Lectra SA (LSS) Earnings Call Transcript & Summary

Well, good morning to all. Thank you for joining us today. This meeting will be broadcast live in both French and English. And then made available on our website for those of you unable to attend. I'll just run through the agenda of the meeting, present -- introduce the speakers. So first of all, the opening formalities. The presentation and the highlights and results of 2024. Presentation of the climate strategy then we'll have a Q&A session, and we'll move to the more formal part of the meeting. We're reading of the statutory auditor's report presentation and voting of resolution and then closure of meeting. Today, I'll be chairing the meeting as Chairman and CEO of Lectra since 1991, as Chairman and CEO, assisted by Olivier du Chesnay in the room, Chief Financial Officer, who will present the results, and Anne Borfiga, General Secretary; Céline  Abecassis-Moedas, Independent Director, Chair of the Compensation Committee; Hélène ne Viot-Poirier, Independent Director, Chair of the Sustainability Committee; Flora Camp, Statutory Auditor from PwC; and Aurelie Lalanne, also auditor representing KPMG.

So just present the executive committee of this meeting. So Daniel Harari, he is Chairman, as Chairman of the Board were appointing scrutineers present in the room. [indiscernible], thank you to both for accepting this important task of scrutineers and I'll be acting as secretary to the AGM. Regarding the schedule for the meeting all formalities were completed on time as shown here and all the necessary documents for the meeting are available here at head office and also on Lectra website. And so to officially begin the meeting, very important, the quorum of shareholders who voted either by correspondents or gave power or who are here present in the room. The quorum has been reached of over 90%. It's a provisional quorum and will have a final tally following this meeting. It's also important to indicate that we received no written question ahead of the meeting nor of a request for the placing of the draft resolution on the agenda. So I'll hand the floor back to Daniel and then to Olivier for the presentation of the results 2024 and the highlights. Thank you.

And so when we review 2024, well, it's far behind with the welter of events that have occurred over the past few weeks. But if we just focus on the key highlights for 2024, well, the results were in line with the latest estimates released in October, and we also revised our estimates to announce that we'd be at the lower end of the range amount at the start of the year, but within the guidance in a challenging context, and that is proof positive of the robustness of the company and the quality of its figures and then the successful integration of Launchmetrics. We acquired the company in January 2024. It's a company that had always lost money, and we managed to successfully integrate it, but the same time, we have profitability of Launchmetrics that was proven in 2024 as expected, and we've improved all the group's fundamentals as we will see. When we look at the situation at the end of 2024, well, we had continuing geopolitical tensions that decreased slightly. Today, we're back in the [ Redwood ] events between Ukraine and Russia, declining global demand that's improved with the announcement of further tariffs, things might deteriorate further uncertainties over growth in major world economies, and we had the weakness of considering that uncertainty has lifted access to credit significantly improved. That's the case. Inflation energy prices regulated and trade wars that began at the start of the year. Events are evolving so fast that if we were to give an update, we'd have to repeat it every day on the time line of the Trump administration tariffs to explain why it's complicated to manage. And if you like, we can perhaps dive deeper into where we're at and what we've done. But as you see, there were regular announcements since early February with contradictory announcements back tracking drastic changes in February, March. It was essentially the Mexican clients of Lectra who worried about the situation. Tariffs affected essentially Mexico and Canada 25% on cars and certain car components and famous Liberation Day, April 2. Everyone was surprised by the scale of the announcement, didn't time with pre-announcements, there have been changes, suspensions of tariffs with China 145%. We're reaching a situation that's particularly challenging to manage, and we'll explain how we've managed the situation since. Turning back to 2024. Firstly, on the market developments, as we can see Clothing sales stabilized. We had growth of 2% everyone we were expecting us to be down in 2024 things stabilize. What you see here. This is what we presented in February after results. Obviously, there are changing situation early February with the 2025 that was particularly promising even if there were challenges to overcome the influence of new CSRD regulation led our clients to work far more on traceability, sustainability, and we have an offer that ties in well with that issue and what we saw in 2024. Our major fashion clients were companies that were not all faring well because with software, it's possible to boost the profitability. And so we're not sensitive to the difficulty of this. We're essentially sensitive to uncertainty when the world is uncertain, clients hesitate before investing, but we were hopeful that things were going to recover positively in fashion. Turning to the automotive sector, the situation is pretty much the same. Everyone had pretty bleak predictions. Sales were down 2%. Things were stable. The major development in the automotive sector is the advent of Chinese manufacturers. It's not a debate of subsidies or dumping contrary to popular opinion. It's simply that the Chinese are far more advanced in their production and product development methods. If you just look at a BYD vehicle, they're now available in France, compare that to American or European vehicles, you'll see the situation is playing for all to see. They're just better. And so we're seeing a ramp-up of Chinese vehicles, not necessarily reflected in these figures because these are local sales figures. We're beginning to see many Chinese vehicles in Europe and other Asian countries, not just in China. Furniture, even if sales weren't that bad is down because people renewed their furniture considerably after COVID, a lot of refurbishing in hotels and restaurants post-COVID. And once that situation passed, well, the budget focused on other items for reasons of uncertainty where we only change once furniture when we're confident in the future, we want to change the setting or when we move and because real estate sales are down, that led to less furniture and a tricky situation. It's not really reflected in the numbers. But the furniture manufacturers have planned higher figures and had preordered in 2021. Turning to the 2024 highlights. We ended the year with revenue up 10%, gross margin up 13%. Gross margin grew faster than revenue and current EBITDA, our major profitability metric, up 15%. So quite commendable figures for 2024. Over now to Olivier du Chesnay for the financials.

Good morning, everyone. I'm Olivier du Chesnay, CFO. As you can see here, you have the results for 2024. Over the next few slides, I'll give you 2 scopes on Lectra 2023. That is before we acquired Launchmetrics in January 2024. Then Launchmetrics, then the 2024 scope. So those are the stated results before Launchmetrics was purchased. You see that we always have 2 things on the left, orders for new systems and on the right, the new SaaS subscription orders. On the left, you can see the business was pretty stable over 2024 as compared to 2023, EUR 144 million of orders in 2024. And in the middle, you can see that there are some differences, perpetual licenses of software minus 18%, and that's normal because after all, we are offering our software as SaaS, and that's up 2%. As you can see on the right, up 8% to the subscription orders relating to EUR 11.6 million from added to what we had previously, and that is, in fact, an illustration of our group moving to Software-as-a-Service. Now if you look at orders for new systems broken down by geography. Over 2024, our business was driven by Asia Pacific that's where you can see our third from the left, up 32%, something we experienced quarter after quarter. On the left and in the middle, you have Americas and Europe. At end of June 2024, we were at minus 25% for both these regions. But in Q3, Q4, the situation improved, and we ended the year at minus 16% in Europe, minus 12% in the Americas. So we've seen orders. Now we're looking at the statement. Here you have on the right, a nonrecurring income of EUR 144 million, down 6% from 2023 because of the -- in 2023, we have the orders started in 2022, delivered in 2023. On the left, you have the recurring contracts, that is 70% of our revenues. The recurring business can be split into carrying contracts and consumables and parts. Recurring contracts, EUR 193 million which includes 3 things, as you can see in the middle. The first SaaS subscriptions that's up 26%, which is in a way the conclusion and the consequence of no longer having perpetual software sold. And then you have contract -- maintenance contracts and then contracts on maintenance. So contract -- maintenance contracts for software. It's only normal that, that should go down over time because that's being replaced by SaaS subscription. And equipment contracts, well that's the maintenance that we saw for what we sold in the previous year. We've got a growth of 6%. which is usually quite -- which is quite good because anything above 5% is generally deemed good. Then you've got consumables and parts, which really illustrates the business of clients, 4% increase for 2024, that's quite good. Within consumables and parts, we've identified the business that we've discontinued that was from Gerber, that was the EUR 18 million or EUR 16 million. And discounting for these, in fact, the increase in consumable and parts for 2024 were 6%. So you've got looked at the order books, the sales, and we're now looking at the other parts of the income statement. EUR 485 million for total revenue, up 2%. You'll remember, EUR 526 million if you include Launchmetrics, then gross margin. The group is producing gross margin to the tone of 69.5%, very high even though it's slightly lower in percentage points as compared to last year. The fact is that having more of our business is in Asia Pacific, but the margins are somewhat smaller in that region. Overheads are stable over 2023, '24. And EBITDA is up 7% from EUR 79 million and now at EUR 84 million. Here, you see that I'm looking at the account for the whole of the year, EUR 79 million is EBITDA for 2023. And you -- how you get to the EUR 84.7 million -- EUR 84.2 million on the Lectra '23 scope. And then in the box on the right, you have the numbers for Launchmetrics, which is profitable, adding EUR 7 million. What it means is that the bridge from 2023 to 2024 is the green impact the 2 bars, and those are, in fact, related to the recurring business and the model of the company. As you can see recurring contracts contributed EUR 12.4 million to EBITDA and the volume effect is EUR 2.8 million. The fifth bar, also in green is overheads, that's stable, which offsets the variable overhead costs and you can see with this bridge, with this chart, the way EBITDA developed over 2023, 2024. So I said EUR 7 million from Launchmetrics, and you have a breakdown here. Launchmetrics is a SaaS business that we purchased on the 23rd of January last year, you can see EUR 7 million EBITDA over the whole year. What were our goals when we acquired this? We expected 10% growth in sales and profitability of 15% or more. As you can see on the right, we were expecting sales of EUR 42 million to EUR 46 million, we achieved EUR 41 million. So slightly less than expected, but Launchmetrics is very exposed to the fashion industry, still good, and the growth is acceptable. We expected a margin above 15%, we posted 16.9%, EBITDA margin so satisfactory indeed. If you look at the business of the group for 2024, we also generated cash flow -- free cash flow quite at historic highs, EUR 72.1 million. Our working capital requirement is negative at minus EUR 25.2 million. EUR 72 million of cash generation is something never done before much more than what we had in 2023, much more than the net income on the financial statements. So what does this mean? It means that with the free cash flow we can finance acquisitions. We paid for Launchmetrics with this spending EUR 77 million. For the first tranche of shares, we -- our debt is at EUR 102 million at 2024, covering seen as we paid back the Gerber purchase and our net debt, therefore, is only EUR 20.6 million, as you can see here. Daniel, would you like to cover the outlook?

