Infineon Technologies AG (IFX) Earnings Call Transcript & Summary

Ladies and gentlemen, esteemed shareholders, I hereby open the ordinary shareholders' meeting of Infineon Technologies AG, which, since last year, we were one of the last companies to have an in-person AGM, will be held as a virtual AGM, which is a premier for us. Furthermore, I would also like to welcome all shareholder representatives, all shareholders, all representatives of the media and anyone else who has dialed into this live video feed. Against the backdrop of the unforeseeable development of the COVID-19 pandemic and the associated behavioral rules, the Management Board with the approval of the Supervisory Board decided to hold the AGM without in-person presence of the shareholders or their proxies as a virtual AGM. An in-person event, wouldn't be possible at any rate, and it would not be admissible from a legal point of view. According to the articles of association, I shall Chair the current AGM of the company and in my capacity as Chairman of the Supervisory Board. It is taking place at the corporate headquarters at Am Campeon in Neubiberg in Germany. In addition to myself as the Chairman, further attending in person are the notary Republic, who is entrusted with taking the minutes, the members of the Management Board and the appointed proxies. Mrs. [ Doro Pluto ] will moderate the Q&A session later on. First of all, I would like to make some housekeeping remarks. The AGM was convoked through its announcement in the German Federal Gazette on the 15th of January 2021 in due form. Our new notary public, Mr. Sébastien Hella, has been entrusted with taking the minutes for the first time because Dr. Goethe, who has rendered services to us for many years, has gone into his well-deserved retirement. Welcome to you, Mr. Hella. All shareholders that have registered to participate in today's AGM as well as their proxies have the opportunity to follow the entire AGM via our Internet service in picture and audio live. If you haven't done so yet, you have to log into our Internet service to do so now. Further information can be found in the convocation and in the registration documents. Furthermore, the first part of the AGM and the report on the work of the Supervisory Board and the speeches of Mr. Ploss and Mr. Schneider can also be followed by anyone who is interested live on the Internet. The speeches will be recorded, and they will be available after the AGM on the Internet. Should the live web feed be interrupted, we kindly ask of your patience. Should the connection prove not to be reestablished, then we would provide you further information via our Internet service. If you have individual technical problems, please turn directly to our hotline. Its contact information can also be found on the Internet service. And just for the sake of clarification, the minutes will not be verbatim. I would like to further point out that it is not permitted to record the transmission on the Internet. In the run-up to today's AGM, the company did not receive any countermotions or electoral proposals. Requests for supplements to the agenda were not sent to us either. Ladies and gentlemen, you can exercise your voting right in-person or via a proxy. Voting proxies, however, can only exercise your voting rights via mail-in ballots or by following instructions that you have issued to the proxies appointed by the company. Now voting rights can only be exercised by you or your proxies at this virtual AGM via our Internet service. There you can choose between a mail-in ballot and issuing an authorization or sub-authorization, and if necessary, instructions to the voting proxies appointed by the company or any third party. I would also like to point out that shareholders who have several shareholder numbers have to register each shareholder number individually with the Internet service in order to be able to exercise the attached voting rights at the Annual General Meeting. Authorizations and instructions can be issued via the Internet until the beginning of the votes. They may also be changed or revoked until the beginning of the votes. The same applies to the issuance, change or revocation of mail-in ballots via the Internet service. The votes themselves in this virtual AGM consists only in the casting of the votes via the voting proxies that you have elected. This is done via the Internet. Any mail-in ballots that have been received will automatically be considered. Since there may be some delays due to the Internet feed, I ask you to cast your vote early on so that they are cast in due time. Objections to proposals by the AGM can be filed until the end of the AGM via the Internet service of the company, and these objections will be taken to the minutes by the notary public. Here, again, I ask you not to wait until the last minute to do so. Ladies and gentlemen, this rounds up my comments with respect to the formal issues and the organizational matters with respect to this virtual AGM. I now call all of the items on today's agenda, which are 10 in number. The complete wording of the agenda and the draft resolutions were published together with the complication in the German Federal Gazette and sent to you. On top of them, they are available on our website. This brings us to Item 1 on the agenda: submission of the approved separate financial statements of Infineon Technologies AG and the approved consolidated financial statements, both as of the 30th of September 2020, the combined management report for Infineon Technologies AG and the Infineon Group and the report of the Supervisory Board for the 2020 fiscal year. This and all other documents that have to be made available have been published on our Internet page since the convocation of the AGM. The Supervisory Board has approved the separate financial statements and the consolidated financial statements, including the combined management report and the further commentary reports. They are thus adopted. There is, therefore, no need to pass a resolution on this item on the agenda in accordance with Section 172 sentence 1 of the German Stock Corporation Act. This brings me to the Supervisory Board. Ladies and gentlemen, I can see that I would much have preferred and much have enjoyed to speak to you in person today. And together with the Management Board, of course, I would have preferred to be able to answer your questions directly and in person. Nevertheless, we should deem ourselves fortunate that so many things are possible in digital mode and, in fact, usually work well, although this format will never replace personal contact. Therefore, at this juncture, I would already like to take the opportunity to express my sincere thanks to all employees for their outstanding dedication and work. The operation of Infineon isn't being maintained just by any means. Quite to the contrary, we are still putting the pedal to the metal and the company is staying its course for success. Under the management of a far-sighted and circumspect goal-oriented Board of Management, the structures and the portfolio continue to be developed also in these difficult times. And therefore, it is also deserving of our thanks, not least due to its constant endeavors to safeguard the health and lives of all people employed by the company and associated with the company as best as possible. Revenue and the margin are already considerable but only an expression of the work of those who are behind these figures. Lockdowns are necessary. There's no doubt about that, but they are to the detriment of the economy. The pandemic, however, also accelerates change towards digitization wherever sensible towards sustainability, and therefore, to securing our future and to the transformation of working worlds to ensure a full life also in the future. Infineon, above all, and this is just a personal remark, who else therefore ranks certainly among the companies that will emerge from the crisis stronger? The megatrends that we are addressing strategically describe the very change that has now gained momentum due to the pandemic. Ladies and gentlemen, many issues have characterized the work of the Supervisory Board in the fiscal year that just came to a close, of course, above all, the omnipresent pandemic and its economic ramifications. It has led to a fact that between the regular Supervisory Board meetings, we regularly have extraordinary virtual plenary sessions concerned with the current business situation. From an entrepreneurial point of view, the past fiscal year was characterized by the Cypress acquisition that was extremely important to Infineon in strategic terms. With respect to the details of the acquisition, I would like to refer you to the comments we made at last year's AGM and nothing has changed since then in that respect. With respect to the current status, I would like to refer you to the commentary of the Management Board, which you will hear soon. Infineon has thus become the top 10 biggest semiconductor manufacturers worldwide and one of the most important partners to the automotive industry in this sector. The Supervisory Board has accompanied the integration measures as well as the extremely successful financing closely and with great conviction. Supervisory also dedicated itself in depth last year with the reorganization of the compensation of the Management Board and Supervisory Board. Let me give you some words with respect to the backdrop to this. ARUG II and the new version of the code, including the application for the management and Supervisory Board remuneration system, having to be submitted to the Annual General Meeting for approval by no later than 2021. Let