Melexis NV (MELE.BR) Earnings Call Transcript & Summary

Welcome to Melexis Capital Markets Day 2025 here in our company headquarters in Ypres, Belgium. Happy to see many faces that were also here in 2023. I was not, but I understand that the weather is also in a much better place today. So thank you for joining us people in the room, but also for those joining us online today. My name is Philip Ludwig, Investor Relations at Melexis, and I'm going to take you through a very brief introduction to get the day started. We're excited to tell you about the progress we've made since 2023, also at different time still in an allocation period, and we'll hear more about that as well as talking about the strategic initiatives that we've been taking since then and how that's going to build our future. Before, however, we move into the actual heart of the event, I need to do a couple of housekeeping tasks. The first one is actually not even on this slide. I'll leave this slide on for now. We've been asked for Wifi code. Please go to Melexis Guest -- and the password is guest. Hopefully, that works for everybody. I'll leave the obligatory disclaimer for now. I assume that you've read it. It's also in the slides. This event is being live streamed, recorded, and the replay will be online after the event. I can also share that the slides are now online, so you can please download those at your convenience. Finally, I would like to ask all of you to put your devices, phones, tablets, what have you into silent mode, not to disturb the event today. A brief look at the agenda. I'm not going to read all of the lines, but we basically built today around 2 main parts. There's a part before the break and a part afterwards. Before, we'll talk about our markets, our strategy to continue winning in those markets. and continuing on our growth trajectory with a focus on our innovation machine and a deep dive on robotics. After a Q&A and a short lunch break, we'll return looking at our automotive growth drivers. Then we'll also do a deep dive on China, which is relevant, of course, for both automotive as well as robotics. Then we'll bring that all together in financials and have some key takeaways before another Q&A. So I would like to invite our executive team on stage to join me right now, please. So today -- hello. Today, we're joined by 4 of the ET members, Tony Duisters, who -- you should now be able to see on your screen, Tony, Chief Business Officer, was not able to join us today due to previously made customer commitments. We're also very happy to be joined today by Maxine Amo, who just joined us very recently as Chief Operating Officer. Maxine, very happy to have you on Team Alexis. Thank you. Equally, we're joined by our Chief Innovation Officer, Vincent Hiligksmon; our Chief Financial Officer, Karen Van Griensven; and our Chief Executive Officer, Mark Biron. So with no further delay, Mark will take the first section. We're very curious, Mark, to hear more about the markets and our strategy. And now the floor is yours, Mark.

Thank you, Phillip. Good morning to all of you, and thank you for having made the travel to Ypres. Okay. I suggest we start. Well again, good morning, everybody. Thank you for having made the effort to travel to IP in order to listen to the Melexis journey. Indeed, Melexis is changing and the Melexis of today is different than the Melexis of 5 years ago. And you will see that the Melexis in 5 years will be obviously different than the Melexis of today. And Melexis is changing because the world around us is changing. There are much more business opportunity in the semiconductor industry. There are also much more competition. There are much more pressure. And I could use an analogy from a Swiss watch company who says, don't break under pressure, don't crack under pressure. I think it's a nice sentence for a watch company to not crack under pressure. But for Melexis, it's obviously not enough. We need to put the bar higher. Of course, we don't want to crack under pressure, but we want to use the pressure to strengthen the company to become a more performance company. And it's what we call anti-fragility. And you will understand more about this concept during the presentation of Vincent and also to be the -- during the presentation of Karen, this anti-fragile. We want to become antifragile. Before we move into the detail of our strategy, explaining how we are going to win, how we are going to improve our top line, how we are going to improve our bottom line, I would like to take you through the world we are operating in, which is obviously also more and more complex. Starting with the megatrend, which is climate change, which is aging population, which is also all the geopolitical tension. We can say that geopolitical tension is a threat. It's a constraint. And we need to make sure that we have a supply chain close to our customer, close to where we sell the product. For the climate change and for the aging population, it's a threat, but there is also a lot of opportunity for a company like Melexis because I really believe that the semiconductor industry can reduce the CO2 emission. We can provide solution to reduce the CO2 emission. We can also provide solution to make the life of our elderly people more comfortable and more safe. Moving to our core market, which is automotive. I think it's clear for all of us that the center of gravity of the automotive industry is moving from Europe to China. It's also moving from combustion engine to EV engine. You will understand in the presentation of Vincent that there is a lot of opportunity in this move for Melexis. But the overall mobility is changing, e-motorbike, e-bicycle drone, those are new mobility region who will also provide new opportunity for Melexis. The software-defined vehicle is also a big change for the industry. It's a big change for the OEM. It's a big change for the Tier 1, the Melexis customer. For Melexis, those are also a lot of opportunity because at Melexis, we are experts in sensor and in drivers. The sensor sends the environment. We measure the pressure, we measure the temperature, we measure the position. Those -- all those measurements, which are done at the periphery of the car are used by the ECU from the SDV in order to take decision and then also to actuate the valve and all the mechatronic. It's why -- we are sensing, we sense the environment. And so we drive the environment, meaning that we are actuate some valves in the car. This sense and drive competency for sure, an important asset for the car. It's also an important asset for the future of the world because the world is much more robotized, much more automatized, much more electrified and many applications in the world will also need this sense and drive capability. Again, Vincent will give some concrete example in his presentation. All those change around us are very, very quick. There is a lot of change, but it's also a very, very quick change. It means that we need to adapt the company and quickly in order to stay in the game. And we need also to adapt the competency of all the employees of Melexis. All our competency must be adapted in order to stay in the game in those new changes. And this is about technical competency. I will give some example later, but it's also about, yes, soft skill competency that we need to adapt. Usually, I say that we need to learn, we need to unlearn and we need to relearn and quickly if we want to be able to stay in the game given all those changes. I think this is one of the duty of the company is to make sure that all the employees of the company are able to learn and learn, relearn and quickly. And how are we going to win? This is, I think, the main goal of the presentation today is to explain how are we going to win, how are we going to improve our top line? How are we going to improve our bottom line. And quickly, I would say, innovation is one of the pillar of the strategy. We don't want to copy existing product. We want really to innovate and bring innovative solution that solve some unmet need of the customer. And then the customer is also in the center of the strategy because to be able to solve unmet need, we need to understand the need. We need to proactively understand the need when we discuss with the customer. Then innovation, customer centricity. For sure, AI will be also part of the strategy. Vincent will explain it because AI is one way to increase the performance of the product, edge AI being an example. But AI will also help us to improve our operational aspect. Then this is indeed the complex world where we are operating in, and our strategy is based on this fact, let's say, on this fact around us. Before we move in the detail of the strategy, I would like to take a step back and look at the history of the company in terms of revenue. And you see that we had 2 big wave of growth in the company, the first one during the first 15 years, the second one during the last 15 years. And those wave of growth have been interrupted by downtime. The first one, for the first 15 years, we were focus on automotive, only automotive. Our customers were mainly Western Europe customer, mainly Germany, I would say. And we were developing and selling ASIC. It means that the customer sends specification to us. We developed the product according to the specification of the customer. And then we sell this product exclusively to this customer. It was the business model during the first 15 years. During the last 15 years, we become more knowledgeable, I would say, from the market, meaning that we were able to define ourselves what would be the product to be developed because we knew the market. Then we have developed standard product. And -- the advantage of the star products is that we can sell those products to all the customers. We don't have any exclusivity because the specification, the requirement has been created by Melexis. We have expanded our portfolio with different product line. Vincent will give some detail. For sure, magnetic was an important part of the portfolio. And also from a regional perspective, it was not only Europe as a main customer, but it was Europe, Asia and also the U.S. The objective of the Capital Market Day is to explain what we are putting in place now, what we have started to put in place in the past in such a way that we can secure the third growth wave. And in order to secure this third growth of Wave, I will explain the strategy. And the strategy is based on 4 pillars. The first one is technology leadership, customer intimacy. I will explain our fabless model. And then I will explain that we want to sell more than the chip. We want to sell an overall solution than something beyond the chip. In terms of technology leadership, I'm using here an analysis from Tech Insight, which is a market analysis who shows that for the automotive sensor, Melexis is ranked #4. We were #5 the year before, and we moved from 5 to 4 at the end of 2024. I think we can be quite proud because when we see the name of the company that are in front of us, onsemi, Bosch, Infineon, those are very big. very big company. The small triangle are the CAGR, the last 5 years CAGR. You see that we have grown by 12% in average during the last 5 years, which is -- if you compare with the competition, which is quite good. Some competitors did not grow. Some competitors grow less than 12%. But with 12%, I think we have a good growth. I repeat, it's about automotive sensors. And you will see from the current presentation that the automotive sensor represents roughly 75% of our turnover. If we go a bit more in detail in the areas where we are a leader, I would like to highlight the steering and the braking system, which are important system of the car will become even more important in the car of the future with the autonomous drive because in the autonomous drive, you need to have e-brake and e-steering system with a lot of safety, meaning that the electronic will be very important in those system for the ADAS. And we are a leader with our position sensor, can be magnetic sensor for some system, can be inductive sensor, but it's usually via our position sensor. Another type of sensor where we are leading, it's in the EV powertrain. The EV powertrain, it's more with our current sensor. -- also with our temperature sensor to measure the temperature of the power system. And also, we have some magnetic position sensor in the motor of the powertrain. In terms of thermal management, we lead for our sensors, but also for our driver. Thermal management is a very important system in the EV car because it's a thermal loop to ensure that the battery stay at 25 degrees and ensure that the cockpit stay around 25 degrees. It's a very complex thermal management loop. There are 2 loops, one for the battery, one for the cockpit with a lot of electronics, a lot of sensors to measure position, to measure pressure, to measure temperature of the loop and also a lot of drivers in order to actuate the different valves in the loop. And in terms of drivers, last but not least, we are also leading with our lead driver for the static lead. And today, in the car, they are mainly static lead, but the new wave will be dynamic, dynamic light, and we are also leading this kind of application. And this is to highlight, let's say, our technology leadership. The second aspect of our strategy is the customer intimacy. I mentioned in the introduction, very important to be close to the customer because we need to anticipate the need of our customer. Listening to our customer I do believe that one of the strengths of Melexis is that we are big enough to serve and small enough to care. Small enough to care means that we are small enough to adapt ourselves to some specific requirement from our customers. If you compare with very big company, they are so big that they don't want to adapt to some specific requirement Melexis, we are small, we are agile, then we are willing and able to adapt. Big enough to serve means that, yes, we have a supply chain which is strong, which is resilient with some second source in such a way that we can serve our customers in all the circumstances. And as a matter of fact, during the chip crisis, yes, we did not put one OEM line down because we did not deliver. And in terms of customer, sometimes the OEM are the direct customer of Melexis. I would say the modern OEM are usually direct customer to Melexis. But usually, our direct customers are the Tier 1. And you see on the slide that in terms of OEM, you can find Melexis product everywhere. I mean we are a global company, and we contribute to the different OEM. You can find European OEM, OEM from China, OEM from Asia, from Korea, OEM from the U.S. Vincent will give some example of cars with some example of Melexis content in the different car. And it's the same for the Tier 1, our direct customer. We are a global company. We address many, many type of customers, big customers, small customers from all the regions of the world. Interesting to note that 10 years ago or 15 years ago, we have received a lot of award from European customer. I remember I have received an award from Continental 15 years ago. But now since 2, 3 years, interesting to note that, in fact, we received much more award from Chinese customer. You have some example on the screen, award that we have received in '23, in '24 and in '25, which is a kind of testimonial showing that we have a very good customer intimacy also in China, and we are recognized by the customer in China as a good supplier, good and reliable supplier. I think it is important for the future to understand that indeed, Melexis is well recognized in China. The third pillar of the strategy is our fabless model. Being a fabless means that we concentrate our resource being our financial resource, but also our brain power resource. We concentrate those resource on defining the right product, developing the right product, testing the right product, making the marketing of the product and also selling the product. This is really where we want to concentrate our effort. This is what is represented by the top of the horizontal line. And you see on the bottom of the horizontal line, those are the process that we outsource. When we outsource the wafer process, we outsource the assembly -- and you will understand later with Vincent that we want also to develop some module, and we will outsource the module in the future. In terms of wafer fab, if I make a small stop on the wafer fab aspect, you see that there is different technology nodes that we used. The vast majority of our products are still using 8-inch wafer from 350 or 110 nanometer. But we are also now using more and more different technology nodes. We are using the 130-nanometer from a foundry in Korea in order to increase the capacity. So one of the lessons learned from the chip crisis is that we didn't have enough capacity. then we are now using another wafer supply in order to diversify our supply and to increase our capacity, having also access to a better cost in our supply chain. We are also using 19-nanometer, which is a 12-inch wafers from a Chinese supplier, and this is part of our China strategy. Vincent will explain the China strategy. But in this China strategy, we are using a wafer fab in China in 19-nanometer. And for some specific robotic products that require a lower feature size technology, we are using a 40-nanometer process in a wafer fab in Singapore for some specific robotic product. Then this is our fabless model and the objective for the fabless model is to concentrate our resource on our expertise. The pillar #4 of the strategy is the system solution, which is something new because historically, at Melexis, we develop an IC with a standard package. But we want to move up in the value chain. And it's why in some innovative products, for example, in robotics, we want to provide more than an IC. We want to go beyond the IC. We want to provide an IC in a specific module, in a specific mechatronic module. Julien will give an example. And we have some development with different kind of system. We have also a development for the -- what we call the T axis, which is a sensor that we use in the e-bike. We are also more or less embedding software in the chip to create some intelligence in the chip. And we are continuing to use complex packaging. The [indiscernible] is an example that we have launched earlier this year, which is a pressure sensor solution. And we will continue to develop some complex package. Then those are some examples of system solution because we want to really to provide more than an IC in the future, and Vincent will highlight some examples. Then those are the 4 pillars of the strategy. But to execute this strategy, we realize that we need to also to upgrade, I would say, the corporate competency. And in order to reach this new competency at company level, we have defined some strategic teams, and we have regrouped different initiatives in 3 strategic team. The first one is about innovation, innovation from a product aspect, but also innovation in a geography aspect and also innovation from different application. The second strategic team is it's about the people. It's about having a high-performing team or higher performing team in the future. And the third one is about our operation, how do we increase the efficiency of our operation. In terms of innovation, I think a good marker of our innovation machine is the number of products that we launch in the market. All those products are defined by Melexis, developed by Melexis and then launched by Melexis. And you see that if we look at the last 10 years, the number of products that we have launched year after year is increasing, meaning that we bring more and more innovative solution on the market. In '24, we have launched 20 products. In '25, we will launch probably 19 products. It's important to note that the green part of the graph is indeed product outside automotive. And then you realize that in '24 and even more in '25, we have launched much more non-automotive product. Innovation in terms of product, but also innovation in terms of market geography. This graph shows our quarterly turnover during the last 10, 15 years. And you see that the green part of the graph is, in fact, the Asia revenue. The red one is the U.S. revenue and the black one is the European revenue. Then it's clear that the green part, the Asian revenue is increasing quarter after quarter. And to be successful, we need to be successful in China. It's why there is a deep dive later on about China. The second aspect of the strategic team is about our team, our people, how do we improve the performance of our team because, as I mentioned, the change are coming very quickly. We need then to modify or to adapt the structure of the company, and we need also to adapt the competency of the people. Adapting the structure of the company, we did it last year, and we have merged the development team inside the business unit. The goal was to have the development team closer to the business unit, closer to the customer to create a better dynamic in the development team. And I think it's one of the reasons why our product launch have increased last year and this year is because we have a better mix and match between the business unit, the customer and the development team. And this is about the, let's say, the corporate adaptation, but it's also important to upskill, reskill the competency of our people. I gave the example of the mechatronic module. It's something new for Melexis. -- we don't have or we did not have those competency in the company, and we need to develop those kind of competency in the company, as an example, for the mechatronic modules, the same for the software. 10 years ago, we did not have any software engineer. 5 years ago, we had some software engineer, and now we are recruiting a lot of software engineers in the different region because we need those software engineers to develop the software for the company or to develop the edge AI solution for the chip. It's also important to have the right strategic workforce planning because we have 18 sites in the company, and it's crucial to have the right competency on the different side. And this initiative or this strategic team around the team include also the diversity aspect and the inclusion aspect. We are doing a lot of program, a lot of training with our people to highlight the importance of the inclusion and the diversity because according to me, diversity is mandatory to have an innovative team. You need to create the right innovation. You need to have different competency, different age, different background, men, women. I mean the big diversity is really critical to ensure the right innovation. It's why we are also investing a lot of time in training and in communication to the company about the need to be inclusive and the need to welcome diversity. Last but not least, the third strategic team is about our operation and about how to ensure a high performance or more performance operation team. It's important to be more performance, but it's also very important to be 0 defect because we could be quick, but with a bad quality. And the quality is also one of the main assets of Melexis, for example, in China. I mean we could say that China does not care about quality. It's really a myth, which is not correct. I would say China care even more about quality than other region of the world. And because it's one of the strengths of the company, we need to be more performance, but we need to keep our high-quality level. And being performance means that we need to create a resilient operation system with second source as an example, in order to be able to change sources in case of geopolitical problem. It's important to improve the efficiency of the operation. AI is one of the way to have, for example, a quicker test, a lower cost of test or a better yield. And it's also important to have the footprint across the globe in order to be resilient about the geopolitical decision or geopolitical tension, it's really important that our footprint is well spread over the world. And those are all the elements that are part of our strategy, and we have reassembled all those elements in what we call the strategy house. The strategy house is, in fact, our North Star. It's our road map in order to make the company more performance. It's our North Star in order to improve our bottom line and our top line. And I will not go through the full strategy house because this is really the combination of what I have explained. But I want to highlight our ambition. Our ambition is to develop innovative solution for the good of the planet and the good of the people. And those solutions are based on sensing and driving product. Our approach is based on the 4 pillars I mentioned, technology leadership, customer intimacy, fabless model and system solution. And I have highlighted the 3 strategic team that I have just mentioned. On the right, world-class operation, in the middle, high-performing team. And on the left, all the innovation aspects and Vincent now will go on stage and Vincent will detail more -- all the innovation aspect of the strategy map. I think Vincent, you are welcome on stage.

