Soitec SA (SOI) Earnings Call Transcript & Summary

[Interpreted] It's being broadcast. I hereby declare open the combined ordinary and extraordinary general meeting of Soitec. This meeting is convened to go over the agenda set out in the notice of meeting, which was sent to registered shareholders and also published in the official voting. As the Chairman of the Board of Directors, I am chairing this general meeting, and I would now appoint the meeting's officers. I hereby call upon the 2 members of the meeting which hold the largest number of votes, and they have agreed to fulfill this role to act as scrutineers. So the company, BPIfrance participation, hereby represented by Mr. Samuel Dalens and the company called CEA Investissemen presented by Ms. Julie Galand. And Samuel Dalens and Julie Galand are seated in front of me here in the first row. The Chair and the scrutineers for the presiding committee of the meeting, and they appoint a secretary Emmanuelle Bely, who's Secretary General of Soitec and also the Secretary to the Board of Directors and who is standing to my left. We now have the officers in place. Also present beside me are Laurent Remont, our new CEO since April 26, who is attending his first Soitec Annual General Meeting; and Albin Jacquemont, our Chief Financial Officer. The statutory auditors are also present in this room. One is Benjamin Malherbe for Ernst & Young Audit, and Laurent Genin for KPMG. And we also have with us the directors who were able to attend those who could make themselves available. And I would like to thank them for attending. I would like to remind you that this general meeting is being video filmed and broadcast live on the company's website. The recording will remain available on the company's website after the broadcast. Now I would like to ask Emmanuelle Bely to inform you of the provisional quorum as established at the beginning of the meeting as well as to provide some further information about our meeting.

Thank you, Frederic. Good morning, everybody. I would like to remind you that our general meeting is convening today on first call, and all of the preliminary formalities in compliance with the law have been duly completed. I have before me all the documents attesting to the validity of the notice convening the general meeting and the proceedings are for the deliberations of documents and information required by law have been available to all communicated to shareholders in accordance with the statutory conditions and time limits. The agenda for the general meeting together with the draft resolutions were set out in the notice of the meeting, which also serves as a notice of convocation published in the [indiscernible] visibility on June 22, 2026. The notice of convocation was published in the Legal Gazette on the 10th of July 2026. I'd like to point out that following the publication of the notice of meeting, the company received no request to include items or draft resolutions on the agenda within the time limits and under the conditions laid down by the applicable regulations. Upon entering the meeting, the shareholders signed the attendant register both in their own names and also in their capacity as proxies. The attendance register drawn up by [indiscernible] , our securities custodian shows on a provisional basis that the shareholders represented or having cast their ballot post collectively hold 18,287 shareholders, representing 27,746,000 voices for a total of [indiscernible] shares carrying working rights. Therefore, a quorum of 50.99% of votes. The statutory quorum has therefore been reached for ordinary and extraordinary resolutions and other shareholders attended general meeting no later than the start of the presentation of the statutory auditor's report, the provisional quorum may be revised and the final quorum will be taken into account when we vote on the resolutions. The meeting is duly constituted and may, therefore, validly deliberate. Thank you for your attention. I shall now hand back the floor to our Chairman.

Laurent Remont will be opening the meeting by reviewing the group's performance by the 2026 financial year before discussing our sustainability strategy. Albin Jacquemont will then take the floor to outline our financial results for the same period, and he will also go over our growth prospects. I will then myself outline Soitec's corporate governance. I will then hand over to Emmanuelle Bely, who will present the remuneration of the directors. Our statutory auditors will present the conclusions of their reports. And before we move on to the vote of the resolutions, we will have the opportunity -- you will have the opportunity to ask questions. Finally, Emmanuelle Bely will briefly review the resolution submitted for approval by the Annual General Meeting.

I therefore proposed to the Annual General Meeting that the management report, the corporate governance report and the auditor's report and the text of the resolution are not read because all of these documents have been made available to shareholders in advance of the meeting. So we don't need to read them. Now I will give the floor to Laurent Remont. He is going to outline the group's activities in detail.