me start with the compensation of the Management Board, the new version of which was drafted together with independent compensation experts and which was adopted by the Supervisory Board at its meeting of November 2020. It is in front of you for approval today. When revising the compensation system, the Supervisory Board primarily paid attention to ensuring that the Management Board emoluments were brought in line even more with the strategic objectives of Infineon, and expressly, the sustainability goals had to be integrated, and overall, an appropriate and motivating compensation had to be insured. Now moving on to the main amendments. In the area of variable compensation in the future, there will only be a short-term and a long-term compensation component. The mid-term one will be deleted. In their place, we will strengthen the share of long-term variable share-based compensation significantly. In the area of short-term variable compensation, we will introduce the 2 former financial goals, return on capital employed and free cash flow, will be complemented by the central operative management KPI, the segment result margin for Infineon. This is the EBIT margin of the 4 group segments. And instead of the payout amounts being reduced by up to 50% or increase by up to 50%, the Supervisory Board in the future will be able to reduce or increase the degree of target achievement up until 30% and then on the basis of clearly defined criteria. The long-term variable compensation will be converted to a 100% performance-linked share performance share plan. The goals of which will be adjusted and supplemented as follows: the financial goal in the future will orientate itself not to the abstract Philadelphia Semiconductor Index. There will be a comparison between the share price and the dividend development of Infineon with an international peer group consisting of 29 companies. Just how well Infineon fares here will make up 80% of the long-term target achievement. Another 20% of the target achievement will depend on nonfinancial goals in the areas of the environment, social and government ESG for short. Here, we will start with a clearly defined reduction of the carbon dioxide emissions and the diversity goal to increase the women's share in management positions. The special bonus, which is at the sole discretion of the Supervisory Board will be deleted without replacement. It is not in line with the times, and it didn't play a role in the past. The new Management Board compensation system further will include a share ownership guideline. The Management Board members have to, within 5 years, establish a minimum inventory of Infineon shares and keep this shareholding up until 2 years after their exit. For the CEO, this minimum shareholding has a counter value of 150% with the other members of the Management Board having to have 100% of their fixed compensation invested. Last but not least, a demerit and clawback provision has been introduced, which enables the Supervisory Board in certain cases to retain our clawback variable compensation components. The details of the future Management Board compensation system can be seen in the convocation to the AGM and the presentation that has been posted to our Internet site. The implementation of the modified compensation system will be carried out via new employment contracts for the Management Board members, which, in general, will take effect as of the 1st of October 2021, which means that they will be effective for the first time as of fiscal 2022. Only the end of the midterm incentive and the associated conversion of the long-term incentive will take effect in the current fiscal year. Within the scope of the conversion of the employment contracts for the first time since 2017, the level of compensation will also be adjusted by plus 25% for the Chairman of the Management Board and staggered for the Management Board members. Guidelines for increasing the compensation were the significant growth of the company while maintaining a stable or solid operating performance in the last years and the position of Infineon in the DAX, which could not be compared anymore in the past. These are all developments that are into interest of our shareholders. But it was -- the task at hand was also to strike a good balance between management board compensation and the emoluments of the entire company and the specifics of the high social and emotional value since the years of the economic fight for survival. That rounds up the view of the future compensation system. Details can be found in the compensation report in the company report for fiscal 2020. This brings me to the Supervisory Board's remuneration. The structure of Supervisory Board remuneration that dates back to 2016 is no longer up-to-date, and also, therefore, needs to be adjusted. In doing so, we want to do more justice to the German corporate governance code, according to which the additional time required to perform Supervisory Board work, for example, working on committees is supposed to be considered appropriately in terms of remuneration. The Supervisory Board remuneration system in front of you that you are being asked to approve envisages in the following major amendments, whereas the fixed base compensation and the bonus for exercising further offices will only be increased slightly for the Chairman of the Supervisory Board, the surcharges for committee work. Chairmanship in the investment, finance and audit committee and industry strategy and technology committee are supposed to be raised even higher to bring them in line with the market. The backdrop to this is simply that, in the last couple of years, the additional work has risen considerably. The previous blocking clause, according to which several functions were only remunerated by one additional payment which was specific to Infineon, will be deleted because, basically, every function should be remunerated in line with the required additional work. However, this will only be the case where a certain minimum importance has been achieved. Therefore, the additional pay for additional functions held for committee work will only be made if in the fiscal year in question at least 3 committee meetings have taken place. On top of that, we want to introduce a cap of 100% of the total base compensation. Another amendment has been planned, and that is that the attendance fees for extraordinary meetings in the form of telephone or video conferences, at which no resolutions are passed, will be reduced from EUR 2,000 to EUR 1,000. The amendments will take effect at the beginning of fiscal 2022. That rounds up my comments on the Management Board and Supervisory Board compensation. Now I would like to come to 2 governance issues. The first, with the effectiveness of the new compensation system, all of the recommendations of the new corporate governance code are being compliant with so that there are no deviations. In August 2020, the Supervisory Board passed a resolution to adapt the bylaws for the Supervisory Board, its audit committee and the Management Board. This was occasioned by the entry into force of ARUG II and the new version of the code. The amendment and review furthermore was also used to update the catalogs of measures requiring approval to strengthen the role of the audit committee in the area of debt measures and to adjust the limits for approvable transactions to today's company size. After all, that provision dated back to 2011. Ladies and gentlemen, after talking about the pandemic, a little bit about Cypress. And a lot about compensation and corporate governance. I come to the parent company and consolidated financial statements. The investment, finance and audit committee as well as the plenary session of the Supervisory Board discussed in detail the figures of Infineon Technologies AG and the Infineon Group and the reports of the independent auditors, KPMG. The independent auditor issued an unqualified audit opinion to the parent company and consolidated financial statements. The result of the audit was approved by the Supervisory Board on the 20th of November 2020. There were no objections to the financial statements or the audit by the independent auditors. Therefore, the Supervisory Board approved and adopted the parent company and consolidated financial statements for fiscal 2020. Therefore, the separate financial statements of 2020 are adopted. The Supervisory Board endorses the dividend appropriation proposal or the profit appropriation proposal of the Management Board, which it deems to be appropriate after an in-depth discussion of the development in the last fiscal year and the prospects for the current fiscal year. The Management Board and the Supervisory Board, therefore, propose to the AGM a dividend of EUR 0.22. The reduction of EUR 0.05 compared to the previous year is due to the uncertainties arising from the pandemic. The investment, finance and audit committee and the plenary session of the Supervisory Board furthermore concerned themselves in a separate -- with a separate nonfinancial report and a group report as of the 30th of September 2020 and audited it. KPMG also issued this report an unqualified opinion. The Supervisory Board took approving cognizance of the separate nonfinancial report and group report of the Management Board. Ladies and gentlemen, despite the current challenges and the volatile environment, we look with great optimism to the future. Infineon is addressing the right topics with employees with outstanding qualifications and motivation, led by a management team, which enjoys a high level of trust. Nevertheless, the Management Board and the Supervisory Board in