Thank you, Mark, and welcome, everybody, for this second part of this Capital Market Day. I have a slide to start similar to the one of Mark with, of course, other elements on it. The high-tech world we operate in, we are a semiconductor company. Look, it's important there to look at some of the key aspects related to semiconductor. One of them is the node. You have probably heard about those mature node and those advanced node. This describe our, let's say, semiconductor industry. We are Melexis operating in the mature node. Mature node means typically, let's say, from 1 micron down to 90-nanometer, 8-inch often for the majority of them, 8-inch diameter size of the wafer and 8-inch is like a 45 RPM when you were using record vinyl, it's the dimension of that. And then the advanced node are rather down there, but even today, 40-nanometer would be considered as less advanced than it used to be. Advanced is often today seen as, say, 6-nanometer or below. And there, you have very dedicated fab to do that, and they work also with much bigger wafer, 12-inch, which are equivalent to the 33 RPM LP type of records. Look, we operate in mature node, but as already, let's say, mentioned by Mark, we are operating mature node also at 12-inch, very important. That's a trend in China to have those line in 12-inch also. And second, we also use some, let's say, more advanced node compared to the mature, not as advanced as the one used by, let's say, the super GPUs type of chips at the 40-nanometer that we use for high digital content because why we use mature node is because it fits well what we want to do. It fits well robustness versus, let's say, supply versus temperature versus all the external environment. That's why we like those mature nodes. They are well, let's say, well suitable for the product we do, sensors and drivers. And the advanced node, we touch on it when we need more computing power and we need more memories and that's why for a modern product for robotics, we are, let's say, addressing that with a 40-nanometer die in combination also with 180-nanometer die in order to get, let's say, the system in package, the solutions that Mark mentioned. We do that also for robotics, of course, in -- at chip level, combining, let's say, 2 technology in such a way that we bring the best solution for the customer. Another part of, let's say, description of the semiconductor industry is to look at the silicon. We use silicon CMOS at Melexis, but you have probably heard about silicon carbide, gallium nitride. Those are also, let's say, semiconductor material. They are usually called a wide band gap because silicon is a narrow band gap. The wide band gap would be for silicon carbide, gallium nitride. They are used for power, and there is a need, of course, of power electronics for all those robotized and electrified world that Mark mentioned. Look, very important that we have power electronic and silicon carbide and gallium nitride are enabling that. At Melexis, we like CMOS, of course, but we also are the friend of silicon carbide and gallium nitride, not by doing those power stages, but by doing all the protection of those FETs, of those field effect transistors. And the protection, let's say, is really one of the niche we also want to explore and also to get revenue from, and I will describe that a bit later. There is no presentation today where you will not touch on AI Mark already touched it. I touch it again here with edge AI and cloud AI. Cloud AI, of course, we use it a lot with our test data to optimize our process. Also, we use it to optimize some of our model. We also use it for the -- helping us to design the simulation data and so on. Look, we have -- cloud AI is definitely something we use. Cloud AI is also something we enable. Cloud AI is definitely, let's say, a power hungry. You have probably heard that one of the biggest consumption of energy is in all those server farms. And if there is energy, although everything is very efficient, there is still a need for cooling. And we are at Melexis, let's say, part of, let's say, that ecosystem with cooling of servers and server farms with our motor drivers, for instance. But Edge AI is definitely part of our world and even closer to us in terms of the chips and the solutions we produce and we develop and we sell to the market. And the Edge AI is where we want to really process the sensor information right at the spot right where they are taken in such a way that what we broadcast to the rest of the system can be an SDV vehicle, an SDV architecture. What we broadcast, let's say, is already a preprocess information to enable, let's say, also faster and higher level of operation on the next stage. Then also somewhat linked to AI, you have the era of data. I mentioned already a couple of times. I'd say we -- there is a lot of need of data, stimulation data, operation data, production data. And data is also part of the SDV to come back again to that terminology, the SDV architecture. They need a lot of data from the peripheral, and that's what we can provide. Then there is also the era of electrification, robotization and automation, what Mark referred to be the robotization of everything and electrification of everything. Those are, of course, 2 domains that we like because they are enabling, let's say, a lot of opportunities in terms of semiconductor content. Then for the one who have been with us in previous events, that will probably be a refresher for the one who joined us for the first time here on site or online, that will maybe be an interesting, let's say, a few minutes, let's say, to give you a portrait of Melexis. Mark gave some high-level description here. We go a bit more in our portfolio and our markets in such a way that you understand, let's say, who we are and how we also want to change, how we want to pivot in our industry. And your pivot means always remaining one foot on solid ground and the other foot is moving. The solid ground being automotive for us, but we move, of course, in other chosen markets. But first of all, the product portfolio. Melexis is known. Look, if you need to remember something about our product, sensors and drivers. With that, you already cover quite well what our portfolio is. And sensors are essential to come back to the previous slide, essential to provide the data, the data to the systems, the data to -- in order to enable, let's say, an extra level of, let's say, processing, let's say, at the next stage, data are provided by sensors. The data come from all the peripheral elements of that architecture of the vehicle or of the robots or of anything else. Look, sensors provide data. And then we do drivers. With drivers, we enable action because, yes, if you have data, you process them, you want to do something with it. And something is, of course, driving is changing the environment, and that's what we do with drivers. If you have still a little element of, let's say, more precise, on the sensors, we are covering, let's say, position sensor needs with magnetic technology and inductive technology. We do also current sensors to measure the current flowing into a wire. We measure also pressure. We have pressure sensors in different type, absolute and relative small range of pressure, higher range of pressure. Temperature, we also do contactless temperature measurement with a fire infrared turmopile, and we also do light sensors. So position current pressure, temperature, light are the 5 key measurement that we do today, but you will learn that we have new technology coming in and with, let's say, enabling further expansion of our portfolio. But today, that's what we have. On the motor side -- on the driver side, sorry, we drive motors. And when it was about action, if you take a robot, you need to move an arm, there was definitely an action there. This is driven by motors, and we drive those motors. In a car, you will have pumps, you have valves, they also need to move or rotate. And for that, you also need motors, and that's the way our driver products are used. We also drive LEDs, light. You have in modern car, a lot of light options that you can activate in the door, in a dashboard, in a central console under the seat, wherever you think, they put light on it, but also external start to become a grill with light and also the rear side of the car get more and more aesthetic light on it next to the, let's say, the legal light as we call them. The driver of LEDs is definitely one of our key portfolio, key product portfolio that we have at Melexis. And if we go again a bit deeper to understand, let's say, from where we come, the sensors can be either integrated where we have on a monolithic chip, everything together, the transducer to sense the position, for instance, as well as the signal conditioning. But sometimes, let's say, we take the sensor signal from our customer. He has an external transducer and then we read out the signal of that sensors to provide them a high-level information to the next stage in the chain. signal conditioning ICs were with external transducers. On the driver side, we have also 2 types. Either we have the internal power stage. We drive directly the motor and the or the LEDs, then we have drivers. And if we -- for higher power application, we will not drive directly the motors, the power stage will be external, and that's where we have predrivers. Those external power stages can be gallium nitride, for instance. And that's why we are also, let's say, developing predrivers to enable the use of gallium nitride, which will not come from us, but our predrivers will drive those transistors. So just to come back that we are silicon CMOS, but we are the good friends of silicon carbide and gallium nitride. Then if we go to the markets of Melexis, here, I put them, let's say, at equal level. Of course, you know automotive is our core business for 3 decades or more. Automotive, let's say, is 90% of our business today and -- but it's represented here like one part at 20% in terms of real estate on the slide. But it's 90%. That's also why we have a specific section after the lunch just to keep you, let's say, energized until that come that you know what our perspective in the automotive. That's what we will cover, let's say, this afternoon. This morning, we'll be focused more on the 4 on the right, which is let's say, the way we want Melexis to transform, to pivot in chosen markets outside the automotive, robotics, automotive mobility, sustainable world and digital health are the 4 chosen markets. We already presented, let's say, 2 years ago, but we want to give you a bit more highlight on, let's say, where we are on that journey. You may also say, yes, you have been trying to do that for quite some time, and we don't see really that, let's say, projected, let's say, in the revenue. The big change, and that's what we will also highlight today is the fact that we really develop, let's say, new product, let's say, from the start. We don't start to reuse product or to modify some automotive product to attack those. We are really ground investing, let's say, in new product also to understand the market needs and develop new product in such a way that -- those 4 segments will become a reality in the next event and in the further events moving forward. I will go rapidly over this slide because we have a full detailed chapter this afternoon on automotive. But maturing market growth in automotive, we have 5 area of focus that I will illustrate and detail this afternoon, and we cover that with ICs and with solution, as already introduced by Mark, and we go beyond ICs. We come with solution. That's also something we do in the automotive, but more on that this afternoon. Then if we come back to the, let's say, other chosen markets outside automotive, we have robotics, alternative mobility, sustainable world and digital health. Why do we focus on those? We could have, of course, selected others, but we select those 4 because we see a high intrinsic market growth. They need data, but they need sensors. They are electrified. Look some way or another, they will need drivers and to actuate things. Also robotization is part, of course, in robotics, but also in other aspects, robotization is -- can be considered. And therefore, we think that there is a clear intrinsic growth, and we will confirm that. There is a higher value proposition that we can bring to those markets. ICs solution, as mentioned by Mark, but also modules as also introduced. That's where we think that we can play. Automotive, those modules are typically coming from tiers, and they have been there forever. We don't want to replace our customers. But in those, let's say, new markets for us and also still emerging, although robotics, let's say, have been there for lot of time, of course, you see robots in manufacturing chain for a long time, but the robotics we refer to here are more those cobots, those humanoid things. This is still a market fragmented, but in the building. And there is clearly on our side, let's say, an intention to move up in the value chain from ICs to system and to modules. We'll also explain that with Julien in a couple of minutes. High multiplier in robotics, that's something we like. Also like in car, we have typically, let's say, 18, 20 chips per car. You will see other example where we have even bigger number this afternoon. But in robotics, there is an intrinsic high multipliers because there's a lot of joints, a lot of degree of freedom that you want to obtain with those robots in such a way that you have many points of actuation, many point of sensors where you want to sense the position. And therefore, there was a high multiplier that we like in robotics. Look, if you add, let's say, a pretty good tailwind on robotics, combined with both high multiplier and a higher position in the value chain, you get a pretty significant business case we are pursuing with our strategy. Then last point on Melexis that you know a bit how we are organized. You have the business units, and we have the representative of the business unit are here today. We have a BU position where we have the position sensors being magnetic-based or inductive position sensors. We have the BU current where the current sensors, of course, are located, but where also we have our electrical protective protection device that we refer to for the silicon carbide and gallium nitride protection devices. They will be in BU current because -- there is always use of those power stages and need for protection close to where our current sensors are used. So there is a kind of synergy in terms of application where those products are used. We have the [ BU OptOMEMS ] where we have the MEMS pressure sensors and also the temperature sensors based on MEMS thermopile. Look, that's why we have it OptoMEMS there. And the BU drivers, of course, where the first 3 are really the sensor part of the house and then the BU drivers is covering, let's say, the second part, let's say, the driver part of the house. Global sales is also included in that business unit to have that global reach that Mark referred to, that global reach, let's say, is obtained from the business unit. Underneath, you have the business innovation serving mainly -- and again, that's maybe something that we could -- I could put a little be on on this slide. serving mainly the 4 chosen area beyond automotive being the robotics, a mobility, sustainable world and digital health. But we also contribute, of course, to the automotive. But what I want to mention there is really where the business innovation is focused on those with new type of product. But innovation is not only in that group. Innovation is also in the business units, and I will describe that in a couple of seconds, let's say, how we innovate, how we move through the innovation chain. But the business units are equally innovating with -- together with the business innovation in order to provide, let's say, new product, new solution, new ID, new -- address new pains, let's say, on the market. And that's why we have, let's say, plan to bring you to that journey from ID to revenue, from ID to dollarization or Eurization. And that's what you can see here on this step. It starts with innovation on the left and it go to recurring revenue on the right through different step of development, launch business opportunity, design wins and then you get eventually the revenue. Time line is important. We always ask, when do you get there? When do we see some signal or signs in your revenue target? Innovation can take up to 5 years. Some products, of course, get started and get sooner converted into development, other die within that innovation period. It's not that everything is successful there. Innovation is there to derisk, and we want to derisk some of the some of the idea we have, some of the technology we want to acquire. Then there is a development phase to develop an IC. It takes some time. On average, you would say, 2 years for new generation, new platform, rather 3 years. When it's about a little iteration, you could do it in a year, but that's the time of the time window you need to consider for a development of a product. Then once that product is finished, we launch it, a very important metric that Mark already mentioned. I will come back to that as well. Then we have the business opportunity. The products available on the market. Our global sales team is addressing, let's say, the market and promote the products that we have launched and developed and launched. And then it stayed there in the business of funnel for 6 months to 3 years, sometimes even a bit more because it takes time for the customers to get -- to adopt the product, to develop his own product with it and also to bring that to the market and validate that to the market. We get at the end of the funnel, a design win. That's when we get the first PO, first decent PO of a product, not a sample PO, of course. And then with that PO, we'll start, let's say, generating revenue with that specific product at that specific customer for that specific opportunity. And that's how we get basically the ball rolling. And you see that some product, let's say, in consumer range will be rather a very short life, 1 year, and then you need to reiterate again the process with a slightly different version or it can stay 5 years, 7 years, the typical cycle of the automotive before, though that get a bit shorter those days. But we have products, of course, that gets, let's say, used and reused by our customers, and they can stay for 10 years or more even in the use. Then if we go now in the detail of the whole journey, the innovation is an important part. And I will try throughout that journey to illustrate that we are changing. As Mark mentioned, we want to pivot from the auto to beyond auto or to outside the automotive and in chosen areas. Look here, we will always illustrate throughout the journey the portion where we have, let's say, the automotive markets and where we have the other markets. So automotive is in blue, dark blue and the other markets are rather in this greenish color. What you see here on the innovation that we are definitely, let's say, increasing the proportion throughout the year, the proportion for the other markets in terms of, let's say, the kickoff of predevelopment and innovation project, derisking project, we do approximately 10 to 15 per year. And as I said, some of them will die. Some of them will continue for 1 or 2 years in that incubation. Some of them will even move faster into development. But first signal, you've seen innovation. We are definitely more focused on the other markets, but we don't abandon automotive. Automotive is still a very important engine for us, and it will remain that for the foreseeable future. And it's not only a couple of years. I think it's 10 years and more where automotive will remain an important field for us. We start with 90% don't forget. But therefore, it's very important that we still have some blue part there. Otherwise, you would say, yes, but those guys are doubled down on everything which is not automotive, is it really the right strategy? We have a balanced approach, of course, where we still innovate also in the automotive. Some of the examples that you have here where we innovate, automotive will be strain sensor, for instance, will be in cell battery impedance sensing. But if we look at autonomous mobility torque sensing, Mark referred to it, an inductive torque sensing module there, that's where we are, let's say, incubating right now in the innovation. But we are also self-illuminating nanoplasmonic biosensor. That's for digital health, a pretty complex name, but that's really a pretty new technology. It's really far out. We are dear Horizon 3. Look, you will probably see that product on the market if it goes through all the process, let's say, in 6, 7 years, hopefully, plus to get, let's say, a biosensor there, which is coming out of that innovation trajectory. Then you get on product development. And you see that there, the blue part is also getting, let's say, a bit smaller, but not that much. We stay quite balanced, as I said, for the product development. We have 20 to 25 kickoff of product development every year. There -- because we have derisked everything, there the success rate of those products is pretty high in terms of getting finished. Of course, the success of the market still remains sometimes a question mark until, let's say, we get the product and we see real traction. But that's clearly, let's say, the trends you see here where we are a good balance, let's say, between the beyond auto and the auto. Some examples. The first one is the one we already mentioned when we were referring to this, let's say, advanced node or more advanced node, this dual core 32-bit MCU that we use for motor control for robotics and alternative mobility. We have hydrogen sensing, which is a new type of sensors, you probably never heard about, hydrogen sensor. And there, we also pivot from our temperature sensor technology to build a hydrogen sensor based on thermal conductivity. And that will be a key sensors for battery, for instance, battery that can be used in the sustainable world approach, but also can be used in the car. Coreless current sensor is also a new type of sensors we developed to address, let's say, modern needs in terms of, let's say, current sensors in converters as well as in chargers and charger unit. Silicon RC snubber, this is the protection of the silicon carbide and gallium nitride device I mentioned to. Look, this is in development right now, and we will get the prelaunch at the end of this year, just to confirm that it's really those products are moving, let's say, in the chain and will start to bring revenues. If we go in product launch, there, we are at parity in 2025. Look, between the, let's say, outside automotive and automotive, we have, let's say, on average, 7 in the 2015, 2019 period. Since 2020, we are more doubling that number of product launch. It's also fit with the inflow. I spoke about 2025 inflow on the product development. We have an outflow, of course, of, let's say, 16 this year, 19 product launch, 11 year-to-date have already been done. And you see that there is a kind of hockey stick towards the end of the year on the product launch, but parity in terms of, let's say, addressing automotive application and other markets we target. Some of the product launch I described here. It's on purpose, let's say, crowded that you see that, yes, we had many launches in 2023. We had of course many launches in 2024. Some examples that you see on sensors and drivers. We are quite explicit when it's about the sensors about the drivers. But you clearly see that there, we are active. We also see application like I mentioned the fan drivers for the server farms. You see that's what we did last year here in terms of a product launch in 2024. But we have current sensors. We have LEDs. We spoke about drivers for LEDs. You also see them there. We have application where you see current sensors where you have a car there and a battery, that's definitely to show where we are with those products. Look, those are new products that we put on the market, new content that we can address and, let's say, to meet, let's say, the next requirements for customers and in terms of application. 2025, you see how this populated with real pictures of the product launch we did. Again, you see current sensors, you see motor drivers, you see position sensors for automotive and for also outside the automotive. Temperature sensor is also on this slide. But just to confirm that we are really combining all those sensors and drivers in our product launch and that we're also addressing not only automotive, but when you see a steering wheel, it's clear automotive, when you see other type of application like, let's say, a cooker top and so on, those are rather, let's say, the beyond automotive aspect. Then business opportunity, very important. Of course, that's where we start to move, let's say, the product in the market and start to see that the revenue is at reach. We have that business opportunity funnel -- we are at the top of the funnel, you have all the opportunity, let's say, that get in first contact with customers, first implementation, samples, change and development and so on. And then, of course, it goes through the funnel. At the end, if it gets out of it, it means that there is a design win, we won the business. And the progression is typically monitored in 2 ways, the unweighted funnel, that's where every opportunity is count at maximum value. And there, you see that the automotive market, of course, is still dominating with 75%, 80% dominating there today, the unweighted funnel. And -- but it's already more than the 90 -- we have -- it's already changed versus the 90-10 that we are in the revenue. That's an important message there. The weighted funnel is similar, but in the weighted funnel, similar proportion. In the weighted funnel, what we want to monitor there is the value, let's say, of the opportunity is depending as a way factor depending on where you are in the funnel. Look on the left side, we consider everything. On the right side, we consider the movement into the funnel. But you see that from a proportion, automotive -- outside automotive, we are quite similar around, let's say, the 80-20 today already versus, let's say, the design win here, recent design win, you see that we are a bit more than that. It's more a 75-25 on the design win that we have for the automotive market compared to the other markets. And then I can move further on the revenue today where we have that 10%, 11% today on this beyond auto versus auto. But just to confirm that from the innovation where we are clearly, let's say, more outside automotive, the product development rather 50-50. As we move through the funnel, you see that, that 50-50 will ripple in such a way that we get, of course, more and more opportunities outside the automotive. Then let me give a deep dive on some of the applications we serve there and how we serve them. Digital and for the outside automotive, automotive, again, come after the lunch. Digital health, here, we serve it today mainly with temperature sensor in wearables to measure in a contactless way, the temperature at the wrist if it's a wearable like a watch or it can also be in phones that's more temperature measurement, let's say, which is more like a head temometer, but with a phone, but we have also other wearables where you can use and also think about patch where we measure temperature. So that's the way, let's say, digital health today is served at Melexis. We serve in a broad scope, the medical market also with some motor drivers, some other temperature sensor application and also position sensors, let's say, used more in the urine machine interface of those big medical device. But on the real digital health, let's say, that's more this part that we cover with temperature sensor that we measure, let's say, very close to the skin. And in terms of innovation, instead of measuring the temperature of the skin, the customer or the patient at the end or the user is rather interested in knowing what is my body core temperature. That's why innovation, we work based on our thermometer, we are developing algorithm to come to the system that Mark mentioned as system solutions. We are developing algorithm as we speak to derive from that, let's say, wrist temperature or, let's say, the patch temperature to the patch location temperature to the body core temperature, which is definitely a kind of holy grail in the industry of the wearables is to get a real body core temperature, and we are working on that in terms of innovation. And as I mentioned already, this nanoplasmonic biosensor self-illuminated, -- we have a lot of project innovation there, targeting, let's say, biosensing that will become, let's say, outside that are today incubated, let's say, in the innovation area. On sustainable world, sustainable world, we -- you could say, what is that? What we cover mainly there is everything that has to do with energy and of course, typically the renewable energy because that's what is quite important those days. And the sustainable world and the energy, you start with the energy that you get from the solar, for instance, or the energy that you get from a storage that's in a battery. You need to convert it because the world is an AC world and those solar panel and those battery are in the DC world. you need to convert from DC to AC. This is what is called an inverter. And like in a car, and we often also refer to inverter, and we will come back also that in the afternoon. You need an inverter. And when you have an inverter, you have a conversion of energy, there is a need for current sensors. So we have current sensor measurement in those inverters. Then inverters mean also, let's say, high efficiency. That's why they go to also those silicon carbide and gallium nitride power stages. That's where we can also bring our protection device. Look our silicon RC snubber will be part of that sustainable world as well. Then I spoke about some innovation that we do around battery. Energy storage is part of sustainable world. Battery is part of that -- is the key element in the storage, of course. And there, we have our impedial sensors, for instance, our temperature measurement on battery, our pressure sensors inside the cell of the battery are also solution that address, let's say, sustainable world need. There is also, although efficiencies everywhere you need often to still cool down those systems because they still produce heat. And from that perspective, also motor drivers will be part of that, let's say, sustainable world in a high energy usage -- an efficient energy usage. That's why we have also motor drivers to cool those server fans and so on. It's also what we consider as part of that sustainable world. it's energy from A to Z from, let's say, the generation to the conversion to the storage and also to the usage. Moving further in the alternative mobility. There, we have few examples, but it can also go, as Mark mentioned, to drones or to [ EVTOL, ] electric vertical takeoff and landing devices that will get, let's say, outside the size fiction movie come in the real world. So that's where we want to serve that as, of course, really pretty adjacent to what we do in the automotive because those segments being motorcycle, being bikes, being scooters, being EVTOL, they go electric. They are -- some of them are already electric. Others will move more and more to electric, which means you have the same trend as in automotive. It's a battery-operated device, you need to measure current and the state of the battery and so on, all the battery sensing will be there with pressure temperature and impedance. You need drive, those are electric, you need propulsion, you need traction. And if we cannot drive with our driver, let's say, a big motor of an EV, we can drive, let's say, this kind of motors that you have low-power motors that you have in those devices. And that's also why we have this product we already mentioned this complex solution with, let's say, a digital die in 40-nanometer with this dual core combined with a pretty high-end, let's say, power stage that we come to -- we want to address, let's say, those alternative mobility needs with motor drivers. I don't forget our conventional, let's say, our classic, let's say, sensing technology like position sensors, inductive or magnetic because it's often using those things in those objects as well, like for the throttle, you need position, like also to activate the brake also in motors and when you have electric motors, we drive them, but you also need to measure where the position -- where the rotor is in order to get the good drive of the motors. That's why we have also sensing solution there on the driver. We have also driver solution, let's say, for the alternative mobility. Look, all the world we have been describing so far are sensor-rich and driver rich. And it's the same for the next one, the next in line. On robotics, I already mentioned high multiplier, if you remember in the introduction. You see some example of those robotics. And for us, robotics also cover the AMR, autonomous mobile robots or AGV, automated guided vehicles that you have on the left here of the picture, but also the cobots, some of the service robots, humanoid, of course, big fashion today, but that's definitely something we address, and you will see in a couple of minutes, let's say, more about that. And we don't forget a bit the connection, let's say, also with digital health is -- and the aging of the population, which was mentioned by Mark, exoskeletons, let's say, rehabilitation robots, let's say, robotized kidney therapy is also something, let's say, that we can serve with that exoskeleton that you see on the right here of the picture. And those are sensor-rich and driver-rich. To give you a few examples, on the cobot arm here, you have the highlighted, let's say, with the dots. And of course, the dots are not exhaustive. But what we want to insist on is there is a lot of motion to be executed, a lot of action to be provided. That's where our drivers are used. And in order to get a good drive of those joints of those motors, you need good position sensing and with position and in magnetic and inductive, we have the right solution there. We have developed, let's say, a portfolio of resolvers and encoders at the green part on this slide that are dedicated, let's say, for robotics application. with very high precision, high accuracy and high resolution, let's say, precision sensing. Then you have also temperature sensors that can be used in order to feel the environment temperature that you have on those robots. That's where contactless temperature, of course, helps. You don't need to touch. You already know like we know sometimes by simply just close enough to something we can feel the heat. We have that property also we can provide that property to robots. And then last but not least, but that will be more -- even more obvious when we speak about the humanoid. You have also in the gripper, the fact that we can add some force sensing in the gripper in such a way that you can adapt automatically in a closed loop if you have, let's say, a fruit or if you have a strong object or if you have a deformable object that you don't scratch it, let's say, when you start to close the finger. It's important, let's say, that we have there the force sensors. And force sensing is also a new technology that we have developed and that we are developing. And it's also based on magnetic. If you want to understand from where do we come with force sensing, the force sensor we use here on robotics, and that will be described by Julia is coming from our magnetic technology. Look all our background in magnetic is used for force sensors. In braking, we also use force sensors that will be a different world. I will describe that this afternoon. And let's come back to the -- let's go further to the humanoid, where there, again, it's not exhaustive the number of points. I mean you have humanoid where we can have up to 46 position sensor need, inductive typically on some of those. Look, inductive sensor will be used there on, let's say, at 46 points on the robot, confirm multiplier sensor rich. And each time there is a joint, there is also sensors. There will be also drivers for the motors. And as again, to repeat myself, we are really dedicated a new product development, look next to all the drivers we have done for automotive. We have a very strong development targeting robotics and alternative mobility with a very high end. We go 40-nanometer technology, advanced node to some extent, for robotics. And we did not see the need so far to do that on automotive, where we can serve the market, let's say, with technology 180, 110 and 90 nanometer. Then as a quick introduction, let's say, for Julien that will give you a deep dive on our robotic solution and module around tactile and giving the sense of touch to robots. Very important to list here a few clips of the last, let's say, 18 months, where you can see that for robotics and pneumonoid, in particular, the numbers are all over the place. And you could even somehow say, yes, what will be the end. And we don't know. The only thing we know is that all those predictions are clearly, let's say, hockey stick, exponential like and you have the bullish one, you have the bar one, you have the neutral one. You have Elon Musk in the middle referring to 10 billion pnumonoid by 2040. And if you look at that in terms of value, you see how much it would mean in dollars and then others are referring to only $5 trillion by 2050. But they are really all over the place, the numbers. What's important, again, it's still extremely fragmented. It's still emerging. It's still in the mix. there was a big momentum, and we want to address it, and we want to be there now, let's say, when the seats get -- the first seats are available in such a way that we can play like we have played well in automotive. We started also when automotive and sensors were not necessarily super popular, I mean, electronic also not. And we have now become who we are in automotive. We want to have -- to secure, let's say, one of the first seat in robotics with motor drivers, with pion sensors, with also, let's say, other type of sensors, temperature and so on, but -- and definitely the sense of touch. And why is sense of touch important? Because there is here, and you may have read that post or some of the journalists that took it that referred to it, Rodney Brooks, who is a guy beyond iRobots and also many other, let's say, robotic -- it's seen as a robotic guru, let's say, from also Professor MIT. This guy set and put really a big debate on the place, why today's humanoid won't learn dexterity, -- referring to the fact that -- and you can see there, all the robots today, many believe that with camera, they will do everything. And you can -- and I think Julien will explain that. That's why I will not spoil his exercise. But what is important here is Rodney Brooks is really mentioning that vision-centric will not make it. And if it will not make it, it will not make it robot, the humanoid big market that we have just seen before. There is a need for a rich sense of touch, true human-like manipulation. Some people refer to a robot doing a lot of -- or many robot types doing singular application or the other way around, a humanoid that can do thousands of actions. If you want to go in that mode, which is more human-like where we can basically adapt to everything, you will need a rich sense of touch. And I think that's a good segue, let's say, to the next presenter, Julien, who will describe, let's say, what we plan to do and how we plan to address this rich sense of touch need with our tactile sensor and Tactile module. Julien, the stage is yours.