Thank you for the introduction, dear shareholders, members of the Board, dear colleagues. It is a great pleasure to be here with you today for my first Annual General Meeting as Chief Executive of Soitec. Since I took my post on April 1, I have devoted my time to getting to know the company from the inside and also meeting all the teams as well as our key partners. I am delighted to share with you the observations I have made what I believe to be Soitec's immediate priority. And also my assessment of our position within an industry in which I have -- I happen to have spent the last 30 years. To begin with, I would like to share with you the 3 main lessons drawn from the 2025, 2026 financial year. I must say it was a challenging year for Soitec Inventory correction weighed a lot on volumes. Visibility remained low in some of our end markets. However, at the same time, and like the rest of the industry, really, we are seeing artificial intelligence picking up speed further and beginning to profound the change and transform the demand for semiconductors. Our performance for 2025, 2026, it really reflects the context. Revenue for 2025, 2026 is down 30% year-on-year. factory utilization is below normal, but that is a deliberate action decision, and it is weighing on margin. On the positive side, our balance sheet is solid, robust. Our liquidity is strong and free cash flow has returned to positive territory. Albin will go through the figures in detail a little later. My second message, we are continuing to innovate, optimize, strengthen our portfolio so that we can capitalize on powerful megatrends, for instance, artificial intelligence. Photonics in data centers, FTSI in Edge, POI in advanced connectivity. We are currently consolidating what sets us apart from the competition, the very close relationship we have with our ecosystem, our unique R&D capabilities. And finally, an agile and scalable industrial footprint. Finally, my third key message. We started in 2025, 2026. We are going to continue in 2026, 2027 to position the company to make sure we return to profitable and sustainable growth. We have achieved this by supporting our customers in reducing their RFSOI specifically inventories by maintaining a very strong discipline on cost and by managing working capital requirements and capital expenditure to improve cash conversion. With regard to the financial results for the financial year, I will give you the highlights before Albin goes over them in detail. Revenues stood at EUR 592 million, so down 30% year-on-year. This is mainly due to the ongoing adjustments of RF SOI stock levels among our customers, and this is still in progress. Now the decline was partially compensated for by the fact that there is a very strong momentum in the AI area. Gross margin is 16.3%. This is a temporary low, but it's a decision we made strategically to reduce factory utilization in order to give priority to stock level returning to normal and maintaining discipline regarding working capital requirements. And our efforts have begun to pay off. Free cash flow is back to positive territory at EUR 63 million, thanks to our control over working capital requirements and discipline regarding capital expenditure. Now restoring the free cash flow is the first step of the journey. Before we can return to revenue growth and then deploy operational leverage, as Albin will explain a little later. Now with all that I just said in mind, let's look at the 2026, 2027 outlook for the financial year. Last week, ahead of schedule, we published our first quarter revenue. EUR 113 million, so up 23% year-on-year compared with the first quarter of 2026. And it's a like-for-like basis for exchange rates and perimeter, exceeding the previously announced target by about 15%. This growth mainly reflects the acceleration of Photonics SOI used for very high-speed optical transceivers, which are designed for AI data centers. the revenue of which has been doubling in 1 year. We have also reached an important milestone. We qualified our Singapore factory for mass production of Photonics SOI for our first customers. Now this is a key step for Soitec. It is going to enable us to meet the surge in demand, which we are currently witnessing. And we will progressively extend the qualification to other customers. Finally, something also very important that led us to publish our first quarter results early in the interest of rigor and transparency towards the market. And I'm referring to our visibility in the photonics industry because it continues to improve and our capacity to deliver at scale is strengthening. Now bearing any major disruptions in the AI market, revenue from Photonics SOI could more than double year-on-year compared with 2025, 2026 financial year when it stood at just over $100 million. We have also confirmed our investments for the 2026, 2027 financial year in the region of EUR 100 million. Now this is the take-on message we are capitalizing on the fungibility of our assets and our past investments because we believe this is going to help us moderate cash outflows and capital expenditure will be brought down to EUR 100 million this year, EUR 900 million. And we are making sure that we maintain our capacity to capitalize on future growth opportunities. In summary, after restoring positive free cash flow in 2025, 2026, our priority is to return to a growth trajectory and then to improve profitability. A major trend is driving the acceleration of our business. We are performing a major change in our industry, artificial intelligence. The trend can be observed on 2 levels. First, data centers, even investments made by hyperscalers is expected to double within the year, driven by the rise in inference and agent-based AI. Now this requires more GPUs, more processors. But it also requires GPUs that are more closely interconnected. And because we are facing a growing or even exponential demand for data, Optical connectivity is replacing copper. In such a way, it increases data rates and reduces energy consumption. Our Photonics SOI platform delivers superior performance for optical interconnects that makes us stand out. notably with optical losses in waveguides that are wavelengths that are very difficult to match at scale. Now with regarding edge, we have new battery-powered AI assistance, and we also have what we call physical artificial intelligence. A large proportion of the estimated 40 billion connected devices, which we expect to have by 2030 will still be running in the background. But this makes us very sensitive to energy consumption. And they also require a very high integration capacity between analogic, RF and digital components. FD-SOI is very, very good in both dimensions, AI coprocessors, automotive microcontrollers, portable AI assistance, Internet of Things centers. They all share the same requires. Low intelligence, more