the last couple of months have dealt in-depth with the structural setup of this very team, and this has been driven above all by the following considerations. Infineon has grown strongly. In the last 6 years, revenue more than doubled. The number of employees within the group has risen by approximately 60%. During this time, the company has also developed in structural and strategic terms, and that to a great extent. With the approach from product to system, we transformed ourselves from a component manufacturer to a system provider with a clear focus on sustainable solutions. The resolute orientation to global megatrends as structural growth drivers has strengthened the business model, and it has opened up new opportunities above and beyond the established core markets. The successful acquisitions of International Rectifier and Cypress have allowed Infineon to progress massively with respect to its corporate culture, technology portfolio and global footprint. More on this and from a much more expert mind will come from the CEO, Dr. Ploss, after this introduction. Although Infineon is outstandingly well positioned now, we still have to do everything we can in order to safeguard the course for success on which we have embarked. Therefore, we have ambitious goals, and in order to achieve these goals, we have to refine methods and processes on a permanent basis. Digitization will buoy this development substantially, both in terms of our own value-added within the company as well as in relation to our products and markets. In view of the continuous rising demands and the increasingly strong cross disciplined character of a number of issues, we deem it sensible to expand the skills on the Management Board by adding a fifth office, that of the Chief Digital Transformation Officer with digital being synonymous to future-proof. In specific, the significant growth of Infineon requires an increased fine-tuning of the company structures without the existing acknowledged flexibility within the organization being lost. The most recent in-company optimization initiatives have shown that new cross-divisional processes and workflows, and in particular, networking, harbor substantial additional potential for opportunities, and this, again, with respect to sustainability. At the end of the day, the task at hand is to establish a homogenous or to integrate a homogenous group-wide network process landscape in a globally setup Infineon Group. So far, Infineon has fared well, but the limits are foreseeable and the future must be addressed comprehensively. Digitization offers in this process huge potential but also needs consistent IT data and process architectures, which should be secured via this new Management Board office. I would like to take this opportunity that these considerations to form a new office of the Management Board were undertaken in a very constructive exchange with the Management Board. As a result of an intensive fact-finding search and selection process that lasted several months, and for which we enlist the services of the renowned business consultancy, Mrs. Constanze Hufenbecher will be joining the Management Board, and this will be from the middle of April 2021 for a term of 3 years. Mrs. Hufenbecher was on the Board of Management of Lufthansa Technik AG responsible for finances and a special area in operations. And before that, she was in the Managing Boards of various companies in various sectors. She is an extremely experienced manager with comprehensive expertise, not less in the process field. On top of that, between 2004 and 2009, she held a managerial position at Infineon, and therefore, she is generally familiar with the semiconductor industry and Infineon. Mrs. Hufenbecher would have loved to introduce herself to you in person, but this, too, has to be done virtually today.

Ladies and gentlemen, my dear shareholders, I am extremely happy to have been afforded the opportunity today to introduce myself briefly to you, at least in this short-video message. I'm Constanze Hufenbecher. I'm 50 years old, and I live with my family in Hamburg, at least for the time being. On the 15th of April, I will take office as Chief Digital Transformation Officer on the Management Board of Infineon. In this role, I will see to it that the huge potential harbored by the digital transformation for the company are leveraged as best as possible. Accompanying and shaping the transformation of Infineon translates into huge responsibility. I'd like to thank Dr. Eder, Mr. Dechant and the entire Supervisory Board for having entrusted me with this important task. I will tackle it with great respect but I also look very much forward to it. I'm extremely pleased that I can come back to Infineon after 10 -- after more than 10 years and to be part of such a successful management team. The diverse experiences that I've gained on my career path so far will help me to do so. At almost all stages of my career path and in almost all managerial positions in the last 25 years, the task at hand was to establish processes and optimize them, drive digitization, manage large-scale projects, and shape comprehensive transformation processes. In my previous position on the Board of Management of Lufthansa Technik, the task at hand was to give all divisions a common digital basis in order to differentiate themselves on this basis from the competition, and therefore, generate added value for the company and customers. I look forward to bringing these experiences to the table at Infineon. Between 2004 and 2009, I was able to get to know the company from various perspectives. Back then, I was in 1 division, chip card and security at the time; and then at a corporate function, namely Operations; and later, I had a project role for the Management Board. Even when I left the company for personal reasons, I was able to continue monitoring the impressive development of the company. What was accomplished here in the last years is unique. It demonstrates the strategic farsightedness of the management team and also the outstanding work done by all of the employees. With my future colleagues on the Board of Management, in recent times, I was able to talk. And at this juncture, I would like to express my sincere gratitude for the good exchanges and warm welcome. Now I can hardly wait to join my wayfarers and see a number of lot of -- a number of new faces and people as well. I'm firmly convinced that, together, the Management Board and the staff, will succeed in continuing to write the success story of Infineon. Ladies and gentlemen, thank you so much already. And thank you so much for your attention.

Thank you, Mrs. Hufenbecher. On behalf of the entire Supervisory Board, I would like to wish you all the best and the best of success for your new task. This brings me to another major personnel-related matter. The Supervisory Board, the day-before-yesterday, also announced its intention to extend the mandate of our CFO, Dr. Sven Schneider, on completion of his first tenure in April 2022 by another 5 years. We are all in agreement that Dr. Schneider in the last 2 years has done outstanding work as the Infineon CEO. Just think about the convincing financing and subsequent refinancing measures of the USD 10 billion acquisition of Cypress. From the first day of his joining the Management Board, Dr. Schneider, the Supervisory and I think, I will be allowed to add this, the Management Board also look forward to another 5 years together with you. This brings me to the end of my report. However, I wouldn't want to close without expressing my thanks, first of all, to our employees, who, wherever they may be in the world, ensured that we were able to navigate a very extreme fiscal 2020, thanks to their outstanding dedication. I would also like to thank the members of the Management Board and my colleagues on the Supervisory Board for the professional open and very respectful cooperation. And last but not least, I would like to thank you, our esteemed shareholders, for your loyalty to one of the most forward-looking German and European companies. And there's one more thing I'd like to say. The digital world can and will never be able to replace the real world. However, it makes it more livable for the coming generations while making it much more sustainable as well. Proof of this and proof of the fact that Infineon is increasingly contributing to this will be demonstrated to you by the following commentary of the Management Board. Thank you so much. Ladies and gentlemen, I have now been presented with the participation register, and I would like to read out to you the precise numbers of the registered capital stock of the company of EUR 2,611,842,274. Let me repeat this, EUR 2,611,842,274 divided into 1,305,921,137 shares. 917,778,915 shares with the same number of votes are represented at the AGM by the voting proxies nominated by the company. This corresponds to 70.28% of the capital stock. On top of that, mail-in votes for 3,694,477 shares corresponding to roughly 0.28% of the registered capital stock have been received. Together, this corresponds to 921,473,392 shares. This, in turn, corresponds to 70.56% of the registered capital stock. We need to take into account here that the treasury stock held by the company accounts for approximately 0.367% of the capital stock. But these shares are not entitled to participate in dividends, and they are not attached to voting rights. This rounds up my comments on the participation at this year's AGM and the requirements for the votes. Now I would like to hand the floor to Dr. Ploss, the Chairman of the Management Board, for his report on the status of the company.

