Soitec SA (SOI) Earnings Call Transcript & Summary

Okay. Hello, everyone. Hi, I'm Steve Babureck, SVP Strategy and Investor Relations for Soitec. Welcome. Welcome to all of you, and thank you for being with us in Paris. It's been a long time, too much time since we could all be together in the same room. Great to have you also online. Thank you for connecting to this event. Before we begin, please take a moment to read our disclaimer. A very short moment. Thank you. In the next 2 hours, we have an interesting schedule. We will be discussing for the first hour our strategic vision with Paul, our business outlook with Bernard, and of course, of fiscal year '22 results with Lea. So that will take us about an hour. And then in the second hour, we will run a Q&A session. So thank you. And now let's get started. I have the pleasure to give you a floor to Paul Boudre, Chief Executive Officer of Soitec.

Thank you. Thank you, Steve. So ladies and gentlemen. First of all, on behalf of the entire management team, I would like to welcome you, to welcome you in Paris in person, but also to welcome you online to the presentations to -- of Soitec's fiscal year '22 results. I'm also delighted to be speaking with you in person. I mean it has been too long since we were able to have this face-to-face discussions, so that will be the case today. And so let me open with a brief recap of the year that summarize Soitec's current positions. Fiscal year '22 was a record. It was a record breaking year for Soitec. I mean if you look at what we have done, we have surpassed the $1 billion marks in terms of revenues. We have achieved the company EBITDA's higher -- highest ever at 35.8%. And we delivered a very strong operating cash flow in terms of performance. I think that our financials, and Lea will talk about it, are just superb. So despite the current challenging macro environment, we have a very positive also outlook for fiscal '23. And we -- as you know, I mean, we have upgraded also our fiscal year '26 model to give you, in fact, even more visibility. So thanks to our fundamentals, I mean, and our operating model, we will continue to grow much, much faster than the semiconductor industry. And more importantly, I mean what Soitec does, Soitec does it with purpose. This is important today. Sustainability is at the heart of our value creation strategy. So the world will continue to be largely driven by very powerful megatrends. The adoption of new technologies will accelerate our transitions in our society. Let me give you at least 3 very specific example, 5G. 5G will be an important driver and will foster new services beyond mobile. And you can name it all. I mean it's talking -- I'm talking about [indiscernible], I'm talking about security. I'm talking about autonomous vehicles. I'm talking about agriculture, education, security. So there is a myriad of applications that 5G is going to bring and to boost in terms of opportunities. 5G will also support a more inclusive society by connecting what I call the none -- the unconnected. So energy efficiency is becoming also another big factor for growth and for what we need as a society. Energy efficiency is becoming increasingly indispensable. And if you think about a couple of example, I mean, I will at least name one. This is the electrical vehicles. This is just the peak of the iceberg. But this is also one of the main driver for our technologies. And this is critical for the next 5 years, specifically with the announcement of this morning, by the way. So advanced electronics will be also a tool to really fight for climate change. And as we grow, as we continue to accelerate, I mean, advanced electronics would be one of the solutions that we will have to implement. So as a result of our semiconductor industry will more than double over the next 10 years. And we will deliver an annual growth of around 10% as the semiconductor industry until 2030. So Soitec, and in Soitec, what do we do? We design engineered substrates to make the world basically more connected, to make the world more energy efficient, to make the world more intelligence. So this is clearly the focus that we have as a company. But around Soitec, we have built a unique ecosystem with our strategic partners. And I would like to spend a few minutes here to explain this because it is where we stand today and probably a unique differentiation compared to what other material company can do in the world. So around Soitec, we have built this unique ecosystem, and I'm talking about our suppliers. I'm talking about the foundries, the design house, the fabless and the OEMs. And our mindset in this ecosystem, our mindset is really very simple. It's to focus on 2 questions: where to play, how to win. That's the always 2 questions that we ask ourselves. So first, let's start with where to play. At the OEM, obviously, and the end market level, we have increased our ability to anticipate demand and market trends and identify key applications with an attractive growth for the future. So a lot of effort has been done in the organizations to really get connected to this part of the industry. The second is how to win. We engage with fabless at the technology level to basically better anticipate semiconductor needs and semiconductor architectures. So it is very important for us at the fabless level to connect the dot and to understand the problem they are trying to fix in order for us to -- with the small signals that we are getting there, to understand how we can provide the solutions based on our materials. So we collaborate to better design and offer the type of engineered substrates that they will require to deliver the best performance at the device level. To support -- basically, to support our fabless customer, we have also invested in design and design capabilities to accelerate the development of our engineered substrate. Now with our direct customers, the foundries, and integrated device manufacturers, we work together, I mean, to reach basically the best industrial and cost of ownership and capabilities, working on their yields and continuous improvement to make sure that our product in their manufacturing not only outperform but, deliver the right performance. So what is maybe one of the most important things into this and specifically driven by the situations today, everybody think about shortage, right? And we are on allocations at Soitec. But when you think about shortage and when you think about what is happening now, which means that we have to continue to accelerate the growth and to build the capacity and the capability for the growth. It is true that, basically, we need to rethink the supply model. And this is a good time now. This is what will probably keep us out of the problems we are in today as an industry. What is happening? I mean we are getting much more visibility. We have now from our customers and customers' customers long-term commitment. We had an average of 2 years visibility at best. We are now on a 4-years type of average visibility, meaning that we have long-term visibility for some customer 3 to 5 years. But this is also linked to real commitment, okay, and the -- with financial commitments. And this gives us also the opportunity to build our own capacity, but also to make long-term commitments with our suppliers. So, there is a big change in our industry. And if you think about that for this industry that is going to double over the next 7, 8 years, this is one of the major change that we are going to see and that we are going to continue to focus on. So you know also that innovation is in our DNA. So we have a critical mass in Europe at Soitec. And with important collaborations with CEA-Leti, with[indiscernible] , the Fraunhofer Institute, but also several universities. And we are building a global network for international alliances for innovations. I mean, clearly, what Christophe Maleville and his team are doing is really to take the talents where they are, but to create this network that give us the agility and the performance that we need when we start thinking about new product development. So how do we convert these strong mega trends and fundamentals in numbers? In fact, we position ourself on markets that will grow at 20% annually in the next 4 years. And our markets will grow basically 2x to 3x faster than the global semiconductor industry. Soitec will grow even faster at 20%, 25% annually. I mean, a clear sign of the value for our product and recognized by our clients. Started of -- starting off a record fiscal year '22, which saw Soitec revenue grow 50% to $1 billion, we now manage our business towards a revenue of around $2.3 billion by fiscal year '26. So this number compared to the number that we shared with you last year, and we were managing basically our model towards the $2 billion. Now, we are seeing basically a kind of acceleration. So it's not a kind, it's an acceleration in the businesses we are in. So we expect our 3 divisions really to grow significantly. I mean -- and we have built low and high case scenarios that you will be able to hear later. Fiscal year '22 was also a record year in terms of profitability. And this, clearly, we have delivered. And you know that an EBITDA at 35.8%, which is the record ever for the company. And we are now driving the company also towards 40% on the fiscal year 2026 horizons. Lea will comment on this, and she will give you much more details. But this record performance basically illustrate a couple of things: exceptional execution, obviously, but based on our operational excellence, our product mix, our customer recognizing the product of -- the value that we are offering them, but also our internal cost management system. So, we all know that. I mean it's simple to understand. I mean, to grow fast, we need to invest. Our duty is to commit capacity to support basically our customer growth. And this is where this long-term commitment are playing a major role. Our EBITDA expansion will fund our CapEx to support both our customers and market growth. Our capacity will significantly increase between fiscal year '22 and fiscal year '26 to a total capacity well above 4 million wafers. So to achieve this, we have been very pleased to announce basically 2 extensions and 2 new manufacturing. One in France, we call it Bernin 4. And this is for Smart SiC product. And then it will also include some refresh activity on site. The second one is Pasir Ris in Singapore, so -- where we extend our 300-millimeter SOI capacity and facilities. Again, I mean Bernard and Lea will talk in more details about it. But as you can see, I mean, there is an accelerations in the business that we are driving, that we need to take care of. So now let's take a moment to talk about sustainability. As I said at the beginning, I mean, sustainability is at the heart of our value creation strategy. We don't just talk about it. I mean, we just don't put words around it. We really, I mean, work for it and think about it and develop a lot of our activity with sustainability in mind. So last year, at our shareholders' meetings, we adopted our corporate purpose. I hope you know it by now. But I'm going to say it again because we spend a lot of times together with my team to come up with this. We are the innovative soul from which smart and energy-efficient electronics grow into amazing and sustainable life experiences. Our corporate purpose motivate us. Our corporate purpose differentiate us. Our corporate purpose is true today, and it's going to be true tomorrow. Our corporate purpose reflects our ambitions to commit to sustainability in the interest of all our stakeholders. And we have built basically our strategy on 3 pillars that really highlight our commitments: sustainable innovation, people and society. Now let's dive into each of these engagements, starting with sustainable operations and product innovation. So regarding our operations, we are committed to reduce our carbon footprint and align with the 1.5-degree pathway by 2026. This are very ambitious objectives. And these ambitions have been approved by the science-based target initiatives. That means that we are putting real numbers. We are measuring ourselves against these numbers. And we are basically challenging ourselves from these set of numbers. Regarding our products, our climate change road map is driven by our innovations. We design semiconductor materials enabling energy efficiency product. This is part of the DNA of the company. I mean low power capabilities, overall energy efficiency is already embedded in -- as part of our product. But let me give you an example. I mean it's our Smart SiC product portfolio for electronic vehicles is clearly one of the latest example that we have on how our engineered substrates are low efficient carbon emission saving at the system level. So if we move on to our second pillar, which is also very important. It's about people. You heard me, I mean, many times saying everything start with people, everything ends with people. I mean, this is -- people are so strategic all along the value chain. So we are focused on how to attract new talent, how do we grow our talent, how do we keep our talent. So our industry is growing fast. And competition for our talent is fierce, this is a challenge for this industry. This is a challenge for all of us. And this is a challenge for us as well. So our corporate culture is centered on attractivity and talent development. It is centered on diversity and inclusion and guaranteeing that a safe and healthy workplace. Finally, I will talk about accountability. Our commitment is to reach the highest standard of governance and ethics. We now have a set of new recommendations that we have built between at the governance table that will deploy through our governance bodies to reach the highest standards of governance. We deploy our higher standards also throughout our supply chain. Today, 100% of our strategic suppliers have signed our supplier quality policy, requiring compliance with our own standard. So this is the first big achievement also in this sense. So now let's talk about just the executive team. How do we deliver this exciting plan? Earlier this year -- calendar year, we have slightly reshuffled our organizations to do a couple of things: accelerate the development of our 3 divisions; better serve our customers; optimize the management of our global supply chain. As we continue to grow and accelerate, I mean, the company is a live animal in a way, right? I mean you have to adjust, adapt and anticipate with organizations. But as you know, I mean, at the end of July, I will take a different personal journey. And Pierre Barnabe will replace me. So for weeks, Pierre, the management team and I have started to work on seamless transition. Soitec's ambition and organizations are clearly in the right hands with Pierre, who will become CEO on July 26. And I would like really, I mean, today for you to meet with Pierre. And as our future CEO, he will write these next chapters for the group and all its stakeholders. So please, Pierre, join me on stage.