capacity to compute less energy, greater integration. FD-SOI meets this challenge on all 3 levels. More broadly, we expect AI to generate new performance requirements, both on the level of the electronic components, but also on the level of the materials from which they are made. This is going to have an impact on the majority of our portfolios, but we are focusing on 3 main technological trends arising from the disruption caused by artificial intelligence. AI computing, connectivity and finally, energy efficiency. In practical terms, what does it mean? While we have 3 short-term priorities. First, accelerate the strong momentum that we are right now enjoying for AI. The opportunity is certainly there, but we must make sure that it is properly executed. Success will also depend on external factors. I believe we are well positioned to capitalize and leverage this opportunity with both ambition but also caution. Second priority, refine our focus and resource allocation. A comprehensive review of portfolio priorities and capital allocation is currently underway. Our potential for technological differentiation remains but we want to improve our execution and the concentration, the focusing of our resources. Third priority, we need to adjust the size of the organization. The cost-cutting program launched in 2025, 2026 is continuing. The aim is to reduce in a structural way, the fixed cost base and improve operational leverage across the entire cycle. But at the same time, the R&D intensity and our strategic capabilities of being safeguarded. We are not going to sacrifice neither on our innovation or our strategic areas. Now this is my take on the Soitec situation and the orientation I would like to provide. We have a well-built portfolio on the right technological megatrends with a unique position in the AI value chain. Secondly, we have talented teams and they have developed structural advantages, and they will continue to do so. Finally, I believe we have very -- applied a very disciplined approach to gradually translate all of this all we have done into financial performance. We have our work cut out for us, but I am confident we are doing the right thing in the right order with the right team. And let us now turn to a fundamental issue for Soitec, our sustainability strategy. Because sustainability is at the heart of our strategy, and it provides a competitive advantage that we are continuing to nurture. Our [indiscernible] debt reflects our conviction. We are the soil on which innovation will grow energy-efficient electronics are turned into sustainable life experiences. And this ambition is built on 3 pillars. Driving the transition to a sustainable economy through innovation and operations, execution, promoting inclusive culture, taking action to become a model for a better society. When it comes to climate action, our decarbonization road map is still continuing to bear fruit. A quick reminder, our emissions reduction pathway was validated by the science-based targets initiative based on the most ambitious scenario, 1.5 degrees Celsius. We met our target for reducing Scope 1 and 2 emissions, 2 years ahead of schedule. And over the financial year, I must say our achievements have been tangible. Gas consumption at burning was halved, thanks to the first year of full operation of the newly installed heat pumps, 58% of the electrical power supplied to our Pasir site in Singapore is now renewable, which means an percentage, an 8-point percentage increase compared with 2024. And 41% of our shipments are now shipped by sea compared with 36% last year and air freight is down 23%. A few words on this progress and this momentum. This year, MSCI upgraded our rating to AA. This is the fourth upgrade in 5 years. And therefore, Soitec is ranking among the sustainability leaders in our industry. This development reflects a series of measures taken to drive our sustainability strategy. And these measures include a road map for sourcing green processed gases with nitrogen and oxygen already qualified for burn-in. Over 40% of our customers are qualified for sea freight. And over 90% of our strategic suppliers share and drive their own carbon reduction road maps. Our low carbon energy supply is on track. Approximately 100% hydroelectricity in France, a target we already achieved in 2021, and approximately 60% green energy in Singapore. And this level has almost doubled since 2023. With regard to water management, we are continuing to pursue our target of halving our water consumption per unit of production by the 2030 financial year compared with the 2021 financial year. I think -- I believe we are on track. Our water withdrawal intensity has fallen from 1.4 liters per square centimeter in 2021, 0.99 meters per square centimeter this year, a 30% reduction. The target is 0.7 liters by 2030. And the key driver for achieving this result consists in reusing the water in our industrial processes. We have reached 49% of water reuse, reuse compared with 16% in 2021 and the target is 50% by 2030. So as you can see, we are very close to achieving the target. Something else I would like to talk about with regard to sustainability, our workforce. We are aiming for gender parity. Women make up 36% of our workforce. The target is 40% by 2030. Women hold 27% of senior management positions and the target is at least 30%. We are continuing to make Soitec an attractive employer to support our growth, 20% of internal promotions have been internal this year. We shared the results of our growth with of our employees. 100% of our coworkers are eligible for a free performance share scheme. Finally, safety. Our ambition is obviously 0 accidents, no industrial accidents were recorded this year compared with 2 last year. And the rate of lost time accidents has fallen significantly from 2.77 to 1.49, accident per million of worked hours. Finally, governance, responsibility for sustainability is deeply rooted in each of our governing bodies. Within the Board of Directors our Sustainability Committee works closely with all the specialists, all of the specialized committees. Furthermore, to lead our sustainability approach. We have set up a sustainability steering committee comprising the General Secretary, the Head of Human Resources; the Chief Financial Officer and the Deputy Chief Executive in charge of Operations and Quality. Together, we assess and analyze our sustainability objectives, results and action plans. The decisions we take are then submitted to the Executive Committee, then shared with the Board of Directors the Sustainability Committee and the Audit and Risk Committee. And by doing this, we ensure seamless coordination and genuine strategic oversight at all levels of the organization. I will now give the floor to Albin Jacquemont, Chief Financial Officer. He is going to introduce the financial performance for 2025, 2026.