Dr. Eder, thank you for the kind words in your introduction. Shareholders, broadcast viewers and listeners, welcome to Infineon's Annual General Meeting. It's good to have you with us. We are living in turbulent times. Mankind is facing huge tasks, the pandemic, the climate crisis, the growing world population, scarce resources. These are urgent global challenges that are crying out for solutions. We, at Infineon, believe that we have responsibility to do our part. What we do as a company is not an end in itself. We need to help people's lives better. That is what motivates us, challenges us and drives us on. We are working in a key industry. Of course, can you imagine us mastering these challenges without electronics? I can't. Take the pandemic. Without electronics, we'd be sitting at home, unable to work, largely isolated. Economic, public and private life would not only be restricted, it will be shut down. Thanks to digital communications, we can maintain large parts of our lives. We stay connected with friends and relatives. We can work from home and we can learn digitally. Of course, not all solutions are perfect, but we are much better off with them than without them. Thanks to these virtual opportunities, my colleagues and I are connected to you today. We can tell you how your company is doing and how we are developing Infineon for the future. The climate crisis. Without electricity from renewable energy sources, humanity would emit much larger amounts of carbon dioxide. Think of the smoking chimney stacks of coal-fired power plants. Our air would be much worse. Where would we be today without our advances in energy efficiency? Technology today is quite significantly helping to counteract climate change. And if we get it right, we can further increase technology's contribution to climate protection. I think we need to exploit all possibilities. Digital technology makes the difference. Semiconductor, in particular, are the key to solving the major challenges. And not only that, they help make life better for all of us. We all want to have a good life, and we all should have a good life, but it must be in accordance with what's right for our children and grandchildren. It's our duty to think outside the box and look to the future. At Infineon, we wanted to use the great potential of digital technologies to do just that. That is what drives us on. Together with our customers and partners, we make people's lives easier, safer and greener. We offer solutions for the efficient use of electrical energy in all areas of life. Our technologies pave the way to clean, safe and intelligent mobility. We make the Internet of Things easier and safer for people. With our innovations, we connect to the real and the digital world. The climate crisis is becoming increasingly visible in many regions of the world. We are currently heading for global warning of 3 degrees centigrade at 5 degrees Fahrenheit by the year of 2100. That would clearly miss the targets of the Paris Climate agreement and the consequence will be devastating. That is one of the reasons why EUR member states recently tightened their climate target for 2030. Our continent should be climate-neutral by 2050. Other leading regions have set themselves similarly ambitious goals. Our company, too, is working towards a binding target. As I announced at last year's Annual General Meeting, we want to be CO2-neutral by 2030. We shall achieve this primarily by avoiding emissions in our production and energy supply. And we are making great progress in this context. One example, at a plant in Kulim in Malaysia, we have installed additional systems to reduce greenhouse gases. In the future, they will help us to reduce direct emissions by 35,000 tonnes of carbon dioxide equivalent per year. That corresponds roughly to the emissions caused each year by 12,000 cars with internal combustion engines based on the average mileage figure for Germany. As the next major step this year, Infineon is switching the electricity consumption of its sites in Europe completely to certified green power. We're making good progress on our way to our intermediate target. By 2025, we intend to reduce our carbon dioxide emissions compared to 2019 by 70%. Achieving all with fewer resources is Infineon's approach to enabling a greener and better future. For more than 40 years, our company has been developing technologies for energy efficiency. Today, we offer solutions for everyday life for industry and the digital world along the entire energy chain. We make the generation of clean energy possible. We contribute to stable power supplies and storage. We provide the solutions needed to use electricity efficiently everywhere: in washing machines and air conditioning units, in industrial robots, in data centers, in trains and cars. Clean and smart mobility is another important building block for climate protection. The need for all kinds of transportation is increasing. There are more and more people in the world. Many people live in metropolitan areas, and everyone wants to be mobile. Megacities, in particular, urgently need solutions to make transport more sustainable, safer and more convenient for people. Electromobility is picking up speed worldwide. It's good for the climate and good for Infineon. We are supporting car manufacturers in reducing the cost of electric driving. This makes it even more attractive to people. As the market leader in power semiconductors, we enable electric vehicles with higher ranges and shorter charging times. For this, we offer our customers the broadest portfolio of products and technologies, and we understand electric drives. Infineon invested in this market earlier than its competitors. This is increasingly paying off. We are ideally positioned to benefit from the widespread dissemination of electromobility. And shareholders, we are continuing. We're thinking ahead. We're moving forward. We are setting the course for a company to be successful tomorrow and the day after. Leading technologies alone are not enough for a company to be successful in the long term. That is particularly true in the semiconductor industry. Our markets are changing constantly. The decisive factors, therefore, are ability and will, as a company, constantly to adapt to new demands. We have an appetite for new things, change the sources of energy for us. Infineon, for years now, has been following a clear strategic guideline and is called from product thinking to system understanding. System understanding means that we support our customers with ideas on how semiconductor innovations can decisively improve people's lives. We don't think in terms of individual semiconductor components, not in terms of nuts and bolts. Rather, we ask ourselves, what can we achieve for these parts. What benefits can they bring? How can we combine the components into complete solutions for our customers? This system understanding is particularly important in the Internet of Things, IoT. This market is increasingly shaped by companies that focus on connecting devices by making them smart, by collecting and processing data. These companies are experts in the device, the software and the application, but they often lack the necessary hardware knowledge. So they don't know what's possible with semiconductor technologies. And it is these customers, in particular, who we can support in the best possible way with our understanding of the system. For example, by supplying the corresponding software along with our microchips. This way, we meet the right needs. This enables our customers to achieve their goals quickly and easily. That is why I like to call our solutions instant electronics. There is ease-of-use as making a cup of instant coffee, just stir it and you're done. A good example is our complete solution for contactless payment. It consists of powerful encryption chips, an operating system and suitable apps. It can be integrated not only into bank cards; wearable electronics, such as digital wrist bands or fitness trackers can also be used to pay. This makes paying more and more convenient. It's smooth, and it's also secure. Our solution lets us offer our customers everything from a single source. With the acquisition of the semiconductor company, Cypress, we have kept to our strategic guideline from product to system. And not only that, we