Thank you very much, Paul. Thank you for the warm welcome and the warm welcome of the team. Thank you very much. But for me, I'm very happy. I'm very proud to be there and to take the relay of you, Paul. And of course, a lot of responsibility because what you have done, Paul, is totally amazing with the team. You laid the foundation of -- for a leader -- world leader, with an incredible history, an incredible turnaround, with, of course, the foundation that will be extremely solid and strong to make the step up and to scale up even further. Then, I would like to pay you a tribute to what to have made over these years in a difficult time. And what you have demonstrated again today is totally incredible. Then for me, it's, of course, a lot of excitement, a lot of responsibilities, as I said. And I'm coming from, let's say, a closed environment. I've spent 20 years of my career in telecommunication industry, defense, civil, products mainly. Then 10 years in electronics, where we moved from #9 to #1 in the world of cybersecurity, and #5 to #2 in cyber -- in supercomputers, even working at the computing unit level. Then of course, the proximity to Soitec was quite obvious. And now I'm working with the team on making the materials more intelligent with a lot of features and functionalities embedded to make the semiconductor industry stronger again. And of course, I've also seen , after really a warm welcome by all the team and all the Soitec employees over the last weeks, if not months, that we are sharing some passions all together. First of all, the passions of product and industry, that is really extremely important for me. I'm coming from the industry. I used to work in product for all my career. R&D innovation, that is also key for me, and it's really the future of our world. And the third element, and Paul underlined it a lot, is people, passion and value creation. And I believe that, ultimately, this is what makes companies successful or not. It's really the passion of the people to create value in the company. Then again, pleasure to be there. Pleasure to be with you, Paul, on stage now. I will have the occasion to talk with you afterwards, and of course, in the coming months with the team. And again, a big, big, big pride for me to take the relay, lot of responsibility. And again, big, big congratulation for what you have done over the years. It's totally amazing and it's unique. Thank you, Paul.

Thank you, Pierre. And thank you for these nice words. And as I said, I mean, I truly believe that under your leadership with Bernard and Lea and the executive teams, this company is in good hands. Okay. So we have a fantastic challenge in front of us. But you guys, and again, Pierre, thank you for taking the challenge to lead this team. This is a beautiful company, and we will have great things coming. So with that, I mean, I am going to leave the floor to Bernard Aspar, our COO. Bernard is going to talk to you in more details about our markets, our products, and give you an overview on where we are and where we are going. Bernard?