Thank you, Laurent. Ladies and gentlemen, the 2025, 2026 financial year was a decisive year of execution for Soitec. We took proactive and decisive measures to realign our operational base safeguard the balance sheet and position the company for the next phase of profitable growth. And despite a challenging demand environment, we delivered on all the commitments we set out at the start of the year. Key takeaways, decisive measures to correct supply and restore balance. This discipline was essential to streamline our working capital requirements and support a healthy rebalancing act to rebalance the distribution chain across the entire RF SOI ecosystem. Of course, this weighed on gross margin in the second half of the year due to temporary underabsorption effect costs. But it was a necessary step. It was necessary to restore structural balance. Second lesson drawn, restoring free cash flow generation and strengthening financial flexibility. This was achieved, thanks to disciplined management of working capital requirements and a more moderate capital expenditure profile. Because this strengthened our financial flexibility and increase our capacity to deploy capital when we find attractive high-return growth opportunities and when we find them in the future. They are less on drawn executing a clear 3-step road map towards a sustainable and profitable growth. Stage 1 consisted in restoring a positive free cash flow. We have achieved that. Stage 2 focuses on generating cash while progressing towards returning to revenue growth while we continue to reduce excess RF SOI stock and inventories across the distribution network. Finally, Stage 3. This will be the scaling up phase during which we will rely on our structurally efficient operating model because we know this will drive significant margin expansion and strong cash conversion as the demand of our end market improves and recovers. If we take them together, these 3 priorities reflect a clear sequence of discipline stabilization and value creation, and they position the company on the path of balanced and resilient growth. And I will now turn to the key figures, some of which have already been highlighted by Laurent, our CEO. Revenue stood at EUR 592 million, down 30% year-on-year compared with the 2024, 2025 financial year on an organic basis which reflects highly divergent end market dynamics. EBITDA margin stands at 25.4% and a 118 basis point decline year-on-year, driven mainly by lower volumes and our deliberate decision to reduce production in our plants. We call this plant deloading. Despite this, operating cash flow remained resilient, EUR 202 million, broadly in line with last year's. And this highlights the strength of our cash-generating model. Consequently, we generated EUR 63 million free cash flow, a significant improvement on the cash consumption, EUR 23 million in 2025. And by way of consequence, our net debt improved. It is now worth EUR 56 million, reflecting a solid and comfortable leverage ratio of 0.4x the EBITDA. During the '25, '26 fiscal year, our revenue contracted by 30% year-over-year on an organic basis, reflecting highly contrasting end market dynamics within our portfolio. For mobile communications declined by 41% year-over-year compared to 24.25%, continuing to be impacted by SOI inventory adjustments among our direct customers. This said, we are seeing encouraging adoption momentum for POI highlighted by first and the first multiple-year contracts signed with Automotive and industrial remained weak, down 44% year-over-year due to the persistent slowdown in the global automotive sector and continuing soft demand for both power SOI and FD-SOI. As to Edge and Cloud AI was once again the standout performer, up 8% year-over-year and up a strong 19% excluding merger SOI. Photonics SOI is now a platform generating over $100 million, posting growth of more than 30% year-over-year. This is in line with the continued expansion of our addressable market driven by accelerating demand for optical interconnects in AI dedicated data centers. since Laurent has already provided an overview of the operational context across all of our key product lines, I will move directly on to gross margin performance. Gross margin stood at 16.3% of revenue compared to 32.1% in fiscal year '24 '25. Beyond the decline in volume, 3 factors contributed to this drop. A lower capacity utilization rate around 50% compared to approximately 70% last year, which represents a headwind of about 800 basis points. an unfavorable price product mix resulting in a contraction of some 300 basis points. And lastly, the operational and subsidies provided a reline of approximately 180 basis points. Going forward, as the utilization rate recoveries and volumes rebound, we should see a natural expansion of the gross margin driven by operating leverage. Now let's turn to our operating performance. We reported a current operating loss of EUR 8 million compared to a positive current operating income of EUR 136 million last year, driven by the compression of the gross margin. This was partially offset by disciplined cost management, achieved while maintaining our commitment to our investments in R&D. Net R&D expenditures decreased to EUR 45 million, reflecting the sale of Dolphin design, increased recognition of grants and lower use of materials, particularly in Smart SIC. Excluding these items, gross R&D expenses remained stable compared to last year. Selling, general and administrative expenses decreased by 10%, driven by lower share-based compensation expenses. The reversal of provisions for variable profit sharing and incentive plans and disciplined cost savings across the entire operational base. On the next slide, we present the details of our nonrecurring items. The net loss amounted to EUR 220 million, heavily impacted by exceptional items, most of which stem from decisions made prior to '22. More specifically, we recognized EUR 123 million in other operating expenses, consisting mainly of an impairment charge of EUR 41 million related to Smart SIC assets. And then 9 million impairment charge on the as a risk expansion, which is currently unoccupied an impairment charge on the advanced payments made in 2022 under long-term raw material