Thank you, Olivier. So we early February, released the outlook early '25 recurring revenue above EUR 400 million and including EUR 90 million of SaaS, EUR 20 million recurring EBITDA revenue between EUR 550 million and EUR 600 million. The EUR 550 million is the stability of new system, and EUR 600 million is the increase of 20%. So of course, today, we no longer have any visibility and will only form a view on an update of these figures during the course of the coming months when we see how things are evolving in terms of tariffs because the markets really in a state of turmoil and so our clients faced with the situation back to the '23-'25 road map that I presented at the AGM of '23 and '24 to give you a second progress report. We can say the strategy was well implemented. The road map unfolded successfully. If there's one takeaway the past 2 years, it's a success to this road map in 2030 to present Lectra as a key player on the fashion, auto and furniture. 4.0 is the full industrial revolution connected with our consumers and creation centers running on technology. So we're more familiar with. When we review, we had 3 main goals. The first was to fully leverage the change of dimension agreed to accelerate its growth. So here, the result is mixing so far as for 2 years in '23, '24. We were faced with a tricky cyclical situation, we're able to leverage a retune significant progress on the 2 other points developing the SaaS business Software-as-Service in the form of revenues from software subscriptions and growth opportunities, M&A will things went particularly well. Let me remind you that Launchmetrics that we acquired in January 2024 as a company, which up until 2022, losing money with double-digit negative EBITDA, which was pretty much positive in 2023. And so consequently, the opportunity was -- many people were challenging the fact that it was genuinely an opportunity. What we could say is that as of today, it's proved to be a very good transaction under terms of the strategic impact because it's our major clients that have launchmetrics software system, creating real synergy in our offering and from the research standpoint, but also in terms of results and numbers. Now this road map in internally comprised 6 objectives. The first was to strengthen all CSR practices and the company has always been a standard setter in this field, but we've made significant progress over the past few years, starting from the very hard point. Second point was to leverage all the synergies deriving from the acquisition of Gerber in 2021. Major progress transition to SaaS, transformation of the customer engagement model. When you enter the SaaS model, the rationale is to enter smaller grow. Subsequently, we have a major effort to get our customers to have more software up selling and cross-selling moving from one offer to another and generate synergies across the various offers, continued external growth M&A, which is what we didn't pave the way for the period '26 to '30. We also did just reviewing either of these points on the CSR front. In 2023 at the end of '22, we had 12 commitments in the field of CSR described in the peers report. The company was recognized by many media rating agency Ecovadis and EthiFinance, standard setter in terms of CSR for the third success we received the label best managed company awarded by Deloitte with a very strong CSR connotation. Every year, we pull teams, it's anonymous survey and our people expressed their view, 60% would recommend Lectra as a great place to work in a year where salaries were frozen. That's a key point that we're reasons to perhaps be less satisfied than the previous year. And when we look at the way our offer has evolved, we have 2 very strong points in our offer. We allow our customers to save and fashion material waste or one of the key factors often double digits, over 20% and fashion sectors, one of the most polluting in the year. We presented at 1% on 20% save, is 5% less pollution when we allow our clients to save 5%, it has a huge impact globally. And lastly, with TextileGenesis, we've traceability from the raw material cotton to the finished product to make sure that the materials are optimized throughout the value chain. Also took a number of initiatives to develop well-being at work. A major problem leads by and The Lectra Way program, a very strong corporate culture shared including by people from the acquisitions Gerber, launchmetrics. We made up aware our teams in CSR or products, eco-designed and everything that can optimize the impact on the environment is brought in from the word go software, from someone who's color blind to operate without seeing the colors with pictogram, people who are not capable of reading. There are still some people who are literate number of countries were really at the high point in terms of eco-design and our tools, they've been factored in for many years now, all our software systems are eco-designs, and we cut our emissions and in compliance with CSRD, which Hélène will tell us more about in a few minutes. Turning now to the synergies achieved and rising from the Gerber acquisition and many in number, had we not acquired Gerber we're not be in the situation we're at today. In the synergies, we stopped counting the savings at the end of 2021 because we exceeded the target set. Efficiencies were considerable, no layoff plan. We just released a number of managers at Lectra and Gerber, we didn't replace a number of leaders and so the impact on synergies grew. We also up to margins on Gerber when Lectra was selling and cutting equipment, we had 60% margin. Gerber 20%, today we're at 40%, not the same level, but it's still pretty good. We developed service contracts and at Lectra, we have 100% of the equipment sold with service contracts wasn't the case. For Gerber, we developed that, put in place a new contract, which is more than just a mere repair contract, which was the case for Gerber in the past. We develop the sale of consumable spare parts, more difficult to Gerber than Lectra because Lectra historically, we created great many parts specific to Lectra, so difficult to copy or to sell for third companies. Wasn't the case at Gerber, they're very often use market parts, so there could be competition on parts and consumables. Obviously, it's a major strength. We had 3 industrial facilities, thanks to Gerber. Lectra had one in France at Bordeaux, 2 Tolland next to Boston, Suzhou, Cestas and in the current context, that's a strength because we can manufacture across the 3 plants. Market share increased with good geographic reach, enhanced customer base for cross-selling and upselling of SaaS additional innovation capacity since July 2022, 1 year after the acquisition, we just have 1 research plan with developments that are joint for Lectra and Gerber, about 1/3 of our R&D investments for maintenance of equipment and software that preexisted, and 2/3 of program common to both brands. So we're able to leverage strongly R&D spend, and we've reviewed our supply chain to strengthen and optimize it. So the integration of Gerber in our view, is an outright success today. The acceleration of SaaS software sales. The chart shown here speaks for itself. We kicked off with the first software for the SaaS model in 2018, we've gone from 0 to EUR 77 million at the end of 2024, very strong growth. Very strong growth of both internally and through acquisitions. So at the top, you have the software that we brought to market through internal development and below the successive acquisitions over the years. Turning to the acquisition of Launchmetrics. We can see there was a strong contribution. Launchmetrics accounted for about half of SaaS revenue at the end of last year, and we have 2 software systems that have grown very strongly. Firstly, Kubix Link acquired in 2018, a company developing a collaborative platform. For those of you who are familiar with the software, it was the first software PLM, Product Lifecycle Management. But other collaborative Kubix Link was acquired when it had 0 revenue and 4 people, we were convinced that the quality of the founders had considerable experience there. We moved, went from nothing to software as a double-digit sales and TextileGenesis to achieve traceability at the end of last year, over 2 billion products transited by the platform. Most clients announced in their annual report when they listed the use of TextileGenesis to prove their commitment to CSRD and sustainability. It's a solution that very soon emerged as a market leader only start-ups on this market. The activity was extended at the end of '24. The footwear and leather goods, it only covered textile initially natural and all textile materials. And lastly, the offer that we reserve to major customers owing to a lack of the means to reach more customers. It's a difficult offering to explain and sell. We focused our scarce resources on major plants is now sold to midsized companies and by Lectra teams supported by teams from TextileGenesis. As regards the fourth strategic focus area, we continued the development of the group's customer relationship through customer success managers. Today, we have individuals who are dedicated to clients and help users and decision-makers to better use our solutions to create more buy-in, and we separated well so that the customer success manager isn't just selling to the customer. The customer can work confidently without having any misconceptions about the plan. At the same time, we reviewed the plan, this is training plan, but it's far more. It's an enablement plan, we train, we coach the teams, be it the sales teams, customer success teams. We support them so that they become there on a par with the best practices used in the group. We've launched a great deal from Launchmetrics that had excellent practices in the field. Let me say that the integration of teams went very well. We found high-quality teams. We learned a great deal, thanks to Launchmetrics. And lastly, today, we have 110 customers success managers, that's a major strength. When we look at the acquisition of Launchmetrics, the value propositions, very compelling Launchmetrics. There 2 parts to this launch. When we launch a collection, a market portion of metrics when we assess the impact in fashion companies, notably in the luxury segment, the marketing budget is the largest budget to optimize the marketing budget, considerable sums are involved a double-digit percentage for all the luxury brands. You can see how much that represents and thanks to Launchmetrics, you can measure the impact of each individual action in the database are considerable, about 1 million influences individuals tracked by all the media paper press, online, outlets, all the statements and when there's the inauguration of [indiscernible], there's a film on the evening news. And with the software, we can spot what every personality is wearing during the ceremony. We know that Madame Macron was wearing a Vuitton outfit and a Dior bag. We can see if the photographs published at a given point had an impact on the traffic of client sites, a very precise measurement, allowing us to spot, [indiscernible] who's the leading European influence one day wore a Chanel bag, it was just a few days after the acquisition of Launchmetrics. We were at a financial conference at 9:00 a.m. We show the shot that's just been released, 9:30, the second investor, there were 500,000 likes, people have clicked to say they like the shot and this photograph brought in more than a campaign in Vogue. So we can see how much the world has changed. The importance of influencers. [indiscernible] has a fan Madonna and the fact that Madonna [indiscernible] that accolade on news reflects the success of the brand. The only way really is to measure detail of what's happening. These are databases of photographs of films that number millions, indeed billions in the field of big data and AI because, of course, we need to be able to analyze all that. The entry barrier is very high such as a company to compete with Launchmetrics. What's specific with AI is based on data quality and this quality took years to build and then educate the algorithms at Launchmetrics, we recognize 93% of clothing and faces automatically. We educate the algorithms to recognize, but the cost to recognize the 7% assisted by operators who place a caption by hand on the films weren't as high. We were at 14% of shots that need to be tagged to indicate and 7%. And of course, we have the cost, and that's very important. We have a barrier to entry that's very high. The weaker point of Launchmetrics was a low financial culture because it developed through acquisition managed by private equity, essentially looking at the growth of nonrecurring revenue and not at all EBITDA or the cost. But in the year, I think we crossed a major milestone. We have the first cost synergies achieved We're able to pull a number of IT tools necessary, of course, to AI, but also to operate the offices. The premises today, the Launchmetrics teams in Paris are located in these offices. And lastly, we've included them in the Lectra Way Program mentioned to have a shared culture. It wasn't too difficult because the culture was very similar to that Launchmetrics that went very well. In 2024, we signed 2 strategic partnerships, with 2 start-up specialized in AI, [indiscernible] the equivalent of an R&D program with people who are at the cutting edge of AI but we'll still have R&D development for the next 3, 4, 5 years because these are long-term developments that require educating algorithms at length and 2 companies that were ahead of us by a few years were they worth having a partnership. We took a minority stake planning to acquire 100% of the company over the next 5, 7 with assisting them in development, design, customer presentation to have a few pilots on these offers. Sixth point was to prepare Lectra for the next step with sustained R&D investments for many years. Now the company is investing more than 12% of its revenue in R&D. Today, that's about 700 people devoted to R&D, 600 engineers and about 100 people doing product definition test quality. We put out 3 major innovations in 2024, new generation of new start. Cutting equipment, it's about 20% Vector, 20% of our fabric cutting. This innovation was a comment of Lectra and Gerber, replacing both Lectra and Gerber equipment. We've reduced our power consumption environmental footprint, about 30% is compared to the previous generation. First in class, we added a huge amount of AI, our equipment are stuffed with sensors that transmits information to the software, which is the machine pilot. And can analyze and change the cutting plan in real time based on the inputs from the sensors. Secondly, Valia. Valia first launch on furniture in January 2024 and launch on Valia Fashion, which is the major market in October '24, the largest research program ever undertaken by Lectra. We believe that it's a revolution in the world of fashion that hasn't occurred for some 20, 30 years, I'd even say since I've been Head of Lectra who managed digitally on a digital platform, the customers' production studying from model design. Every item of clothing has a digital double and the whole value chain simulated digitally with great many algorithms who decide after education by many experts. There's no deterministic solution in fashion. It's all experience based, and this experience is held by a limited number of experts. We analyze about the input of 1,000 experts, and we modelize the behavior of Valia. If I want to manufacture a particular garment, is it better to get it made in a particular country, particular factory. It's very complicated to explain to manufacture in Indonesia. There's more humidity. The fabric will shrink. Some are better manufactured in Indonesia and others not. It's best not to go to a country that doesn't meet the requirements of your fabric. There are plants specialized in certain fabrics. And with Valia, of course, once you produce your plan, it can be changed daily. You have orders that vary. You have a change in fashion such that certain models are sold better than others. You can radically change your plan and manage real time. You have a problem somewhere because you've got, say, a plant that's on strike, you can shift the production 24 hours on to another plant. All the characteristics will follow. It's a unique tool on which the difficulty, nobody was expecting it. It didn't exist. There's no software that is close to similar to Valia. There no budget for Valia. People weren't expecting for us to have this software. We want to convince customers to spend money for Valia that brings very significant value. We've also beefed up our executive committee by appointing 2 more people Antonella Capelli who was the deputy leader of our Europe team who took over from Fabio Canali, who retired having served with Lectra since 2004. He had been bought out when we purchased the Italian business. Antonella has taken over that team and I believe that Antonella any team are responsible for the great success of Kubix Link. In Italy, we had -- across the world, we had 15% share market, but in Italy, 65% immediately. And we also appointed Michael Jaïs, CEO of Launchmetrics, who is very useful in that he knows the SaaS environment very well. Which now brings me to our product offering that is changing and developing. As you can see here, there are 5 bubbles that give a presentation of our product offering. First of all, in the center Kubix Link which is really the bridge amongst all the business -- between all the business for fashion. In manufacturing, we've just got Valia. But basically, in fashion, we've got creation, manufacturing and marketing and sales. On creation, we have a number of pieces of software that we -- that have been established over the last 20 years and something will come in the next 3 years to replace these. Then in manufacturing, Valia that is taking over all and replacing all the previous software we had and being more effective. And you can see up at the top of the pieces of equipment that are interconnected with Valia, which will give it instructions. They will look at the various ways the fabric or the material reacts, retracting, for instance, or crunching or whatever. There'll be captive sensors. Valia will then adjust the production plan accordingly. So as we optimize the use of the fabrics and materials available for instance. And this will then improve the production plan and have an influence downstream on the marketing project and mix. In marketing, we've got Retviews and Neteven and we also have traceability that covers the entire chain, TextileGenesis. So on the top left, you have Lectra's and Gerber's historic software, which will be replaced over the next 3 years in the create bubble, which brings me to Hélène. Hélène here is our Independent Director, which has the Sustainability Committee previously known as the CSR Committee.

