as a digital admission ticket and voting card on their cellphone or tablet. Please make sure that you keep this card until the end of the AGM. You will need this admission card and voting card, for example, if you would like to take the floor during the AGM. In order to do so, you need to register with the speakers' desk. If you'd like to file any motions, please do so as early as possible and definitely, before the end of the general debate. If you have filed any written questions or announced them in the run-up to the AGM, it is necessary for you to present them verbally today again. In order to do so, please register with the speakers' desk as well. The voting procedure on the items on the agenda will be explained to you after the general debate by me. However, I would like to address one point right now. In the run-up to the AGM, we received a countermotion, which we immediately published on our website. This countermotion is directed to the nonapproval of the acts of individual members of the Board. However, management maintains its draft resolutions for the approval of the acts and also published their reasoning in an official statement. Irrespective of this, I hereby find that the vote on the approval of the acts of the Executive Board and the Supervisory Board will be voted on for each member individually. This means that you can reach an individual decision on the approval of the acts of the board members. You can exercise your voting rights in person or if you want to leave the AGM early through a proxy. In order to authorize the voting proxies appointed by the company, you can submit your admission ticket and voting card at the exit control desk and complete it accordingly. Alternatively, you will be able to use a tablet to issue authorizations and instructions to the voting proxies of the company. For all other cases of authorizations, you can receive a form that is available at the speakers' desks. Authorizations and instructions can be issued via the web through to the end of the general debate. They can also be amended and revoked. The same holds true for the issuance, change or revocation of absentee ballots. Here on site, authorizations and instructions as well as absentee ballots can be issued, made, modified or revoked through to the end of the vote at the entrance or exit control. I would also like to point out the following. If you receive more than 1 admission ticket or voting card, be it in paper or in digital form, for instance, because you have several shared deposit accounts with various banks, please make sure that all of the corresponding shareholdings have been recorded. If this hasn't happened yet, you can do this at the speakers' desk or at the entrance control desk. As announced in the convocation, the shareholders will be afforded the possibility of following the entire AGM via a live simulcast on the web. Furthermore, the first part of the AGM with the report on the work of the Supervisory Board and the speeches of Dr. Ploss and Dr. Schneider can be followed by everyone on the Internet. We will not have a verbatim minutes of the proceedings here today. However, your questions and motions will be noted in order to make sure they can be processed properly. I would like to point out that from now on, you are not permitted to use image and audio recording devices. This also applies to recordings of the simulcast on the web. Ladies and gentlemen, this rounds up my statements on the formal and housekeeping remarks with regard to the AGM. I would now like to address all of the items of today's agenda. This brings me to item 1 of this agenda. A presentation -- submission of the approved separate financial statements of Infineon Technologies AG and the approved consolidated financial statements, both as of 30 September 2019, the combined management report for Infineon Technologies AG and the Infineon Group and the report of the Supervisory Board for the 2019 fiscal year in each case. These documents and all other documents that have to be made available have been published on our website since the convocation of the AGM. You can receive these documents today at the information counter as well. The Supervisory Board has approved the financial statements for the parent company and the group, including the combined review of operations and the informational reports. The financial statements of the parent company, therefore, adopted in accordance with section 172 Sentence 1 of the Stock Corporation Act. A passage on resolution on this item on the agenda is therefore not necessarily. This brings me to the report of the Supervisory Board. Ladies and gentlemen, it is not just since the new President of the European Commission, Mrs. Ursula von der Leyen, announced the green deal at the end of 2019 and announced that Europe should become climate neutral by 2050, that it has been clear that sustainability is not just the order of the day, sustainability is without a doubt a challenge for generations. We all shoulder responsibility in this regard, not just in terms of politics, but also and above all, every single one of us must shoulder substantial responsibility and shouldn't just pass the buck. And of course, companies also must assume their responsibility. I'd like to take this opportunity to quote Larry Fink, Founder and CEO of BlackRock with nearly USD 7 billion under management and the world's biggest investor, and as such, representative -- represented in many DAX companies, including Infineon. In his annual letter to the CEO, Fink asked the companies to make sure that they've placed higher importance on sustainability than before in their actions. For BlackRock, sustainability is a key deciding factor when making investments, and this applies to all investors. We at Infineon have been living sustainability for a long time already. It has long been part of the Infineon DNA. Our production -- our products enable increasingly efficient generation transmission and use of electrical power and therefore, ensure a continuous optimization of the sustainability in central customer sectors. It is not just about our products leading to substantial savings of carbon dioxide and other emissions as well, we are also working on being climate neutral ourselves. Dr. Ploss will give you some more commentary on the climate strategy specific to Infineon in his speech later on. Ladies and gentlemen, lived sustainability translates into great accomplishments, not just as a company in technological terms and economic terms, but also to champion a livable future of our company. The most important strategic decision in the last fiscal year in our company was definitely the acquisition of the U.S. company Cypress Semiconductor. Dr. Ploss will give you some more information on this in about a minute and give you an update on the status quo, and therefore, I can be brief at this juncture in my role as the Chairman of the Supervisory Board. The Supervisory Board has carefully weighed the opportunities and risks of this acquisition very carefully, I must add. In many sessions, including extraordinary meetings, it discussed all relevant issues and was informed on them extensively by the Executive Board. The debates were extensive and intensive. In summary, the Supervisory Board is fully convinced of the rationale behind the acquisition. Just as the Executive Board, we're also of the opinion that the structural growth drivers of Infineon remain. They will gain momentum once the global economy picks up speed again. It is, therefore, important that the company prepare itself through strategic projects such as the Cypress acquisition and continues to follow its profitable course for growth with resolve and defend it. This in connection with a resolute expansion of innovation and technology leadership in these segments that are of key importance to us, in particular, in the automotive and energy sector. In view of the opportunities arising from the acquisition for Infineon, the Supervisory Board believes that the purchase price weighing all circumstances is appropriate. The Executive Board also provided a robust and serious financing concept for this, including various refinancing options. Against this backdrop, the Supervisory Board, in the end, issued its approval to the acquisition of the company and the key parameters of financing. The large-scale acquisition also requires our equity share to be increased substantially. Specifically, the Executive Board implemented 2 refinancing measures to this end. First, in June 2019, a capital increase was conducted from approved capital. Approximately, 113 million new shares with a net issuance proceeds of a good EUR 1.5 billion were issued. Second, the company, in October 2019, issued a hybrid bond with a volume of EUR 1.2 billion, thereby significantly increasing the equity share of financing, once again, without this resulting in an additional dilution of the shares held by shareholders that would have happened if further shares had been issued. It was also important to the Supervisory Board to be involved intensively in these financing measures. Therefore, we left the decision on the capital increase and the hybrid bond up to the Investment, Finance and Audit Committee, but also to extraordinary meetings held by the plenary session. Ladies and gentlemen, 2019 was not just characterized by the Cypress acquisition, but also by major personnel decisions. For one, in the past fiscal year, the Supervisory Board decided that Dr. Reinhard Ploss should continue to stay at the helm of the company through to the end of 2022. His original tenure would have ended on the 30th of September 2020. On behalf of the Supervisory Board, and I believe it is safe to say also on behalf of you all as shareholders, I would like to express my gratitude to Dr. Ploss at this juncture for having been instrumental in the successful course steered by Infineon in the past years as CEO and that he has declared his willingness to continue doing this work going above and beyond his original tenure. In addition, in Dr. Sven Schneider, we won a renowned new CFO for our company. Right after Dominik Asam, who had been our CFO for many years had informed us of his plan to leave the company, the Supervisory initiated a structured succession procedure. In so doing, the Board was supported by a personnel consultancy firm. Within the scope of the selection process, both external candidates as well as internal applicants were evaluated. After a series of interviews and in-depth debates, above all in the executive committee, but also in the plenary session, the decision was reached to appoint Dr. Schneider CFO of the company with effect from the 1st of May 2019. His mandate and employment contract have an initial term of 3 years. Dr. Schneider was previously the speaker of the Executive