supplies agreement and imagine a loss on the earn-outs on less than EUR 10 million associated with the sale of Dolphin Design. These noncash charges reflects the rigorous management of our portfolio and a clear eye reassessment of market dynamics, particularly in light of the rapid expansion of low-cost Chinese while our crystalline silicon carbide capacity and the resulting pricing environment for smart SIC-related assets. Below operating income. Net financial expenses totaled EUR 31 million, reflecting higher interest costs related to recent financing transactions and a noncash foreign exchange loss of EUR 17 million recognized in April and May '25. The group has since implemented enhanced hedging measures to reduce residual foreign exchange risk going forward. When we adjust our reported net income of minus EUR 220 million, for the exceptional nonrecurring and noncash items detailed above, we arrived at a net loss from continuing operations of EUR 14 million and an earnings per share from continuing operations of EUR 0.38. We have fully delivered on our commitment to restore positive free cash flow, which reached plus EUR 63 million for the '25, '26 fiscal year, marking a sharp turnaround from the minus EUR 23 million reported last year. I would add that this generation of free cash flow exceeds the consensus, which was EUR 8 million. So it's extremely appreciable. The performance clearly demonstrates the quality of our execution rather than any support from market conditions, I would like to sincerely thank our teams for this achievement. This marks a structural turning point. Soitec is once again generating consistent free cash flow across the entire cycle, supported by a more selective and profitability-focused capital allocation framework. This turnaround is based on 2 key drivers: First of all, strict discipline maintained regarding working capital requirements, generating a positive contribution of EUR 49 million to cash flow year-over-year. This was primarily driven by a reduction of EUR 145 million in accounts receivable, reflecting lower business volumes and more rigorous collection management, as well as a EUR 24 million reduction in inventory resulting from deliberate actions aimed at reducing the workload of our plants and deliveries below the demand -- the underlying demand, in particular, in the second half of the year. This reflects a clear priority on cash generation. and strength of the balance sheet rather than short-term margin optimization which would have been a femoral. To provide more context. This slide takes a closer look at these working capital dynamics from a balance sheet perspective. As you can see here, our optimization efforts have paid off, particularly in the second half of the year. That's where the plan was defined. Now let's turn to the second driver of our improved free cash for investment discipline. We have strengthened our capital allocation by reducing capital expenditures by 40% year-over-year to EUR 135 million, EUR 135 million. Our capital allocation framework has become significantly more selective with resources increasingly directed towards the more attractive long-term value creation opportunities, in particular, Photonics SOI and POI. Alongside proactive inventory optimization, this more targeted capital allocation has enabled Soitec to return to a generation of structurally positive free cash flow leveraging our significant past investments in capacity expansion, which allows us to improve and secure growth opportunities. This is a major turning point in strengthening our financial profits and we're entering into a new phase of our development. Now as to the balance sheet, we ended the fiscal year with a solid and strengthened financial position. Net debt decreased by EUR 38 million to EUR 56 million, driven by continued strong cash generation and disciplined financial execution. This further strengthens our balance sheet and increases our financial flexibility for the future. To conclude on our performance for fiscal year '25, '26, we maintain a solid balance sheet, supported by strong liquidity and a moderate net debt position. At the same time, we are continuing to make progress in our commitment to greater transparency, improve consistency and high-quality financial reporting. So to summarize, we are very attached to our discipline in terms of managing capital with CapEx for fiscal '27, which should remain contained in EUR 100 million throughout the whole year. Now as to the exercise in 2027 will be a transition year. But the path to margin recovery is clear and linked to improved capacity utilization at our plants and the ramp-up of our high-growth platforms. Fiscal year performance in '27 will reflect factory utilization rates that although improving, will remain well below their optimal levels. as well as the level of subsidies expected to decline significantly. Indeed, discussions are underway as the calendar year '25 marks the end of the EPCI 2 program, the head of the anticipated launch of a possible IPC EI3 framework. Finally, the strengthening of the euro against the U.S. dollar is expected to create an additional headwind for our financial performance under current operating conditions. Our net exposure to currency risk for fiscal year 2027 is now 95% hedged with an exchange rate of $1.19 per euro. In conclusion, the company is well positioned for the future, building on a significant diversification of its portfolio has achieved over the past few years. The execution of the plan presented last November remains fully on track. As a reminder, this plan is structured around 3 distinct phases. Phase 1 restore cash generation by reducing working capital requirements and returning to positive free cash flow. The initial results are already evident, and we expect further progress in the future as a significant portion of our working capital requirements is set to be converted into cash over the next few years. Phase 2, return to growth. You know the results of the first quarter, which demonstrate that Soitec is already back in terms of growth. Phase 3, restoring a structurally higher level of profitability through operational leverage and cash conversion in line with our expected growth. Thank you.