Hello. It's the first time we're presenting the climate strategy within Lectra. As you will have understood, we take all this very seriously at Lectra, and it really is -- has quite a pace in the 3-year strategy. So the idea is to give you -- the purpose is to give you an idea of where we stand and the commitments and undertakings for 2022, 2030 and maybe also give you a sense of what we are doing for 2024. Of course, there's a bit of jargon with scope, Scope 1, Scope 2, Scope 3, but I'll come back to that in a minute. The point there was to really use 2022 as a reference year with clear and specific measurements of our emissions across the board and systematically, meaning that we look at our direct, indirect emissions and look at the entire value chain for Lectra business. So to better understand what our undertakings will be by 2030, we have to take into account, of course, the commitments made in 2024 and the drafting of a clear road map. But let me try and explain. What we did in 2024 was to, again, have a starting point, a reference point to get an understanding of what our emissions were and what our impact is with the reference year being 2022. Then a number of workshops were organized within Lectra to identify the priorities to see what we can do, where we can really make a difference in terms of emissions reduction. And then set up the right kind of organization to implement this and monitor it and report back in the sustainability report. So I'll come back to what Scope 1 and Scope 2 are. But basically, Scope 1 is direct and Scope 2 indirect emissions, including from energy. Scope 3 is all the indirect emissions from, for instance, the shipping of our machines, the purchase of raw materials, the onboarding of our software by our clients and anything of that kind. What are we committing to? Well, we want to reduce our emissions by 25% in Scope 1 and Scope 2, which is significant and 20% on Scope 3. Over the course of last year, we have identified a number of ways to get there. On Scope 1 and Scope 2, well, mainly reducing our energy consumption and also increasing our share of renewable energy sources, mainly at Lectra and also the introduction or increase in the number of electric vehicles in our vehicle fleet. So that's what the teams and the staff here are doing. On Scope 3, which is very broad and diverse. We've identified a number of ways we can do something, and that is the electricity or the power consumption and electricity consumption of the equipment we -- and material we have. And we'll try -- I'll try and show you a bit more about what this means in a minute. Scope 1, Scope 2, you have the starting point in 2022, the target, minus 25% by 2030. And you see here the various ways in which we can get this. First of all, buying and purchasing 50% of renewable electricity, then reducing our electricity consumption and then also having a proactive policy to switch to electric vehicles for the company. On the energy consumption, we've taken -- given undertakings on gas consumption. We have sites in the U.S., for instance, operating on gas. And we really want to have an increasing share of our electricity produced by ourselves with solar panels, for instance, and we really want to be able to produce 15% of the electricity we use in -- on that site, Cestas. So so much for Scope 1, Scope 2. Scope 3, as I said, is much broader because it's upstream and downstream in the value chain. Maybe it's worth reminding ourselves that there are 2 value chains. First of all, there's the value chain relating to equipment and the one relating to software, and they're very, very different from one another. Both upstream and downstream. And that's what you can see in the sustainability report. And it means that we can be clear-sighted in what our upstream and downstream impact means under Scope 3. And basically, what we see is that when we give soft or hand over software or equipment to our clients, that basically uses up electricity. The objective here by 2030 will be to reduce by 20% the consumption of the equipment we manufacture and roll out. And then there's something that can be done on freight and air shipping. And we've already been working quite some time on this issue at Lectra when we're looking at eco-design or environmentally minded design, how we can factor the shipping or the transport to our customers under that heading too. So we've been working on this for some time, and we will go on doing so. We really want to keep in check as much as we can the emission levels under that heading. And then there's what we call Scope 4 in-house, if you will, and there's no obligation there, no regulation. But basically, -- how should I put this? As Daniel was saying, when you do eco-design of our software of our machines, we really factor in this need to reduce electricity consumption, and that has an impact here on Scope 3 and the consumption of equipment placed and services sold by Lectra. But once we've sold our products and handed them over, equipment or software, we want to try and make sure that our clients can themselves once they've received the equipment or software, limit the consumption of materials and electricity, for instance. So we really want to offer them SaaS solutions that are really in line with the market needs for the broader Lectra ecosystem. Thank you.