Thank you, Paul. Hello, everyone, and it's a real pleasure for me to be here with you in person to discuss this fiscal year '22 results. So Paul, give you an overview of our ambitious growth, reinforced by our record fiscal year '22 performance. I will now update you on how we will execute this vision and achieving our upgrade growth ambition. You know about our ambition growth. And you see that our fiscal year '22 record revenue of $1 billion, we are on track with this journey. Strong megatrends are supporting our double-digit growth in our 3 strategic end markets. The continued increase of semiconductor content in end products is driving around 20% growth of our addressable market for fiscal year '26. Based on this element and improved visibility on our customers and prospect, we are managing now our business to grow toward $2.3 billion in fiscal year '26, a 20% to 25% growth -- annual growth rate. To deliver this, we are expanding our product portfolio to enable customer differentiation and increased value creation for Soitec and for our customers. We are constantly -- we are -- first of all, we are -- we have built a collaborative innovation model. And this innovation model is based on our own R&D and partnership with key research player and university across the world. We are constantly improving customer intimacy, to understand the customer critical needs and ensure adoption of our product in their technology road maps. We also integrate sustainability from the substrate design level at the very beginning, down to end product application. To achieve our ambition, we have deployed a new organizational structure that will help us to execute our vision and deliver solid commercial, operational, industrial and financial performance. Our customer request faster product development. So we are accelerating our go-to-market strategy through faster alignment between our customer group, division and global supply. We are piloting performance in every aspect across the company, from product design to operational excellence. And we are becoming more and more agile. We are improving our ability to anticipate market trends and better adjust demand and supply dynamics. You are familiar with our 3 strategic end market. To better understand -- for us, it's key to better understand the customer need, to propose a comprehensive product portfolio, bringing value to them. For that, we have shaped our new organization around this 3 markets with 3 division. And the 3 division are mobile communication, industrial -- and automotive and industrial and smart devices. Now let's analyze this driver market by market, please. On mobile communications, we grew around 50% in fiscal year '22 comparing to fiscal year '21. And this business is expected to double by fiscal year '26, with the revenue of around $1.5 billion in fiscal year '26. What are the drivers behind this growth? 5G. And when we talk about 5G, first, we talk about 5G sub-6 gigahertz, the first generation of 5G. And you need to keep in mind that 5G sub-6 drives large increase in RF content, 2x versus 4G. 5G millimeter wave, second wave of 5G, is now becoming a reality, as penetration is accelerating. And 20% of the 5G smartphone are expected to support millimeter wave in fiscal year -- in calendar year '23. WiFi 6, WiFi 7 ultrawide band for both connected object in smart home and mobile is also a key driver for us. The value that we bring to our customer, the industry standard that we are defining and the increased visibility on our business will support on our growth of around 18% per year until fiscal year '26. When you look at the smartphone, we have addressed the customer need for front-end module with a comprehensive product portfolio. For sub-6 gigahertz, 100% of smartphone [indiscernible]. Today, this product is a standard for antenna tuner, switch, low-noise amplifier. And we are proposing 4 filters and GaN for power amplifiers. For 5G millimeter wave, we have developed different solution, from RF-SOI to FD-SOI, depending of the level of integration. Specifically, on FD-SOI after the Pixel 6 phone using Samsung FD-SOI product, we are very happy now to see MediaTek announcing publicly that they are adopting the generic platform FD-SOI for millimeter wave solution. With this ala carte menu of product that we have, we address all of our customer need for front-end module and we are continuing to increase the penetration of Soitec product into the smartphone. Our mobile story is a content story. Most of you will recognize this chart. It represents an aggregate die-size RF content opportunity of our product in high-end smartphone. The order of magnitude of the total opportunity remains the same as we introduced to you last year. The total opportunity was in the range of 60 square millimeter per smartphone and is expected to more than triple in the next 4 years to over 200-millimeter square for RF-SOI, FD-SOI, POI and GaN. Now let's have a look to our Automotive and Industrial division, which also deliver around 50% growth in fiscal year '22 and is expected to be multiplied by 5 by fiscal year '26. We have been developed product like Power-SOI solution for Automotive segment for around 25 years, starting for infotainment application. More recently, we are penetrating new markets, including ADAS and functional safety. Today, we are expecting electric solution to become a significant growth driver for us as they require new technological solution and new materials for powertrain, traction inverter and onboard charger. For this division, we are developing a comprehensive product portfolio to address the customer need in automotive with specific product for the following application. For infotainment and ADAS, we have developed different flavor of SOI, just -- such as Power-SOI for [indiscernible] amplifier in-vehicle networking and FD-SOI for application and vision processor radar and data fusion. To address the power train, on top of our power SOI products, we are developing new materials such as Power GaN and Smart SiC to support the development of new power MOSFET. All of our product are encouraging the adoption of the car that are safer, more connected, more autonomous and more energy efficient. This product portfolio that we develop to address the growth driver that I mentioned is translating into an increase in content of Soitec product in high-end cars. This content is expected to be multiplied by 6 in the next 4 years. Here again, the order of magnitude is on track with what we communicate last year. We are seeing more opportunities materializing for SOI and silicon carbide in application such as ADAS for SOI, functional safety and electrification. We are progressing on our SmartSIC road map and are getting a better understanding of the SmartSIC value creation that we are proposing to our customer. We have upgraded our vision on this footprint. So let me explain now to you SmartSIC value proposition. Our engineered substrate called SmartSIC is a new generation of silicon carbide, which benefits from the combination of prime mono silicon carbide layer, bonded on 2 ultra-high conductivity poly silicon carbide wafer, which enable high conductivity substrate. So SmartSIC brings many advantage over bulk silicon carbide. It is greener, faster and better. Better, we can get an improvement of device resistivity of up to 30%. This benefit to current devices. But more important, it enables new generation of silicon carbide devices. Greener. SmartSIC saved 20,000 tonnes of CO2 for each 500,000 wafers produce. Faster, thanks to our smart card technology, we can accelerate silicon carbide adoption with around 10x wafer reusability with our smart card process and 200-millimeter scalability. To summarize, SmartSIC brings significant value to device maker and silicon carbide ecosystem by answering to the need to improve the yield, increase device performance and enable larger dies. So where we are on our SmartSIC roadmap? In -- we started to talk about that in '19 -- in 2019. 2020, we built our pilot line at CLAT, and we are now continuously delivering wafer to many customers. In 2021, we acquired NOVASiC to complement our technology portfolio with polishing capability and signed a strategic partnership with Mersen to secure poly silicon carbide supply. A few months ago, thanks to our strong confidence level, we launched the construction of Bernin 4, where we will produce SmartSIC wafers. Next year, the fab will be ready. And end of 2023, beginning of 2024, Bernin 4 will be qualified and will begin ramp-up for this product. On top of that, we have developed several product families, such as SmartSIC performance, or another family, SmartSIC advanced product, where this different flavor provide different advantage to the customer, like SmartSiC Advance is providing both ultra-load effectivity on top of ultralow resistivity. We are working on this product both on 6-inch and 8-inch. So we have a very clear product and industrial road map to bring SmartSIC to the market and address the new silicon carbide device generation. Let's move now to Smart Device division. For this business, our revenue grew significantly in fiscal year '22, and it represents the greatest upside for our [indiscernible] revenue scenario. Smart Devices is a rich market segment that cover a lot of different application: Edge computing, which require low power consumption to bring artificial intelligence on the device; sensing, to collect information; data center, to support cloud infrastructure; and new trends such as Metaverse, which is a requirement for augmented reality and virtual reality. Here again, we have developed a comprehensive SOI product portfolio to address critical needs in the smart device environment and address different markets to sense, connect, compute and display. In all this case, ultralow power consumption and performance computing are required and our FD-SOI product is a great platform to offer system-on-chip technology solution. Photonic SOI capture several application, such as optical transceiver for data center, critical to supporting cloud infrastructure. But this photonic SOI is also suitable for new application, such as bio sensor, essential for a smart device to capture information it requires. And we are seeing today a proven deceleration of application in health and safety. So now that we are review the key driver of our business, how do this translate into numbers? So you see that we are upgrading our financial model -- and now we are driving the company toward a $2.3 billion revenue for the base case. You understand the growth drivers. 5G, where RF-SOI remains a strong driver today and tomorrow. Automotive with ADAS and electrification and smart devices. And all of that, thanks to our current product portfolio and the introduction of new products. We have also low case, which is $2 billion, mainly linked to macro economy and slower adoption of our new products. In parallel, we have identified a lot of new opportunities to build a high case. It is driven mainly by FD-SOI adoption, acceleration of SmartSiC and more RF. To achieve our growth ambition, we are adapting our industrial footprint and capacity to meet customer demand. In France, Paul already highlighted, we have announced a few months ago the extension of our building with Bernin 4 for 150 and 200-millimeter SmartSIC as well as 300-millimeter SOI refresh. And yesterday, we announced another significant milestone, the extension of our Pasir Ris 300-millimeter SOI fab. This will bring Soitec a total 300-millimeter SOI capacity to 2.7 million wafer per year. With this fab extension model to increase capacity in order to be able to optimize our industrial footprint, to optimize our operation and to accelerate the qualification process of our product. On this slide, you'll see also that we are growing our industrial footprint, and this with a diversified product portfolio beyond SOI. So to conclude. After a record fiscal year '22 performance and the solid positioning across our 3 strategic end market, we are driving our business toward $2.3 billion revenue by fiscal year '26, thanks to our ability to understand the challenge of the customer, innovate to reinforce our product portfolio and adjust our global capacity to demand scenarios. And we are prepared for all the next challenges. Thank you very much. I am pleased now to leave the floor to Lea that will present our financial performance.