Board, CFO and Labor Director of Linde. My dear Dr. Schneider, it already feels as if you have been here with us for much longer than 10 months. It almost feels as if you have been with us forever. In order to complete the staffing of the boards of Infineon, it is a great pleasure for me and honor for me to have been afforded the possibility to assume chairmanship of the Supervisory Board as a successor to Dr. Sünner at the beginning of August 2019. This brings me to Executive Board compensation. In fiscal 2018, the Supervisory Board saw to it that the compensation system at Infineon and the target annual salaries of the Executive Board members were subjected to an external audit. The compensation expert reached the conclusion that the compensation system met the statutory regulations and the recommendations of the code. In particular, the Executive Board compensation was customary in comparison to the market and appropriate, and the variable compensation was oriented towards the sustainable development of the company. In addition, the target annual salaries of the Executive Board members was generally appropriate, irrespective of existing room for maneuver. The Supervisory Board dealt with this assessment at the beginning of fiscal 2019 and agreed with this opinion. However, last fiscal year, it became apparent that this could only be considered a snapshot against the backdrop of the expected regulatory novelties in the field of Executive Board compensation. The Supervisory Board followed the developments concerning the law on the implementation of the second shareholder rights guideline, which is referred to as ARUG II and the new version of the German Corporate Governance Code. ARUG II requires that the compensation system for the Executive Board be submitted to the AGM for the first time in 2021. We discussed the voluntary early submission at today's AGM, but we decided against that because the serious following analysis of regulatory developments and the audit of the Executive Board's compensation system required thereafter on the basis of that would not have been possible in such a short period of time according to the opinion of the Supervisory Board. It wasn't until the end of May 2019 that there was clarity about the code's new requirements. The announcement of ARUG II in the German Law Chronicle did not happen until the middle of December 2019. And on the finishing straight, there were major changes to the draft law. Now that the clarity has been established with respect to the new regulatory requirement, the Supervisory Board over the course of 2020 will make the necessary adjustments to the Executive Board's compensation system and present a revised Executive Board compensation system to the 2021 AGM for approval. Details on the Executive Board compensation, in particular, in the 2019 fiscal year, and the emoluments paid can be gleaned from the compensation report in the annual report. Now 2 more corporate governance issues. In the statement of compliance of November 2018, the Executive and Supervisory Boards, in deviation from Item 532, Paragraph 3, Sentence 3 of the German Corporate Governance Code declared that the Supervisory Board's Chairman should not be the Chairman of the Audit Committee. This deviation was due to the fact that the Chairman of the Investment, Finance and Audit Committee, Dr. Sünner, was also Chairman of the Supervisory Board. After I was appointed Chairman of the Supervisory Board, this deviation ceased to exist. In consequence, the statement of compliance was adjusted to the status quo back then, which continues to persist. This was done in August 2019. According to the current statement of compliance of November 2019, therefore, all of the recommendations of the German Corporate Governance Code were followed, and we intend to do so in the future as well, without exception. The Supervisory Board subjects its work to an efficiency audit every year. Since the audit in fiscal 2017 was carried out with the support of an external independent consultancy firm, the Supervisory Board, in the last fiscal year 2019, also subjected its work to an efficiency audit, but did this on the basis of a structured questionnaire, as was done in 2018. The audit resulted in a positive picture of the activity of the Supervisory Board and its cooperation with the Executive Board throughout. There were no major deficiencies identified. Ladies and gentlemen, this brings me to the financial statements of the parent company and the group. The Investment, Finance and Audit Committee and the plenary session of the Supervisory Board discussed the financial statements of the parent company and the group of Infineon Technologies AG and the reports of the independent auditors, KPMG, in detail. The independent auditors issued an unqualified audit opinion to the parent company and group financial statements. The Supervisory Board approved the result of the audit of KPMG in its meeting of 22 November 2019. We didn't have any objections to the financial statements or to the audit conducted by the independent auditors, and we thus adopted the parent company and group financial statements for 2019. As mentioned earlier, the 2019 financial statements of the parent company are thus adopted. The Supervisory Board also concurs with the proposal for the appropriation of distributable profit of the Executive Board. The Executive and Supervisory Board thus propose to the AGM that a dividend of EUR 0.27 be paid, which is the same as in the previous year. The Investment, Finance and Audit Committee and the plenary session of the Supervisory Board furthermore discussed the separate nonfinancial report and a group report as of the 30th of September 2019 for the past fiscal year, which was prepared by the Executive Board. KPMG conducted an audit of these reports under the proviso of providing limited assurance and also issued an unqualified auditor's opinion on this. The documents were reviewed by the Investment, Finance and Audit Committee and by the plenary session of the Supervisory Board. The Supervisory Board has approved and taken cognizance of the separate nonfinancial report and the group report. Ladies and gentlemen, at the end of my commentary, I would like to make some remarks with respect to the future composition of the Supervisory Board and the Supervisory Board elections that will take place under Item 6 of the agenda. At the end of today's AGM, the tenure of all shareholder representatives and of 6 of the 8 -- shareholder representatives will end -- correction, it's a tenure of all of the employee representatives that will end. Only Mrs. Picaud has been elected through to 2022, and my own mandate will expire at the AGM in 2023. Last December, the 8 employee representatives were reelected and they will take office right after today's AGM. These are the Infineon employees; Dr. Johann Dechant, Dr. Susanne Lachenmann, Mrs. Melanie Riedl, Mrs. Kerstin Schulzendorf and Mrs. Diana Vitale, as representatives of the labor unions in the future. Annette Engelfried and Mr. Jürgen Scholz will be members of the Supervisory Board. They are both from the metalworkers' trade union. And Mr. Gruber as a representative of the executives. 7 of the 8 employee representatives that have been newly elected already belonged to the Supervisory Board until just recently. I would like to express my sincere gratitude to them and to you, my colleagues, for the years of good cooperation. I'm looking forward to many years of continued success. Mrs. Riedl is new. She is a trained engineer and has been working for Infineon for a number of years already. Mrs. Riedl, welcome to the Supervisory Board. Mr. Gerhard Hobbach will leave the Supervisory Board as an employee representative. He joined the Supervisory Board in 2007 and has, therefore, been a great service to the company over years. Mr. Hobbach, thank you so much for your dedication, and I wish you all the best for the future. This brings us to the shareholder representatives. As mentioned earlier, today, 6 of the 8 shareholder mandates have to be restaffed. The Supervisory Board proposes following a comprehensive and complex staffing process of the following candidates who shall now be listed in alphabetical order, Mrs. Xiaoqun Clever, Dr. Friedrich Eichiner, Hans-Ulrich Holdenried, Dr. Manfred Puffer, Dr. Ulrich Spiesshofer and Mrs. Margret Suckale. I would like to give you some brief insight into the nomination procedure at this point. From September 2018, the Nomination Committee has been concerning itself with staffing of the Supervisory Board mandates that would become vacant in 2020. The basis for this were the statutory regulations, the recommendations of the German Corporate Governance Code and our skills profile and the target catalog for the composition of the Supervisory Board. However, the expectations of our investors were also taken into account. The Nomination Committee, on this basis, put together a pool of candidates, and in so doing, it also availed itself of the services of an external consultancy firm. After following the evaluation of the references, a shortlist was drawn up and personal talks were held with the candidates. The Nomination Committee recommended to the Supervisory Board that Mrs. Clever, Dr. Eichiner, Mr. Holdenried, Mr. Puffer, Dr. Spiesshofer and Mrs. Suckale be proposed for election to the AGM. And with respect to Mr. Holdenried and Dr. Puffer, it requested that their tenures be extended. With respect to the 4 new candidates, the Supervisory Board is absolutely convinced that Mrs. Clever, Dr. Eichiner, Dr. Spiesshofer and Mrs. Suckale are extremely qualified, have outstanding experience and should therefore be put up for election. Mrs. Clever has years of experience on an international level in responsible positions in the field of software engineering, IT and digitization, and she has also gained experience on Supervisory Boards. Dr. Eichiner is also very qualified, not least due to his years of experience as CFO at BMW and Chairman of the Audit Committee at Allianz, one of the leading international -- and, therefore, is one of the leading international experts with respect to standards. Dr. Spiesshofer, as the former business consultant and long-term CEO of the globally active technology group ABB has outstanding industrial competency, especially in the power sector, which is so important to Infineon. Last but not least, Mrs. Suckale will contribute years of experience as a member of the Board of Management of BASF and Deutsche Bank as well as extensive knowledge of Supervisory Boards and personnel and legal competency. Now I would like to afford the 4 new candidates the opportunity to come to the stage and introduce themselves personally. Mrs. Clever, would you perhaps get started and approach the rostrum?