Thank you. So as you can see, we were already quite dedicated to applying the CSR regulation. The numbers -- the absolute numbers are really not that big, but we are trying to improve further even though we've been very good at in-house and also looking at these things on the impact with our clients. There we go. Any questions? Yes?

With a microphone, please.

Yes. Could you tell us what use of AI you make within Lectra to date? And also as concerns the marketing of Lectra. We understand that at Launchmetrics, it's particularly high, but what about the entire group?

Well, Lectra has been doing artificial intelligence since the very beginning. When I joined in 1991, we were already using artificial intelligence. Of course, nowadays, what we're talking about is generative AI or at least that's the one that people are most familiar with, ChatGPT, et cetera. But within the industrial world, we manage data. And it's true that with the Internet, there's been an increased access to data, a lot of it, but a bit [indiscernible]. And AI basically has to operate on the basis of fuzzy data or missing data and make the most of it. I mean, look at Amazon, they can only make recommendations on the basis of what you have clicked upon and looked at before. In the industrial world, it's a bit easier or was a bit easier because we managed and controlled some of the data. And what we really wanted to do was to make sure that this would fit into our basic ways of operating. And that's been true ever since 2017 when we launched the Lectra 4.0. We already had data for creation and production. What Launchmetrics brought is marketing data. So -- and Kubix Link also as is also TextileGenesis, which is bringing more data. So we've got these 5 data sources, and we can apply AI to it. So we already had AI in our machines, not so much for the creation software because they were really seen on -- as a toolkit, and we weren't too sure how people would want them. But we will use AI in the new create bubble that I've mentioned earlier. In Kubix Link, there's also a lot of AI algorithms, and it's also true in Valia. So we have AI across the board. In-house, -- we launched an AI use program to educate our staff. And we're looking at 2 things: a cross-cutting approach, a horizontal approach so that people can use copilots, so a bit like ChatGPT. And we have this across the board in all our desktop software, if it's only to translate memos or set up reports. For instance, we were able to translate the PowerPoint presentation so that it can also use the in-house Vocab. And we also have some pilot programs for applications of AI in our clients' businesses. And we've got one pilot test in the Industrial division so that you can get a better understanding of what might be worth testing. And the software will say these are the 3 most likely causes of failure, and this is what you need to test, for instance. Second application or second use and with customer service. When clients come with questions about equipment or software that is, I don't know, 20 years old, for instance, because there's maybe a loss of institutional memory, the AI will be able to factor in all the previous interventions and what was said or done in the past and will identify probable cause. Now again, as the case for Launchmetrics, as I said it, you acquire -- you learn more as you acquire experience and we'll speed up the process in 2025. And then there's also what we do in marketing when we analyze markets, analyze clients to get a sense of what analysts have sent and done maybe in covering the annual reports and the reports they write on our customers so that we can get a better sense of all this. So yes, AI will really be a key feature of our road map for 2026, 2028. Yes, sir? Yes, sorry.

Along those lines of vertical, horizontal, I expect you have a tremendous issue in terms of organization with the Launchmetrics and the Gerber databases already organized. I mean, Lectra was a tiny team 50 years ago. So how are you managing these?