are taking a giant leap forward on the way to becoming a provider of complete system solutions. We are further levering Infineon into a driving force in the Internet of Things. The Internet of Things encompasses all areas of life. It's changing the way we live and work, how we communicate and how we move from a to b in cities, in buildings, in industry and agriculture and in traffic. Connected vehicles, virtual assistance, smart refrigeration, smart robots are performing more and more tasks for us, humans. By 2030, it's expected that 50 billion devices will be connected. That is an incredible number. More and more devices have sensors. They have ever-increasing computer power, and they're increasingly working with artificial intelligence. This offers Infineon enormous opportunities. With Cypress, we now have all the essential building blocks we need for energy-efficient, smart and secure system solutions for the Internet of Things. With these components, we link the real and the digital world. Think, for example, of a collaborative robot, or a cobot for short. It works directly with us humans. It supports us in our work. For example, in industrial production, in trades, in hospitals, in care homes and at home. Thanks to our sensors, the robot has a human-like impression for its environment. For example, it sees how the person next to it is moving. Our microcontrollers process environmental data and generate control commands. They are the robot's brain as it were. Our power semiconductors ensure that robot can move its arm. This lets it lend its human colleagues a hand. Using a wireless connection, the robot can exchange information with other devices and the cloud in real time. Thanks to our integrated security solutions, it is predicted from unauthorized access in the process. We have the semiconductors, the security and the connectivity solutions. We have our own ecosystem for software development. That makes us a natural partner for many IoT companies. We make the Internet of things what it should be for people, easy-to-use, secure and real. In this way, we can create tangible benefits for us, humans. I'd like to show you another example of what innovative system solutions from Infineon can do and how they can help us humans. [Presentation]

Viewers, listeners, this example illustrates how fascinating useful innovation can be. Good indoor air quality helps us feel better and be more productive. That is an important contribution to a better life. In the current pandemic, the carbon dioxide sensor provides another practical benefit. Scientists have shown that the coronavirus attaches itself to aerosols, which we breathe out constantly. The risk of transmission is, therefore, particularly high in poorly ventilated rooms with a lot of people in them. That is why schools, many offices and restaurants had to close. Because of the concentration of aerosols and carbon dioxide correlate, the CO2 sensor can help ensure the people in buildings can once again meet safely, for example, in conference rooms, classrooms or daycare centers. At our corporate headquarters here at the Campeon, we already use the carbon oxide sensor as part of our hygiene concept. It measures the carbon dioxide levels in our meeting rooms. And as soon as a particularly value is reached, a signal reminds people that ventilation is needed. A central dashboard gives an overview of all the CO2 data at Campeon. This allows our building management to keep an eye on the air quality and meeting rooms at all times and to optimize room air control. We shall be equipping the Munich Security Conference planned for summer at the -- with our carbon dioxide sensors. It makes us proud that in this way, Infineon can make a contribution to ensure that participants can meet with greater safety. We'll certainly get a grip on the pandemic at some point. As you saw in the video, the quality of indoor air also plays a major role beyond the coronavirus. At Infineon, we're already thinking about further possible applications for the carbon dioxide sensor. Environmental sensor technology is a very broad field, and we're still at the very beginning here. Innovation opens up new possibilities, but of course, it's not an end in itself. Not every innovation makes sense. Not everything that is technologically feasible makes our lives better. At Infineon, we act according to one guiding principle. Innovation is an idea that brings real benefits to people and is, therefore, successful. I am convinced that if we do innovation right, technology will bring immense value. For me, getting it right means trying something out. We have to be prepared to make mistakes. We need to -- we can't think of everything. We can -- but we can think ahead. And companies need this agility in order to develop innovations that benefit people. Often, the most effective technologies, the ones have the greatest impact are the ones we barely notice on everyday lives. Just think about how natural we rely on our smartphones. With the Internet of Things, a wide field for comparably important innovations is opening up. And we want to take advantage of this. Infineon is very well positioned to benefit from the accelerated digitalization occurring in all areas of life. Our customers' demand for semiconductors is high and will continue to rise in the coming years. We are preparing for this. We started earlier than our competitors in expanding our capacities. You may remember, at the beginning of 2019, we started building a new state-of-the-art chip factory at our Villach site in Austria. At this time, some people thought this was the wrong move. We knew it was the right thing to do. Now some competitors are following suit and building factories as well. But because we started earlier, Infineon has a lead. We're right on schedule with the contractual factory. See for yourselves. Despite the difficult conditions caused by the pandemic, in the last few months, we've made good progress. The factory is ready. In the coming weeks, we'll already start equipping the clean room with production technology. And we are even bringing forward the start of production by around 3 months to early autumn. I'm very pleased that the new factory is starting up at what is likely to be a very favorable time. The markets are recovering. The demand for semiconductors is growing. Demand is picking up significantly because of digitalization in all areas of life, and Infineon can deliver. With this increasing production capacity. Infineon can meet the growing needs of our customers, and it can also do that in the long term. Once fully expanded the new factory, we'll be able to produce enough power semiconductors every year, for example, to equip the drive trains of about 25 million electric vehicles. The calculus is based on the mix of hybrid, plug-in hybrid and pure battery electric vehicles. In the future, we should have 2 large power semiconductor manufacturing facilities based on producing large 300-millimeter wafers. The plants in Dresden and Villach use the same processes and machines. This will enable us to control production at 2 sites as if they were 1 factory. This virtual megafactory sets a new benchmark in 300-millimeter manufacturing. The advantage for Infineon, lower manufacturing costs; the advantage for our customers, greater flexibility because we can move production volumes of different products quickly between the different sites, and in this way, respond even faster to our customers' needs. The advantage for you as shareholders is increasing profitability. We are extending Infineon's lead in power semiconductors. Viewers, listeners, the 2020 fiscal year was a difficult one, even for Infineon. We, too, didn't see the pandemic coming and had to adjust to it. The fact that we managed the year very well is no coincidence. There are 2 main reasons for this. Firstly, Infineon has a robust business model. We have broadly deployed in many different target markets and all regions of the world. If things go badly in one of our markets, as in the automotive market in the last fiscal year, we can compensate for that with our presence in other markets. Secondly, Infineon can adapt. We quickly adjusted to the new situation resulting from the pandemic in all areas of the company and at all locations. Our teams have acted prudently, pragmatically and