Good morning, ladies and gentlemen. I am Xiaoqun Clever. I was born in China. I studied IT and Computer Science in China and Germany, and I took my MBA in the United States. For more than 20 years, I have been active in the field of software engineering, technology development and digital transformation in various international companies. These include 13 years in senior positions of the management and as a member of the management and supervisory boards or advisory boards. It was my privilege during my professional career to work in different countries; Germany, United States, China, India and Switzerland. In the last few years as Chief Technology and Data Officer, it was my pleasure to accompany the media industry through the digital change. It's an industry which is facing players like Google, Amazon and the Chinese player such as ByteDance and has become really disruptive. What can I do for Infineon? As a globally important provider of semiconductor solutions, Infineon, in the last few years, has expanded its product portfolio with unique software and hardware components. And this has set it on the right way to a comprehensive provider of system solutions. I hope and wish that with my expertise in software development and technology like Cloud, Big Data, Artificial Intelligence, Edge computing and Platform Engineering that I will be able to make a contribution to the future of Infineon. In addition, with my multicultural background and my network of international digital community, I hope that I can provide a supportive role for the further development of the global business of your company. I am delighted to be able to introduce myself in personal to you today. Thank you for your attention.

Thank you, Mrs. Clever. Dr. Eichiner, please?

Shareholders, ladies and gentlemen, I'm glad to be able to introduce myself briefly as well. My name is Freddie Eichiner. I'm 64 years old. After studying Business Management and doing a Doctorate at the University of Munich, I, in 1987, joined BMW, which is a long time ago. In the first few years, I was working in the field of logistics and production, in particular, where I took on management roles, including IT roles. And in 1999, I changed to sales, where I was important for factory management. Then I moved on to group planning, where I was responsible for the group's strategy of the BMW group. This was a task which I performed until 2007 and then in 2007 I moved to the Board of BMW AG, where my first role was to head a division for the brand development. And in 2008, I became CFO of BMW AG. I think that, that was also an interesting period, and it was the time of the financial and economic crisis. At present, I am exercising 2 important Supervisory Board tasks, one at Allianz SE, I'm Head of the Audit Committee and I'm also Chairman of Supervisory Board of the AVISTA Group. Now of course, the question arises, what can I contribute? Well, I think long experience in automotive and, on the other hand, also an insight into automation technology, this can help me to assess technological developments and from the insurance industry, I bring not just knowledge on accounting and classic financial issues, but also risk management. I'm a member of the Risk Committee of Allianz SE. And I think that in these days, it's an important issue for an industrial enterprise. With that, I'd like to thank you for your attention.

Thank you, Dr. Eichiner. Now I'd like to ask Dr. Spiesshofer to introduce himself briefly.

Shareholders, thank you very much for giving me this opportunity to introduce myself to you today. My name is Ulrich Spiesshofer. I'm 55 years old, married, with 2 adult sons. After school, I was trained as a tank fitter with the German army and then studied Engineering and Business Management in the University of Stuttgart, followed by a Doctorate in Economic Sciences. My professional career can be divided into 2 phases. The first phase, I was working in professional services in the field of corporate consultancy. It was an interesting time. To understand and to shape companies in these industries, region, cultures and how they can be advanced. The first 11 years at AT Kearney as a consultant in Europe and then in management positions in Australia and Asia. In 2001, I came back to Europe, to Switzerland as the person responsible for the European management team. In 2002, I became a consultant myself and part of the shares of Roland Berger Consultants I bought and I became a Senior Partner and Head of Global Operations. In my time in Switzerland, I had contact with ABB. And in 2005, I was offered a post on the Group Board at ABB. First of all, with a portfolio of functional sponsor from strategy to supply chain and quality management. And in 2009, the robotics division and the new formed for automatic drives, I took over, I updated the robotics side and turned into a technological leader and then drive technology with acquisition of other electrics in U.S.A. We took over market leadership in this area. In 2013, I became CEO. I was able to continue to lead the change of ABB from a copper and iron-oriented company to a technology company, which is leading in the digital industry. And I am delighted by the end of my time, I have just resigned, and there are 5 divisions in ABB, where we are either 1 or 2 in the world. What can I offer? I've got this infuse of technology. And I also had contact with Infineon during my time at ABB, where we were an important partner. I can also work in different cultures. Yes, in the strategy committee, we will look into the subject of integration of acquisitions in China and electromobility. And I've moved in all these fields. Shareholders, you've got a great company that belongs to you, and I hope that I can make a small contribution with my experience to continuing your success story. Thank you.

Thank you, Dr. Spiesshofer. And now still keeping with the alphabetical order, I would now like to ask Mrs. Suckale to introduce herself briefly.

Shareholders, ladies and gentlemen, my name is Margret Suckale. I was born in Hamburg, where I also studied. I took my first and second state examination in law. Then I began at Mobil Oil AG in Hamburg. And then I set out to see the world. I was in many of the European sites of Mobil Oil normally as the legal official and also in HR. And then in 1997, I moved to the German railways, which was very interesting because German railways was supposed to be launched on the stock exchange. And we have a legal sector there that I was responsible for. There were many organizational changes at Deutsche Bank at that time. There wasn't a stock exchange launch because of the financial crisis. And then in 2009, I took another big step and moved to BASF in Ludwigshafen, the biggest chemical company in the world. I was appointed member of the Board and was responsible for the sites, the European sites to begin with, engineering maintenance, environment, that's very important for a chemical company, of course; work health and safety and also for the HR sector. Then in 2017, I retired and divided my time up between honorary posts and also memberships of Supervisory Boards at HeidelbergCement, Deutsche Telekom and DWS. I have seen quite a lot in the course of my life, and I am very inquisitive. I find it a great honor, and I will be very happy if you would vote for me so that I can help a major company like Infineon. I think from what I have done in the past it becomes clear what I can contribute here in future. This question of sustainability, ESG, is an important issue, that too I was responsible at BASF, where I was on the sustainability council that I headed. And then also quest for the social partnership, areas where I have gathered some experience in the course of time. Perhaps one comment about my private life. I'm more consistent that I have been married for almost 40 years now. Thank you.

Thank you, Mrs. Suckale. This rounds up the commentary on the future of the Supervisory Board. Now I would like to make a brief retrospective, and to be quite honest, only rarely have I experienced a Supervisory Board that has been so demanding as it has been supportive of the Executive Board and the company in its function. The shareholder representatives who believe in the Supervisory Board are Peter Bauer, Herbert Diess, Mrs. Renate Koecher and Mr. Eckart Sünner. My dear colleagues, with great dedication, with great professionality and providing important stimulus, you have all contributed to transforming Infineon into one of the world's leading semiconductor producers. Peter Bauer, after your years and successful time as member of the -- as member and Chairman of the Executive Board, you have basically gone into overtime by accepting your office on the Supervisory Board for our company for your Infineon. Thank you so much for that. And I think I'm speaking on behalf of many, if I say that, we would have loved to have kept you with us for longer. But of course, we understand the reasons for your resignation. Herbert Diess, WirtschaftsWoche a while ago named you Mr. Elektro of the global auto industry. Mr. 100,000 volts is more fitting name in my mind, but I think that, that name has already been given away to someone else. Thank you so much for more than 5 years of very valuable work, not only in the field of electric mobility but also far beyond that. We would also have loved to have kept you with us longer, but that's a different story. And I hope that you don't sever your ties to us. Mrs. Koecher, 15 years on the Supervisory Board of Infineon, you've gone through thick and thin with our company over the years. And it is, therefore, with a teary eye that I have to bid you farewell. But of course, first and foremost, I would like to express my sincere gratitude to you for your decades of highly professional work on the Supervisory Board and unfortunately, governance stands in the way of you serving us even longer. Thank you so much. My dear, Eckart Sünner, a similar number of years connected to Infineon as do Mrs. Koecher on top as Chairman of the Audit Committee and not least as Chairman of the Supervisory Board for 1.5 years in an era during which trailblazing strategic decisions were made by the Supervisory Board. Let's just think of the expansion at Villach and the acquisition of Cypress. Thank you very much for your dedication, loyalty and also a very big personal thank you. Ladies and gentlemen, if you allow, I would like to make some concluding remarks with respect to today's Supervisory Board elections. I'm especially pleased that, together with the employee representatives in the future, we will have a women quota of 50% and that the internationality of the Supervisory Board continues to increase. As a result, the composition of the Infineon Supervisory Board is meeting diversity requirements as part of our sustainability mindset. And this is another reason why I ask you to support our proposed candidates. This brings me to the end of my report. However, I wouldn't want to close without expressing further gratitude. First of all, I would like to express my sincere gratitude to our highly dedicated employees for their outstanding commitment wherever they may be in the world and the outstanding performance that they have displayed in many respects in a very challenging fiscal 2019. I would also like to thank the members of the Executive Board and my fellow Supervisory Board members for their professional and trusting and appreciative cooperation. And last but not least, I would like to express my sincere gratitude to you, my dear shareholders, for your persistent loyalty to this our company. Thank you so much. Ladies and gentlemen, I would now like to hand the floor to the Chairman of the Executive Board, Mr. Ploss, for his report on the state of the company.