Thank you, Albin for the presentation. I'd like to have a look at Soitec's governance reciting with the composition of the Board of Directors for the 36th fiscal year. As of today, the Board of Directors has 12 members, including 7 independent directors, representing 70% of the Board members, excluding directors representing employees. 6 women representing 60% of Board members, excluding directors representing employees and 2 directors representing employees. The governance structure is also characterized by its diversity with 4 nationalities, representing an average age of 53 years old. During '25, '26 of fiscal year, the director's commitment was reflected in an 88% attendance rate at Board and committee meetings. Let us now examine the composition of various committees and the work they carried out during the '25, '26 fiscal year. As of March 31, '26, the Strategy Committee was composed of 64% independent members. They met 6x during the fiscal year with an attendance rate of 84%. The Audit and Risk Committee for its part consisted of 5 members, 80% of whom were independent. They met 7x during the fiscal year with an exemplary attendance rate of 100%. the Board's compensation Nomination and Governance Committee also consisted of 5 members, 75% of whom were independent. They met 7x with a consistent attendance rate of 97%. Lastly, the Sustainability Committee consisting of 5 members, all of whom were independent, met 5x during the fiscal year with an attendance rate of 76%. During the '25, '26 fiscal year, the Board of Directors and its committees addressed issues ranging from strategy, finance and sustainability to governance and compensation. The main points of these activities are summarized on the slide you have on the screen. Since these items are covered in full detail in the universal registration document and in the general meetings materials I will not go over them here in detail. I will now turn to the annual evaluation of our Board and its committees, conducted in December '25 in accordance with the recommendation of the MEDEF code. This evaluation was conducted internally via an individual anonymous questionnaire sent to all directors, with the exception of one Director representing employees who was appointed in November 14, '25. Its findings analyzed last March by the Board's compensation Nomination and Governance Committee and presented to the Board of Directors reflect a high level of overall satisfaction with a global functioning of the Board and its committees as well as a culture of continuous improvement. The findings first highlight several major strengths: strong leadership underpinned by the excellent relationship between the Chairman, myself and the CEO, as well as strengthen ties with the Executive Committee. The exemplary quality of discussions is characterized by a freedom of expression and increased efficacy within our committees. Rigorous forward planning, particularly in succession planning, and the management of Board renewals. Highly praised involvement and training programs reflected by a high level of commitment and a near-unanimous agreement on the relevance of the training provided. Highly appreciated support from the Secretary or drives great visibility, strong responsiveness and the quality of the proposed work options, all of which were warmly praised. Looking ahead, the council has identified 4 areas for improvement to continue to incorporate new types of experts during the upcoming renewals to send documents earlier and prioritize more concise formats to offer new targeted training programs, particularly on AI and the availability of critical materials. And lastly, maintain the Atmos vigilance regarding the confidentiality of discussions. Based on these guidelines, an action plan has already been established for the 2026 fiscal year reaffirming our commitment to a process of continuous improvement. I will now turn to the rigorous process that guided the selection of our new Chief Executive Officer. Following per Barnaby's decision to step down on the October 2025 from his position effective March 31, '26, the Board of Directors active immediately to organize and manage transition structured in 4 main phases. The first stage began with the establishment of a dedicated select committee and the precise definition of the die profile, which will be detailed on the next slide. Once the search was launched, we compiled a short list of internal and external candidates who will then approach a confidentially. During the second stage, all shortlisted candidates whether from outside the company or from within its ranks, underwent in-depth interviews designed to assess their skills and their alignment with our strategic priorities. The third stage, finalize the selection. After a final round of interviews, the select committee submitted its recommendations to the Compensation Nominations and Governance Committee, which then presented its conclusions to the Board of Directors, which have been kept informed throughout the process. Finally, during the fourth and final stage, the Board of Directors unanimously decided to appoint Nora Rumo is the Chief Executive Officer, effective first of April 2026 and his remarkable career that industry giants such as Incheon and ST Microelectronics proved to be perfectly aligned with our group's ambitions. This slide outlines the target profile we define to guide our research. The Board of Directors established very clear criteria to identify the ideal leader for Cortec. Regarding the profile and key competencies, initial preference was given to candidates who already had an experience as a CEO who are high-potential talents. The candidate was required to have in-depth