Thank you, Bernard, and hello, everyone. So as promised, FY '22, in FY '22, we resumed our growth trajectory, and we achieved a record level of revenue and EBITDAs. This FY '22 performance and the increased visibility for the coming years give us the confidence to upgrade our financial model for FY '26. I will come back to it at the end of my presentation. But first, let's take a look at the FY '22 financials. In line with what Paul has disclosed in his introductions, we are happy to report that we overachieved on our initial commitment for FY '22, both in terms of revenue and EBITDA margin. We delivered a record revenue of EUR 863 million, up by 50% year-on-year on a -- at constant FX rates. And our EBITDA margin reached 35.8%, up by 5.9 points on a year-on-year, the highest level in our history. The main highlights are, all profit indicators from the revenue to the net profit improved. Our FY '22 net results reached -- more than doubled and reached more than EUR 200 million. We invested EUR 229 million in CapEx, mainly for capacity investments. And at the same time, we achieved to reach a positive free cash flow at EUR 42 million. Finally, we reached a very strong net cash position at the end of March '22. Beside achieving a very strong financial performance and delivering on our objective, what has been key for us and for me has been to prepare for the future. There are 4 key items. One, make capacity investments at the right time in order to have the production on time while optimizing cash flows and business visibility. Two, ensure we have the appropriate level of R&D in order to prepare the next generation of products for the midterm, but also beyond FY '26. Three, be confident we'll be able to finance our growth throughout. Thanks to our available cash, the cash will generate with the operation and also with all the financing tools we have access to. And 4, of course, make sure we have a sufficient number of staff and the right talents to support this growth. Let's move to the revenue. We published our revenue last April, so no surprise there. We delivered over 50% growth this year, driven by the increased success of 300-millimeter SOI wafer sales products. This 300-millimeter wafer sales grew by 79% at current FX rates, thanks to a sharp increase in volume, driven by all our product lines: RF-SOI, FD-SOI, imagers, photonics. As presented by Bernard a few minutes ago, we are now organizing our business across 3 end markets: mobile communications; automotive and industrial; and smart devices. And we now plan to change the way we will report our revenue from this fiscal year, moving from wafer size to end markets, to better reflect the way we are driving our business. If we look at the FY '22 performance, you can see that all our 3 end markets recording significant growth. Let's talk now about profitability. Our gross profit reached EUR 316 million, a 36.6 points margin. It's a 5.2 points improvement year-on-year despite an unfavorable currency effects. Our strong growth improved the loading of our fab and our operating leverage. And on top of that, we enjoy a very strong operational performance with better yield and highly efficient cost control. Finally, as anticipated, we benefited from a favorable timing effect of our long-term agreements with our key bulk suppliers. From this EUR 316 million I just commented, we generated EUR 195 million of current operating income. This represents more than 22% of our revenue. We increased our investment in R&D by 28% to EUR 57 million in FY '22. This was done to strengthen our position in each of our 3 end markets. To maintain leadership in the SOI business for the -- especially for RF-SOI and FD-SOI new products, to go deeper in POI development for the next generation of products, to accelerate on silicon carbide and to continue to develop Dolphin Design portfolio. We invested both in hiring new talents and in our collaborations with innovation platforms. Regarding SG&A, we have continued to structure our multiregional footprint to prepare for the growth beyond FY '22. In a high-growth context, we increased our SG&A expenses, but we managed to reduce them as a percentage of the revenue. Employee expenses increased due to new hiring this year and the effects of the last year new hirings and higher employees compensation items. We are focused on talent acquisition, retention and making our group an attractive place to work in. This is key to secure our growth. At the net income level, we also improved our profitability. We reached EUR 202 million at the end of March '22, representing 23% of revenue. In addition to the current operating income I commented just earlier, we booked a nonrecurring income of EUR 9 million. That is mainly related to the reversal of the impairment loss related to our Singapore plant, initially booked in FY '16. Our financial results, which was a loss of EUR 15 million last year, is close to 0 this year. Financial expenses increased by EUR 2 million. This was mostly related to the noncash interest of following the issuance of our new convertible bond in October '20, partially offset by the conversion of our convertible bond '23 in October '21. In FY '22, financial expenses have been fully offset by a net gain of EUR 13 million, thanks to a positive foreign exchange rate effects. And finally, our income tax continued to benefit from tax loss carry forward, and we recorded an additional EUR 12 million of deferred tax assets. Let's conclude the P&L chapter with the EBITDA margin, the main profitability indicator of our guidance. EBITDA amounted to EUR 309 million in FY '22, up 73% year-on-year. While we continue to invest in R&D and SG&A and despite unfavorable currency effects, EBITDA margin reached the record level of 35.8%, benefiting from a strong operating leverage and a very strong industrial performance. Moving on, let's take a look at the cash flows. Overall, net operating cash flows increased by 46% to EUR 255 million in FY '22. Of course, we had higher working capital need over FY '22 due to the growth, while last year, revenue was flat. Nevertheless, we drove our group to monitor strongly this working capital and to contain the increase at EUR 52 million. To add to this, we paid less tax than last year due to tax reimbursement and lower downpayments. Cash-out from investing activities reached EUR 213 million compared to EUR 133 million last year. This EUR 213 million do not include tools financed through leasing contract. If we include them, cash-out for CapEx would amount to EUR 229 million, in line with our expectations. Capital expenditures mainly related to capacity investments, both in Singapore, in our current fab, for 300-millimeter SOI products, but also additional capacities for epitaxy and refresh, and in our Bernin 3 facility for POI product production. They also include investments for innovation, including capitalized R&D as well as NOVASiC acquisition. Overall, FY '22 was really good on the cash generation side as we managed to generate positive free cash flows at EUR 42 million, while you're also investing in order to fulfill our growth plans. We had a strong increase in our cash position, moving from EUR 644 million to EUR 728 million at the end of March '22. Investing flows are positive at EUR 37 million, thanks to 2 new loans: the EUR 31 million drawdown on the EUR 200 million long-term loan granted by the Banque des Territoires as part of the Nano '22 plan; and a second loan in Singapore to finance tools for EUR 31 million. Let's move on the financial structure. 2 KPIs to underline the solidity of our balance sheet. Equity is above EUR 1 billion, up EUR 367 million year-on-year, thanks to the result from the period, but also the conversion of our OCEANE '23 for EUR 139 million. We moved from a net debt position of EUR 4 million last year to a net cash position at EUR 142 million this year, thanks to the positive free cash flows over the period and the conversions of OCEANE. And overall, our liquidity remains very high. I will now move to the outlook for FY '23. In FY '22, we resumed our growth trajectories. And we plan to continue this trajectory in the following years, including for FY '23. We anticipate FY '23 revenue to increase by around 20% at constant exchange rates. However, this growth will not be linear over the year with a lower half year. This growth will be driven by all our 3 end markets: mobile communication, with ongoing deployment for 5G; automotive and industrial, with further expansion in the automotive markets; and solid market trends for smart devices. Of course, our confidence in the ability to achieve our ambitious goals does not prevent us watching closely the international situation. The consequences of geopolitical conflicts, such as the rising inflation, are embedded in our budgets, but may have a greater impacts than currently anticipates, depending on the evolution of the situation. We anticipate EBITDA margin to be around 36%, slightly above FY '22 EBITDA margin. We'll continue to benefit from a strong operational performance and from the operating leverage due to the higher level of activity. But we'll have some headwinds, such as raw material costs due to the timing of our long-term bulk agreements, energy costs, and more generally, the effects of the inflation. On the FX side, FY '23 is fully hedged at a euro-dollar rate of around 1.18. Cash-out from CapEx is expected to be around EUR 260 million. And it will be mainly explained by our first investments for the first tools for silicon carbide for our Bernin 4 facility, equipment for 300-millimeter SOI refresh capacity, again, in Bernin 4; further ramp-up in our current Singapore facilities for 300-millimeter SOI products; and investments for innovation, including capitalized R&D. Let's now move to the midterm outlook. As we disclosed, we are now managing our business to reach a revenue of around $2.3 billion in FY '26. To support this growth, we will need to continue to invest, both in investment capacities and in R&D. We presented our CapEx plan last year during the CMD at EUR 1.1 billion for the FY '22, FY '26 period, excluding new building costs. We confirm today this estimates. And moving to the right of this slide, you can see that we are now including 2 new building, leading to a total investment of EUR 1.4 billion. We will need to invest in 2 new building extensions before FY '26. First one, as presented by Bernard earlier in Bernin 4, dedicated to SiC products, but also refresh capacity for 300-millimeter SOI product. And the cost of this building is estimated at around EUR 80 million. And a building extension for our current Singapore factory, as we announced yesterday, for 300-millimeter SOI product, that will ultimately reach 1 million SOI wafer capacity. Construction will start this year in FY '23, to be ready end of FY '25. And the estimated cost for this building is around EUR 200 million. As Bernard explained a few minutes ago, we have several very solid growth drivers which focus on value-added products. We are now driving our business to reach a revenue of around $2.3 billion in FY '26 compared to USD 2 billion announced last year during the CMD, thanks to higher average selling prices, better product mix with the introduction of new generation of products and strong visibility for the business, leading to additional volumes. Our profitability will benefit from this upside. And we are now driving our business to reach an EBITDA margin of around 40% in FY '26 compare to around 35% communicated last year. Our profitability will benefit not only from a full loading of our current factories, but also from more value-added products. And the upside with last year estimate is explained by the anticipated increase in the average selling prices and the better product mix, but also the very strong operational performance we achieved in FY '22, with yield improvement and cost control, which we expect to maintain in the future despite the effect of the inflation. This 40% EBITDA margin is based on a 1.20 euros-dollars rates. Remember that a change of 0.05, for instance, if we are at 1.15 instead of 1.20, has a positive effect of one point of EBITDA margin. On the financing side, thanks to our current cash balance, thanks to the cash we will generate through the operation, we will be able to finance our CapEx level. And in addition, our balance sheet is really solid. We have liquidity tools such as credit lines and a further drawdown on our loans if necessary. To conclude. You can see we have multiple growth drivers that will allow us to more than double our revenue between FY '22 and FY '26 and boost our profitability. FY '22 was the first step of the journey. I will now hand over to Steve to open the Q&A question -- session. Thank you for your attention.