Shareholders and viewers watching the world broadcast, ladies and gentlemen, Infineon shapes the future. We are paving the way to sustainable and safe mobility. We're helping to supply the growing world population with energy from wind and sun. We have the technologies that make the Internet of Things smart, fast and secure. Together with our customers, we are shaping the world of tomorrow and a future worth living for all of us. Welcome to the Annual General Meeting of Infineon. The 2019 fiscal year was turbulent for Infineon and for the entire global economy. It began with a flying start. Everything pointed to continued strong growth. In particular, the market for power semiconductors was in a real boom phase. In some products, we were unable to meet demand with our existing production capacities in any way. And it was clear to us that this phase would come to an end at some stage. The only question was, when? At the same time, we were aware of the potential risks evolving from increasing geopolitical tensions and intensifying trade conflicts, and we were aware of it at that time already. From January 2019 onwards, the economic outlook deteriorated very quickly. In our end markets, demand declined noticeably. We had to adjust quickly to a completely different situation, with markets that were growing significantly more slow, and in some case, not growing at all. For a semiconductor company, this change is particularly challenging because the throughput times in manufacture are quite long. Consequently, it takes time to adjust to a lower level of capacity utilization. We implemented that quickly and smoothly. Delivery capability is a factor of success for Infineon. Our customers appreciate our reliability. Too cautious capacity planning will sooner or later lead to allocation, and then you cannot take advantage of market opportunities when they arise in an upswing and you lose customers. We, therefore, deliberately prepared for further strong growth and expanded our production capacities, which, in some cases, requires a very long lead time. In weaker market phases, this means that we have to manage underutilization. Experience, however, shows that overcapacities are usually replenished after only a few quarters, even if the markets develop weakly. The strategy is, therefore, clear: Provide capacities with a sense of proportion and manage underutilization when it occurs. The bottom line for the 2019 fiscal year is now revenue of EUR 8.29 billion, an increase of 6%. The segment result margin was 16.4%. Despite a challenging macroeconomic environment, in a shrinking semiconductor market, Infineon has continued to grow, and that's the sixth year in succession. This shows that our business model is robust. Infineon grows even in difficult times. For the first time in the company's history, we exceeded the revenue mark of EUR 8 billion. And given the conditions of fiscal '19 -- 2019, we are satisfied with this result. On behalf of the management board, I would like to thank all the employees for their contribution. The fact that Infineon has mastered this challenging situation so successfully is due not least to your commitment and flexibility. You, shareholders, we want you to have a fair share of our success. Since the 2010 fiscal year, Infineon has almost tripled its dividend payments in several steps from initially EUR 0.10 per share to EUR 0.27 last year. For the 2019 fiscal year, we proposed an unchanged dividend of EUR 0.27 per share. The new shares issued in June 2019 as part of the capital increase are fully entitled to dividends here. As a result of the approximately 10% larger number of shares, the dividend payout will increase from EUR 305 million to EUR 336 million. So much for the past fiscal year. Let us now look at today and tomorrow. Now in the middle of the second quarter of fiscal 2020, we are seeing the first signs of stabilization in the market. This confirms our assessment. In the past few months, we have held our ground, and we are now preparing for the upturn. Over Christmas and New Year, we'd initially planned a 2-week holiday break in our fabs in Kulim and Dresden. However, due to better short-term demand for certain technologies, we continued production unchanged. When the market picks up, Infineon will be ready. Currently, we continue to assume that a broad-based recovery will not set in before the second half of the fiscal year. When we look at the target markets of our 4 divisions, we see a mixed picture. The long-term growth drivers, however, are generally intact. In the Automotive division, we are benefiting, to a lesser extent, from the growth in unit numbers in the global car production. The long-term average is around 2% per year. At present, however, it's declining. What is much more important to us with an average of about 6% growth contribution per year is the increasing share of semiconductors per car. On the one hand, in classic automotive applications, there's still a technological change in favor of semiconductor-based solutions. Examples are LED headlights, better light with lower power consumption. On the other hand, the 2 mega trends, electromobility and advanced driver assistance systems, are creating an ever greater demand for semiconductors. At present, however, in electromobility, we're feeling the effects of the weakness for the Chinese market, which in 2019 collapsed unexpectedly. However, there are signs of stabilization. The fact that subsidies will not drop further in 2020 will certainly help. However, inventories are still high, and it will take time before any significant growth impulses reach us again. In Europe, manufacturers were actually forced to increase the share of electric vehicles in their fleets in order to meet emission targets. Since this year, new cars have been subject to the stricter limit of 95 grams of carbon dioxide per kilometer on average. We have already taken this effect into account in our planning. Given the current demand for the market launch of new models in the second half of the year, the effects will be felt. In the medium-, long-term, electromobility is a key structural growth driver for Infineon. That's shown by the fact that in the meantime we're now representing more than 35 models of plug-in hybrids and fully electric vehicles that will go into production by the end of 2021. One example that is now going to cease production can be seen in exhibition foyer today. It is Volkswagen's ID.3, the first vehicle based on the MEB platform of the VW Group. Depending on the selected battery capacity, a range of up to 550 kilometers, 330 miles, is possible. With 100 kilowatts of charging power, you can recharge about 300 kilometers total miles of range in just 30 minutes. In the basic version, it costs less than EUR 30,000. These key data make it clear electromobility is becoming suitable for the mass market. The second major growth driver is the trend towards more and more advanced driver assistance systems up to automated driving. With our comprehensive portfolio, we are in an excellent position to take advantage of the boom in assistance systems. The industrial power control division addresses very different markets with its power semiconductors. The fields of application include wind, power and photovoltaic plants, systems for energy storage and high-voltage direct current transmission, trains, industrial drives and major domestic appliances. Many of these markets allow long-term structural growth for us. The submarkets typically behave differently. Factory automation, for example, is a classic late-cycle business. There, at present, we are observing stabilization. However, stocks, first of all, have to be further depleted before things can start to improve again. In the case of trains and power transmission, on the other hand, demand is good. The expansion of renewable energies is also progressing. And by the way, these are among the first fields of application for power semiconductors that have adopted silicon carbide, and I'll come back to that in a moment. In our target markets of power management by the market, we are also seeing some positive signals in the meantime. The so-called multisource business, the smaller customers, which was also the first to feel the effects of the slowdown, has bottomed out. Here, and in some other areas, inventories in the supply chain have returned to normal levels. The server market is beginning to recover. Because of the increasing complexity of server architectures caused, among other things, by data centers for artificial intelligence, the demand for special power supply solutions is also growing. At present, demand for our silicon microphones is very strong. They have excellent acoustic properties. The strong growth is the result of 4 simultaneous effects. Firstly, the microphones are used not only in mobile phones but more and more also, for example, in voice-controlled assistance or headphones with noise cancellation. Secondly, the markets for these devices are growing. Thirdly, more and more microphones being used by device. A set of headphones, for example, contains up to 6 of them. Fourthly, because of the outstanding characteristics of our microphones, we are gaining market share. And now we've got one of these microphones. It's very small by nature. Here, you can see the microphone. The round part is where the sound goes in, the dots next to it are where the electrical signals come out. Next that you see the chip itself and the rear of the housing. It's fascinating to see how much can be packed into this small chip. You can see in the picture, a membrane, which oscillates with acoustics waves reach it. And there is a very broad range of soft to very loud sounds are possible, including transmissions in rock concerts where you've got virtually studio quality. We are very proud of this technology. And it is the success that is there, which differentiates us with this performance. Infineon needs a space of 1.44 square millimeters to achieve this superior performance. As you've seen, the latest generation was shown on my hand and on the screen. As I said, the microphone membrane vibrates in tiny housing. Its properties determine how precisely the sound is captured in the surrounding area. As end users, we noticed this in