Well, we're, of course, forever trying to improve and use the teams as best we can and to adjust our organization to our strategy and our road map. Every 3 years, we -- with a new road map, we've adjusted the organization. We're getting ready to do so again over 2026, 2028. But what we can say -- the fact is that for Valia and the cutting room world, you have people who are focusing on customer success and marketing and commercials. So commercial and customer success is basically what we have out there in the field. But for other SaaS software, we really want specialized teams for major accounts, of course, we'll have someone in the forefront with support in the background. And that is, in fact, what we expect will be going to because it means that the expertise can be presented to the clients. And then in R&D, it's organized according to the products. And then we have corporate HR, Finance and geographies. So geography leaders manage customer success and all the finance is managed from headquarters or HR also. Of course, this will change over time as we get ready to introduce the 2026, '28 road map but to be announced early next year. Yes, please?

That concerns your results for Q1. Can you tell us a bit more per sector about what the clients are saying. And maybe a second question on ForEx and the ForEx impact on guidance. I seem to remember that it was 104, the euro to U.S. in the guidance, a back-of-the-envelope calculation seems to suggest EUR 12 million on sales and EUR 5 million on EBITDA. I don't suppose you're hedging. What do you intend to do to manage this? I know you probably don't want to adjust guidance just yet. Victor says something else related -- not related to currency exchange, but it's something related to events on which we have no hold, but how do we manage the ForEx impact? And third element, the balance sheet. I seem to remember your net debt is below EUR 5 million that will be cash out because of the second chart of launch metric in Q2. I expect that cash generation will be preserved. However, I would say that the tariffs that you mentioned earlier have already been factored-in in the financial world. So we get a sense that either will have escalation now that all the announcements have been made and there is already something of that at hand or there'll be adjustments that we'll muddle through. So could you maybe not make the most of your balance sheet to buy back shares that seem particularly appealing nowadays. What's your view of this? Do you expect to speed up share buyback to have an accretive effect for all those investors and shareholders who've been with the company for a long time. So what is that? And what about M&A?

So if we look back on Q1 in March, it's our U.S. plants producing in the automotive sector in Mexico that were in panic mode because of course, 25% additional tariffs was obviously not easy to absorb. In practice things were perhaps a little overrated. The NAFTA agreement was maintained 65% of Mexican output wasn't taxed, but this announcement indicating that the impact will be reduced down. But it was a psychological impact on the 2nd of April, President Trump turned to a union rep showing how much scope there was to rationalize automotive production in the U.S. So we're really there for rhetorical effect. And in practice, U.S. clients, in March, were the only ones worried about what was going to happen. Perhaps because they were more sensitive for practical reason, they were closer to all the statements. Our European or Asian plants weren't expecting the situation or the more so in China, there are already the two 10% hikes Chinese clients, we're expecting it to stop. Their things changed in April after the April 2 announcement where we can say that the real debate. So situations vary by market. I'll describe them. Automotive has been operating by hub. So for decades, it's a near-shoring logic for the U.S., a large parts manufactured in Mexico so we brought back to the question what's going to happen, how things go involved in practical terms. I don't think the impact will be as high as what we see by clients because the large part was preserved and with a number of modifications, Mexican output escape the tariffs as long as they source components from the U.S. final assembly in the U.S. Only vehicles fully assembled in Mexico would seem to put problems today. No impact in Europe, the hubs regional, no impact in Asia because our regional on auto, the real debate hinges on output in Mexico. On furnishing, that's regional, practically no impact. Furniture doesn't tend to travel the shipping cost versus the manufacturing costs far from negligible. The furniture is manufactured locally, a lot of furniture still made in the U.S. The impact on furniture doesn't represent much revenue. It's not impacted by tariffs fashion. It's most impacted. To give you a couple of numbers in the U.S. today, 1% of footwear sold in the U.S. manufactured in the U.S. and 2% of garments, there's no leeway to grow that number significantly if we take all available resources where we 3% or 5% locally manufactured and then there's no labor availability or know-how. So fashion will remain important. Today, the current situations are shocked for all our Chinese clients who were the first to be targeted, had set up factories in Vietnam, Cambodia or elsewhere to ship to countries that were free of tariffs and tariffs set to cover all Asian countries. So a real question that will arise here, what will be the tariffs for the Asian exporting countries for China above all for Vietnam, which is a big exporters. Cambodia, Bangladesh, now India, not too affected by tariffs that has an industry that is upscaled considerably of late. The real debate will be how will our Asian plants emerge from this episode. That's one area we don't have visibility, the level of which the tariffs will go in these countries. In fashion no one's manufacturing. We just have one software business fully protected because software and services not impacted by tariff. Service software business is currently protected worldwide. When we look at the situation in Europe in a challenging context. Europe is either be on a par with Asians or in an advantaged position as we look at imports in the U.S., everything is imported, either with European or Asian tariff. I'm European. I'm not happy to have tariffs but have an advantage of my Asian competitors, who's upset by the tariffs. It's the U.S. consumers and what our clients worry about today is the U.S. consumer is going to buy less because prices will be higher. And the big debate is the cost share between the consumer, the retailer and the producer of the brand. We want to look at that closely how markets will balance out. The real impact in Asia, about 1/3 of our clients manufacture for the Asian market, not affected. 1/3 for the European market, not affected. So we're talking about 1/3 of our clients who our subcontractors in fashion, Lectra in the U.S., essentially auto. So that's about 15% of our revenue. We have a small percentage of our revenue that truly impacted by the situation. The problem is the fear syndrome because there's been so many announcements, everyone's wondering what's coming next. Everyone is in waiting and seeing the sooner we're out of this episode, the better things will be, but we don't know how far tariffs will go, and we'll arrive perhaps at the reasonable position accepted by the people will say, what's going to happen in 1 or 2 years down the road, it's going to create, wait and see, wait and see is the #1 enemy. People hesitate, think twice too before investing worried about how things they're going to pan out. We have a large part of our revenue, as I said, not at all affected all recurring revenues, not concerned. When we -- sale of new systems, that's about 1/3, we can say 1/3 is sensitive to the 2/3 we're talking about just over 10% sensitive to the situation. But there are side effects, including clients that are not affected today are wondering what's going to happen. That's the impact to date. In terms of actions, we've taken 2 short actions. On prices, we pass through the impact of tariffs and the declining dollars on our U.S. prices the day after tax were introduced. We, even in Q1, refused orders for which we had a transfer that was in place or there was due to pay a deposit to renegotiate the partial cover tariffs by clients saying terms have changed. We no longer apply the prices that we've negotiated even for orders signed. When the tariffs went to 10% it was easier than when they were announced at 20%. Second impact is in terms of shipping logistics because today in the U.S. has equipment sold in the U.S. is produced in the U.S. and what the other half of the equipment on which we have no local competitors, so at best we're on a par with every -- or it was with everyone and it best better than all our Asian competitors. Because a lot of these cutters are manufactured in Asia, it will be China, it creates disruption, but where rather more advantage and disadvantage that the other factor is for years. Our clients notably automotive in Mexico, close to the U.S. border, all shipments were done via Houston. And so we rerouted all traffic, all vessels and shipments to Mexico to Veracruz. Further away from clients had the advantage of not transiting by the U.S., not generating tariffs. So we put that in place the days following announcement, and that's working very well today. So if I look at the direct impact of tariffs to date, it's very small. If I look at the competitive impact over time, we'll probably have an advantage over our clients, not just that we're built manufacturing across the 3 geographic homes, which is -- we have a very significant portion of recurring revenue, which our peers don't have if sales decline, they can either shrink their sales force or their R&D team. So necessarily it will be to the detriment. Look at the situation simply, it's necessarily worrisome. We've done everything. We can today, we're well equipped to address that. And then we can't control the way in which things will evolve all the [indiscernible]. Psychology of our clients, we can try and reduce the impact. Experience have shown these past few years. It's not when times were tough for margins smaller than our clients weren't buying our SaaS software that's viewed as a spend, as an expense, it's viewed as an investment and offer a return. It's not viewed as unproductive expense, but a way of improving one's earnings. So on the SaaS business, the situation, as soon as it stabilizes, will have no impact or even positive impact. The real debate on the equipment and the debate on the equipment is dependent on the wait-and-see position of our clients or the concerns that stem from that. If we look at the company aside from the impact, it might have on our share price that could, of course, be significant. Our fundamentals are strong, whatever happens. We hedged 94% of our costs with through recurring business, we cover it. So in -- we -- in January, we exceeded the breakeven of the year. We're in a situation where earnings will very up or down, but we can view the future confidently. That's not under threat a position I've always defended. We need to have a mid-long-term vision to stick to it, but to adapt to events, of course, where things to change. It would -- it might require a few decisions to be made at the margin. But we -- it says that the situation will be beneficial mid-short term for COVID, we decided to acquire Gerber in April 2020, 80% of clients factories were closed. The question put to us at the AGM, what have you got in place in terms of restructuring, we didn't put in place a restructuring plan. We acquired Gerber under good conditions. So to answer the last part of your -- no, we don't plan any share buybacks. There's no resolution that allows us to do that. Our commitment, the credit facilities, EUR 100 million doesn't allow us to do any share buybacks with the credit in place. We have to reimburse it. And we believe that there'll be huge M&A opportunities and conditions far more favorable in the next 18 months because we're seeing very interesting companies. But have in mind an over stated valuation overvalued because as soon as they put the word AI, they think that they're worth a lot. Overrated because there's been inflation on valuations with the funds, hopes of IPOs and sales that disappearing. So we've got funds that own these companies or major shareholders. It will end up with a reduction of their means compelling them to reimburse their shareholders coming to the end of the road. They'll look for successors. Successors are fighting shy because the exit opportunities are shrinking. We expect to see real M&A opportunities. We've shown our proof for Gerber launch metrics, our ability to integrate companies that the initial valuation was very reasonable in both cases, given that situation. So for cash was far more for M&A deals, then the interest for us is to reduce our net debt to have more leeway. Just to return to the numbers in Q2, we have the dividend about EUR 15 million and the second tranche of launch metrics just under EUR 25 million, total EUR 40 million. As you can see, we're generating enough cash at the end of the quarter. Maybe our debt will reach EUR 30 million. But very reasonable net debt given the situation. So it gives us a lot of leeway, perhaps I'm repeating myself here, I think I've said this at many AGMs what counts for business is the sleep soundly at night. We take that decisions when we don't sleep, but sleep soundly because we're doing what it takes. We're strong, resilient. We have an ideal balance sheet in this context. We have strong ratios, the fact that we cover 94% of our expenses, and that will grow over time is conferring on this visibility. Of course, short term, we're going to be prudent. We're going to -- are on the side of caution. Of course, our service contracts will streamline costs even further. But in the current comp, we just have to grit our teeth and wait. It's as simple as that. And the currency, the ForEx. Yes, currently, of course, there's an impact, if I'm not mistaken, your maths is correct. There's a direct link between what's happening and the dollar rate. It's not just a change in the currency rate. It's a new geopolitical balance that is emerging and will result in different exchange rates. So we can't do much else than see those develop. Our position has been not to hedge our currency flows. We can hedge the long, when we hedge 3, 4 -- 3, 6 months that we have the same. We've hedged all the balance sheet as no balance sheet risk. So it happens that I majored in Stanford in 1980 on the currency markets. And I thought about it. And every time we took a decision, a hedging decision, it was the wrong decision. So it teaches us modesty. Our position, our view is that the impact, of course, can be regulated over time. We hugely reduced the impact through the acquisition of Gerber because we balance out our revenues and costs with Renminbi, the plant at Suzhou, same currency, natural currency hedge between expenses and income. And we hedge the balance sheet. That may change, but it's difficult when this high volatility, the hedging cost is high and things have to move along to be reimbursed. If you could use the microphone as the session is recorded. Thank you. With the ramp-up of recurring revenue, you're going to have less volatility of SaaS rises, you may be able to hedge the currency exposure. It's almost naturally covered because our teams are proportionate to the SaaS revenue. And there's a natural hedge, our dollar exposure has shrunk, so we'll continue to reduce it through the natural impact of recurring revenue in the currency where we have the cost. We have the teams to service to customers where we cash in the same currency, so the natural effect is very strong.