resolutely. And I must say, I'm still impressed by how well they managed to do that. As a result, despite the difficult conditions, we're able to continue working smoothly and quickly stabilize the business. Infineon can also do plan B, shareholders. The figures in the 2020 fiscal year underlined this. Overall, Infineon share revenue of almost EUR 8.6 billion. This includes about EUR 850 million from Cypress. That is from the business that we gained with the acquisition. The segment result was just under EUR 1.2 billion, and that corresponds to a segment result margin of 13.7%. We were able to maintain our profitability despite the special challenges. My colleague, Sven Schneider, will go into these figures in more detail later. It is important for me to emphasize that we have continued to develop Infineon even in this challenging year. There are probably not many companies that can implement the largest acquisition in the history in the middle of an unprecedented crisis. We did that with Cypress. And not only that, under difficult conditions with travel and contact limits and restrictions, we successfully drove the integration of the new business units successfully. We are already leveraging our expanded portfolio and broader customer access to achieve the planned revenue synergies. The new Infineon is far more than the sum of its 2 parts. There are now 46,700 people working for Infineon worldwide. Their expertise, their ideas, not least their passion for this company, are impressive. That is what makes Infineon special. Together, we can make a difference to the world by being movers and shakers. That is one of the main reasons why I enjoy working with this company so much. On behalf of the Management Board, I'd like to thank our employees for their commitment. Hats off to them, for their outstanding performance in a challenging 2020 fiscal year. Shareholders, Infineon has mastered its challenges well so far. Your company is successful and will continue to be successful because we think about tomorrow and prepare for it. And in this way, can we sustainably increase the value of the company? Our dividend policy follows this approach. We want you, our shareholders, to participate appropriately in the economic development of our company. Even if results stagnate or decline, we aim to pay out at least a constant dividend. The 2020 fiscal year, however, was a special year. Infineon's Management Board and Supervisory Board have a responsibility to take the effects of the pandemic into account. We must take into account the risks that continue to exist for our company. For the 2020 fiscal year, we are therefore posing to the Annual General Meeting a dividend of EUR 0.22 per share. This is EUR 0.05 less than in the previous year, but we are convinced that in a time of huge challenges and cutbacks, it is a very respectable figure when we look at other companies. We're thinking of tomorrow, and we want to be well prepared, and we ask for your support to this end. 2020, with its drastic events, is unprecedented. However, we expect change to continue. The pandemic is far from over. We're experiencing a second wave of infections. The virus is mutating. The long-term effects on our society and the economy are not yet foreseeable. Global technology competition between leading industrial regions is becoming fiercer. The stakes are high, and the players are raising their stakes. Europe must be careful not to be caught in the crossfire of the technological competition within the United States of America and China. We are taking these developments seriously, I'll show you. We are vigilant, and we're keeping a close eye on how the economic and political environment for Infineon is developing. At the same time, we are convinced that with our strategy, our competence and our corporate culture, we are well equipped. Infineon has got off to a good start in the 2021 fiscal year. Demand in recently weaker target markets has picked up significantly, especially in the automotive sector. The digitalization push in all areas of life is playing into our company's hands. Despite headwinds from the weak U.S. dollar, we have made significant gains in revenue and segment result during the first quarter. Substantial uncertainties remain with the pandemic and trade conflicts ongoing is mainly to setbacks in our target markets. Nevertheless, we have full confidence in the strength of our business. Order intake is picking up significantly. Our production lines are well filled in many areas. We, therefore, slightly raised our guidance for the year. Sven Schneider will explain this in more detail in his report next. Viewers, listeners, Infineon has been on a path to growth for many years, and we are convinced that we can continue along this path. However, the demands on our company are increasing as Dr. Eder already explained at the beginning. Our markets are developing dynamically. Competition is becoming more intense, and managing the company is becoming more challenging. The ability to master increasing complexity is essential for Infineon's success. Ms. Hufenbecher will support Infineon significantly in this respect. We, therefore, welcome the expansion of the Management Board very much. In this way, the Supervisory Board is creating the conditions for further developing the Infineon for long-term success. With various initiatives. We have already laid a good foundation in the company in recent years. We now want to bring these together and develop them in a continuous transformation process. The new structure will bring Infineon's constraints to bear better, and at the same time, will enable the targeted further development of our company's digital competence, which will link the work of typical areas, such as technology development and marketing or sales and marketing even more closely and standardized manufacturing procedures. The knowledge that has so far been distributed throughout the company must be bundled and made available online. In this way, it will be accessible for fast learning and rapid well-founded decisions. Digital tools support us in this. The new Board of Management will help us manage complexity and drive change in the digital context. It also underlines the growing importance of information technology, cybersecurity and data protection issues. We are very pleased that Ms. Hufenbecher will be working on these issues for our company in the future and will complement our Management Board team. With her extensive experience, she's the ideal manager for this task. We are very much looking forward to welcoming her to Infineon in mid-April. Shareholders, our sum-up. Your company is successful because it makes a difference. Infineon delivers solutions to global challenges. We make life easier, safer and greener. In an exceptionally difficult 2020 fiscal year, Infineon has proven that it has a robust business model and is profitable. However, we are not resting on our laurels. Even in uncertain times, Infineon continues to evolve. With Cypress, your company is taking a giant leap forward. Infineon is becoming a driving force in the Internet of Things. This opens up new growth opportunities for us. With our expanded manufacturing capacities, we are well positioned to serve the growing demand for semiconductors. We are creating the occasions to ensure that Infineon grows profitably and is successful in the long term. Your trust, shareholders, is supporting us on this path. And I would like to thank you very much -- we would like to thank you very much for your support.

Thank you, Dr. Ploss. I think that it is hardly possible to describe what Infineon does for companies and people more clearly than what you have done is impressive. What has happened in the pandemic despite all the frictions and what has been possible in the company, the Supervisory Board, of course, agrees with everything that Dr. Ploss has not just hinted at but has specifically described for the future as plans. And together, on the basis of this very sound starting situation in the next few years, we shall continue to help the company evolve. And I'd now like to give the floor to our CFO, Dr. Schneider, and ask him to talk about the financial situation and other important financial issues in the company and also to explain item 8 on today's agenda to explain it. Dr. Schneider, you have the floor.