Thank you, Lea. And yes, indeed, we are going to start the Q&A session. So on stage, we'll ask Paul and Bernard to come back. And for your information, first row here, we have other members of the executive team, with Pascal Lobry, Thomas Piliszczuk, Cyril Menon and Christophe Maleville, in case we have additional details to be provided.

[Operator Instructions] And maybe I'll try to take some questions from the audience. [Operator Instructions] First question from Emmanuel Matot, ODDO.

Emmanuel Matot from ODDO. Two questions, so that's great. First, Soitec is very exposed to mobile ecom. How do you explain that you seem to be immune to the slowdown of the smartphone markets? Some institute of research are now clearly speaking about a decline in volumes this year after around minus 10% in Q1. So that would be interesting to hear why you are so resilient. And you are still speaking about 20% organic sales growth for this year. And second, why Singapore for the new fab? I was thinking about another location such as the U.S. or -- why such a decision? And maybe what about incentive in Singapore?

So thank you, Emmanuel. I will start, and maybe, Bernard, you can complete on the RF. So that is for sure, that RF is very strong and continues to be a very strong business for us. We are not immune. But because we see that there is a shift in the demand, and specifically in the low-end phone, the phones that are below $400. And we -- on the other way, I mean, we continued to see an accelerating -- an accelerations on the higher end phone, which for us, it's a content story. So -- and you have seen on the graph that we are moving even higher right now on the 5G, but also starting to see more applications to come into the smartphone. We talked about WiFi. We talked about millimeter waves. Even if it's the beginning, it's still coming. So we continue to see that the mix of this low-end phone obviously going slower and the still very well sustained growth on the -- or stable growth on the high-end phones continue to fuel our internal growth because of the content. And other indicators for us is the entire supply chain and the level of inventory that we have throughout the supply chain. So clearly, we were in a desperate mode. And we are still in some places in a very complicated mode. So we are still under allocation. I mean, we are under-allocation on RF. So we continue to fuel the pipe and making sure that we can deliver as much as we can. I covered it. But maybe. That's one of my problem. I need to stop.

Now the second question. Why Singapore?

Maybe why Singapore? Bernard, maybe we should give it to.

Thank you. Thank you, Bernard. Thank you, Paul. Why Singapore, thank for the question, Emmanuel. So obviously, I mean, 3 major points. The first one is definitely the speed. As you know, erecting a building, a plant in a semiconductor environment will take a bit of time, 18 months. And qualifying a new site take times as well. So you've seen the amazing growth in front of us. And obviously, having this opportunity to qualify -- to have a short qualification time is playing a major role in the decision. Second, the synergies. Obviously, you know that when we start up our Pasir Ris plant, we started our Pasir Ris plant 4 years ago. We have announced that this create a significant amount of fixed cost. At that time, it was 20 million. And we believe that this additional fixed cost will be very limited in the facts that we extend a building already existing and having already the know-how, the fixed cost, including the facilities there. So there'll be limited the fixed cost to take into account in our perspective. And the third point is the ecosystem. And talent is critical in this ecosystem. The ability, in France and in Singapore demonstrated to be able to acquire talent at a proper speed is critical for such a growth journey. So this is the third reason.

Thank you. Sebastien?