the form of a clear sound when we make a phone call and reliable almost complete cancellation of unwanted ambient noise. What you don't see is the enormous technology and the know-how that it involves. Great technology can be fascinating, but success is shown by the market. For the current fiscal year, with microphones represent growth of almost 50% compared to the previous year. This will increase our revenue to around EUR 300 million. Yes, it is great, I must say. And quite honestly, at the end of the day, it is knowledge that is able to differentiate. We can manufacture the so many mechanical parts and you couldn't imagine. But back to business. Look at the situational divisions is completed by the digital Security Solutions division. Security solutions are another core competence of Infineon. In an increasingly connected world, and especially in the year of the Internet of Things, we are sought after partner. In the past few months, we have gained further projects in application areas, such as smart meters, cloud and battery authentication, and the security expertise of DSS also benefits us in all other business areas. Robust security solutions are needed almost everywhere for the connected car, for industrial robots, for mobile communication and for many other applications. Here too, in view of global trends, we can see interesting growth possibilities for Infineon. As you can see, we are well on track, but there are still some challenges to master. We are well prepared for this. As you know, my colleagues on the management board and I did not mention the success solely in terms of numbers for individual quarters or fiscal years. Infineon's real quality is to develop sustainable competitive advantages and create lasting value. We did this last year as well. Even though the present has already demanded a great deal of attention. As a company, we have to manage the day-to-day business and economic cycle. We must not show or make the mistake of permanently giving higher priority to today rather than to tomorrow. A missed business opportunity could never be as damaging to the company as a missed fundamental change of course. That is why it's important even in such hectic times as these to keep an eye on what will bring success in the future for us. Many people talk about continuous change. We live it. When we enter the market today with an innovative technology and to generate the first euro of revenue, we have already put in many years of development work both in the product and in the necessary production processes, we have expanded our production network, which makes a major contribution to our differentiation, and we've developed over years, keeping it at the cutting-edge of technology. Because today's success was what we achieved on the basis of yesterday's work and what we do today contributes to tomorrow's success. The planned acquisition of Cypress is also an important step in Infineon's evolution. For many years now, we've been working with great success on continuing expanding our system competence in the various markets. With Cypress, we should be able to continue making ever faster progress in this respect. The acquisition is the biggest transformation in our company's history. It's a challenge for all of us, but we are confident we can manage it, and I'll explain why. For a good 20 years now, Infineon has been an independent company. Before that, we're part of a large conglomerate. Our main task was, above all, to develop and manufacture those semiconductors that were needed by the other divisions. The target application was known. Market knowledge was of secondary importance, and nobody that time thought of system solutions. And for all the [ internal themself ] knew best what was needed. Why do I mention this? Well, Infineon in those days cannot be compared with today's Infineon. The semiconductor industry is characterized by continuous change. Anyone who has not set the course in time will end up in a dead end. The best recipe for sustainable success is to shape change actively. That is exactly what we do. An example of power semiconductors makes it clear how much Infineon's success from concept has changed over the years. How much it has had to change in order for us to stay ahead. Energy efficiency and the use of renewable energy sources have always been core elements of our strategy. As the undisputed market leader in power semiconductors we play a key role because we have helped shape the market ourselves. For a long time, the focus in power semiconductors was on using technological progress to reduce losses and cut costs on a component level. That was very successful, and it's still valid. Infineon has succeeded better than its competitors in continuously optimizing the various parameters. But that alone is no longer sufficient today. The technologies are coming closer and closer to the physical limits and the effort to make further improvements is increasing enormously. That is why it is important today to find new ways to increase efficiency. This is where it pays off to master, not only the product, but also to understand a system in which it is used. Because in the interaction of the individual components, especially between switches, control ICs and the passive components, there is a great deal of potential. Optimization at system level creates completely new products. This may also include new materials. Silicon carbide and gallium nitride have superior physical properties compared to silicon, but they're more expensive and they are more difficult to process. Only proceed in justifying the higher costs by better performance of save costs elsewhere, will it be possible to be successful with new materials. Silicon carbide, for example, enables complete new solutions, and we work very closely together with our customers to get the best out of this technology. In the foyer, you can see our photovoltaic converter from the KACO company. The blueplanet 125 was developed for decentralized photovoltaic power plants. Thanks to Infineon's CoolSic technology. It is very compact and highly efficient. With a nominal output of 125 kilowatts, it weighs less than 80 kilos. The maximum efficiency is an impressive 99.2%. The great progress can also be seen in the development of the size, you can't look in -- look at the booth. Our colleagues are looking forward to meeting you. As the world market leader in power semiconductors, we master the entire range and can offer our customers exactly what they need for their specific application. Leading-based technology, a comprehensive portfolio covering all voltage classes and form factors, suitable components for power control, system understanding and innovative products based on new materials. But as you can clearly see, even in our core markets, we cannot rest on our laurels. What was successful yesterday may be outdated tomorrow. And that is why, at Infineon, we are continuously developing further. This is the only way that we continue to develop the innovative power that makes our customers successful. If we succeed in doing that, we automatically set standards for the entire market. The acquisition of Cypress supports this strategy. With Cypress, we shall strengthen our core business of power semiconductors and sensors and security controllers. This will enable us to serve an even wider range of applications and offer customers complete solutions. That underpins our potential for differentiation and growth. Cypress has a comprehensive portfolio of microcontrollers and connectivity components as well as the corresponding software. Together, we are in an even better position to connect the real and digital world. We are ready, and we're looking forward to welcome our new colleagues into the Infineon family soon. At present, approvals from 2 authorities are still pending with CFIUS in the U.S. and [ CEMA ] in China. We are engaged in productive talks. As things stand today, we expect to be able to close the acquisition towards the end of this quarter or at the beginning of the next quarter. The acquisition will also help us to leverage the digital transformation for Infineon. Demographic change, suggestive resource and urbanization are global megatrends that pose major challenges for mankind. Digital transformation is part of the solution on the one hand, but on the other hand, it is also a challenge in its own right. Without chips, it's not even conceivable. In the many areas of today's life, electronics is used quite naturally, it's the base of automation and higher productivity in industry. It makes everyday life more convenient in many situations. It helps us to use energy more efficiently and thus to save resources. Digital transformation is the next level of this development, but its effect will be far greater, it's closely linked to the Internet of Things. Thanks to modern sensor technologies, electronic systems can in the meantime, catch a wide range of environmental data. Microcontrollers process the data and generate control signals. By connecting the systems and intelligently linking the reservoir, the cloud, use cases are created that significantly, those of the local singular solution. Precondition with this, however, is that the appropriate security mechanisms protect the integrity of the devices and information. What does this mean for Infineon? Digital transformation is not only changing the way we work. And that at every stage of the value chain, it affects the lives of everybody. It influences each of our target markets and consequent also changes the needs of our customers, and we want to benefit from that. We don't have a separate digitalization strategy for this, that would be the wrong approach, digitalization must be an integral element of our corporate strategy. Because in real life, too, it doesn't just affect the large computers and data centers, rather it takes place on all levels. A simple example, the greenhouse of the future uses LEDs as a light source and supplies itself electricity from solar cells and calculates the water requirements of plants precisely. As different and varied as the fields of application are the semiconductors that are needed for that. With our broad portfolio, we have the right technological base to help our customers achieve this. In this