Good morning, everyone. And in 2023, we shared a strategic shift that our focus in robotics as a significant growth vector beyond our automotive market. And we saw a clear opportunity actually that's grounded in the fact that the mass adoption of intelligent and highly dextrou robot was actually not a future trend, but an imminent and imminent reality. And our mission that we set 2 years ago was to develop within 1 to 3 years market-specific products actually to address this market and follow this next growth of automation. And today, I'm here to report to you on this commitment and to show you an example of how we have translated the technological vision into an actual product family. And when we set out in this endeavor, we actually identified a core industry challenge that was already hinted many times before, which is actually the lack of sense of touch for robots. And indeed, while vision -- computer vision has indeed advanced tremendously over the last years, right now, robots still remain unaware of the types of forces and textures that they actually interact with. And we recognize that to achieve this mass adoption, as it was shown just before, the sense of touch is actually a need and the robots must become more tactile. And this raises an important question, why actually do we need to give the sense of touch to robots and why isn't vision sufficient? And for the young parents like myself, I mean, if you take your 1-year-old child, the way they learn about the world around themselves is they look around and they point out of an object. But quickly, they will go to the next step and they will try to reach grab that object. And why? Because just like you, they already know that intuitively having an object in your hand actually gives you way more information about that object than just looking at it. This is also why when you are in a museum, you're looking at the stat, you have the urge to touch the stat and there's a small note that says, please don't do that. Now there's also another application, which we are looking at here, which is lies prosthetics. It is actually the same technology. And right now, the users of prosthetic hands actually can manipulate the robotic hand. But whenever they're grasping an object, they have to visually control that the object is actually in their hand. They have no feedback. So this technology is actually not just giving the sense of touch to robots, but it also has the potential to give the sense of touch back to those people who have lost it. Now our innovation team has already been at work on this for quite some years on the basic technology to solve this problem and based on our core expertise of whole effect sensing and magnet position sensors. And the incubation phase of this technology eventually gave us a critical building block to solve this issue, and it is today at the core of our -- of the development of our product family for tactile sensors. Now that was our ambition. Fast forward to today, 2 years ago, we moved decisively from the incubation phase into an aggressive acceleration phase. And a key success to this, okay, it's not just in the technology, it's also in the people. It is in the team that we set out and that we have built a bit more than 1.5 years ago, a growing team and whose singular mandate right now is to take that technological building block and actually create a concrete product line out of this. And what you see here on the screen, the Tactaxis sensor is actually the first outcome of this effort. And the Tactaxis sensor is -- it's a tactile pixel that you also know referred to as tile. It's a force sensor that actually is sensitive to the force applied to it, but not just in magnitude, but also in the direction of that force. And essentially, it's a true 3-dimensional force sensor. And to us, this is actually a critical building block to develop highly dextrous robot, highly sensitive robots. And this product actually some samples and prototypes have already been shipped out to our customers across the globe and the feedback that we had was actually very positive and also invaluable for the next product. Now building a new product family, okay, you need the team, you need the technology, but that's not sufficient. You also need to be acutely aware of your customer feedback of their pain points. And while the performance of the direct access sensor is actually pretty good and was confirmed by customers, one of the problem and one of the main feedback we got was, how do I integrate your sensors into my robotic system? And indeed, this is a very legitimate question, very simple question. However, the answer to that question for our customers was -- is very complex. Indeed, they would need to spend weeks, if not months of engineering effort in order to learn the sensor, learn how to integrate, talk to it, over mold it, put it in the mechanical system and then do all the validation, testing, reliability and so on. This is nontrivial. And effectively, this complexity of integration is acting as a barrier to adoption for this technology. And while this feedback this actually was positive, it was an opportunity for us to realize that our value is actually not just inside the sensor itself, but also in providing a solution to that integration challenge and actually move up the value chain here in these type of products. And this actually leads us to the second product entry. And for those here in the room, we have a small video to show you, which is the tactile fingertip module. And that's actually our direct answer to the integration challenge that the customer put forth. And indeed, it looks nothing like an IC like we're used to because it's this singular self-contained mechatronics module designed specifically for human robotic hands and dextrus rippers. And by packaging inside this module, the tactaxis sensors, the required processing and all the robust mechanical interface we actually shifted the complexity of the integration from our customer to our team internally. And essentially, this new type of product lowers the barrier of entry to our product. It also -- it also actually accelerates some design wins at our customers since it is simpler for them to integrate. It opens us the access to new customers and especially to those customers who might not or will not want to put the extra engineering effort into doing the integration like that they actually can focus on their own objectives instead of just dealing with the integration of our sensors. Now for you, this strategic pivot actually demonstrate 2 things. First is that we committed on our 2023 commitment of delivering a commercial product, the Tactaxis sensor that you see here on the right, where we have moved from an incubated technology into an industrialized product available. And second, with the module, it shows you our capability to respond to the market, be agile in the robotic market that is fast moving in order to identify bottlenecks, the integration issue and move up the value chain and move up the value chain. And let's be clear, this is actually the foundation of a new high-value tactile product family. We're not stopping there. We have other things in the pipe as the pipe was shown before that will actually help us address this high-growth applications where tactile is actually becoming a must and not just a nice to have. Now small conclusion on my part. I showed you here a small example of how we have moved from a strategic vision into a concrete product family. And to make it more tangible for those in the room at the end of the day during the demo, I have a pile fingertip module set up for you to try out, and I will be there to answer your questions around the technology and further -- or any further questions. So thank you. And right now, we're going to have the first Q&A session. So I invite back Karen, Vincent and Mark on stage to take your questions.