technical expertise in semiconductors and cutting edge or cutting-edge technologies. We are looking for a strategic thinker with an international outlook and a strong commercial or go-to-market mindset. Finally, a strong preference was given to French or French-speaking European candidates. In summary, as noted in the box at the bottom of the screen, the Board's objective was to select a leader capable of maximizing the value of our diversified product portfolio, while seizing new growth opportunities, particularly those driven by artificial intelligence. This rigorous process and these demanding criteria led the Board of Directors to appoint Laurent Remont as CEO effective 1st April '26. His background meets all of the criteria of the profile we just described. Laurent Remont brings world-class industrial and international expertise to SOTC. After starting his career at Philips, he spent more than 15 years at STS microelectronics, where we held senior management positions in the Connected Home division, R&D and Embedded Systems. He served as CTO as a member of the Executive Committee of Contra and followed by Senior Vice President, General Manager of MEMS division and Magnetic Sensors division at Incheon Technology. He is a graduate of reenable INP and has an in-depth understanding of our local innovation ecosystem. And so he brings the expertise and the technological vision needed to steer Soitec towards its next successes. Now let's turn towards the proposed changes in the composition of the Board of Directors for the coming fiscal year. As shown on the slide, the renewal of our directors' terms is spread out evenly over 3 years. Today, 3 terms are set to expire following our Annual General Meeting. Pierre Barnabé resigned from his position as a Director in core with the end of his tenure as CEO, effective at the close of business, March 31, 2026 in the evening. These are the terms of Mad Puliti, Mr. Forge and Devineur, Hale. I would like to know that Bad Pontegadea has chosen not to seek a reappointment as a director due to timing constraints linked to our other responsibilities. On behalf of the Board of Directors, I would like to thank and for her active contribution to the Board's work since 2022. To ensure these upcoming renewals are carried out successfully, we are following a rigorous selection process structured around 4 key steps. First, we define the desired profiles based on the Board's annual assessments and our diversity policy. Next, a specialized recruitment firm identifies and preselects candidates. These candidates have been evaluated and interviewed, ensuring strict compliance with the rules regarding independence and the holding of multiple positions. Finally, the Board, upon the recommendation of the Board's compensation nomination and [indiscernible] committees approves the selected candidates before submitting the nomination to a vote at the Annual General Meeting. I will now turn to resolutions 4 to 7, which concerns the proposed appointments and reappointments submitted for your vote today. First, the reappointment of Delphine Segura Vaylet as an independent director. Her solid experience with governance and human capital issues will continue to enrich the Board's work. If you approve her reappointment, she will continue to chair the Board's compensation Nomination and Governance Committee while remaining an active member of the Strategy and Sustainability Committees. Last, next, the reappointment of Christophe Gégout, also an Independent Director. His leading financial expertise and insight into industrial risks are key to safeguarding our strategic investments. Subject to your approval, he will continue to chair the Audit and Risk Committee through April 2027. Please note that in April 2027, having reached the term limit for independent directors set by Afep-Medef. We will hand over Chairmanship to an independent director. The Board's compensation, nomination and governance committee is working on this transition and on identifying a successor. The appointment of Laurent Remont, our CEO. His presence on the board is part of our commitment to creating seamless synergy between senior management and the directors. He will bring his key insight into markets and technological opportunities, particularly in the field of artificial intelligence. If it's a point that is approved, he will join the Strategy Committee. Also, as part of Resolutions 4 through 7, we proposed the appointment of Didier Fontaine as an independent director. Didier brings more than 30 years of financial and strategic experience gained at major global industrial groups, such as edema, Plastic Omnium, now is called Pity, Constellium, Narela and Safran. His in-depth expertise in global financial strategy issue strategy in cybersecurity as well as experience in supporting companies listed on international markets will be valuable assets and supporting Soitec's performance and growth trajectory Resolutions 4 through 7, if they are approved, the composition of the Board of Directors will be as shown on the screen. The Board would thus consist of 13 members. The proportion of women on the Board will decrease from 60% to 45% the percentage of independent directors will decrease from 70% to 64%. Finally, all committees will continue to be chaired by an independent director. Mr. Jegou, for the Audit and Risk Committee, Laurence Delp for the Sustainability Committee; Define Segura, who chairs the Board's Compensation Nomination and Governance Committee; and myself for the Strategy Committee. I will now turn the floor over to Emmanuelle Bely to present the compensation of the corporate officers of the '25, '26 fiscal year in the 267 fiscal year. Thank you.