And obviously, the level of subsidies were in line with our expectations, I mean, at least full year.

Yes. Sebastien from Kepler Cheuvreux. One question regarding the visibility. It seems that 2023, you are fairly relaxed with your business. What is about 2024? Do you have any kind of visibility already building up for 2024? What is the sales strategy covered by your contracts for next fiscal year? And coming back to millimeter wave, you have been quite successful with both MediaTek and Samsung. What is happening to Qualcomm? Can you make some update? What are they doing? Are you working with them? Are they preparing anything for millimeter wave?

Maybe I start with the first, and you take the second. All right. Yes, we are not -- we are never relaxed in this industry. That's the problem. It -- everything keeps us busy and awake every day. But you are true. I mean, what is correct is that we have this now level of commitment that is really fueling not only one year, but several years in front of us. So for fiscal year '23, we have basically the visibility, the total visibility. I told you we are basically under-allocation all in our factories, specifically in 200-millimeter and in 300-millimeter. So yes, we know that fiscal year '23 will be a good year. When it comes to fiscal year '24, we are feeling it. I mean we have already long-term commitment. As I said, we have commitment from customers 3, 4, 5 years. Okay? So obviously, as we go down to fiscal year '26, we are probably in the range of still a low number in terms of percentage. But fiscal year '24, I will say it's high double-digit number. I mean, okay, we are not at those 3-digit number. It's not 100%. But it's clearly on the high double-digit numbers that we are feeling. And it is part of, again, again, it is part of the decisions we have made. We cannot make a decision on a new factory without a strong commitment. And you have seen the commitment in terms of date. So that means that, yes, we are going to fuel and to feel not only Bernin 2, but also the Phase I of Pasir Ris in order to get into in fiscal year '26, in '25 already, end of '25, the need for this new factory.

On the millimeter wave, so from 2, 3 years, we talk about -- we talk to you about the value of our FD-SOI solution for millimeter wave. It's now with the [indiscernible] using this Samsung technology, Samsung product is a demonstration about the value. MediaTek moving to that is, again, a new win for FD-SOI. So this means that several players now are adopting, this is a value. And the world over, everyone is looking to this value. So let's see, stay tuned. And we will see what could be the next one coming to that. But the value that FD-SOI is bringing to the ecosystem is clear, is recognized. Millimeter wave requires low power kind of solution, and FD-SOI is very suitable for that.

Okay. Thank you. Anything to add, Thomas? No? Okay.

I have 2 questions as well. The first one would be on your CapEx. So I guess you were guiding for EUR 240 million for the year you just reported, and that came a little bit lower. So what are the reasons? Are there delays in equipment shipment to you? Or any other reasons for this discrepancy? That will be the first question. And then secondly, you mentioned some headwinds for margins going into the current year. Just understood that some of your input costs will increase quite substantially. Do you anticipate more pressure in H1 and then an improvement in the second half? How should we think about the phasing of the gross margin and EBITDA margin over the year?

So on the first question, regarding the CapEx. So yes, we are a little bit lower for EUR 10 million. But it's -- it's only related to the cash flow profile. We placed all our purchase either as expected. But we were able to better manage the cash flow related to these investments. So we are in line with our capacity expansion plans. You saw it in FY '22. We were able to do even more than anticipated. And we don't expect any delay for FY '23 or the following years with all the information we have as of today. In terms of gross margin profile for next year. So in term of costs, we don't expect significant discrepancies during the year. But as usual, the first semester will be lower in revenue than the second one. Yes, we expect a better profitability in terms of margin for the second half of the year.

Francois-Xavier Bouvignies from UBS. My first question is on your comments, Paul, in the beginning. You said one major change in the industry is like the commitments. And you talk about commitments already in terms of years. But you mentioned as well financials commitment from your customers. So I would like to understand -- or if you could elaborate on this financial commitment. How is it? The details around? Are we talking about prepayment? Or how many of your contracts are locked in? Are we talking about pricing, locked in volume? Just a bit -- some details around this comment would be helpful. The second question is maybe on the capacity. So you have your target of EUR 2.3 billion. And you -- Pascal, you mentioned the high base scenario. The CapEx you are spending today, is it on your base? Or what is the total capacity basically that the CapEx spend you forecast for the next 3 years is? So I just wanted to understand the total capacity you have for fiscal year 2016 at the current CapEx level.

I can start with the first one a little bit. You can complete and take the second. So yes, I mean, there is a major change in the semiconductor industry. I mean, as I said, we have to double this industry over the next 7 years. And so everybody has to double -- I mean, we have to double capacity overall, right? So it starts with a long-term commitment from the end customers. And these commitments translate to us in basically downpayment, as you said, take or pays. And clearly, it is linked to volumes. It is linked also to pricing. And it is linked to going through the entire commitment. Meaning that you have downpayments that you don't release if the contract is not really fulfilled, right? So we are all very serious about that from up to bottom because we are also doing the same with our suppliers in order for them to grow their capacity for us in order for them to give us access to new product and new capabilities. So it is a big change in the entire value chain. I mean, when you talk to other players, you see it. You can basically ask the same questions. They will all tell you the same thing. We are all moving up into this because this is the only way to secure and to grow the entire supply chain. So we are exercising this. And this is basically what is happening for us, right? Second question was more about -- do you want to add something on the contract itself?

No, no. I don't think so. Yes. We got a significant downpayment from customers, and we will continue to do in the future.

Maybe one more things to add is that in our contract, we have also built into it clauses where you can reopen and rediscuss the contract in case of a major change. I'm talking about if there is situations where you have a material or utilities increase or things that you have not planned. I mean, that is totally outside what we have already agreed with our customers. We basically -- on all our contract, we have now the right to reopen it and to rediscuss this very specific situation. So we are obviously taking into account what we see every day. And this is also to continue to protect not only the company, but to protect also our suppliers and customers.

And the second question was regarding the capacity expansion plan. So our CapEx plan is based on our baseline, so the USD 2.3 billion. And if you -- if we are on the high case, we will need to accelerate some investments in term of tools. But the -- our current factories and the 2 extensions we are planning will be sufficient in terms of building. We'll not need another factory in order to be able to reach this $2.8 billion.

Maybe one more question here and then I have some in the queue.

Jerome Ramel, Exane BNP Paribas. On the SmartSiC, could you quantify the one improvement on the MOSFET trajectory you are seeing for your customers? And the second question I have, the slide you showed on the automotive, industrial revenues multiplied by 5. Even if I strip out the SmartSiC, it seems there's a strong growth coming in automotive industrial. What is driving this growth? Is it the microcontroller? Either -- just to get a sense of what is the driver beyond the SmartSiC.

So beyond the -- I will answer to the last question first. And then I will give the floor to Christophe to talk a little bit about the results that we get on the SmartSiC and the property of the product. So what is beyond the growth? We have the FD-SOI with the MCU is part of it. Power-SOI is also for power management IC and so on, is also a key driver. So beyond this SmartSiC, we have this SOI product portfolio which can be totally different when you are talking about Power-SOI or FD-SOI, which is supporting also the growth and the penetration. On a lower scale, the gallium nitride is also a part of it. But it's -- the main is SmartSiC and our SOI for different product. Christophe? You want to answer?