It's Philip. I just wanted to make one quick comment. We have to be small enough to pivot to sometimes. We're a little bit behind our own schedule right now. So I would ask you to ask the most burning questions from the first part. All of our people will be available during the lunch to discuss with as well, and we'll, of course, see Q&A at the end. So with that, I would ask you to raise your hand. We'll bring a microphone around. Please state your name and the company you work for. And we'll take one question and a follow-up.

It's Janardan from Jefferies. On the robotics side, a very, very interesting presentation. Can you give us some idea of your SAM, which includes all the potential drivers and sensors for those 46 joints and the tactile side that you just showed. What is the potential possibility for Melexis in, let's say, fully fledged humanite robot costing $100,000 or something like that? What can you get out of that? I mean not -- your share will probably be lower, but what is the addressable market there? And my follow-up is, given the 50-50 split on the new product introductions, you have talked in the past of achieving 20% from nonautomotive, et cetera. Are we thinking that in, say, 5 to 10 years' time, you're looking at a 50-50 split? Would that be reasonable? Or is that too optimistic on the nonautomotive sector?

I would take the first answer. Look, first of all, it depends on what base you take for the sum market. I show a lot of data. Would you want to believe first.

The question is more on one single robot.

Yes, on one single, yes, that's why I understand that. But if you look, let's say, in terms of numbers of -- if you take humanoid and number of joints and where we would address, let's say, all the sensor needs there, which is about the sum. That's not say what we will be able to capture at the end. But if you address all of them, I took 46, that's really a very high-end example. If you take more moderate and say there are probably 20 position sensors, 10 to 20 motor drivers and you add the tactile sensors, if it's about the humanoid where you have also the tactile things, you will definitely get way beyond $100 in terms of pricing there. And just also a comment on the -- you spoke about $100,000. You see Elon Musk predict $20,000 to $25,000, I think, in 10 years from now. And that's clearly what we see also in China. There is a trend there. There was one -- you probably did not notice, but there was one curve which was going down that was basically the expected price of those units. And there will be a high and low end, like in cars, you have high-end car, low-end cars. But it's clear that the $100,000 humanoid will not make it. I mean it will never be a successful market if they stay at that level. But we are rather doing all our, let's say, our analysis, let's say, with much lower value in such a way that the adoption can be there. And our content, let's say, it's way beyond $100 if we can capture all of that.

And the split in revenue, say, in 5 years' time?

Yes. I think 5 years, probably not. As you have seen, it takes time to move all those -- the train, let's say, from innovation to product and so on. But it remains clearly, let's say, the change from -- is Engage. And in 5 years from now, we should definitely see a transition probably in the 80-20 that we mentioned already a couple of times, but let's say, this time, probably more for real. It also depends on how automotive. if automotive, let's say, get back into a boost cycle, you also -- you need them to catch up also that against that one. But that's, let's say, the one that you referred to is rather more a 10 years' time horizon.

Michael Roeg of Degroof Petercam. I also have a question about the robotics. On Slide 64, I see 4 different types of robots. The most sophisticated is probably the humanoid robot. Based on information from the X-FAB Capital Markets Day, I calculated about $70 in sensors for humanoid. Would that be the biggest market opportunity compared to the other 3 robots that look simpler?

Yes, it's clear that the humanoid and again, it will depend on, let's say, how all those things will be actuated. We have some innovation projects on hands, for instance, where only the hands would probably already cover more or will be much, much bigger than that, only for one hand of a humanoid and you don't have yet the second hand and all the joints that go with it. But it's clear, that's where you have the highest multiplier is on the humanoid. If you take the other -- you have -- they are more simple. You have less numbers of joints to drive 6, 7. Look, that's definitely lower a bit. But there are also many people convinced by the fact that they won't have lex. They will rather be like the AMR basis AMR, which is more on reels. -- and without the lex, which means that you get already some reduction on that for the humanoid. But indeed, today, that's the biggest potential is the humanoid, but we are not blurred by that -- only that, let's say, big numbers. We see the other segments also pretty sensor rich. The AMR probably being the less. You can see them already around. They don't need that much, let's say, position sensors and motor drivers. They need a few, but not as much as we have in when you need to control all the degree of freedom.

Okay. It's clear. So these are clearly much more expensive sensors than what you have in typically automotive.

Yes. And also from the fact that we go higher in the value chain on the -- we go higher value chains for the sensors in the tactile sensors, for instance. When you look at the motor drivers, we also go for a more advanced product compared to the one I explained why we use those advanced technology because we will deliver a product which intrinally do much more than what we do to drive, I could say, now a simple pump in the thermal management system. Those products are more complex, which means also then more expensive.

Okay. My second topic is about Slide #24, the fabless model. Your Chinese foundry partner will be providing you with chips made on smaller nodes, which are typically associated with higher ASPs and on larger wafers, which are typically associated with lower cost per die. So will all those chips have much higher gross margins in your existing business? And by 2030, how big will this be of total group sales?

I will answer it. Yes, the 12-inch wafer, one of the goal of the 12-inch wafer is to reduce the cost of the unit cost. That's indeed the case. But we need also to realize, let's say, that the Chinese market also expect lower ASP. It's why I do believe that the margin of those products will stay close to the corporate margin. The cost will be lower, but the sales price will be also lower.

Okay. And then the final one before other people want to ask questions as well. In conference calls, you always said that only newly developed products will be made in China.

We don't copy an existing product in the China.

True. But if an existing Generation 4 sensor is replaced by a newly developed Generation 5 sensor, is that entirely new product that you can make in China? Or will you consider that an existing product to be made on an inch 8-inch wafer atXA?

No, we can -- what we mean is we could address the same application with the product -- the new product made in China in comparison to the old product made somewhere else. And it's -- we could address the same application, but the product will have new feature, new performance, but for the same kind of application. If we take the example of the current sensor because the first product we have received -- I mentioned last week, we have received the wafers of the first current sensor. They are lift in the chip, the chip is working. It's a new current sensor with new feature, better performance, but it's still measuring current. It's still addressing the same kind of application.

Okay. I wonder what you said. I mean the Gen 4, Gen 5, let's say, Gen 4 developing historical fab Gen 5, the Chinese fab they can serve similar application, but they come not with a simple copy. We add features on it.

Okay. But it means that many of your future upgrades, Gen 6, Gen 7 can move from 8-inch to 12-inch, thus benefiting your margins.

Yes.

Mark, ING. First question is actually on your allocation of your R&D resources. I think if I compare it today versus 2 years ago, you already talked about the beyond automotive, but it seems that the focus is clearly catching up there or even accelerating on the beyond. Is that also a reason -- did you become a bit more cautious on the automotive opportunity? Or is it really that the beyond automotive is now really catching up? Is it -- why did you make that change to accelerate in the beyond?

I think it's clear that the -- first, we had to give more attention to the beyond in order to start moving the needle for all the explanation I gave earlier. In the automotive, let's say, we are quite present. We have good portfolio already that we have built up over the past years. That's also why we think that we can do that pivot without jeopardizing the whole auto business. But it makes also no sense to create generation after generation if there is no real new needs from the market and so on. That's why we try really to look at that from that perspective. But being said, we also innovate in automotive with hydrogen sensors, with impedance sensors for batteries. Look, it's not that we are more balanced, correct, but because we want to develop products in automotive, which definitely bring extra business. We can address new sockets and not simply try to address the same sockets with new product and to come back to the previous question.

Okay. And then you also addressed it before, the design cycles are changing as they become shorter.

Correct.

And are they also in this beyond category, are they significantly shorter in automotive? And if that's the case, do you have to change your way of working because the cycles are different in the beyond category?

Again, that's first, robotics, it's -- on one end, you could say it's a very old market, but it's not true. I would say the one that we cover is -- the one we target is definitely in flux completely in flux today, all those robotics, rhumonoids and so on that we have mentioned to. Look, we don't necessarily know exactly the dynamic. There is still -- it's a dynamic also in terms of players today, look, not only in terms of the speed of the market, -- but it's clear that we need to adapt to that. I think Mark always mentioned the learn, unlearn, relearn and quick. We need to adapt the speed of China. You will see that it's spoiler alert on one of my slides later. That's the point. I would say it's not only about the market, let's say, a specific market being faster in cycle and so on. In general, we need to be much more dynamic, much more. in automotive.

Not only in the non-automotive, we will also see that in automotive, the design cycle will much be much quicker because of the China speed.

But it's not contradicting the fact that we also do less -- we balance more the R&D effort. That's -- because when they stay fast, it definitely be able to to iterate, and that's more the iteration aspect that China like a lot to be fast. That's also a mindset we need to have at Melexis more than before.

It's part of the new behavior when I discuss about the upskilling, reskilling of the people, one of the behavior that we want to implement is indeed quick decision, more entrepreneurship, more autonomy because those are 3 important behavior if we want to address indeed the speed of the speed that is expected by the customer, which is much more the case today than 5 years ago.

Minor private investor. If the lifetime of the product is coming down, is there a risk that in the inventory, which has gone up from about EUR 180 million to nearly EUR 300 million over since end of 2022 and end of third quarter '25, that this inventory contains obsolete products, which will have to be written off in the near future and which will impact the gross margin?

The product life cycle today is still very long of our products. So the obsolescence risk in our inventory is from that respect, very small, I would say. So -- and we have -- we are also building inventory in those applications where we know the products will still be wanted for a very long time. So that hasn't changed substantially over the last couple of years, I would say.

Yes, high level, we have 1 year of inventory, but the lifestyle of the product is much, much longer than the 1 year of inventory. Then from this aspect, the risk is very low. And I can mention, yes, we have carefully selected which product we put in inventory, what we call the toxicity level of the product. I mean we have some metrics, let's say, to assess the toxicity level. And yes, obviously, we put in inventory product with low toxicity level.

And we are very diversified in terms of markets -- the application we serve, customers we serve. Look, it's not because one customer would decide suddenly to change his system more rapidly that all the others will suddenly also do the same. Therefore, that diversification that will also be explained by Karen later this afternoon, you will see that, that help also to be able to get all those stock inventory, let's say, spread to the customer.

Yes, mainly wafer banks -- it's mainly wafer banks that we keep. So it's the first stage of the product of the manufacturing process so that we still have -- I mean, the further we go in the process, the more customized the products become. So the wafers are sellable to a big variety of customers usually.