Ladies and gentlemen, a very warm virtual welcome from me as well. As you've just heard, Infineon has had an extraordinary and quite challenging fiscal year. Against the backdrop of the pandemic and the resulting major economic consequences, we have once again proven that we have a robust business model. We are continuously developing our company even under challenging conditions. I am therefore pleased to be able to report to you today on a fiscal year that has been successful overall. Infineon achieved revenue of EUR 8.567 billion in the 2020 fiscal year. This includes around EUR 850 million from the former Cypress business, which we have been consolidating since the acquisition in April last year. In the previous fiscal year, revenue stood at EUR 8 billion. Revenue from the former Infineon business thus decreased by around EUR 300 million. The weaker, overall, revenue performance was mainly caused by the effects of the coronavirus pandemic, which had a particularly strong negative impact on the automotive industry. The pandemic also hit the semiconductor industry suddenly in the spring. At Infineon, we had to switch to crisis mode very quickly. In almost all areas of the company, we swiftly adjusted to new priorities and new ways of working and intensified our cost optimization measures. Today, we can say that we have succeeded in doing so. Let us turn to our operating expenses. Our research and development expenses increased by EUR 168 million to EUR 1.113 billion in the 2020 fiscal year. This was mainly due to the rise in headcount resulting from the acquisition of Cypress. Selling, general and administrative expenses increased by EUR 177 million year-on-year to EUR 1.42 billion. The rise in operating expenses was partly offset by cost-cutting measures. The segment result amounted to EUR 1.170 billion. This corresponds to a segment result margin of 13.7% compared to 16.4% in the 2019 fiscal year. Revenue and the segment result were, thus, slightly above the outlook which we adjusted first in May and then again in August 2020 to reflect the dynamic overall economic situation. Against the backdrop of the coronavirus pandemic and the challenging macroeconomic situation, this is a remarkable result. During the year, we quickly adjusted to new developments. In order to minimize underutilization costs, deliveries to customers and inventory management were well balanced. This was achieved, for example, by continuously reassessing demand scenarios and adjusting the manufacturing program across segments and sites. In addition, short-time work was introduced at the 4 manufacturing sites in Germany and Austria. The productivity and cost-optimization measures already initiated in the previous year were further intensified in the course of the 2020 fiscal year. Our business model is geared to long-term structural growth but is also resilient in times of crisis. We demonstrated this in the year under review. Despite the difficult times, we succeeded in achieving respectable profitability. Consolidated net income declined to EUR 368 million in the 2020 fiscal year. Cypress results were included in the consolidated income statement for the reporting period since the acquisition date in April 2020. Cypress operating contribution had a positive impact on the segment result margin. However, overall net income was negatively affected by amortization related to the purchase price allocation of the acquisition in addition to the impact of the coronavirus pandemic. Our earnings per share amounted to EUR 0.26, which is well below the figure in the prior year. Adjusted earnings per share decreased from EUR 0.89 to EUR 0.64. Now moving on to our segments. The automotive segment continued to be the strongest in terms of revenue. At EUR 3.542 billion, it contributed 41% to Infineon's total revenue. Despite the slump in automotive production of more than 15% in the 2020 calendar year, we still achieved a 1% increase in revenue. This was due, on the one hand, to the consolidation of Cypress, and on the other hand, to the higher value of semiconductors installed per vehicle compared to the previous year. The segment result margin fell from 11.5% in the previous year to 4.4%, in particular, because of higher underutilization costs. Revenue in the industrial power control segment amounted to EUR 1.406 billion in the reporting period, which was roughly on par with the previous year's level. On the one hand, demand for industrial drives and train systems decreased. On the other hand, due to our good position in fast-growing application areas, such as renewable energy generation through solar and wind power, we almost offset this decline. The segment result margin rose slightly from 17.7% in the previous year to 18.2% in the reporting year. There was no allocation of the former Cypress business to this segment. In the power and sensor systems segment, buoyed by the contribution from Cypress, we achieved revenue of EUR 2.650 billion. This corresponds to 8% growth. Ongoing digitization, coupled with the expansion of data centers and 5G mobile infrastructure, continued in the past fiscal year partly as an indirect result of the coronavirus pandemic. At 24.0%, the segment result margin was on par with the previous year. Revenue in the connected secure systems segment rose by almost 50% year-on-year to EUR 953 million as a result of the acquisition of Cypress. However, declines in revenue were recorded in the original business activities. The segment result margin increased from 12% to 12.8%. Let us take a look at the breakdown of revenue by region. The Greater China region accounted for the largest share of our revenue or 37%. However, this includes a significant proportion of supplies for end products that are reexported. The Europe, Middle East, Africa region accounted for 27%. Asia Pacific accounted for 15%, with the Americas contributing 12% of revenue. Although Japan is the region with the smallest share of revenue, year-on-year growth was 29%, largely due to the acquisition of Cypress. We are thus continuing our course of regional diversification. Let us now turn to some select financials. Free cash flow in the reporting year was minus EUR 6.727 billion. It was mainly affected by the purchase price payment for the acquisition of Cypress. Excluding expenses related to the acquisition, free cash flow was a positive EUR 911 million. The early implementation of cost-cutting measures made an important contribution to this. Furthermore, we flexibly adjusted our production to take account of lower demand and keep inventory development under control. We adjusted our investments to the significantly weaker market environment, reducing them from EUR 1.5 billion in the previous year to EUR 1.1 billion in the reporting year despite the acquisition of Cypress. The return on capital employed, RoCE, for short, was 3% in the 2020 fiscal year compared to 12.2% in the previous year. In addition to higher underutilization costs, the decline primarily resulted from the acquisition of Cypress. Operating profit was negatively impacted mainly by the scheduled amortization of fair value adjustments from the acquisition. Capital employed was affected by the assets acquired from Cypress and the recognition of goodwill of EUR 5.4 billion upon first-time consolidation. Let us now turn to our financing policy. The main objective we are viewing here is to maintain what is referred to as an investment-grade rating. This ensures that we have access to all relevant capital markets and financing sources at all times, enabling us to finance our organic and inorganic growth at low-cost and on good terms and conditions. In the course of the acquisition of Cypress, the rating agency, S&P Global Ratings, lowered Infineon's rating by one notch to BBB-, initially with a stable outlook. This continues to correspond to an investment-grade rating. We are pleased that S&P Global Ratings recently upgraded our outlook to positive. Alongside the market recovery, this was mainly due to our conservative financing policy with a focus on high liquidity and fast deleveraging. As you know, we communicated a clear strategy to refinance the acquisition of Cypress when the purchase agreement was signed in mid-2019. We then implemented this strategy consistently and quickly. In 2019, this included an initial capital increase, through which we raised EUR 1.5 billion, and the issue of a hybrid bond of around EUR 1.2 billion. We successfully took further measures in 2020, despite the capital market environment being affected by the pandemic uncertainties. At the end of May 2020, we raised just over EUR 1 billion in a second capital increase. On the basis of authorized capital 2020 I, pursuant to Article 4, Section (4A) of the articles of Association, the Management Board with the approval of the Supervisory Board, placed 55 million new shares with institutional investors. The exclusion of subscription rights made it possible to raise capital quickly, taking advantage of the favorable market situation and optimizing the proceeds for the company. The shares were allocated at a placement price of EUR 19.30 per share, representing a discount of 4.2% on the previous closing price. They are entitled to participate in profits for the 2020 fiscal year. In addition, a total of 237,000 new shares entitled to dividends were created in the past fiscal year through the exercise of