Thank you. Thank you for the question of silicon carbide. Give me the opportunity to tell you a bit more and answer your question. So we started silicon carbide in 2019 just before COVID winter, I would call. And 3 years later, so where we have the pilot line running, Bernard talked about it. And we have frozen the technology. And we are now qualifying this technology, shipping product to the customer every week. And shipping products with a lower defectivity, looking at improving the yield, shipping product with better geometry, improving the die size and shipping product, most importantly, with lower resistivity overall into the structures, thanks to this substrate that Bernard described. So the most important is that we are demonstrating the value, working with the customers. The value is a lower die side, lower die cost through yield and die size, as I said, and improving the overall system cost through energy efficiency. That's what we are working with customers. So you asked the very key questions, which is, how is the improvement of the [indiscernible] on to the product? So on the work with the customers, depending on their design, depending on the voltage they are using, were like 7% to 20% improvement into this [indiscernible]. And we are working further with them in looking at designs and improving again our products to seek for even better efficiency.

Okay. Thank you, Christophe. Maybe just to take a question that was sent on the platform. So question from Didier Scemama at Bank of America. So I'm reading the question, so don't shoot the messenger. But many -- it's on silicon carbide. Many of your potential customers for silicon carbide substrates are complaining that your solution is too expensive. When do you expect to meet the right total cost of ownership required by your customers?

I will start with that. So first of all, what we are always proposing to our customer is bringing value. With our SmartSiC, we are bringing value to the ecosystem. We are bringing value to the direct die makers. But at the system level, we are bringing value. So it's for that, that we are now in this phase or defining and really defining the value for all our -- all the stakeholder in this ecosystem. And as we are progressing and with all the results that we have, the value that we are bringing is totally recognized today. Okay? So -- and then -- so this mean that the story on the price is another story. What is important is that the value is recognized today by the key player. This is the first thing. Then the second thing, we are always working to have a competitive and to propose competitive solution. So it's for that also that when we are planning to have our Bernin 4 building is really to have fab, which is big enough in order to provide a very competitive cost structure to bring value, as I say, to the customer, but also to Soitec by controlling our cost structure.

Okay. Thank you. Thank you, Bernard. Maybe just to follow up on line also and on silicon carbide. A question from Rob Sanders at Deutsche Bank. How soon would you look to scale up to 0.5 million 8-inch wafers per year in SmartSIC? I think that goes back to the roadmap.

Yes. So in term of -- back to the road map. So the -- as you see, -- and today, what we provide is up to fiscal year '26 information. So in fiscal year 2016, it will not be at the level of 500,000 wafer. But what we see in the 2 years, 1, 2 years after, we can reach this full capacity. You want to?

Yes. Yes. And the model will also could be that we don't also manufacture all the wafers ourselves in order -- I mean, clearly, the -- as Christophe said and Bernard said, we are bringing unique values. And what we did last year is really to work with customers in Europe, in U.S., in Asia, to make sure that we could really out of all the materials in that we are using, meaning polysilicon, where we have now several sources when it comes to silicon carbide where we have also various sources. We come to basically a point where we wanted to check that all the value that Christophe just mentioned was recognized. And then you can start about, how do we share the value with our customers? How do we share the value with our customers? And to come up to a competitive pricing that is give us and give them these competitive acts that we are all looking for. So it could happen also that from the mother fab in Bernin, we could also leverage some other business model where we could have a license to expand and quickly also expand our footprint in silicon carbide with direct customers. But the mother fab is very key in our model because it will be the place where we can continue to implement new improvement in the technology. And if there is a specific license with specific customers, also to make sure that we can transfer this to our end customers. So it will grow as fast as we can in order to make sure that we can basically fulfill the end customers' commitment.

And maybe one last question from silicon carbide from Adi Metuku at Credit Suisse. So you have previously noted that your silicon carbide products are being trialed by IDMs. Can you please provide an update on qualification?

Yes. Last year, if you remember, in calendar Q4 last year, I told you that we will make decisions on the factory based on business milestones. So we have passed all these business milestones. And part of the business milestones it was also, obviously, taking into account that we needed to get very advanced devices built on our substrate we were able to demonstrate the value of this very advanced devices in terms of everything Christophe said. But we also -- and you know that there is a long process in automotive is to make sure that all the reliability tests are also well engaged and not showing any significant impact, right, on the quality of the devices. So that's where we are. I mean we are on the -- I mean we are very comfortable right now with the quality of the wafers that we are shipping. And obviously, we are working and talking to customers to looking how do we build this together.

Thank you, Paul. In the room, any follow-up questions? Yes.

One follow-up, if I may. On the organic growth evolution quarter-after-quarter. You mentioned that it will not be linear. What should we expect H1, H2? What are the puts and takes on the organic growth?

I will not give guidance for H1, neither Q1. But yes, we expect less growth during the first part of the year.

I would say, okay, I'm going to push it a little bit. It's always the same. We have an H1 slightly below and H2 slightly above. And this is where the -- I mean, look at the pattern every year. Okay? So that's the same pattern that you have seen last year, that you have seen the year before. We are going to duplicate this again. But basically, no change.

I was talking about the organic growth, the revenue growth, not the revenue in near term, so...

In terms of organic growth?

Yes. Organic growth, yes.

This is the same, yes.

For me, it's the same.

Yes. It's the same.

Just a clarification on your pricing. So you had a target to 2026, and you mentioned pricing, positive mix. Can you quantify what the pricing positive that you forecast for the next 3 years? Is it like low single, mid-single?

We don't really share pricing information. But clearly, I mean, we always told you that we have been able over the years and including today to pass to our customers the supply increase that we had. We have been able to pass also in our new contracts not only the supply, but also some of the inflations that we have across all our supply chain and then -- but also what we have also to deliver to our people. So basically, we do have the ability to continue to really deliver competitive product and still continue to manage with our customers an acceptable pricing increase to make sure that we protect our gross margin. We protect our EBITDA margin.

Yes. And as you said before, we now have better visibility due to longer-term contract with customers. So we have quite a good visibility on the pricing we can have in FY '25, '26.

Okay. Maybe back online, some questions on the P&L cash flow side, the financials. From Didier Scemama, Bank of America. So maybe one on clarification because we talked about the booked capacity for fiscal '23 and the visibility in fiscal '24. So how much of the capacity is booked for fiscal '23 and '24? And the second is about free cash flow generation. Do you expect to generate free -- positive free cash flow going forward?

So in terms of capacity, I mean, clearly, as I told you, I mean, most of our products are running stretched. And we are, for some of them, under allocations. Our Bernin 1 is running full, and the overflow is going to our partner in China, Simgui. And Simgui is increasing capacity, and they will be running in the 450,000 wafers per year. So that's where we stand. And so for 200-millimeter, our Bernin 2 is full. And basically, the overflow is going to Pasir Ris. Pasir Ris, every time there is a tool coming in, we rush for qualifications, and we bring this tool back to manufacturing as quickly as possible. And so -- and we will continue to do so because this is where the growth in 300-millimeter is coming from. On 6-inch, we have multiplied by 4 our capacity over the last 24 months. And clearly, we will not increase capacity this year, but we are going to basically run with the capacity -- installed capacity here. So that's the way we manage things for silicon carbide. I mean you have heard, I mean, we will use our pilot line for the next 18 months until the capacity is installed in Bernin 4. And by then, I mean, I can tell you that we will be in a rush exercise to continue to expand the capacity and feed it.

Okay. And on the question regarding the cash flow. So we are not providing any guidance for cash flow. But of course, we'll continue our report to manage the best as possible our working capital needs.