We just have time for one last question, please, before a lunch break, and we'll have time for Q&A as well later. Maybe for a new person, if there's any others.

And if not, Philippe, there is on the back.

Sorry. I'm sorry, I did not see very well. Apologies.

My first question is on the competition on robotics for magnetic sensors. Is this the usual suspects, Infineon, Allegro, et cetera? And how do you see competition today and your position there versus automotive?

Yes, I would say the usual suspect you mentioned are there. You have also seen on the slide from Mark that next to usual suspect now we also need to introduce Chinese competitors as becoming new usual suspect, look very important. I would say we -- yes, they are there. Our position in terms of position sensor with our combined offer of magnetic and inductive, I think it's very important to notice that we have both aspects. And I know some of our competitors are also moving in that direction, but that's -- that's a fold that we took already a couple of years back to really focus on those 2 aspects. And we see clearly on robotics, sometimes even more obvious than in automotive that, that combination is in the portfolio is very important. And from that position, I would say we want to claim like we claim a pretty strong position in position sensors in automotive. We want to at least get the same leverage in the robotics compared to our competitors there.

Okay, clear. And a quick follow-up on the business outside automotive. How would you rank, let's say, in terms of the size of the opportunities in the next 5 years of new opportunities, if you exclude robotics between digital health, wearables, alternate, mobility, servers, et cetera. What's the most important?

I would say, next to the -- probably next to robotics, it's clear alternative mobility is one where we are also bringing a new product. I mentioned this famous motor drivers that we use for robotics is also targeting alternative mobility. Precision sensors will also be the key. We have talk sensor innovation on that. Look, I would rather rate that one as pretty strong in terms of new business, knowing that sustainable world around AI servers, it's something we serve already historically. We put it as -- and it's not just to make it nice, but it's just to -- I incorporate that in the sustainable world because that's where it should be. But that's a market we serve already for quite some time, where we see also a pretty good growth, but we are already engaged. On alternative mobility, we are less engaged. Therefore, the product we bring there is really to address new sockets I mean, that were uncovered and untapped before from our side. And digital health, as mentioned, of course, we have that wearable, which has come with all the consumer cycle type of -- which are definitely even lower and shorter than the one we mentioned earlier for the reduced automotive cycle. that one, let's say, there is some volatility around it that we need to cope with. And next to that, I would say, all the biosensors, as I mentioned, are rather horizon 3, they will come later. That's why if we have to rank robotics, automotive mobility and then the sustainable world is already covered today, which means there will be probably a less delta visible, but still will be a growing sector for us.

Okay. We try to do one more question, a quick one just before the lunch.

Do you have the feeling that you are leading the pack or that you're more reactive knowing that, for instance, for even Musk robots, they already do quite a good job and you're not yet in their products or are you? That's the first question. And then the torque sensing, so the ELaxis sensor was also one very important for robotics. You're not mentioning that or you're not stressing that today. What's your view on that going forward?

Look, first, on the first question, we don't give any comments on where we are, where we are not. But...

Discuss with all the big actors...

We are the main players, but I will not answer your question. But there, we are definitely with the main actors. You also know that similarly to automotive, there is a big center of gravity in China that we address and that we're also, let's say, changing a bit some of the way we are organized to also be able to be more successful there. And I would say, yes, leading the pack is knowing that it's a fragmented, still a very fragmented market that's still also very dynamic. We innovate. Therefore, we come with unprecedented product. So from that perspective, I would say, yes, we did the pack, and we have a very nice portfolio. And to come to your question on [ ElAxis, ] that was indeed a product which was in innovation. It's Park today in that initial form, the one we described 2 years ago. Thank you for bringing that back. But you have probably heard we spoke about torque sensor because ElAxis was about measuring torque. And we have -- now we have pivot that innovation project to an inductive one. look, it's an inductive torque sensor where that will replace that. But as I mentioned, innovation is not something where you start and you suddenly get millions 3 years down the road. No, it takes much more time and you have project that needs to be parked because they get some hurdle that you cannot address, you cannot solve or you don't meet anymore the targeted spec. But we did a pivot there and move from a magnetic-based restrictive magnetic-based solution to a more inductive solution. And we are not starting from scratch. Look, we take some leverage there, but we did not speak about it today other than mentioning it. Maybe next time, let's say, it will be one of the highlights that we do for the [indiscernible].

Okay. Thank you very much for your questions. Thank you, Karen, Mark, Vincent. I propose we now pause the live stream. We break for a 30 minutes lunch. Please be back here in 30 minutes. Thank you. Welcome back to the second part of the Melexis Capital Markets Day 2025. We're going to try to catch up a little bit on time now. So without any more delay, we're going to accelerate into our automotive growth drivers. I invite Vincent back on the stage.