way, we ensure that digitalization serves people. We ensure the trustworthiness of the data used. We provide a reliable and fast connection to the cloud. With our sensors, the cooperation between man and machine becomes an intuitive experience. And our power semiconductors supply the connected things with electricity, reliably and efficiently. Even today, Infineon has many technologies that are used in this field for the future, which enable it to be a very successful player. The acquisition of Cypress will strengthen us significantly. The success of the digital transformations not just depend on technological progress, however, politics is called upon as well to create the right framework, the fields of action are extremely varied. So let us walk together along this path into the future. This includes rules, but standing still and waiting is not an option. We want to be the future. We want to shape it. Earlier on, I was talking about power semiconductors. They have been a central pillar of our growth strategy for more than 20 years. Electrical energy is the life elixir of modern society. The power grid is their circulatory system and power semiconductors provide the right circulation. Without it, the world as we know it would stand still. Even the automotive industry is not immune to electrification. In generating, transmitting, storing and using electrical energy, our power semiconductors are needed. Energy efficiency is a global trend and an important growth driver for our business. And that is exactly why we are present building a new 300-millimeter factory in Villach. Our products help to conserve resources and make use of renewable energy sources. In this way, Infineon is making a contribution to a future worth living in. Every year, we calculate how much carbon dioxide equivalents we emit as a company. And how much our products can help to save in return. Currently, this ratio is 1 to 40. This means that Infineon enables savings that are 40x higher than our emissions. Our employers all over the world are very proud of this and so are we on the management board. You might object Infineon will benefit if more electrical devices or cars are produced. That's correct. But without us, there wouldn't be fewer cars or service or air condition systems. They're just being much less efficient. We're convinced that you can only change things if you actively participate. Shaping begins with participating. It's not enough to condemn the need for mobility. For many people, it's the basis of their professional and private existence. We also need to understand that especially in emerging markets, many people want to have as good a life as we already have here. Many will not accept a call for restriction and renunciation. That is why we need the approach that Infineon stands for. We want to make more from less. We start with what is possible today, and at the same time, we're working on offering better solutions for the future. The lightbulb was also invented in room lit by candles. Finding better solutions is what drives us on at Infineon. We want to make a difference, and there are many possibilities. Climate change is threatening the global ecosystem, and thus the very basis of human life. This insight is not new. Nevertheless, much valuable time has passed. Young people such as the activists of Fridays for Future, have ensured that climate change is once again receiving the much-needed public attention. Exactly 18 months ago today, on the 20th of August 2018, Greta Thunberg stood with a banner in front of the Swedish parliament in Stockholm for the first time and demonstrated for better climate protection. I find that great. I'm happy when I see young people getting involved and pursuing things with passion and perseverance. And I'm impressed by what Greta Thunberg and the whole movement have achieved in such a short time. They have reminded all of us that we can do more. Indeed, we must do more. And they have led many people and organizations to question critically their own carbon footprint and to ask whether their priorities are right. The president of the EU Commission, Ursula von der Leyen, is making climate protection a central theme of her term of office with a European green deal. More and more companies' investors are taking a critical look at the effects of their actions on the environment. The World Economic Forum in Davos in 2020 was also marked for the first time by the climate crisis. And that was made clear, not just in the speech by the German Federal Chancellor. These examples show the necessity has been recognized, but analysis and demands are not enough. Now it's a question of acting. For to do this, we must show ways that will take us forward on a global basis. Infineon is already doing a great deal. I've just explained the net benefits of our products. In addition, we also pay attention to our use of resources. Per square centimeter of processed wafer area, Infineon uses 32% less water, 52% less electricity and generates 65% less waste than the global average of semiconductor companies organized in the World Semiconductor Council. But we know as well that we can do more. Just as we're always looking for new ways to improve on the product and systems side, we also want to work towards reducing or even completely avoiding carbon dioxide emissions in production. For this reason, we are setting ourselves binding reduction targets for the first time as a company. By the end of 2030, we want to be CO2 neutral. Our primary goal is to avoid emissions from production and energy supply. But we're not going to leave it at a long-term goal in 10 years. By 2025 already, we want to have implemented 70% of the necessary steps starting from the basis of fiscal 2019. The greatest savings, for example, we can achieve by PFC exhaust air purification in the plants. With reduction measures of this kind, we are doing far more than required by law to reduce greenhouse gases. We intend to offset the remaining emissions by purchasing green electricity, and to a lesser extent, by purchasing certificates that support development projects with environmental and social benefits. The targets apply to our own footprint and includes all direct emissions and also indirect emissions from electricity and heat. To the outside world, they are promise by which we want to be measured. Internally, they are motivation for ourselves to give our efforts an even greater boost. We are happy that our employees are fully committed to this as well. Ladies and gentlemen, as you can see, your company is in perfect health. We have mastered the challenges of the last year well. We are addressing long-term social trends that will enable us to grow faster than the market in the years to come. We are about to complete the biggest acquisition in the company's history. We stand by our social responsibility, and we are not resting on our laurels. Currently, we are preparing for upcoming upswing. There is still disagreement on trade issues at the international level. This continues to be a source of conflict. We therefore do not expect macroeconomic impulses and a significant market recovery driven by them in the short term. Nevertheless, our markets are increasingly developing in the right direction again. We are monitoring the effects of the Coronavirus very closely. Our top priority is the health of our employees. We've already taken appropriate precautions to protect them. The economic consequences for China and the rest of the world cannot yet be fully assessed. For the automotive market, market researchers expect production losses of 1 million vehicles in China alone. That is the equivalent of a good 1% of annual global production. However, a catch-up effect cannot be ruled out in the coming months. The number of smartphones could also fall by a good 2% this year according to analysts. So far, both on the customer and supplier side, we've only seen little impairment of our business. As of today, it's not possible to make a reliable forecast about the effects of the virus on the global economy, China and Infineon. We are, therefore, maintaining our outlook for the current fiscal year. And to remind you, we expect revenue growth of 5%, plus or minus 2 percentage points and a segment result margin of 16% at the midpoint of this range. This outlook is based on an assumed U.S. dollar exchange rate of 1.13 to the euro. It does not include the planned Cypress acquisition. My colleague, Sven Schneider, will go into more detail on the outlook in his speech. You will remember, a year ago, from this platform, I said farewell to Dominik Asam as Chief Financial Officer. Sven succeed him on the 1 May 2019, and he had ample opportunity to prove his abilities from the very beginning. With the largest acquisition in the company's history, there was little time to go from 0 to 60. The professionalism with which he and his team planned and implemented the refinancing measures in the course of the Cypress acquisition, is among other things, impressive. Sven, we are happy that you're now at Infineon and are part of our team on the management board. There will also be changes on the Supervisory Board. At the end of today's Annual General Meeting, Dr. Sünner, Mr. Bauer, Dr. Diess, Mr. Hobbach and Professor Koecher are leaving the Board. On behalf of the entire management board, I'd like to thank all of you very much for your many years of support, your trust and our constructive cooperation. I wish you -- or we wish you all the best. I should like to thank the future members of the Supervisory Board in advance for their interest in joining Infineon. Last but not least, what would Infineon be without its shareholders? Thank you to you, too, ladies and gentlemen. Your trust gives us the strength and confidence we need to work in turbulent times like these on the long-term development of Infineon. Thank you.

Thank you, Dr. Ploss. Ladies and gentlemen, our products are based on advance in knowledge, in physics and chemistry, but our success, I think, is also based on our heart, blood, and the CEO is the best proof that, that is true. But heart, blood is also needed in a stable financial structure. And Dr. Sven Schneider is going to talk to you about that as announced by Mr. Ploss. Thank you, Dr. Schneider.