stock options. The relevant 2010 stock option plan has now expired and no further stock options can be exercised. Members of the Management Board and executive staff received part of their variable compensation in the form of shares from the performance share plan and executive staff additionally from the restricted stock unit plan. Under these 2 plans, Infineon transferred a total of approximately 749,000 owned shares in the 2020 fiscal year. These shares originate from the existing treasury stock that the company had bought back in previous years. As a result of the transfer of the shares to the Management Board members and executive staff, the shares are now again entitled to dividends. The number of shares outstanding thus increased to 1,305,921,137 as of the 30th of September 2020, of which, 4,790,406 are currently owned by the company and does not entitle to dividends. The 2 share programs mentioned continued to exist as part of variable compensation. For this reason, under agenda item 8, the Management Board and the Supervisory Board proposed the creation of a new authorized capital 2021 I. This is to replace authorized Capital 2016 I, which expired on the 17th of February 2021. The total volume of up to EUR 30 million would correspond to that of the previous authorized capital 2016 I, and the authorization will be valid until February 2026. Since the purpose is to issue shares to employees and executives of Infineon and its group companies, shareholder subscription rights are excluded in this case. You will find further detailed explanations in the written Management Board report, which is attached to this agenda item. Let us return to refinancing. In June 2020, we successfully placed bonds with maturities of up to 12 years totaling EUR 2.9 billion. Together with the proceeds from the aforementioned capital increase, we were thus able to completely redeem the bridge facility of the acquisition financing just a few weeks after the acquisition closed. Infineon now has a balanced maturity profile until 2032 with low financing costs. The strong interest of investors and banks in our financing activities impressively demonstrates the positive perception stakeholders have of Infineon. We can thus rightfully claim that around 1 year later, we have already succeeded in largely implementing the refinancing strategy announced in mid-2019. The closing of the acquisition and the financing steps taken are reflected in our balance sheet. As of the 30th of September 2020, total assets amounted to EUR 22 billion. This represents an increase of 62% compared to the 30th of September 2019. Equity rose by EUR 1.6 billion to EUR 10.2 billion. Our financial debt grew considerably as a result of acquisition financing from EUR 1.6 billion in the previous year to EUR 7 billion in the reporting year. In line with our strategic liquidity target, we intend in the coming years to systematically further reduce the debt, which is currently at a higher level due to the acquisition. The repayment of $555 million of the outstanding term loans last September, well ahead of their actual maturity, is evidence of this. This focus on conservative leverage and free cash flow generation secures and strengthens the retention of our investment-grade rating. Now to the development of the Infineon share, your share. Between the start of the past fiscal year, on the 1st of October 2019 and the close of the stock market last Monday, Infineon's share price rose by 121%. After the corona-related share price slump in March, the share value recovered steadily and grew strongly as the year progressed. Our share performance thus bested the Philadelphia Semiconductor Index, SOX, for short, which is relevant for us and was even clearly up on that of the German blue-chip index, the DAX. In the 2020 calendar year, we were the DAX stock with the second best performance overall. This strong growth demonstrates the market's trust in our long-term success. And that brings me to our dividend proposal. With our dividend policy, we pursue the goal of allowing Infineon's shareholders to partake appropriately of the company's economic development. In general, we want to at least pay a constant dividend even if segment results stagnate or decline. However, we need to take into account the serious economic ramifications and the ongoing risks associated with the coronavirus pandemic and to maintain appropriate financial headroom. Furthermore, the number of shares entitled to a dividend has increased by a good 4% as a result of the capital increase carried out in May last year. Regarding agenda Item 2, the Management Board and the Supervisory Board propose to you a dividend of EUR 0.22 per share for the 2020 fiscal year, EUR 0.05 lower than in the previous year. The 55 million new shares issued in May 2020 are fully entitled to dividends. The expected total dividend payment would thus be EUR 286 million compared to EUR 336 million last year. The percentage decrease in the total dividend payment is thus lower than the percentage decrease in the dividend per share. This brings me to the outlook. Following a good start to the new fiscal year, as you've just heard before, we have raised our full year guidance slightly. For the 2021 fiscal year, assuming an exchange rate of the U.S. dollar to the euro of 1.20, we anticipate revenue of around EUR 10.8 billion, plus or minus 5%. This includes, for the first time, the consolidation of Cypress for a full fiscal year. At the midpoint of the guided revenue range, we expect a segment result margin of around 17.5%. Investments in property, plant and equipment and other intangible assets, including capitalized development costs, are planned at around EUR 1.6 billion. Free cash flow is expected to exceed EUR 800 million. A year ago, we presented to you the new financial targets we aim to achieve following the acquisition. We confirm these today. Our business model is robust because it is consistently focused on long-term growth drivers. The coronavirus does not change the relevance of the structural drivers that enable Infineon to achieve above-average growth in the long term. In some cases, or areas such as digitization, the pandemic is actually acting as an indirect accelerator in addition to diversification of our business model, means that declines in individual areas can be offset in other ones. As a result, we navigated the crisis fairly well. We still aim to grow revenue by an average of more than 9% per year over the cycle. As integration progresses, the segment result margin should gradually increase to 19% over the cycle. As a result of the reduced capital intensity of the combined company, we plan to achieve a lower investment to sales ratio of 13% also over the cycle. According to our definition, this figure does not include investments in the 300-millimeter production facility in Villach, which is currently under construction, or certain large office buildings and associated IT infrastructure. As a result of the higher segment result margin and reduced capital intensity, we also expect a gradual improvement in free cash flow. These targets will be bolstered by the realization of planned synergies. We do not expect a substantial negative impact to come from the coronavirus pandemic. The complementary portfolios will enable long-term revenue synergies of EUR 1.5 billion per year. In addition, we expect annual cost synergies of EUR 180 million by the middle of the 2023 fiscal year. Finally, let me make some remarks on the agenda for today's Annual General Meeting. I have already explained the proposed appropriation of profits under Item 2 of the agenda as well as the proposed resolution on the creation of new authorized capital under agenda Item 8. In addition, agenda Items 6 and 7 should to be mentioned concerning the compensation of the management and Supervisory Boards, which have already been presented in detail by Dr. Eder. The long-term focus of our business, based on sustainable growth drivers and supported by a conservative financial policy, makes us fairly resilient to crises. Despite these challenging times, we are preparing for the expected rapid growth that will follow so that we can benefit accordingly from it. We are convinced that through our successful management over economic cycles, we not only offer great added value to our customers and an attractive workplace for our employees but also an attractive return on your investment in our stock to you, our shareholders. Thank you very much to you for your trust in Infineon and for your attention.

Thank you, Dr. Schneider. I think we have all learned that even after the major acquisition, Infineon is in a sound economic situation. Ladies and gentlemen, that was the speeches by the Management Board. The Internet transmission accessible to everyone is now finished. The remainder of the Annual General Meeting, particularly answers to the questions -- and the ballots, can only be followed on the Internet by our shareholders and their representatives. If you have followed the AGM via the public transmission so far, you now need to log in again via the Internet service. In the Internet, you can also see the reader contributions with the comments by shareholders on the agenda, which we'll find in advance. At this stage, I should like to say goodbye to everyone who can no longer follow the Annual General Meeting, and thank you for your interest.