Okay. Look, we are back after this lunch break, and I need to keep you energized and awake, of course, during the digestion. But we will manage that. And also I need to speed up. I heard about speeding up. It's good because we are automotive and an electric car is a pretty good acceleration. Look, let's be at the speed on electric car or acceleration on electric car and also to sneak preview on things that have already been mentioned, also try to work at the speed of China. Major automotive trends, you have seen that electrification, premiumization, ADAS. This is still driving today. Look, we did not change it because there was no need to change it. That's really the 3 trends that we see in the car today, electrification, premiumization and ADAS. And then we will cover a bit like last time, and then I will go into detail on the portfolio, of course, and what we innovate, what we develop for those trends. Look, first, the global vehicle production, you see the tailwind in the car industry is not that huge, 1%, but still a little growth. And we should be able by 2029 to reach back the peak of 2017, the historical peak of the auto industry where we reach again. If now we split that number of vehicles in terms of powertrain type or propulsion type, you see that you have the combustion engine in the blue color, blue because it's making a lot of smoke sometimes. That's why it's in the blue color. Internal combustion engine is definitely decreasing and minus 11% in terms of CAGR, where all the others, which are the electrified propulsion systems are definitely growing. Outstanding versus previous Capital Market Days is the fact that the hybrids get a second booster and then now they have the same growth approximately as the battery electric vehicle. And this is mainly driven from China where -- and also in Europe, I mean there have been some certain thought, let's say, on addressing the range aspect, the range anxiety, also the price aspect and the market perspective in terms of electrification, that's why you have then a CAGR of 14% and 13% for electric car and for hybrid electric vehicle. And therefore, you see that the pie, of course, from 2025 get definitely more or less bluish and definitely more green and orange in terms of propulsion segments. If we go then continue on electrification. And here, we have a snapshot where we remove, let's say, the full electric car where there is only an electric motor. There is no combustion engine, and you get that curve, that's where there is at least one combustion engine in the vehicle. There there's only a minus 2% CAGR. Yes, the ICE decrease, but thanks to this second life of second growth vector on the hybrid full hybrid, plug-in hybrid and range extender, you see that the decrease of the cars with a combustion engine is definitely more moderate than it used to be in terms of production. Of course, the one on cars where you have an electric motors as part of the propulsion mix, sometimes alone, sometimes with a combustion engine, you see that there, you have a tailwind of 12%, confirming that there is definitely, let's say, a lot of potential of growth, let's say, when we address electrification. And that will be part of the presentation today, of course, how we address the electrification. Then if we look at the premiumization, that's about, let's say, here, the segment of the car, premium segment, like the E segment or we have then more the midrange and then the entry level. You see that there is not that much variation in the different segments compared to the growth. That's why in terms of, let's say, the premiumization is rather not changing the mix. But of course, premiumization today require much more content. Let's say people want more comfort in their car. They want things on seats. They want thing on lighting, for instance, that are definitely helping us, let's say, to get extra sockets in the premium car. And premiumization doesn't only mean that you get more chip on premium, but also get that many premium features go down and ripple down through the, let's say, C and D segment and even sometimes even to the entry level. So that's where we are. And when we look now at ADAS and ADAS, we cover it, let's say, exclusively at Melexis through the braking and steering because there is a braking and steering change in the way those applications are done. because when the car gets more autonomous, and that's why we project here the Level 2+ and Level 4, that's, let's say, the highest level of autonomy compared to the basic level, Level 0, Level 1 and the Level 2, which is also pretty basic and pretty common those days. Level 2+ and Level 4, those are really the step engage towards more autonomous drive. That's why that's the level of driving automation. But you see that there, there is a 21% CAGR that will trigger the need for new type of sensors for the braking and steering because the function steering and braking needs to become more and more safe. And that's because to become more and more safe, there is a new requirement in terms of what we do at chip level. And having been a player in braking and steering, let's say, for -- in the past, we are well placed to be part of that innovation and address those new needs that are required for those applications as part of a more autonomous vehicle. Let's go then now in the detail of our offer. And EV powertrain is the first, let's say, growth drivers that we have identified that we definitely want to consider as a key market and the key segments we focus on. EV powertrain, of course, address the electrification. But all that 12% tailwind on production vehicle is definitely addressed with those EV powertrain application. What you have here on the screen is an example, let's say, of a car with 2 electric motors, one on the front, one on the back, where you have then, of course, 2 power electronics, 2 inverters that are supplying those motors. And the inverter is converting the DC voltage of the battery into an AC voltage, which is needed, let's say, to get the motor spin and to get the acceleration that -- which is, let's say, pretty phenomenal, let's say, from an electric motor. You get then with the inverter and on the inverter, we are able, let's say, to address all the current sensor needs on those inverters. And that's also on the inverters that silicon carbide gets a boost in terms of implementation and adoption. And that's where also our silicon RC snubber, which is a protective device will -- or protection device will be, let's say, introduced, let's say, on inverters in combination with our current sensor to measure the current and then to protect the power stages with this protection device. Then next to the current sensor, we have also the motor, the motor itself, where you need to measure the position of the rotor. A motor is a spinning rotor inside. There is a static part and there is a rotor part. And the rotor position is a key element to get a high efficient and also a high acceleration, all the things that you expect from a car -- from an electric car get driven also from the motor commutation and the motor control and you get -- you need a position sensors for that. And with our magnetic and inductive, again, I insist on that duality of our portfolio, we are able and therefore, mainly the inductive in this case, we are able, let's say, to address the harsh environment of these electric motors. We can measure the position in such a way that the inverter and the old control electronic can have the most efficient, let's say, driving of the motors, which is key, of course, the more efficient you are on the motors, the more range you can do with the same battery size, that's influenced directly the range. Also important that because there is a lot of power, although it's very efficient, you still have some heat loss, as I mentioned also earlier this morning. And that heat loss, of course, needs to be contained and measured, and we do that with temperature sensors, which are monitoring the health of the power stage. The silicon carbide, we protect them, let's say, electrically with the silicon snubber, but we also, let's say, monitor them with our temperature sensors in such a way that they don't overheat. And if they would overheat, then the control electronic will be adapted. But we are, again, a data provided to more complex systems in such a way that you have, let's say, a sustainable system, but also a reliable systems moving forward. Then we have also very simple switch and latches in our portfolio. And for this kind of block, let's say, where you have 400 volts, sometimes 800 volt inside, you better make sure that when there is a repair, you disconnect everything. And that's where we have also our switching products, let's say, get used. And once you open the box of the power electronic, everything gets switched off. That's also part of our offer. It's, of course, a kind of side effect next to the big part, which is covered by the current sensors today, by the current sensors and temperature also today and by current sensors, temperature sensors and RC protection devices in the future. Then if we move to the thermal management, another big part of the electrification trend is also covered -- addressed with the EV thermal management. Thermal management is a key point. In an ICE car, you have the heat for free, in an EV car, you don't have the heat for free, which means you need to create it. And if you create heat, then you need to dissipate energy from the battery, which means you have let's say, energy that don't go to the wheel, but that goes simply to the thermal management. And therefore, I mean, there have been a lot of, let's say, evolution on those systems. That's why now more -- the most modern car are using heat pumps as part of the heating and cooling of the car. And why do they do that is, first, to have an efficient system, but also to have a pretty good, let's say, modularity in terms of being able to specifically cool down, let's say, the battery or condition the battery, condition the power electronic and also condition the cockpit because at the end of the day, there is a driver, of course, and passengers that need to feel comfortable in the car. The whole EV, the whole HVAC system has now completely been rebuilt around heat pump and the thermal management system with multiple loop and pretty complex systems, where you have pressure sensors for all those refrigerant or coolant that are flowing into those different loop. And you can imagine that you have like a fridge system or like also your air conditioning system or your heating system at home, modern house also go for heat pumps. That's also why in the sustainable world that we mentioned earlier, there is also kind of, let's say, a move towards high-efficient use of energy, where all the product we use in thermal management for cars can also be used in thermal management for buildings and houses. So pressure sensors is a key part of the thermal management. We have also a lot of valves and expansion valve, actuated valves that needs to be operated in such a way that you have the good, let's say, thermodynamic cycle at play. And for that reason, we have a lot of motor drivers to drive those little valves combined with position sensors to measure where this valve is, if it's completely on, completely off, for instance, those things get measured and are part of the complex system. Next to that, we have also motor drivers for pumps. If you have liquids that needs to circulate, you need some pumps there. But we have also then drivers. Drivers are also used for compressors. If you need to do a heat pump, there is a compressor inside. That compressor needs to be driven, typically 48 volt. Some of them go also to 300 volt or, let's say, the high-voltage part of the DC voltage of the battery. Those are also applications that we serve with motor drivers and position sensors because where there is a motor to drive, if you want to have an efficient drive, you typically combine that also with a position feedback of the rotor. Finishing on that, we can also look at the conditioning of the battery is important for the fast charging. And that's also why we see clearly the thermal management an important step, let's say, that influence the way you experience an electric vehicle. Thermal management will definitely, let's say, be part and continue part of the architecture, let's say, of a good modern vehicle and an optimized electric vehicle moving forward. If now we go to the battery. As already mentioned, on the battery, we have some innovation projects, which are looking at, on one hand, hydrogen sensor, not to prevent thermal runaway, but to detect it earlier enough or earlier than existing solution, which are temperature-based or pressure-based that we serve also with our temperature sensors, our pressure sensor. But here, that hydrogen sensor could give an early warning on the thermal runaway, which is, let's say, an event which is unpleasant because the car gets on fire at the end. Hopefully, it's not -- every day, it's not with a high level, but all the car by regulation, let's say, need to be equipped with a system that gives you 5 minutes to leave the car and probably leave it a bit far away from housing and so on when it's possible. And that's, let's say, that early warning, let's say, could be improved with this kind of hydrogen sensor. Full innovation product currently in development. Look, we will get that, let's say, in the hands of OEMs and battery makers very soon and to probe, let's say, if this is really the right solution to their problem and make sure that we can iterate on that with our technology. Linked to the battery, of course, current sensor are always close by. We have our current sensor there that can help the battery -- the complete car, let's say, to know exactly the state of the battery while you charge it, while you discharge it. And next to that, also our innovation will be targeting state of charge, which is critical. That's what you see on your car when you see only 50% remaining, 25% remaining and so on. But that's a critical information that's the state of charge. There are also other state of the battery, which are important like state of health and state of function. Those are also, let's say, part of our perimeter of, let's say, of exploration, but we are definitely focused on state of charge right now with a modern technique on in-cell monitoring to have that at cell level, cell level monitoring, in cell is for even the future, but cell level monitoring of the impedance of the electrolyte of the battery in such a way that we can have a state of charge definition, which is much more accurate than today's solution. And we do it at cell level because there is a regulation in Europe going for the European passport for the battery, which is something that will get in place in 18 months and that early '27. And that passport, let's say, will definitely focus on having cell level measurement, and we want to participate, let's say, with this kind of product, let's say, of those, let's say, passport -- battery passport-driven application and needs. E-braking E-steering. Look, we just covered, let's say, with the EV powertrain, EV thermal management and the battery, we have covered, let's say, everything that's suitable for the electrification trend that we want to address, which is a pretty significant CAGR. As I said, thermal management, EV powertrain and the battery are also applicable, let's say, to robotics to sustainable world that we evoke this morning because that's about battery, that's about inverters, that's about conversion of energy, that's there. Then we go now for E-braking E-steering, which is more addressing the ADAS and the high level of automation that the OEMs want to have for their car and not only the OEMs, also the users would like to get their car more and more, let's say, robotized or helped in while they drive. And on the braking-steering, which is a sector we dominate already today in the existing implementation, which are hydraulic with a certain level of safety and redundancy, but we are moving forward with the market, let's say, on a higher level of safety and redundancy in the system as well as we moved from the hydraulic braking to the electrohydraulic and to the electric brake. We have solution that we work on e-innovation as well as in the current product development, let's say, to address those needs with position sensors at the caliper level, also strain sensors. Motor drivers could also be interesting sockets on those calipers of E-braking in combination, as I said, with strain sensors that we are currently incubating, let's say, in our innovation track. Next to that braking system needs to remain and steering needs to remain conventional like today where you need also to have, let's say, position sensors for the pedal as well as for the steering wheel angle and torque. Those are segments that we have covered. And as I said, we will continue to cover them with more advanced product in terms of functional safety because they support those higher level of automation. Look, our content, let's say, on car is clearly, let's say, increasing on those. Our value on those products is increasing. And as you can see, we will also address new trend related to the E part, the E-braking part. Last but not least, another big, let's say, growth drivers that we see for the automotive is the lighting. We had, let's say, already introduced a bit earlier this morning, but I come back to it, where we cover basically all the need interior. We have pioneered interior lighting many years ago. We have also pioneered the dynamic lighting, no longer static, means some of the lighting cars today are more dynamic because they want to transfer some information to the user and also try also to get some good feeling, let's say, of the car by having that modulation of the light as you drive or when you get a call or when you get, let's say, an emergency braking that suddenly the car is telling you some message. But we do that lighting application, but we also go outside with all those decoration aesthetic light that you have on the rear of the car that you have on the front of the grill. Also the normal rear lighting is a segment that we target with our product because there is really a good fit for moving from inside the car to outside the car in terms of, let's say, synergetic requirements for those applications. Okay, I've covered here 5 growth drivers that are really the, let's say, a subset of automotive application where we are playing, where we are winning, as you have seen earlier by Marc, on thermal management on both sensors and drivers, let's say, we have a leadership position. On EV powertrain, when it's about current sensor, we are also in a leading position on the inverter side of the powertrain, which is the key part, let's say, driving the motors. And the lighting, also seen there that we have a pioneer and a leadership position with the lighting application on E-steering E-braking. Similar, we are -- we have been playing in those fields. We know what they want for the next level of those products, and we are implementing that with, let's say, all the expertise that we have. The one in not really fully covered today, I would say, or not really extensively covered today, but we work on it is the battery. We touch it with, let's say, the current sensors to some extent, but we will definitely cover it and also with pressure and temperature, but we'll definitely cover it more in the future with those, let's say, hydrogen sensing as well as the impedance sensing for the state of charge. That's definitely, let's say, something that we want to demonstrate to you next time, let's say, that we have been progressing on those. As a summary here, you have those, let's say, 5 segments. And if I first introduce you the, let's say, the consensus from S&P Global on the automated semiconductor trends, they predict in their tracker in August, a 7% CAGR, '25-'30, 2030 on the automotive semiconductor in general. In the play field of Melexis, let's say, look where we play because we have part of the auto semiconductor that we don't cover by, let's say, by -- from the origin and by choice, we have decided not to do MCUs because we thought that we were not necessarily able, let's say, or have access to the right technology to do that, and we let other play there. But in the play field of Melexis, when we look at that, the sensors and drivers, that CAGR gets a bit shrunk because there are, of course, some of the big driving force which are not into it. It's only a 4% CAGR. But when we look at the subset of that, that are the one that we have selected as growth drivers, you can see that we have growth drivers going up to 19% and as low as 7%. With a combined CAGR when we look at our complete analysis of serviceable addressable market -- available market, sorry, we see that we have a CAGR of 11% between 2025 and 2030. All those segments cover 36% of our automotive revenue today, and it will be in 5 years from now, around 46%. Look, we are definitely increasing a bit like we saw the outside automotive and automotive that we invest a lot outside automotive in such a way that pie -- that share of the outside automotive is growing compared to the automotive. The same here, the share of those 5 growth drivers will grow in the coming 5 years, thanks to all the developments that we are -- we have done and also the innovation that we are bringing on those different applications that I've covered at length in the past minutes. Then combining all those information here, you see that in a kind of waterfall we inverted. You see that our SAM in 2025 would be added with a 5-years CAGR on the Melexis play field for the other 4% CAGR, the one that predicted by S&P, and you get then a combined CAGR of 7% when you do the mix that we have there. Because it's also important that we are, of course, focused on those 5 growth drivers because they are relevant. We have tried to demonstrate that we will create more content there for us, and they are definitely supporting big trend of the automotive. At the same time, Melexis remain a pretty strong player in other part of the vehicle. And that's what we will see in a couple of minutes. I will probably go to that slide first. Just to illustrate, let's say, that we are in many other applications related to the seats, related to the tire pressure, related to the suspension, related to the tail gate, the window controller, HVAC systems, the HVAC flat because we don't look at the HVAC flat as part of thermal management. We see them as a separate comfort function. All those applications, of course, part of the body and the chassis and sometimes the safety aspect of the car get also part of the Melexis portfolio. That will grow less. That's why we have, let's say, the growth drivers and those parts. But still, those are segments that we serve. And just to illustrate, let's say, a bit like we had for the outside automotive and automotive, the trend, you see again that change from the journey from ID to revenue. And you see that the automotive growth drivers today are dominating all the innovation exercise we do. Look, when we innovate at Melexis today, we look at what do they need in the next step for those 5 big segments in order to be part of the game in terms of electrification, premiumization and ADAS through the steering and braking. You see that dominance in the blue automotive growth drivers in development is also there, but we continue to develop for other like the aircoflap or some seat functions. We get still active on those. On the launch, you see back again that we are definitely more launching product related to the growth drivers. In the funnel opportunities, we have rather 60-40 with the growth drivers. Design win 50-50 this year with some, let's say, a little forecast on where we will land by the end of the year, a 50-50. And in terms of recurring revenue today, 36. But as I said, we plan to be around 46 in 5 years from now. Thanks to the moving, let's say, from all those, let's say, dominated blue from the left to the right when it's moved, that's exactly the same journey as we illustrate for the outside automotive, let's say, product shift. Here, that's not really a shift. We stay in automotive, but we get clearly focused on area of interest and interesting because they grow and they will grow the revenue for Melexis. Okay, in that car that I already introduced, where you see, let's say, many related product related to powertrain, conventional powertrain where we have been playing with and where we adopt the last man standing, let's say, market posture there, and we are pretty successful at it of, let's say, remaining, let's say, the supplier for all those cars with a combustion engine. And as you have seen, it's only a little reduction over the coming 5 years. So that's a good, let's say, offset that we have in our revenue. Look, it's not that we have a lot of, let's say, from that position, a lot of headwind. But of course, we support a lot of the tailwind with the EV and EV powertrain, EV thermal management battery, steering, braking and lighting in such a way that we are outperforming that with our 7% sum that you have seen here. On the right side, all the chassis, you see many applications related around the seat, the cockpit, the central console, the steering we mentioned, the air conditioning, all the lighting on the rear, some of the lighting inside, the window controller, the trunks, the front -- on the front. I mean all those applications are served by Melexis as, let's say, not being necessarily part of the growth drivers, but as being part, let's say, of our entire portfolio that we cover with Melexis. But focus moving forward is clearly on the growth drivers. And then from that, we can conclude, let's say, this part of the presentation with the fact that -- and look a bit at some car examples, not the generic car is the one that was below this. But we conclude that we have at least 50% more content in the new EV platforms versus conventional ICE platform. Why that? Because first, we have seen that the EV is driving some specific content. You could also say that some other content goes down. But that's also why we say for the hybrid vehicle there, we are even closer to 100% of additional content. But what's important is also the EV is typically associated to a bit more premium automatically, they get more features inside, also typically also the higher level of autonomy because they are more modern and they get -- they adopt, let's say, more modern system. They are less frozen on previous platform. Therefore, let's say we can serve there with 50% more content on those EV platforms compared to ICE. And as we said and we always said, a hybrid vehicle for us is the best of both worlds. That's why when hybrid vehicles get a bit more traction than anticipated or when EV penetration, the full EV penetration gets a little bit delayed, we are welcoming that because we know we have a pretty significant stake on hybrid vehicle with an additional content compared to a conventional car. And this gets automatically confirmed here on 2 cars, let's say, for reason that we want to anonymize for reason that we got sometimes common in the previous year, not from you, but from the OEM at stake. We are definitely, let's say, now, let's say, anonymizing the car in such a way that you have a Melexis car, which is presented here. But we represent a real car, which is here from a European OEM. It's a mild hybrid. That's also why it's Europe. Typically, mild hybrid is famous in Europe. But to illustrate that, that mild hybrid car, which is on the road today in pretty big volume is using Melexis chip. You see that we are on the inverter side with the 48-volt EV inverter, we have 6 products on current sensor. But you also see that we are on the front part, okay, the active shutter is also part of the -- in combination, let's say, with the ICE and it's a hybrid car, we have the ICE. You have the powertrain function of the ICE. You have also the cooling, the expansion valve and the oil shutdown shutoff valve, which are also, let's say, a product where we have drivers and/or position sensors that are covering the powertrain of this car. Just to confirm that, let's say, we like the best of both worlds. And then next to that, you have the different application where you would see lighting dominating. That's the big variable from 20 to 100 in terms of lighting on the options. And then many of the sensors I refer, which are outside the strategic growth drivers, you see power leave gates, seat position, OBC cooling fan, gate valves and so on other applications related to the motors and then to the rest of the car, which are not necessarily, let's say, part of the growth drivers, but which are definitely also key to us. But lighting and as you can see, powertrain is present and partially the thermal management as well. If we now go for an American car, EV. And there, again, it's not from the usual suspect when it's about American EV car. We on purpose took another one, just to give you an example of more historical big 3, although they are rather big 2 today in the U.S., that's one of the big 2 in the U.S., where we are also present in inverter, just to confirm what Mark mentioned at the beginning that -- we have definitely a pretty good market share, let's say, on the inverter to claim a #1 position on the inverter, let's say, sensing need. And to that car, you see also, again, interior lighting as a second big part of our strategic growth drivers. And then other function related to seats related to power lift gate to more comfort function, window lift and so on. So that's for the U.S. car where you see that we have here a content, let's say, approximately 52. We had a content on the other one, which was, let's say, between 80 and 160. So just to confirm that we have definitely a rich content in those modern mild hybrid car in Europe and EV here in the U.S. as two examples of cars we are in and that are driving on Melexis From that portion, I wanted to give you then a good illustration, let's say, on how we select the market where we play, how we address them with existing products, with the product development, with innovation. You have seen that those growth drivers are definitely a good tailwind to us. We have still all the rest we can count on, but definitely the growth drivers are the one we focus on and the reality on the market is visible. With that, I can move now in the next part of the presentation where we will remain automotive, but we will do a deep dive in China. And that deep dive in China is driven by one of the statement that Marc made at the beginning is that there was a pivot in the industry where it used to be ICE-centric. It used to be German-centric or European to a broader extent. And now it's more becoming electric-centric. And definitely, China is a big player at it and is taking the lead on it. Therefore, we need to look at what does it mean? We are an automotive company. Look, we need to see what we can do -- what we do and what we can do and we continue to do in China. Therefore, we thought that it would be important that you get that message today on, let's say, how we profile ourselves in China. Similar to the initial presentation on automotive, I come back to that slide where you see that the CAGR is 1%. I go rapidly on top of it. If you look now how you split it by country of manufacturing, you see that the red part is China is more or less flattish. It's even a CAGR of 0% moving forward. But you see that the fact that there are a lot of car produced in China is already a reality from the past. But in the past, those cars were mainly driven by JVs of European or American or Japanese combined, let's say, with local, let's say, local manufacturer, I would say, in China. That's when the China as a manufacturing country was, not really with OEMs there or, let's say, with the domestic OEMs. Look, you see that, that trend of China producing a lot of car has been there and it's a fact. But more important, and here you see that it did not change that much over the past 2017, 2025, 2030. But what I want to insist now is that slide, which show who are the real domestic OEMs. Now here, the map is done by country, but red China means a domestic Chinese OEM. And what you can see is that since 2017, the peak of the auto industry, you see that the China OEM were still very, very, let's say, minimum or modest at that time. And moving forward, they increase a lot, and that increase already happened. It's now more in a stabilization because only the growth will be 3%. But that's just a sign to show you that the market really pivot, but not from a manufacturing location perspective, but more from the OEM domestic perspective. Those are an illustration where you see Europe shrinking and U.S. shrinking, but at the advantage, let's say, China is increasing at the detriment of Europe and the U.S. But that's an important fact to realize that the market is in China, but it was already in China, but it's now with domestic players rather than with joint ventures between OEMs in Europe and -- or American and the Chinese one. And if you look at that, it's even more represented here, 13% in 2017 for 37% Europe. And now '26-'27, and you see that it will have a slight evolution, but the big shift already happened. The pivot Marc mentioned, already happened in China. The domestic OEMs are leading the industry. And then when you look at the trends we mentioned earlier, you have similar, let's say, similar curve. You see that the mild hybrid, of course, is decreasing a lot in China, but they really believe a lot in the hybrid and the EV, the full EV. That's why you see that the blue part is definitely decreasing a lot, the internal combustion engine. But otherwise, you see that the picture is more or less the same, but the speed is different. Look, you see that China is today where we will be in 5 years, and China in 5 years will be even further. But that's just to show that the trend there is even, let's say, higher and what we like there, again, 13% on the hybrid because the big change why hybrid is more on the map today than 2 years ago is definitely came from China. That's, let's say, a mix in China that changed, which is again a good situation for us. If we look at the premiumization, where I told you there is not that big shift over time. You can see here the difference between global. I put also Europe because Europe is often seen as a premium car continent, especially Germany. Look, you see the different there -- the mapping, let's say, or the share of the different segments. And you see again in China that there is a different color, different rainbow there, and they are much more, let's say, on the high-end car. The car are, on one hand, more electric, hybrid or full electric, but they are also more in the high-end segment or premium segment with those C, D and E. You see that orange, blue and green together in 2030 will approximately be at 90%, which is a pretty significant part, where Europe and the rest of the world definitely have a bigger portion on those cars, on low entry or entry-level car. And then even more on the ADAS, you see the global trends we show earlier. And then down, you have the one in China where you see that Level 2+ and Level 4, which is, let's say, the target higher level of automation. You see that China is basically today where, let's say, we will be in 5 years. And you can see again in 2030, 2035, there will be an 80% in China, let's say, planned, at least that's the forecast of the OEM there to have much more autonomous car. And if you have the chance to go to China, you will probably experience or you can experience already today pretty nice features on some of the car there. Again, will it be -- that's also part of the regulation. Why in Europe, it does not necessarily penetrate that much is also because there is some strong regulation in Europe than in the rest of the world. But clearly, you see that China is going also to win that battle in terms of this higher level of automation. Look, the car will be domestic OEM, if you look at the overall portrait, the car will be with domestic OEM in China with clearly electric powertrain, hybrid or full electric, more premium segment and definitely also a high level of driving automation. The they have same trend as here or rest of the world, but they go faster and bigger. That's, let's say, the sentiment that you have always when you look at China, that's why many people highlight that China aspect of being big and also being fast. And that's also why we need to adapt and we cannot stay where we are with, let's say, with the current mindset. We need to change the mindset in such a way that we can embrace and we can benefit from the growth offered by that market. That's a summary here at Vision Premiumization ADAS. They are, let's say, ticking the box on all the 3 leadership, very dynamic market, high speed is needed. We play and win in China. I think that's an important point. Today, we play in China, and we win in China. And an example, of course, like we did for the other continent is to take a car from a Chinese OEM, rather, let's say, a higher segment car, as we can say here, where we are covering again there, all the powertrain-related things, also battery -- current sensors. But we see with current sensors, we have more or less a grand slam there with that car. You see also that we are on the steering angle as well as on the brake position, but we are also there on E-steering E-braking, which is an important aspect. And I told you that there is a clear leadership of Melexis. We are recognized there with our quality track record, with our automotive track record. We are playing there on steering and braking, being ready, being in the right location, let's say, to serve those markets. Seat fan, seat ventilation, power lift gate, those are, let's say, more classic comfort and body functions that we already explained. And I don't forget the thermal management, which is on the expansion valve that you see on the left, again, in the green color. Just to confirm that on this car, we have many of the growth drivers that we target are covered, thermal, powertrain, steering braking and also the battery, not with the advanced sensors we bring, but with the existing sensors. The only one which is not present on that car is the lighting. We have not -- on this platform, let's say, our lighting solution are not in. But to give you an illustration that, of course, still a lot of potential there, but just a confirmation that we play and we win in China today with our portfolio within also the growth drivers that we have illustrated earlier. Then the question, of course, is how do we continue to play? How do we continue to win? That's, I'm sure one of the questions you want to get answered today. And you saw the Marc presenting the 3 growth, the first, the second and the third wave of growth. How do we make that happen? Automotive will remain our core market. We mentioned that we will get at parity probably in 10 year plus from now. There is definitely, let's say, the big growth of Melexis is rely on our ability to grow within automotive. We know that to grow automotive, you need to grow in China. Not because China is, let's say, dominating in terms of quantity, but if you cannot win in China, you will not win the rest of the world. Therefore, we want to continue to win and perform in China in such a way that we can remain a global player, also a winning global player offering growth to the market. Then how do we continue to play? How do we continue to win? Some of the recipe have been -- or some of the elements I have already mentioned by Marc will be also by me, will be reconfirmed also by Karen. But it's just, let's say, one slide to illustrate, let's say, what we do proactively to do that. And again, not starting yesterday, starting already a couple of years back that we are building on that. And I would say we have definitely understood the speed of change that China wants and the dynamic because we have done probably a lot of changes recently just to adapt and be able to answer yes to those questions. Look, we have first, the product innovation. What I described earlier is, of course, valid for globally, not only for, let's say, the European market. We target, let's say, all our products, all our growth drivers when we innovate are for the global market, including China. We have a quality track record, as mentioned by Marc, it's one of the interesting pedigree of Melexis. We have been there for 30 years, and we will be there for the next 30 years. We have been automotive-driven and focused, so we know what it is. That's what that give a lot of trust to the Chinese customers, OEM and peers. And we have a good quality track record, which, of course, help there. We are not a newcomer. And I think for all the growth drivers we mentioned, not only the gadget, but all the growth drivers that we mentioned, those are not gadgets. Those -- they rely a lot on our capability, let's say, to make those products -- those applications successful. Then we have a local team, and we have had a local team, let's say, for more than 17 years, meanwhile in China, and we strengthened that team, let's say, with technical and commercial competencies in such a way that we can address that market because it's leading, as we said, the market, but it remains also very fragmented. China is a big country. You have, of course, hotspots, but it's still a big country. But we need to strengthen definitely our team there because that's where the market is, and that's also why we need to be able to address it at the appropriate level. Product customization, as mentioned also by Marc, also by me, we see that there is a need to evolve and to iterate a bit faster than usual. It doesn't mean that you need to change the product completely, but there is a need for, let's say, some iteration, some customization that people would like. We want to be more responsive to that. We call it VOC, voice of customers, but it also sounds well with Voice of China. But we listen to what the markets say in such a way that we can, let's say, faster react and be more dynamic in iterating with product. And then because at the end, you will tell me there is always an economical aspect linked to that. China is probably willing very strong, let's say, put pressure on price. And indeed, they are. That's why we need to remain competitive. Look, we can have all the first bullet point there. If you are not competitive, it's not a long-term strategy. But we need to think and we have thought and we have been working on that, as I said, for the past 5 years on building, let's say, step by step of building a localization, a local supply chain, China for China to remain competitive, to play in an equal level playing field, and that's important. And we have done that local supply chain program, including what we mentioned already a couple of times, the wafer fab 12-inch 19-nanometer. Still a mature node, but 12-inch with all the advantage that have been mentioned by one of the analysts asking a question before the break. Packaging also we do in China. The logistics, we want to -- I mean, if we produce in China for China, I mean, we should not bring back the parts back here. Look, we definitely have a logistic hub over there. And also Premier since we started, as mentioned by Marc also in the flow, we typically in-source at Melexis test of wafer and packaged product. That's what you can see also here in if you have selected, if you have not seen it 2 years ago and you want to visit you will see our test center, how we test the product we have described today. But we now outsource also the test at assembly house in China. Again, if you do local for local, you don't bring back the parts to Belgium for testing them, you test them where they are made. And all of that, that we see here, we are addressing it with the mandatory feature, the mandatory attribute, which is at the speed of China. I think it's key, and we have been reflecting on that a couple of times already. China is very dynamic. It's very speedy. You need to react fast to customers. You need to react fast also in supporting them and service them. If you are not there fast enough, let's say, you get that because there are, of course, other players that are ready to take your position. But the speed of China is definitely, let's say, driving us in all the things we do over there, of course, with our team, but also here in Europe. That's the whole change of mindset that also Marc mentioned in terms of people on our side, let's say. So that's, let's say, our plan for China, and Karen will also let's say, relate more the financial part of that move in her presentation. But to end, and I think that's probably the appropriate time to evoke again a concept that Marc introduced certainly in the morning, and that will be covered now because he announced that I would speak about it. That's about anti-fragility. You have here the concept. And I'm sure that the same way you were coming here to say what will they tell about China, and we uncover a little bit the part of the China. Karen will continue. That's here a bit what we want to describe here. Antifragility is something where under stress, you get it stronger. You get it better. You improve it. You don't break, you get it better. And to come to the point of Marc with the switch watchmaker, this switch watchmaker was simply saying, I'm not fragile. I will not break. That's what he said. But he did not say what the Swiss maker did not do something else, did not say something else. Marc said it's not enough, not to break. We need to be able to, of course, resist, adapt and innovate to become antifragile. And what we have tried to illustrate today is that on some aspects, we have been and we are still in resist mode, but we are definitely a lot of potential to adapt, and we have adapted already a lot, and we continue to adapt the whole company, not only on portfolio, but also on suppliers, on supply chain, on the mindset of how we want our people to behave, but we have done that already. And we continue, of course, to innovate to become more and more this anti-fragile archetype that we all wish to be. But we are definitely not -- we want to step away from that breaking, as Marc mentioned, from the first minute of this presentation to go to the more promising adapting and the resilience and moving further on the antifragile level with the innovation. And as I mentioned, product innovation, it's what helped us today, let's say, to play in China, but to play in the rest of the world, to also to be able to move to those, let's say, outside automotive chosen markets that we have described, where, by the way, China is extremely strong. Robotics is also a China market as well. Look, we should not say, we can -- we do that because we will avoid China. No, we embrace even China more when we go robotics because that's where the market is. But we go that with an innovative mindset and with clearly an anti-fragility concept, let's say, to help us to stay strong and go through that and start that third wave of growth. This being said, I think I have already spoke about a couple of times about Karen, giving you a bit, let's say, the financial part of the house. I've been discussing a bit more the product and the innovation part of the house. Now the financial is, of course, very important because you are financial analysts, but that's where you want to know a bit -- show me the figures. And you will get that with more than figures, you will also get some of the highlights of our strategy over there. Karen, over to you.