Thank you very much, Mr. Eder for the motivating and appreciative words, which are really touching and also many thanks to you, Dr. Reinhard for your warm words. In my first 10 months at Infineon were very intense. I am new to the company, I was new to the sector and I took a deep dive right away. I was welcomed with open arms and quickly felt as a part of the team. In fact, already by now, I feel as if I have been working at Infineon for years. At this point, I would like to thank the Supervisory Board, my colleagues on the management board and our employees for their excellent cooperation and for the wonderful support I've experienced in the last couple of months. I have taken over a well-kept organization and a highly professional finance team. Ladies and gentlemen, good morning. Infineon grew again in the 2019 fiscal year, albeit at a much slower pace than originally expected. However, you have to put that into perspective. Despite a challenging macroeconomic environment and against the trend of an overall shrinking semiconductor market, we were able to increase revenue for the sixth time in a row. Compared to the previous year, it rose by 6% to EUR 8,029,000,000. As you heard before, in so doing Infineon for the first time in its corporate history, achieved revenue of more than EUR 8 billion. The segment result declined by EUR 34 million to a total of EUR 1,319,000,000 by contrast. This corresponds to a segment result margin of 16.4% compared with 17.8% in fiscal 2018. It was thus in line with the forecast adjusted in March 2019 of around 16% at the midpoint of the guided revenue range. This result is remarkable, especially against the backdrop of the challenging macroeconomic environment and the shrinking semiconductor market. At the beginning of the fiscal year, you may recall, we had expected a significantly higher revenue growth, 11%, give or take, 2 percentage points instead of the 6% we now achieved. At that time, the market was still in a boom phase. During the fiscal year, however, demand in our end markets dropped in some cases sharply. We had to adapt quickly to a new situation with little or, indeed, no market growth at all. Given the temporary lower demand, which was caused by destocking in sales channels to some extent, we were unable to fully utilize our increased manufacturing capacities, especially in the second half of the fiscal year. This cyclical effect led to higher idle costs, which had a negative impact of about 2 percentage points on the segment result margin. The fact that the margin has nevertheless remained so stable, close to our target of 17% on average over the cycle, speaks for the robustness of our business model, and it also furnishes proof of the adaptability and speed of our teams. They have quickly and successfully switched from growth mode to cost control. The favorable development of the exchange rate for the U.S. dollar also had a positive effect. The average rate for the year was 1.13 compared to 1.19 in the previous year. So ladies and gentlemen, as you can see, Infineon delivers profitable growth even in difficult times. Net income for the 2019 fiscal year dropped by 19% to EUR 870 million. This represents a decrease of EUR 205 million compared to the previous year's figure, which had included the pretax gain of EUR 270 million from the sale of the RF power business. Our earnings per share amounted to EUR 0.75, down 21% compared to the previous year. Adjusted earnings per share fell from EUR 0.98 to EUR 0.89. This brings us to segments. Revenue in the Automotive and Industrial Power Control segments grew by 7% in each case, and by 5% in the Power Management & Multimarket segment. The Digital Security Solutions segment posted a 3% decrease in revenue in a weak market environment. Nevertheless, according to the most recently available market analysis, Infineon has been able to keep its market share stable. Segment result margins developed as follows: Automotive dropped from 14.2% to 11.5%, Industrial Power Control dropped from 19.3% to 17.7%, Digital Security Solutions dropped from 15.8% to 12%. Idle costs were one main reason for the decline in these segments as I mentioned earlier. Given the temporarily lower demand from our customers, we were unable to fully utilize our increased production capacities especially in the second half of the fiscal year. In the Power Management & Multimarket segment, however, we were able to achieve growth in the segment result in excess of revenue growth. EUR 585 million represent a 10% increase compared to the previous year. The segment result margin was thus a strong 23.9%. Let us look at the distribution of revenue by region. In China alone, we generated EUR 2,159,000,000 of revenue, which is 27% of our total revenue. Germany accounted for a share of 15% with EUR 1,169,000,000. USA accounts for 11% of revenue. Here, Infineon achieved the highest percentage revenue growth of 20%. Also, in Japan, Infineon realized a remarkable revenue increase of 11%. Although, as you see, Japan accounts only for 7% of group revenue, we are pleased with this growth. Japan is a particularly large and important market for both automotive and industrial applications, but so far, has been dominated by domestic suppliers. We see the fact that this region is gradually opening up to us as a clear sign of the competitiveness of our technologies. Now moving on to the operating expenses. Our research and development expenses rose by EUR 109 million to EUR 945 million in the 2019 fiscal year, equivalent to 11.8% of revenue. A further EUR 125 million in research and development expenses had to be capitalized in the 2019 fiscal year and thus reported as investments according to the International Financial Reporting Standards, in short, IFRS. If you take into account additional subsidies and grants received to the tune of EUR 111 million, we invested a gross total of EUR 1,181,000,000 in research and development and thus in the future viability of your company. This corresponds to 15% of revenue. Selling, general and administrative expenses as a percentage of revenue declined slightly to 10.8% in the 2019 fiscal year, they were 11.2% in the previous year. Free cash flow, for a CFO, this is quite an important KPI, amounted to EUR 39 million in the reporting year and was thus within the forecast range. The acquisition of Siltectra and payments in connection with the acquisition of Cypress, had a negative impact on free cash flow. And please don't forget that the EUR 618 million from the previous year included the cash inflow from the sale of RF Power to the tune of EUR 345 million. By far, the largest share of investments in property, plant and equipment were capital expenditures at our manufacturing sites, around 2/3 of that went to front end, meaning chip manufacturing, and the rest mainly to assembly, which we refer to as the back end. At EUR 156 million investments in intangible assets were down on the previous year's figure of EUR 164 million. The lion's share of this at EUR 125 million was accounted for by the aforementioned capitalized development costs. Now let's take a look at our balance sheet. As of the 30th of September 2019, total assets amounted to EUR 13,412,000,000. This is an increase of 23% compared to the 30th of September 2018. Our financial liabilities increased only slightly by EUR 24 million. Total equity increased by EUR 2,187,000,000 to EUR 8,633,000,000. This was primarily due to the capital increase carried out in June 2019 in connection with the acquisition of Cypress, which I will present to you in further detail later on. The return on capital employed, ROCE for short, was 12.2% in the 2019 fiscal year compared to 20.5% in the previous year. The previous year's figure was positively influenced by the aforementioned sale of the RF Power business. Now moving on to the development of the Infineon share, your share. Between the beginning of the past fiscal year, on October 1, 2018, and the close of the trading last Friday, Infineon is the red line, the Infineon share price rose by 13%, thereby, slightly outperforming the German stock index, DAX. In the first months of this period, stock markets suffered from the tightening of the trade conflict between the U.S.A. and China and the deteriorating economic outlook. At the end of March, Infineon adjusted its growth targets downwards, as I mentioned earlier, which led to a significant decline in the share price. On the 3rd June 2019, as you can see quite clearly on the chart, Infineon announced the acquisition of Cypress. On this day, the share closed 8% below the previous day's price. Why? The development reflects several factors. In a volatile market environment, we announced the largest acquisition in Infineon's corporate history. Cypress was known outside the U.S.A., mostly only to industry insiders. The purchase price of EUR 9 billion if -- without doubt, not low, the synergy potential, and Dr. Ploss already said a lot about this with respect to our strategy that justifies it, will be realized to a large extent, in the medium to long-term through revenue synergies. And finally, we have announced a financing corporate concept that includes around 30% equity for the acquisition. The core objective that we are pursuing with this financing concept is to maintain an investment-grade rating for the combined company. This ensures that Infineon continues to be able to withstand unexpected periods of economic downturns, even after the acquisition and to take advantage of market opportunities at any time. We want Infineon to continue to have a solid capital structure and does have access to capital markets and financing sources at all times. The rating agency Standard & Poor's global ratings rates Infineon's creditworthiness as BBB. And following the announcement of the planned acquisition of Cypress has placed us on what is referred to as a credit watch with a negative outlook. This is common practice in such transactions and means that Infineon will remain investment-grade after the acquisition with the planned financing structure. We took measures very swiftly to reduce the risk of refinancing of the Cypress acquisition. This consistent action has contributed to the noticeable price recovery since late summer. You can see the main steps behind me. The initial financing of the entire acquisition amount was guaranteed by 3 banks, which was then syndicated to 20 national and international banks. In June 2019, the same month as the acquisition was announced, we raised around EUR 1.5 billion through a capital increase, thus quickly reducing the refinancing risk. Let me explain this in more detail. The management board was authorized in accordance with Article 4 Section 4A of the Articles of Association to increase the share capital of the company with the approval of the Supervisory Board in the period up to February 11, 2020, by up to EUR 676 million by issuing new registered no par value shares against cash or noncash contributions. On the basis of this authorized capital 2015/I, the management board decided on June 17, 2019, to increase the company's share capital by EUR 225,547,846 against cash contributions and excluding the preemptive rights of shareholders through issuance of 112,773,923 new registered no par value shares with a notional value of EUR 2 per share. The Supervisory Board approved this resolution of the investment, finance and Audit Committee of the Supervisory Board on June 17, 2019. The new shares were issued at a price of EUR 2 per share, giving a total issue amount of EUR 225,547,846. Due to the exclusion of shareholders preemptive rights, the new shares could be placed with institutional investors by means of an accelerated book building process. So this basically happened overnight. At a price of EUR 13.70 per share, the gross issue proceeds amounted to EUR 1,545,000,000 before commissions and costs. The exclusion of preemptive rights thus enable the company to raise capital quickly, taking advantage of a