So Claude Laroche, a new Lectra shareholder. Thank you. Your 2026 outlook, you plan to achieve revenue higher than EUR 400 million, of which EUR 90 million of SaaS, software as a service, in other words, about 20%. Design and distributor of software you're moving towards a company selling a service, which brings me to my first question. What is the EBIT margin of the software distributor activity? And what are they in a service supplier activity. Second question, how do you see the split of revenue in 5 years in these 2 segments distribution and SaaS. And as a follow-up question to that, you're going to reach almost a market cap of EUR 1 billion. You'll be almost have a unicorn status. So opposite is EUR 1 billion. You have 375 million consolidated equity. Isn't there a manifest on the valuation of your balance sheet.

Well, just a few points. Electrodes born in the field of software, first product was a computer-assisted design. And so we've been in the soft business from day 1, and we are creator not distributed. We create 100% of the software that we sell. The transformation and SaaS for us was a major opportunity for 2 reasons. The first is that it was very difficult for us to put a price on our software. We already at 3 to 5x the price of that competition. We couldn't up our price initially the comparison was done in a selling position. With the subscription, we can up it over time, we can enter at a reasonable price and up the revenue generated over time because at some point, it's on the value broad and not the comparison with the price of the competition. So Software-as-a-Service, we offer a service that combined expertise, AI and software and all our services are a combination of the 3 today. The software is a subscription it enters a monthly settlement and the people pay annually in advance, but over time. Then we have artificial intelligence that's in the SaaS platform, but also in our expertise centers. Last year, we have an expert who can bring an expert eye on the result of the AI or the generated. Data's real value is -- lies in the capacity to combine the three. A lot of synergy between our industrial business, the sale equipment and SaaS. We see this with value. The 2 are closely and to find I mentioned value for the equipment to manufacture, you have to create the data and value and creation, marketing software in Kubix Link, in TextileGenesis that traces the whole value change. We know which client outsources to whom to do what. It's a coherent whole. It's very difficult to know what the margins generated by activity and the decisions we could take to assign costs left to right, would overstate the reality. We tried to do a couple, it's very tricky. But as we've seen, we are an investment period on SaaS software until the end of 2023. We had R&D budgets in SaaS. 75% of our R&D teams work on SaaS software, current or future, and we have R&D spend, all booked as expenditure that onerous in terms of size, but constant. And at the margins, we optimize the great deal. We sell a SaaS software, we have a gross margin in excess of 90%, very high in the SaaS world, having paid. Amazon, Microsoft for the cloud-based services. And we also have margin cost such if we take an additional euro in SaaS, we generate EUR 0.60. And in Industrials [ were ] EUR 0.30. We're very sensitive to the increase in revenue. The more SaaS revenue increases the more SaaS margins will increase. It's difficult to say what they are and what they're not spent, how we treat R&D. We take it as a spend if you depreciate it over the lifetime of the software, they're already high for the spend, we have the expenditure that will accrue over the coming years. Obviously, the SaaS potential in our total revenue will increase sharply. Firstly, because it's natural growth through the addition every year of the new subscriptions, the value of the software is proven in all our offers. We had several hundred customers today who have been users for quite a while for several years, save for the very recent ones, and we have a value that improves over time because we're enriching our offers with the experience derived from customer feedback, and we monitor directly what's happening today. Entering, we have over 1,000 servers that are monitored by Lectra directly with all the SaaS softwares. Whereas when Helene mentioned optimization environmentally, we've optimized the use of service. It's crucially important for what comes next. Pollution with the use of AI that consumes a lot of power. So all that's going to grow. Over time, unfortunately, not that we market cap, I mean, just over EUR 1 billion, EUR 1.5 billion a while ago, just over EUR 1 billion this morning. I don't know if we're a unicorn or were a unicorn or will become a unicorn. I have high hopes going forward. You're right on one point, the Lectra fundamentals are far stronger than the valuation of the market. The analysts give it a far higher value. There's a fair today on the part of shareholders that things will worsen further. I mean I'm not here to judge by definition, we depend a great deal on the anxiety inducing attitude for our clients and shareholders. That's probably what determines the stock price if we consider the fundamentals of people will say SaaS business is worth EUR 1 billion. We take the SaaS ratio. EUR 2 billion with the industrial activity, we have a discounted to everyone's running scale. I notice the numbers are the same or stronger. I believe the fundamentals of the company are far better than what is shown in the valuation, not for me to judge a shareholder decides to buy or sell it is absolute rate decision. We'll see what happens. We're strengthening the fundamentals here by your role as management to boost the fundamentals improved, we done a substantial effort these past few years that's very sound that has born through difficult to read because every time we have cyclical events that play against. It's anecdotal, the announcements on the final day of the quarter, such that we're expecting to have double-digit growth of orders early March. And then we had the first announcements on tariffs in Mexico and then the fear around the April 2 announcement. Every time there are things that play on the long term and the short term very strongly. So I'd be very prudent to the fact that we can't control what's going to happen. Hence, we consider that today, we can't reassess the end of year targets. It can be better, less good. We're expecting short-term difficulties. But midterm, we're better than our competitors to face the situation. If we look 1, 2, 3 quarters, we'll probably be impacted negative. But if we look 2, 3 years down the road, it's probably the opposite, not to mention M&A opportunities that we're generating more cash and valuations are declining. I'm hugely confident in the future. I think the situation is difficult. But when a situation is difficult, we to face it, it's easier when it's difficult that we're not equipped, we can grid our teeth and wait. And obviously, that's important.