So indeed, let's look at anti-fragility, but from a financial perspective. So we will look at 3 different pillars, starting with the diversification. It's been mentioned already by Marc and Vincent. but I will dig a bit deeper into it into the commercial diversification. We will talk about profitability and how we -- well, plan to improve our margins, and we will also talk about the balance sheet strength. So let's now start first with diversification. Starting at the bottom right. Melexis has 11 -- well, a strong portfolio, 11 product lines. 3 actually are part of the drivers and drivers is around 23%. The other 8 make up the sensor business and this accounts to roughly 75%. And these product lines, as you've seen already with Vincent as well, a lot of diversifications in different applications in automotive, but also more outside automotive. Geographically, we also have a nice diversification. Asia is becoming dominant, 60% today with a split on the one hand for China, close to 30% and the rest of Asia, a bit more than 30% today. Europe, also close to 30%, equal to China and then the U.S., 8% -- and the growth in China or in Asia in general has made that also our channel has increased in sales. Today, we are at 38% of sales for the and 62% for actually our direct business. And in the direct business, also there, we are quite well diversified. The top 10 of our customers accounts for around 43% of our total sales and only 2 customers account for 2% or more. So this makes us less vulnerable for big changes in our markets, in applications, geopolitical events. Then moving to profitability. Let's first look at gross margin. What is the trajectory of improvement that we can expect in our gross margin? So historically, if you look back, 44% has the average been the average. Today, we are at around 39% of gross margin. So quite a gap with the target of 45% that we have today. How will we get there? Well, in the first place, we will actually already next year, we will see that already next year, improvement -- well, economies of scale of actually some products where we use new fab technologies and where we still have a lot of waste in the yields, low yields. economics of scale will bring us back to more normal yield levels, and this will already become visible next year. We will also get operating leverage as we grow, better use of our capacity. This will also help. But next to that, we also have been working, it's been mentioned by Marc and also by Vincent, we've been working on our supply chain with amongst other -- yes, starting with our internal -- what we do actually internally, our testing and manufacturing. There, we are actually also building more concentration and specialization. We have mentioned it already. We are in the process of moving our final test from Germany towards Bulgaria and also towards Malaysia, Gucci. And this will, in the longer term, help us also in improving the margins as from '27. Next to that, we've been working also on the external supply chain with a lot of diversification with new suppliers, particularly wafer suppliers. This will give us a better cost advantage, which was also mentioned and which will also help somewhat the margins moving forward. And then, of course, the diversification is also leading to better localization and then mainly in China, local for local with a full supply chain, wafer supply packaging, but also testing in China, which again will also help us in our cost competitiveness. And then also our product mix will gradually help us to move up the gross margin to closer to the 45%. And certainly, the innovation that Vincent mentioned, actually, it will be a growth accelerator because of the fact that we move from chip to more systems, but also higher margin. It is innovation. It comes with higher margins. A bit more on the EBIT margin. Here, we have -- historically, we have 24% EBIT margin. The target is 25%. But today, we are at 17%. The biggest contributor will indeed be gross margin. We just discussed that. But we also expect operating leverage throughout the cycle from actually through the growth. So for R&D, we expect -- today, we are in the range of 13%, 14%. But throughout the cycle, we expect actually to remain in the range of 12% to 14%. And for SG&A, we actually expect more leverage as we will consciously make sure that the cost of SG&A will stabilize or grow very slowly, so much less than the growth in our sales. And all of that will bring us back to an EBIT margin of 25% in time. Looking at the balance sheet. Actually, Melexis has a very strong balance sheet. Today, Melexis is one of the few companies that actually expenses all the R&D. We also have no immaterial or very limited intangible assets, so a very clean balance sheet. Next to that, our net debt. EBIT -- net debt level is also quite low today at 1.3. And we expect to lower that even more because we have -- a few years back, we prepaid. We made a big prepayment to our biggest supplier. But since Q3, actually, as we speak, we get repayment of that prepayment, and that will last till '28. So that will reduce overall even further our debt level, so strengthening the balance sheet. And yes, we also have our free cash flow, which we expect to improve. It was already touched upon. We have very high -- we have historically a very high inventory level today at EUR 300 million. But as already mentioned, we expect that this is the peak and this inventory level will gradually come down. So generating more free cash flow. Looking then at our capital expenditure or capital allocation. No big surprises here. But for Melexis, of course, R&D remains key, 12% to 14% of our sales. We want to continue to invest in R&D to bring all that innovation and a big increase or at least the product launches that we can continue there to increase that as well. On the CapEx, we expect that to be depending on the cycle in the range from 5% to 7%. We want to keep our strong balance sheet, reducing debt there as well, keeping it clean with limited intangibles. And also, when we speak about dividends, yes, Melexis has a consistency in paying high dividends, and we also expect to do that. And then also opportunistically, we might also invest in share buybacks. If we bring all this together, we had -- what you see here is the return on equity of Melexis, but also the peers. You can see that Melexis has consistently been very high in return on equity because of all the reasons we mentioned before. And we -- I mean moving forward with higher growth -- well, high growth also supported by better margins, we will be able to continue doing that. So let's now have a look at our target operating model, bringing everything together here. Maybe important to say this operating model is throughout the cycle. In the past, 2 years ago, we came with a target based on years. But Melexis is in a cyclical business, will always be in a cyclical business. The market is just like that. So these targets are made throughout the cycle. So if you look at the sales target, high single-digit growth throughout the cycle, better than our market. Vincent already explained, we expect 7% growth in our -- I mean, the areas where we are active in, 7%. We have been outperforming the market in the past throughout the cycles, and that's important. We aim to continue outperforming our market. Margins, 45% remains the target for gross margin and 25% for our EBIT margin. So strong diversification combined with a trajectory of growth in sales, in margins and a strong balance sheet, I believe this is evidence of the presence of antifragility within Melexis. And I would like to now hand over again back to Marc, who will do the closure of the event.

Yes, I have no challenge to recover the time because we are late indeed. Yes, we are close to the end of the presentation. Yes, during the presentation, we have highlighted to you our strategy, how we are going to win, how we are going to improve the bottom line, how we are going to improve the top line. And I think you have already seen that Melexis is changing. We are changing, but we remain a very important automotive supplier. Vincent has explained that in automotive, we will focus our innovation of 5 growth driver because we do believe that those 5 growth drivers will grow much quicker than the other one. But that remains, we are still an automotive supplier. And this is the main booster, and it will stay the main booster of the company for a while. But at the same time, we are also adding new booster. Robotic, alternative mobility for sure, 2 boosters that will be activated in short term. We have shown that we innovate a lot in those 2 areas. And we have also 2 boosters that will come later, which are the digital health and the sustainable world. We are also changing because we don't plan to provide only a chip, only an IC. We plan to provide more than an IC, what we call the system solution, the module aspect. Vincent has mentioned it. This system solution will be much more visible outside the automotive because in automotive, we have our Tier 1 customer. But outside automotive, for sure, we want to play on the system aspect. It's an important change for us. We have also explained that in our strategy, one of the strategic team is clearly innovation in automotive, outside automotive, also from a geographical perspective in China. China is very important for Melexis. We have also decided recently to create a legal entity in India because we do believe that India will also be another geographical area where we need to play, where we need to win. From a financial perspective, it's also important to mention the third strategic team, which is the operational excellence. Yes, for sure, we can become more efficient from an operational perspective, and we have a plan around it. And last but not least, the Melexis people will execute the strategy, and they are in the center of the strategic team because the people will execute this strategy, and we need also to help the people, to develop the people, people being all of us, including Vincent, Julien, Karen and myself in order to become a high-performing team or higher performing team. And I do believe that all of this, when we combine all of this, we will indeed ensure and we will trigger this growth of bottom line and this growth of top line, as Karen just mentioned it. And as a last slide, I would like to come back to the slide about the wave of growth. And now we can add how we are going to become anti-fragile, how we are going to secure this third wave of growth. For sure, not only in Europe, but mainly in Asia. China and Asia are really important in order to secure this third wave of growth. The nonautomotive, the beyond automotive application in the future will also take part of this growth. Vincent has mentioned the high multiplier aspect in robotics as an example. The module and the system will also help to be more anti-fragile and for sure, all our standard products in automotive, all our innovation in automotive with the 5 growth driver will for sure secure this anti-fragile concept. And this is how I would like to conclude the presentation. I think it's, let's say, the final formal part of the presentation. But now I would like to invite Vincent and Karen on stage, and I think we can take some of the Q&A. I don't know from a timing perspective, Philip, but I think we should have time for some questions.