Okay. Thank you, Lea. Another question on the business, question online regarding POI from Adi at Credit Suisse. Can you please give an update on recent traction with POI? We haven't heard much about other customers after Qualcomm started using POI?

Yes, I can take it. So on the POI today, what we see on the -- across the ecosystem is that the value of POI is recognized by all the players. So this is a key thing. And so this means that today, most of all the players are working on this kind of solution. Doing -- depending on the customer today, we -- okay, we were public with Qualcomm. But there is several customer beyond that. And with all of them, we are running wafer and there are different levels. Some of them qualify, not qualify evaluation. So we are a different step with a different customer, but the key thing is that this POI is recognized today as a key solution for this business filter -- filter business.

Yes. And it takes time for our customers -- for our qualified customers. And as you said, there is several now that have qualified our technology and product. But it takes time for them to also be qualified at the system level. And so they have to tune their design to get into the final socket for the -- on the phone. So even for us, I mean, we see that as something that it takes more time than what we -- than expected. Okay? But the good news is, across the board now, there is a trend moving to POI for all the value that Bernard explained.

Thank you, Paul. Any question in the room? Okay. So I have a question online regarding governance from Rob Sanders at Deutsche Bank. So how is the progress with retaining key top talent in the ExCo after the disagreement around CEO succession in January?

Yes. In fact, it was not really a disagreement on the CEO because I personally think there is always a time to make a change. And we all agree that the Board has had to make the decision. So later or sooner, it was the decisions to be made, and everybody accepted it. So not a question about this. We -- clearly, the situations probably shown some irritants that have been public. And we all regret that. But at the end of the day, that was for the good, right? Because we are scaling up in basically the way we think about governance. We are scaling up in the way we are looking and facing, how do we grow this company, how do we expand, how do we manage altogether, and what is the role and responsibility and governance for any stakeholders in the company and outside the company. So the outcome is that there is a strong plan basically in place right now with responsibles at the Board level, at the management level. And we are all as a team driving this plan to make this company even stronger and even more ready for the next big things, right? So back to the questions about the management team, I think that you have seen the plan. I think the team has demonstrated, I mean, an incredible strengths in supporting this plan and building this plan with our customers and with our suppliers. I will let them comment, but -- and you can talk to them during the drink, but everybody is excited. Everybody is clearly on board. And then I think it will be a beautiful ride. But Bernard, do you want to comment?

Yes, you should.

By the way, you should. That's a good point.

Yes. I think that you said it. I think that we build all together this plan, this growing plan. And it is our plan that we all want to execute to achieve this -- what we are -- these are very ambitious growth. And the -- here is -- as you say, there is -- anything also on the governance side, there is some, as you highlight, some, I would say, improvement at the governance level, which are mandatory to go to the next step. So he was -- I think at the end, we are all here ready to -- for the next challenges.

Yes. And let me joke a little bit about it. When you have an accident, you could be killed or you could get stronger. In our case, we will get stronger. Okay? And that's the beauty of what happened. So this is great.

On that note, Paul, thank you. So another question online, talking about finance and more housekeeping question from Russell Champion. Will working capital remain constant as a percentage of sales?

Come again?

Will working capital in percentage of sales remain constant or up or down in the next year?

Yes, it decreased.

Okay.

It's decreased. At the end of March '22, we were at 26%. At the end of March '21, around 31%.

And going forward, what should we expect?

Last year, during the CMD, I said around the 30%. I believe we have to be between 25% and 13%. At the end of March '22, our level of inventory is a little bit low due to the shortage, of course. But at the same time, we will continue our actions in order to optimize so -- to be between 25% and 30% is realistic, but ambitious goal, I believe.

Thank you, Lea. I have no further question on the line. Anyone here? Okay. So if everything is clear, thank you very much. I think Bernard and Lea will go back to their seat. And I will let the floor to Paul for some final remarks. Thank you, Paul.

Yes. Thank you. And thank you first for all these questions. And let me share maybe a few words before we conclude this call and the meeting here. So we are in '22, and Soitec is turning 30. So this is a beautiful year to celebrate a wonderful events with absolutely great results. You have seen it, and a greater outlook. So I'm very, very pleased for that. And I think the team is excited about what we have presented today and the outlook. So throughout the years, I mean, our internal process of strategic planning has become stronger and stronger and clearly has helped us to deliver the results that we presented today. I mean what is interesting is that every year for 5 months, we have about 200 people in the company going deep in our strategic planning. And looking at this 10 years horizon and deciding where to play and how to win for 5 years, and we need to do that every year because we have been through the pandemic. We have been through the trade war. We have been through many other changes in technology. And so we can then plan, anticipate, revisit and stay agile on all this. Just as a kind of a little story here. And in fiscal year '17, we were planning for fiscal year '22. And the plan was called 1, 2, 3. One for EUR 1 billion. We were planning in fiscal year '17 to really deliver this EUR 1 billion. Two was double the profitability of the company. You will see on the slide, we were in the range of 15-point something, 16% EBITDA. And now we are at 35.8%. And 3 was to say we need 3 revenue stream. We had the new SOI. So now we have SOI. Now we have a compound. And now we have designs and royalties that we are going to continue to grow as part of the licensing process. So the plan of last year is going to extend into this year. The name is going beyond. I can tell you that the team is really -- how do we go beyond what we have shared with you on fiscal year '26. And beyond is clearly how do we continue to grow the company, what are the opportunities that we have in terms of technology inflections and the trends that are coming to us. So this is the value. And this is deep into the company. And this is why we are probably in terms of materials company a kind of unique in terms of how do we think about our strategy, how do we deploy our strategy, how do we anticipate with our customers. So for that, I would like to really congratulate the teams here because they have done a fantastic job, and they will continue. So I can tell you also that we will guarantee strategy continuity during our CEO transitions. And Soitec is now ready for the next chapter. And this is going to be a beautiful chapter. And I really trust, not only Pierre, but the entire team to make it right. So this is also a very important time for the company, but the company is prepared for that. There are no things that we have not really anticipate, and this is a good time also to do this. So now this is my emotion time. Now clearly, it has been a beautiful journey. It has been a great journey. And for some of you, I mean, I met in 2015. Wow, that was a tough time, right? In some of your office, I couldn't stay more than 5 minutes. But we had to rebuild that credibility together. I told you at that time, I mean, we are going to tell you what we are going to do. And we will come back and show and demonstrate to you that we are doing what we said we will do. So, it has been a beautiful journey for me, for the team. And I'm going to do something else, and my journey will be more on the beach maybe for sometimes. But I really, really would like to thank you all because you have been part of this journey. You have been clearly supporting us. You have been part of the excitement that we were building every day. And so I would like to thank you all of you for these years. Again, maybe to finalize this, I can only the reiterate my convictions that Soitec is a great company. We read books in the company. And every year before summer, I tried to give my executive team some books. Some are smiling, but some are not smiling because they don't want to read. But it's September, we talked about books. And over the last 7 years, we have read 2x the same book, good to great. Okay? And if you -- I can tell you that Soitec is becoming a great company. And this is a very important book that makes a lot of sense. Even if it's a 25 years old book, it gives you a lot of things in terms of how do you differentiate your company, how do you compete, how do you stay strong despite the trends in the economy and situations like that. So Soitec is prepared to double the size over the next 3 to 4 years. It's an impressive challenge. I trust the team. I trust Pierre. I trust the company to make it right. And I would like again to thank you all. And maybe we can meet over a glass of water. Thank you.