One last question maybe. Yes, briefly. About tariffs. And I'm trying to understand in 2019, under the first Trump administration, tariffs had already been introduced. How long has it taken to -- for things to settle down to work out at 1 quarter, 2 quarter, 3 quarters, how long did it take for your customers?

Well, there was no impact on us because the tariffs on automobile industry were soon suspended because American brands were manufacturing less in the U.S. than other companies, and therefore, the tariffs were suspended after some lobbying with the President. So there was no impact there. And the impact on Chinese fashion was very limited insofar as it only affected those products that came from China. And our Chinese customers were making deliveries in the U.S. from other plants they had elsewhere in Asia. And there was also a minimum amount. So there were any tariffs on any sales above $800. So Shin, for instance, was repackaging things. And there were also, therefore, loopholes. This time around, the loopholes have been closed, and we're in a very different situation compared to what it was under the first Trump administration, where nothing really happened. Anyway, let's now move on to the next phase of our shareholder meeting.

Yes. The statutory auditors will have the floor for Pricewaterhouse and Madam Lalanne for KPMG.

Mr. Chairman, ladies and gentlemen, thank you for giving us the floor. The statutory auditor, KPMG, represented by Aurélie Lalanne and PwC, represented by myself, have audited the 2024 accounts. And we have issued a number of reports. First of all, the report on the financial statement. Lectra SA, also the consolidated financial statements, a report on related party agreements and a report on the sustainability report published for the very first time by Lectra following the coming into force of the European regulation, the so-called CFRD regulation, which provides for reporting on ESG issues and other obligations that are much wider and higher reaching for listed companies. First of all, on the financial statements, I will introduce sir, and my colleague will look at consolidated statements and related party agreements, and I will come back with the sustainability issue. On the annual statements, we are able to certify that they are true and give an honest representation of the financial situation of the parent company. During the audit, we looked at the sales and also concerns the equipment and pilot software being exported, we recognize that, that was a key feature in the audit. In the management report and the governance report, we looked at them and we found no specific comments to make either.

On the consolidated statement. There were no specific comments to be made. My colleague mentioned already exports. So we have something to do and to say about acquisitions. This accounts for about 45% of the assets. This amount will change with the recent acquisitions made by Lectra. We implemented specific measures to perform the audit. We brought in our valuation experts from both firms. We identified a number of things to mention, for instance, the purchase of shareholdings in other companies, we're relating -- discussing here recent acquisitions. For instance, the acquisition of launch metrics that led to something like EUR 150 million being accounted and booked as debt accounting for something like 16% of the whole balance sheet. We also involved our experts in these issues. And last, a specific audit point. In 2021, you'll remember that we had looked at the acquisition of Gerber. We did very same thing this time around with the acquisition of Launchmetrics, looking and making sure that the acquisition of Launchmetrics was properly accounted for and properly booked as concerns, maybe more specifically the first half of 2024. Our concerns, the specific checks. So there are no particular comments, as you will have noticed in the report that you received. And we also looked at the compliance of the consolidated financial statements with the European single electronic reporting format as is stated in our report. So much for the consolidated financial statements. Our side reported for a special report on related party agreements. There are no new related party agreements signed over the course of this financial year. And there were none in previous years for which their effects would have been felt over 2024. Any agreements, in fact, normal agreements under the usual conditions. So I'll give the floor to my colleague on the sustainability report.

Yes. As I was saying earlier, Lectra issued in 2024 its very first sustainability report in compliance with the CFRD regulation. If you're not particularly familiar with this, let me tell you that the purpose is to give assurances on compliance for 3 things that you can see up here on the screen. First of all, compliance with the so-called double materiality process, meaning that the company must assess the impact, risk and opportunities, both financial and ESG, hence the double materiality. Then the legislation -- under the European -- the new European ESRS issues provides for some 400 data points to be shared. And lastly, there's the issue on taxonomy, which was, in fact, already included in previous years and no observation here. On the basis of the work conducted, we have come to the conclusion that no significant inconsistencies were identified. We have only made 1 observation, which is true for most listed companies across Europe, and that is the methodological limitations and the uncertainties inherent in the fact that this is the first year of implementation of the regulation. This being said, the observation does not, in any way, shape or form, challenge our conclusion of compliance. Thank you.

Thank you, ladies. We now come to the last phase of our meeting, the agenda and the resolutions. On the agenda, we have 14 items, 14 resolutions, 11 of which come under the ordinary General Meeting of shareholders, so you require a simple majority and 3 come under the extraordinary general meeting required, therefore, a majority. Before we move on to the voting of the first resolution, let's have -- we have a show of hand and our team from Societe Generale will take down your votes. Maybe the final quorum is 90.6%, taking into account all those who have signed up. I think we can now move on. Resolution 1: Approval of the parent company financial statements as found in the financial report. I'll remind you that the profit is EUR 24,399,430. Cost excluded from tax deductible is EUR 127,043. Would you please raise your hand if you voted against or abstain. No, thank you. Given the correspondence vote, et cetera, the resolution is passed with more than 99%. Thank you. Resolution 2: Approval of the consolidated financial statements to be found in the financial report and as presented to you earlier by Olivier. I'll remind you that the net income group share stands at EUR 31,163,506. Let's vote. So please raise your hand if you vote against, if you abstain. No abstentions either. Thank you. Given the votes already received on internet or by proxy and in the room, the motion is passed with more than 99% in favor. Third resolution: Discharge of Directors. You are required to grant a discharge to the members of the Board for what they did in 2024. Any one voting against in the room, or abstaining. No. Okay. Thank you. That's so fast. Also passed with 95% or so. Resolution #4: Appropriation of earnings for 2024 and the dividend, the dividend worth EUR 0.40 per share. You have it, you have the breakdown of the numbers up on the screen. Let's vote, please raise a hand if you vote against or if you abstain. No, thank you. Given the votes received previously and factoring in what has been said here in the room, the motion is passed 99% or more. The dividend will be paid out on the 5th of May, so next week. Resolution #5: Maybe Céline Abecassis, the Chairman of the Compensation Committee can give us a rundown of the 5th and 6th resolution.

On the CMP ex post here. yes, we ask that you approve the information relating to the compensation of the company officers for FY '24. So-called say on pay ex post. That is what you have in the governance report. Please raise your hand if you vote against or if you abstain. Thank you. Given the votes previously received, the motion is passed with 96% in favor. Resolution #6. You are called to approve the fixed and variable components of the total compensation for Daniel Harari, Chairman and Chief Executive Officer for FY 2024. Here again, we're on the [indiscernible] of say on pay ex post -- say on pay, sorry. As you can see up here, the fixed compensation is EUR 420,000, variable EUR 81,167, which stems from a 19% achievement rate, no extraordinary compensation and conversation as a director and benefits in kind, which is basically the company car. So grand total for compensation, EUR 562,043 for the Chairman and Chief Executive.