Ruben Devos from Kepler Cheuvreux. I was just looking at the CME slides of 2 years ago, where you also identified the sensing and obviously, the battery management and the powertrain and the lighting and so on. But I think for E-braking and E-steering, it was quite surprising that you see quite a deceleration. I think you talked about a quadrupling market for E-braking and E-steering back in '23. Now it's about 7% growth forward. So yes, just curious what happened. Yes, maybe...

It's a good remark. The thing there, we took as data -- underlying data for the steering and braking, we took -- if you come back to those slides, if you go a few slides before, you will see that we take exactly the same CAGR as the ADAS. And it was definitely when we look again in the detail also looking at -- we start with an offset of business that we have at Melexis. But it was not -- let's say, it was not possible to get that. I mean that -- this was on wrong assumptions that we took the same value as ADAS growth. We see it's exactly the same percentage that was an error on our side, let's say, a misjudgment of the value.

Okay. Okay. And then of the 36% revenue that is being serviced by these 5.

It's for 30, by the way, 3 years. 30. It's increasing a bit.

And like could you give a relative size of these? Like are they 7% each? Or which one is like, let's say...

You obviously saw that battery is definitely the small child in the family. And I would say, EV powertrain, thermal management, lighting, I would steering and braking. And again, we try to be extremely selective on steering and braking because we have a big base historical on that. That's where we need to pay attention to make sure that we cover really E-steering E-braking and not a too wide story. I would say probably the second -- the fourth are more or less at the same level. Maybe EV powertrain a bit more.

All right. And then maybe just a bit bigger picture. I think just considering non-auto, I think based upon the first statement of the Capital Markets Day, certainly, it looks like that will be strongly outgrowing automotive, obviously, right? I think in terms of business opportunities, development, design-ins. They're all trending very well. I think for those who have been covering Melexis for quite some time, there was always a bit the idea that obviously, non-automotive will be out growing and represent 20% of the portfolio. How do you think about, yes, non-auto -- because I think also 2 years ago, you talked about 15% CAGR, right, for the non-auto business. I don't think you explicitly -- talked about this -- so yes, one question is why haven't you explicitly given an updated number? And also with regards to robotics, I mean, obviously, it looks like a very significant opportunity for you in terms of the SAM could be a multiple of what it is in automotive. Have you ever considered like maybe providing more disclosure on how you get to the different yardsticks for investors to really see how you're making progress on this front?

Start first.

Yes. Why we did not split indeed between automotive and nonautomotive, I would say there are 2 reasons and perhaps Karen can complement later, but it's because we are somewhere in the middle of a cycle, then there is all the cyclic aspect that blur a bit the picture. And the second aspect, it's because, as Vincent mentioned, it will take time to change the needle. And there is -- it's not that automotive takes time, as Vincent mentioned it, there is a lot of time to book the business and so on. In robotics, it's a bit the same also because the market is extremely fragmented. There is a lot of customers that are working on it, let's say, meaning that for those 2 reasons, I do believe it will take time really to see the effect on the revenue. We see already the effect on the customer interaction. It's incredible how many customers are in contact with Melexis on this robotic in China mainly, but not only in China. And from a customer traction, it's enormous. We see also the effect in our opportunity pipe. The number of opportunities growing in the pipe and the maturity of the opportunity is also growing. But I think we need to be a bit patient. It will take time to really create revenue. And it's why we didn't want to -- we want to manage expectation, I would say.

It will be -- we expect it to be higher than in automotive that still remains, but we didn't make a split.

Bit linked to the all the uncertainty, I would say.

Yes. In 2023, you remember, we did 2 months after we book our best year ever. There was definitely also a little -- maybe a bit a foristic way that we cover, we correct a little bit in this one, not to come way down in the fully pessimistic way, not at all, but we correct a little bit in our view on the future market...

[indiscernible] I have a follow-up question about the sales target because indeed, like Ruben mentioned already, it's a bit of contrast between the enthusiasm about the products, the market share and your sales target. If I use, yes, high single digit, 9% on consensus estimates for '25 to 2030, I arrive at EUR 1.3 billion. If I use the more pessimistic side of more than 10%, so 10%, 11% in 2023, I arrive at EUR 2 billion. So that's a big gap. And it cannot really be explained by FX or maybe some comments on price erosion or yes, you don't expect market share losses. So can you elaborate a bit on that because it's quite a big gap.

I think in general, the whole market has come down because...

Yes, but we're not on a cyclical high now. So you could expect some cyclical uptick as well in the next 5 years. I mean we cannot remain in a downturn for 5 years, I guess. So...

No, but it's through the cycle. That's what we mentioned. It can -- it will be higher at some point, it will be dropped at other points. It's through the cycle.

I think we need also to realize that when you look at the market analysis, if we compare in '23, I think from the overall semiconductor market, the expectation was 12%. Now today, same expectation is 8%. For the playing field of Melexis, it was 8% in '23. Now it is 4%. Then all the market analysis have also downplay their expectation. This is one of the explanations why we have also a bit adapted to the analyst view. And the other aspect is what you mentioned, the price reduction is also playing a role, which did not play in '23, I would say.

Okay. So, do you agree with the market analysis in the past, sometimes Melexis was very fierce in saying, yes, we will get an uptick. We're in a down cycle right now and that's not truly the case.

So our ambition is to grow faster than what the market is because I mentioned the market believe 4% growth for the Melexis product portfolio. Yes, we expect high single digit, okay, you mentioned 9%. Our SAM is going to grow by 7%. We expect high single digit. And I think our ambition is...

And then I arrive at EUR 1 billion instead of -- we go from EUR 2 billion to EUR 1 billion. So that's an even bigger gap. So...

Yes.

Nigel Putten from Morgan Stanley. Just on that concept of anti-fragility, I mean, I think part of that is also to identify parts of the portfolio that are no longer sort of fit for purpose. So have you walked away from business in the last couple of years? And is that a headwind for some of the growth targets going forward?

No, we did not walk away from business, except, let's say, the time of flight, which was a very small -- a historical very small business. We have decided to stop the development of this product, but it does not change the needle. It was a very small business. But this is one business where we have decided to walk away.

So sort of at the moment, you're not seeing any pressure, especially in China to potentially sort of monitor a situation and be anti-fragile, be sort of dynamic in your approach to some of your portfolio decisions?

I'm not sure I understand the question, but...

We've seen quite a bit of price pressure, right? That's kind of obvious in the gross margins. I was just thinking, has that now been fully sort of rightsized in terms of how you look at the portfolio today? Or is there more action to be taken? So I was using your anti-fidelity language, but this is the real question here.

We've taken a lot of actions, but it will be on a continuous basis that we will need to keep working on it internally and also on our external supply. This is...

The price pressure is not over.

I mean -- historically, we had price negotiation every year with our customers. And historically, yes, the price pressure was already there. It will continue, yes, in Europe, in the U.S. and in China, there is a bit more pressure on the price than in Europe. And I think it will continue. And it's up to us to adapt the company in such a way that we can also reduce our cost base in such a way that we can continue to sustain this price pressure. But on the other hand, all the innovative aspect, all the innovation in our product portfolio is also an answer to those price pressure because on the other hand, we cannot continue always to reduce the cost, to reduce the price at one point in time. It does not make sense anymore. And it's why we need to pivot or to adapt in a new product portfolio, finding new niches of product with less competition where we can add more value. And I think this is the goal of this innovation team that Vincent introduced is really to increase the maturity of this innovative product in such a way that we can be on the market with a real unique feature where we discuss less price and more performance or feature of the product. This is really the goal of the innovation. It's also the goal of the... Why do we insist so much on the product launch? It's because usually, when we launch a new product, the product enter the market with some unique feature, and then we have a higher margin. And then along the lifetime of the product, the margin is going down because of the price pressure that you mentioned. And it's why it's really important and we insist in the organization, but also with you about the product launch because it's a way to replace low-margin products that are fading out by new products with higher margin. And this is really the goal of this innovation machine.

So more organic, I guess.

Yes.

Maybe, Karen, on the gross margin bridge, last quarter in the call, we've discussed sort of the cost of yield, 2 percentage points coming from inventory that sort of, I know say contaminated, but maybe not the right word. But it seems to be absent in the bridge you presented today. So where does that fit in?

So when I was talking economies of scale and yield, that's -- I mean, that's a big part of that improvement indeed. And that's minimum 2% that we will see next year. We will also -- if the dollar does not stay stable, I didn't mention that because that's not structural. That's really something we have -- we saw in 2025, particularly, but that will also be a benefit in '26 on top.

Got it. Maybe a quick last one. Then on introducing maybe some signposts. So can you maybe disclose systems as a percentage of revenue today and what you're looking at as a target in the next couple of years? And is that something we can maybe track on a regular basis, that would be helpful, I think.

You mean system -- the fact that we want to move from IC to System and module?

Yes, system and module, yes.

I think that it will -- the best way to monitor it will definitely be the robotics and the evolution of robotics, alternative mobility because that's where we bring that in at the full extent. I would say in the automotive, we typically -- when we do the product launch, we also mentioned those products. We brand the fact that they are a bit different than the normal ICs that we bring when we will launch the special motor driver that I referred to a couple of times where we go to 4-nanometer and so on, you will see from the product launch perspective that, that's what they discuss here. That's now one of the element. Because say product launch, again, mentioned by Marc, it's a key indicator. we report, let's say, let's say, volumes or turnover on that, I don't think that will be -- that's not something we do typically. I don't think we would do that, especially with that. But the launch will give you an indication, yes, we see those products that they were referring to are coming. You will see soon snubber, you will see soon the motor drivers, you will see soon the fingertip. I mean all those things you will become visible. And then, of course, afterwards that, as you have seen, the business opportunities and then you get into the real revenue.

So today, it is still relatively small. There is already sales in it, but still relatively -- we are talking percentages, I would say.

I think the majority today is still ICs. Although we have IC with specific packages that are getting a bit more -- a portion of it, but it will remain single digit. Therefore, I don't think it makes sense to really track that for the time being. But looking at robotization message that Mark will deliver, Mark and Karen deliver as well as the product launch, for instance, those will give you a right indication that we are on the track. And you can always still challenge them in the call.

Michael Roeg, Degroof Petercam. I also have a question about China. When do you expect the Chinese automotive market to reach peak electrification?

We have mentioned -- again, I don't know what you mean by peak electrification. Is it 100%?

No. It means that the benefits from growing electrification, the extra percentage that goes electric, positive impact on content is offset or equal as the negative impact from price erosion on the rest of the mix. When they are equal, you have a peak. From then on, the market will turn south.

So when the semiconductor...

I gave an example based on 2 of your slides, #92 and 101. China is about 60% of electric cars this year. The outlook for 2030 suggests that next year, it will be 65%. That 5% will gain a lot of content because they were ICs and will be electric, a lot of positive value. But the other 95% of cars don't change powertrain and will have 4% price pressure. That combined price pressure is more than the positive impact from electrification.

Depend, of course, yes, you have -- your model is, let's say, combining those 2 things. I'm not sure that it's really reduced to those 2 parameters.

On electrification, I ignore ADAS, I ignore premiumization because on Slide 92, an electric car, whether it's hybrid or EV is on average 1.75x more content. So if you do the math based on those 2 slides, it will be next year peak electrification.

I trust your analysis. We -- that's not what we see in our way of looking at it from, let's say, opportunity and business one and so on. But if you -- let's look at your math.

I think this is maybe part of the reason why you lowered your automotive targets. ADAS will benefit growth going forward. But if next year's peak and the years thereafter, it will come down and then ADAS will support the top line, but only to a certain extent because also there, you have a growing base that will become more difficult to beat every year. This is not something that you've seen or from S&P or your strategist or your market intelligence?

No, because there is also premiumization that is a big growth driver.

At least when we look at our funnel of opportunity, we don't see it at all. The funnel of opportunity in China is still growing much faster than in the other region of the world. And I think you should come back to what you just mentioned, Karen. The electrification of the car is always coming with a more modern platform. And in this modern platform, there are a lot of comfort and safety feature. I think you cannot isolate the electrification aspect from the overall platform of the car.

Well, it's easy to calculate because you have the data. The premiumization is still driving, but even that will reach a certain plateau at one moment, but that's further out.

Yes. Well, I can just repeat in our funnel of opportunity. China is growing, I would say, much faster than the other region.

Market share leverage that you did not take into account there that you can still count. That's also what we see in our funnel, of course. That's -- I think we have time for one last question formally, but of course, we'll be with you for the next period as long as you're here for. Last question.

I just want to know what your R&D split would be between automotive and nonautomotive. Would that be similar to the launch of new products, roughly 50-50? Or would it be -- and my question is, you're not capitalizing R&D and if you're spending quite a lot on products for robotics where the revenue may not come in for the next 2 or 3 years, but may come quite significantly after that. Is there a possibility that your long-term EBIT margin could go well above your target in the event that those revenue streams start coming in quite nicely in 3 or 4 years' time?

It will, for sure, give some nice leverage on our current cost base. But to come back to your first question, it is not 50-50 R&D. It is rather 25% that is spent today in outside the automotive and 75% in automotive. So the majority by far is still automotive.

And is that because the R&D intensity of an automotive is much higher because you have to engage with the customer much more? I mean, if you're launching the same number of products on either side, why does the intensity of R&D be so much higher on the automotive side?

One of the aspect is if you take the tactile sensor, for instance, that have been described in the tactile fingertip, there, we reuse a chip, it's a chip which has been developed, let's say, as part of the general portfolio of Melexis. We're not saying necessarily automotive, but let's say, when we were not necessarily considering those different splits, and which means that the development, when you say product development, which is indeed, let's say, counting there. It's not -- we don't spend chip design. And I would say, a module, the way we see it in terms of, let's say, intensity to take your words, is clearly lower in terms of -- when you have a chip design, you are going for 2 years, you have mask set to pay this bigger team to work on it and so on. But I would say there is definitely a different type of development cost, I would say, that associated with an effort to it.

And I guess my last question, if you -- would you need to increase your selling expenses to address the market opportunities with robotics or wearables or alternative mobility in the future as those revenue streams become more real? Or can you address it with your current capabilities?

As you have seen, we leverage a lot also distribution, and we continue to -- we want to do that. and it has grown quite a lot. And again, another pivot that Marc did not mention, but historically, we were more or less 100%, let's say, internal sales force to serve a very limited market being Germany and a bit France. And then, of course, we grew a lot. Distribution went to a peak that mentioned by Karen. At the same time, let's say, we could, again, reskill or take other profile, let's say, to address more and more specific market. But it's clearly that we will move as we see the opportunity arising -- there's no real need, I think, today to do a big jump on that or a big plan on that.

Thank you very much. This concludes the Q&A section part 2 in the group. But as I said, we'll be with you for the rest of the afternoon. I'd now like Marc, just curious if you have a few closing remarks before we close the formal part of the event.

Yes. First, I would say thank you. Thank you to you to come in -- Yes, we were all happy, I think, to share the strategy with you. What is important to remind, let's say, is that, yes, the strategy will strengthen further our anti-fragility archetype. And we do believe it will strengthen this anti-fragility, thanks to the leverage of this innovation inside automotive and outside automotive. And I think it's important to remember it's and inside automotive. We'll continue to innovate in automotive, but we will also innovate more in outside automotive. And this is supposed to strengthen our anti-fragility. Thank you.

If I get a microphone again, yes. That ends the formal part of the presentation.