favorable market situation and optimizing the proceeds for the company. The placement price represented a discount of 4.6% compared to the previous day's closing price. At the end of September, we took a further refinancing step and broke new ground for Infineon. By issuing what I referred to as hybrid bonds, which, as the name implies, has both equity and bond characteristics, we raised additional capital of around EUR 1.2 billion. Under IFRS, the hybrid bond is accounted for fully as equity. The rating agency Standard & Poor's counts 50% of our hybrid bond as equity, which helps us considerably in achieving the targeted equity ratio of the overall financing. From this perspective, the capital increase and the hybrid bond already bring us to a good EUR 2.1 billion euros of eligible equity in total. These steps give us great flexibility with regard to the time line and instruments for the remaining refinancing requirements. We will adapt our financing concept to the specific constellation after the acquisition has been consummated, and in particular, we will carefully examine whether a further step to strengthen the equity base makes sense. However, a direct placement of shares would be only one of several possible measures. The vast majority of the refinancing that is still open will be carried out via bonds as planned. Since the capital increase, the Infineon share has -- and this is the red curve again, and now we're at the top significantly outperformed the DAX and the Philadelphia Semiconductor Index, in short SOX, which is relevant for us. We are impressed and delighted by the strong interest of investors and banks in our financing rounds. Ladies and gentlemen, this underlines the confidence in the market opportunities of your company. In addition to financing risks, a major acquisition is also associated with currency and interest rate risks. On the one hand, we have to pay the purchase price in U.S. dollars. And on the other hand, we want to take advantage of the currently very favorable interest rates from the issuers’ perspective. We have ensured both by concluding appropriate hedging transactions, which will only take effect when the Cypress acquisition is closed. And this brings me to our dividend proposal. We continue to pursue 2 goals with our dividend policy. We want our shareholders to have a fair share in Infineon's economic development. And we want to pay a dividend that is at least constant, even in times of stagnating or declining earnings. The net income is not the only decisive factor for us here. We have not defined a fixed payout ratio. In connection with agenda Item 2, the management board and the Supervisory Board proposed a constant dividend of EUR 0.27 per share on the basis of the results achieved in the past fiscal year. The number of dividend entitled shares, and consequently, the total dividend payout, increased for 3 reasons. First, the capital increase; second, performance share plan becoming due; and third, the exercise of stock options. I would like to explain these to you briefly. The more than 112 million new shares issued in June 2019 as part of the capital increase are already fully entitled to a dividend for the past fiscal year. In addition, the tranche of our performance share plan, which is part of the variable compensation of the members of the management board and executives, and that is due in October 2019, was serviced with treasury shares previously held by the company. As long as the shares were held by the company, they were not entitled to dividends. With the transfer of the shares from the company to the members of the management board and executives, the dividend entitlement has been activated. In total, the volume is a relatively small 600,000 shares. The company still holds 5,431,692 treasury shares, which are not entitled to dividends. Finally, the exercise of stock options resulted in the creation of 237,000 new shares entitled to dividends. Taking into account the newly added dividend entitled shares, the anticipated dividend payment for the past fiscal year will probably increase to EUR 336 million compared with EUR 305 million in the previous year. Moving on to the outlook. As Dr. Ploss already mentioned, we expect revenue growth of 5%, give or take 2 percentage points for the 2020 fiscal year. As I said earlier, this guidance is based on the assumption that our business will not be significantly affected by the spread of the Coronavirus. The effect of the planned Cypress acquisition has not been included in this guidance either. In the middle of the guided range, the segment result margin should be about 16%. We assume an exchange rate of 1.13 of the euro to the U.S. dollar, which, by the way, corresponds to the actual average exchange rate of the previous 2019 financial year. Our business model is geared towards long-term structural growth. A large portion of this comes from power semiconductors. Due to the long lead times for semiconductor manufacturing, we have to make investment decisions early. In conjunction with the current economic slowdown, it leads temporarily to a lower utilization, and thereby, to a negative impact on our margin. Conversely, however, it would have been much more -- it would had much more severe consequences if we were permanently limited by our production capacities. Delivery reliability is a critical success factor for Infineon. It is a major reason why our customers choose and value Infineon as a supplier. In total, we plan to invest around EUR 1.3 billion this fiscal year, excluding Cypress. Approximately 1/3 of this amount will be allocable to production buildings including the infrastructure and office buildings. We invest in order to establish the conditions to benefit from the next market upswing and fully exploit our structural growth potential. The single largest project remains the continued construction of the clean room for the new 300-millimeter fab in Villach, Austria. The time line for the completion of the new clean room will be adjusted according to market developments, and we expect production to start at the end of the 2021 calendar year. I would now like to comment on some items on the agenda of today's Annual General Meeting, which are rather more technical in nature. Under Item 7 of the agenda, the board of management and the Supervisory Board propose that the conditional capital 2010/I be set aside. According with the Articles of Incorporation, this conditional capital was created in order to issue subscription shares to employees of Infineon Technologies AG and its group companies. From conditional capital 2010/I, 10,018,668 shares were issued. Now it is no longer required because the 2010 stock option plan has expired in the meantime and no more options can be exercised. Under agenda Item 8, the management board and the Supervisory Board proposed the creation of new authorized capital 2021 for general purposes. It is to be available for capital increases against cash and/or noncash contributions and is to replace authorized capital 2015/I, which expired a couple of days ago on the 11th of February 2020. The total volume is up to EUR 750 million. And thus, like the previous authorized capital, 2015/I again corresponds to just under 30% of the current share capital. The shareholders have preemptive rights also with the authorized capital 2021 on principal. However, under certain conditions and with the approval of the Supervisory Board, the management board may exclude the preemptive rights. On agenda Item 9, the 2018 Annual General Meeting authorized the management board to issue bonds with warrants and/or convertible bonds with a total nominal value of up to EUR 4 billion and resolved a contingent capital 2018 of EUR 260 million. In other words, 130 million shares. The management board was also authorized to exclude shareholders' preemptive rights on the warrant and/or convertible bonds in certain cases, in particular, if the issue price of the warrants and/or convertible bonds is not significantly lower than their market value referred to as the simplified exclusion of preemptive rights. This option to exclude preemptive rights is limited to 10% of the share capital. The capital increase from authorized capital carried out in June 2019 has to be counted towards this, however. As a result, it is now no longer possible to issue warrants and/or convertible bonds with simplified exclusion of preemptive rights. In order to continue to give the company the opportunity to issue bonds with warrants and/or convertible bonds in the future, in particular, with a simplified exclusion of preemptive rights, the authorization and the conditional capital 2018 should be canceled now and replaced by a new authorization and a new conditional capital 2021. The maximum volume remains unchanged. The written reports of the management board on agenda items 8 and 9 contain further detailed explanations, in particular, also on the constellations in which the subscription rights can be excluded. At this point, however, I would like to specifically mention that the limit of a possible exclusion of subscription rights is more restrictive than before. The authorizations to exclude subscription rights are now limited to a total of 10% of the share capital. Dear shareholders, Infineon has performed well in a challenging 2019 fiscal year. After the boom in previous years, we had to adjust to a changed situation and break hard. We reacted well and above all, quickly. In the long term, however, we see continued structural growth potential in a large number of applications in which Infineon has a particularly strong presence. With the Cypress acquisition, we intend to exploit this potential even more comprehensively. We, therefore, adjust our targets for revenue growth, segment result margin and investment to sales ratio over the cycle. Dr. Ploss explained the strength of the combined company from a strategic perspective. This strategically stronger positioning is also reflected in our financial targets. Once the acquisition has closed, we plan to grow our revenue across all cycles by an average of more than 9% per year. The segment result margin is expected to gradually increase to 19% as integration progresses. As a result of the reduced capital intensity of the combined companies, we are planning an investment to sales ratio of 13% instead of 15% of revenue. As usual, this figure does not include investments in front-end clean rooms, along with their infrastructure and certain large office buildings. Due to the higher segment result margin and the reduced capital intensity, we expect a gradual improvement in the free cash flow ratio. These new targets will be supported by the realization of the planned synergies. We expect cost synergies of EUR 180 million per year through to the 2022 fiscal year. The complementary portfolios enable additional system solution offerings of chips that will generate long-term revenue synergies of more than EUR 1.5 billion a year. In taking investment decisions we will continue to follow our proven strategy of fully leveraging our medium- to long-term growth potential. We achieved this primarily by ensuring delivery reliability, a key criterion for our customers. We are convinced that by investing through all phases of the economic cycle, we not only offer our customers the greatest added value, but also provide you, my dear shareholders, with an attractive return on your investment in our share. Ladies and gentlemen, my particular thanks go to you for your attention and for your trust in our company. Thank you.

Thank you, Dr. Schneider for that accurate description of the financial situation of our company. This brings us to the end of the statements by the board of management. And this is also the end of the Internet transmission open to everyone. So it is now being switched off. The remainder of the Annual General Meeting, including the general debate and the following votes can now only be followed by our shareholders on the Internet.