Thank you, Celine. Voting now, any one against or abstaining. Given the votes previously received, the motion is passed with more than 97% in favor. This now brings just to Resolution #7: Renewal of directorship of Céline Abecassis-Moedas. Daniel, would you say something?

Well, I've known Celine for a very long time. It so happened that she first did an internship at the lecture when she was studying at Normale Supérieure, I believe. Then we lost sight of each other, and we opened a chair at ESCP, so the Paris Business School and Celine was one of the professors there, and we were looking a few years ago for an independent director and have chair with fashion and technology. So sound about right. Maybe Celine can introduce herself and tell you what she's done as Chairman of the Compensation Committee over the last 4 years.

Yes. Thank you. So my name is Céline Abecassis. I have an academic career and also a long career as Independent Director. On the academic side, I'm a graduate of Economic Superior and a PhD from École Polytechnique, after which I joined lecturer at the New York office in 1990-2000, but then I went to [indiscernible] in London. And then I went back to the university joint -- teaching at Queen Mary in London, and I now also teach at the Catholic University in Lisbon and have been for many years. Management is my topic. And indeed, fashion and technology is at the heart of my academic interest, meaning that I'm near enough to the concerns of Lectra. As a nonexecutive director, I serve here at Lectra, but I also have served in 5 companies and 3 countries of grand total of something like 25 years. I've been at Lectra over the last 4 years, sitting on the strategic Committee and the Sustainability Committee, and I've chaired the Compensation Committee. There have been 2 major changes over the last few years on compensation. We've revisited the allocation of stock options and revisited the variable share of compensation, factoring in CSR issues and RSC issues.

Thank you. So let's vote on the renewal of Celine's directorship for 4 years. Anyone against? Anyone abstaining? Thank you. Given the votes previously received, the resolution is passed with more than 97% in favor. Thank you. Thank you. Well done. Which now moves us -- brings us to resolution #8. This is say-on-pay still, but ex ante this time. You have the floor.

Yes, me still. We -- you're called upon to approve the compensation policy for Mr. Daniel Harari, Chairman and CEO for 2025. The great principles are unchanged, meaning that the total competition with 100% achievement would be EUR 840,000. So fixed compensation, EUR 420,000, variable EUR 420,000 and that's it. The Chairman, maybe what has changed is that we -- you have -- sorry, is that the next slide, sorry. Yes, indeed, sometimes the performance criteria, what has changed is the weighting. Last year, we already had a strategic criteria and CSR criteria. On the strategic scorecard, we've increased the EBITDA share of relevance. And on -- we've increased somewhat the criteria on the improvement of the employee engagement share. And we've added a factor the climate transition plan. Also, the CSR scorecard can have a negative impact on the strategic scorecard. All of this is not new. We have the same things last year. Yes, the only change is the weighting of the various criteria.

Yes. Thank you, Celine. Can we now vote. Please show your hand if you are against this 2025 policy, anyone abstaining? Thank you. And given the votes previously received, the motion is carried 95% or so in favor. Resolution 9. This is the approval of the directors' compensation for FY 2025, Celine.

Yes, me still. You have been called upon to approve the directors' compensation policy ex ante, so for 2025. The overall maximum amount is EUR 480,000, unchanged, but the cap on individual annual consternation has gone up to EUR 75,000. The fixed share is what you have here and the variable compensation for the attendance to the various committees. The only change really is the Sustainability Committee, which has increased somewhat because the sustainability report is much more detailed and we've also mentioned the variable -- the impact of sustainability on variable compensation.

Thank you. Would you please raise your hands if you vote against this -- the policy, any abstentions. Given the previous -- the votes previously received, the resolution is carried at more than 99%. Thank you very much, which now brings me to the next resolution. Resolution #10: Appointment of Ernst & Young and others statutory auditors and charge of certifying accounting and financial information and we're anticipating the end of the term of KPMG and ending at the AGM in 2026. And in anticipation, we put out an for the statutory auditors the end of last year, 2024, the process was steered by the Audit Committee with the support of financial division following the request for proposals. There are 2 auditors with staggered terms over '25, '26, the Audit Committee, the Board proposes to appoint Ernst & Young as others as statutory audits and charges certifying financial from a 6-year term ending after the AGM in 2031, and we have the signing company present with us in the room. Jean-Christophe Pernet, is the signee of Ernst & Young, who managed to join us here to briefly introduce himself over to you, Mr. Pernet.

Well, good morning to all and a few words, Jean-Christophe Pernet. I'm a Partner at EY based at the Paris office. I have experienced primarily for listed clients. So clients financed by private equity in the tech sector, particularly in SaaS software, as was mentioned earlier. So I'd like to thank the group for its trust and confidence to the financial division committee subject to the AGM vote. We're delighted to join the adventure to support the group going forward, Lectra is a fascinating activity, and we look forward to kick off a little bit.

Thank you. So you'll have understood, so we'll have 3 auditors for FY 2025, and I suggest we move to the vote. Please raise your hand if you are against the appointment of EY or who wish to abstain. Thank you, given the votes by correspondent proxy votes, resolutions carried over 99.99%, well done. Thank you. Next, Resolution 11: Authorization for the Board to trade in the company's share under a liquidity contract. It's a straightforward resolution that we propose and ask you to approve every year to buyback for a maximum period of 18 months of our own set maximum amount is 2% share capital, maximum purchase price pressure, EUR 60 and a maximum gross amount of -- to be used in this repurchase program of EUR 10 million. And without further ado, let's vote on this resolution. Those who are against this share buyback program, please raise your hands or who wish to abstain. Thank you so given the votes by correspondent proxy votes resolutions passed over 99% of the vote. We now move to resolution subject to the extraordinary general meeting. Some may have seen this morning, we had a special meeting that was in order to do away with double voting rights that existed up until the day a large minority of our shareholders only 0.51% of our shareholders still held to date, double voting rights to cash to their registered shares at the meeting held this more the special meeting held this morning at 08:30 approved the deletion of double voting rights. And as a reminder, we have encouraged this dilution because there was in quality of rights between shareholders. And so we really pushed the principal of 1 share, 1 vote that we see in most companies in Europe in order to promote greater equity within our shareholder base. therefore be a correlative change to the company's bylaw 2 articles, Article 6, you have the before and after the change propose on screen Article 21 that will also be amended given that we're deleting double voting rights. And so we'll now put this to the vote. Please raise your hand or those who vote against. This special meeting approved in its majority approval. I don't know if we have the detail of the vote that it was -- I don't want to make a mistake. It was a 2/3 majority that was required this morning also, and we largely exceeded that 2/3 majority -- we'll give you the result. It was approved. It will be published on our website in the coming days. But it was approved. So you're asked because you the shareholders meeting to approve this deletion to change the boils accordingly. Please raise your hand if you vote against this resolution or if you wish to abstain. Thank you. And given the votes by correspondent by proxy votes and in the room resolutions carried over 99% of the vote. Thank you. Penultimate resolution on screen. This is a change to artic the paragraph 1 of the bylaws regarding adoption of resolution by written consultation of our Board of Directors. Thus far, we up until now had the possibility of having this written consultation that for a number -- limited number of matters. The law now allows us to extend that to any matter subject to explaining and detailing the arrangements and the by law and the right of our position to any director who doesn't want us to consult by written consultation let's align our bylaws with these new legal provisions. It's not very legible, but it's on the screen. Let's put it to the vote. Please raise your hand if you vote against this resolution or wish to abstain. Thank you. So given the votes by correspondents, proxy votes in the room resolution carried higher than 99% of the vote. Thank you. And lastly, final resolution of the shareholders meeting, you are to grant powers necessary for the performance of formalities subsequent to this general meeting, primarily these are formalities of filing and advertising the vote. Votes against or abstentions given the votes by correspondence via Internet and in the room, resolution is approved by the 99% of the votes. thank you. This brings to an end of voting process.

Thank you. Thank you all for your attendance, for your questions. And the next financial dates are displayed on screen. Quarterly results, shareholders' meeting, next Analyst Meeting in 2026. This is my 35th AGM. Let me say but not the last one. I feel a young man. Thank you all. [Statements in English on this transcript were spoken by an interpreter present on the live call.]