Thank you. [indiscernible] to me as capacity as Company Secretary to present the section relating to the remuneration of our corporate offices. I'd like to point out that all provisions that are here have been approved by the Board of Directors in accordance with the recommendations issued by the Board Remuneration apartments and Governance Committee. You will find all the details on this information in the 225.6 universal registration document, Chapter 4.2 in the notice of the Annual General Meeting and on our website. Let us begin with the remuneration paid or awarded during the 2025, 2026 financial year to the company's directors, corporate officers. These, of course, fall within the framework of the policy approved by the Annual General Meeting in July 2025. These amounts are the subject of resolutions #8 through to 10 submitted today for your approval. This is an ex post vote. Resolution #8 regard the overall approval of information relating to the remuneration of corporate officers. This is known as the overall export to be distinguished from the individual ex post approval, which will be subject of Resolutions 9 and 10 Resolution #8 submits the remuneration of directors for the 2025, 2026 financial year for your approval. Total amount, EUR 691,710. And I would like to emphasize that as a jester of solidarity night of the partial furlough of our staff. The members of the Board then in office agreed on November 19, 2025 to a 5% reduction in their remuneration, applied on a basis equivalent to 2 months service. The remuneration paid for this financial year reflects this measure. With the exception of Niseko whose term of office ended before the decision was taken. And with regard to the arrangements and in accordance with the remuneration policy you approved during the 2025 Annual General Meeting. The budget is allocated on a pro rata basis according to the director's actual attendance at Board and committee meetings. As is customary, participation via video conference or conference call is treated as physical attendance and travel expenses are reimbursed upon presentation of supporting documents. Finally, I would like to remind you that the Chairman and the Chief Executive Officer received separate remuneration, which is not drawn from this overall budget. Similarly, directors representing employees do not receive any remuneration in respect to their role as directors. Let's move to Resolution #9, which concerns the remuneration and wanted to further list in his capacity as Chairman of the Board of Directors. As a reminder, our Chairman's remuneration policy provides exclusively for the payment of a fixed annual remuneration. The Chairman of the Board of Directors receives no other remuneration or any other benefits in kind with the exception, of course, of reimbursement of expenses incurred in the performance of his duties, but this on presentation of supporting documents. Accordingly, for the 2025, 2026 financial year for direct listed received a fixed annual amount of EUR 277,667 gross in euros, in accordance with the policy approved by you on the 2025 General Annual Meeting. As with the other members of the Board, I would like to point out that this amount into solidarity measure mentioned just now, namely 5% reduction implied on the basis equivalent to 2 months of service. We now come to Resolution #10, submitting for your approval of the remuneration awards to Pierre Barnabe in respect of his as Chief Executive Officer, which she held until March 1. 2026. For the 2025, 2026 financial year, his remuneration breaks down as follows: Fixed remuneration, EUR 525, 673 gross. This amount includes the 5% solidarity measure based on 2 months of service. short-term variable remuneration set at EUR 443,080, representing an overall target achievement rate of 83.6%. For the record, this variable component was based on the one hand on 3 financial criteria turnover, revenue, EBITDA and free cash flow. And on the other hand, on 4 strategic criteria, innovation, commercial performance, human resources and ESG. In detail, with regard to financial criteria, only the free cash flow target was fully met, 30% the actual performance standing at 147% and the target was of the 100% target. Regarding strategic criteria, they achieved an overall fulfillment rate of 53.6%. Finally, the 10% bonus on the results achieved against the financial and strategic targets, payable in the event of increased diversification of the product lines currently marketed by the group. It was not triggered. As part of this long-term variable remuneration, Pierre Barnabe was granted 28,754 performance shares valued at EUR 1,218,56 but this allocation laps on March 31, 2026 following Pier Barnabe's departure from the company. Furthermore, he was granted 2029 shares during the financial year under the ONIX 2025 scheme. In addition, a noncompetition indemnity to EUR 162 million, EUR 837 was pervade representing 50% of its gross fixed remuneration for the previous 12 months. This provision was activated in November 2025 in order to fully protect Soitec's technological and strategic assets by prohibiting Pierre Barnabe during this period from taking up a position, accepting a direct ship or acting as an adviser for one of our direct competitors. To complement this package, he benefited from a mandatory retirement savings scheme called PERO with contributions totaling at EUR 14,941. Finally, benefits in kind which include the provision of a company car and company accommodation as well as private GSE unemployment insurance totaled at EUR 36, 262. Having reviewed the remuneration paid or awarded to the directors during the 2025 and 2026 financial year. We will now turn to the remuneration policies applicable for 2026, 2027 financial year, which are subject of Resolutions #11, 12 and 13. We will start with remuneration policy for our Chairman of the Board of Directors, which submitted to your approval via Resolution #8 -- #11, sorry, as I mentioned a moment ago, the Chairman receives no variable component or benefits in any kind in respect of his directorship. This remuneration is exclusively fixed. For the 2026-2027 financial year, it is therefore proposed that this fixed annual remuneration be kept at its current level, EUR 280,000 gross. With regard to the remuneration policy for directors submitted for your approval via Resolution #12, no changes proposed to the total annual budget allocated to them, which remains fixed at EUR 820,000 gross since the 2022 Annual General Meeting. Now this policy is strictly in line with the one you approved last year. The allocation will therefore continue to be made on a pro rata basis according to the actual attendance based on the grid that you see now with the scale detailed in the split calculated on basis of 100% attendance rate. We now come to the remuneration policy for the Chief Executive Officer for the 2026, 2027 financial year, submitted to the approval via Resolution #13, the Chief Executive's remuneration policy provides for remuneration comprising a fixed component of short-term variable component and a long-term variable component as well as certain commitments and benefits. On January 8, '26, following appointment of Laurent Remont as CEO of the company with effect from April 1, 2026. The Board of Directors on recommendation of the Board's remuneration of the Board's Remuneration Appointment and Governance Committee reviewed the remuneration components applicable to him from the date his term of office takes effect. In structuring this policy, the Board of Directors has paid its approach in 4 fundamental pillars. Strict compliance with the recommendations of the AP MDF code and the Board's guiding principles, direct alignment with the company's strategy, performance and long-term objectives, competitive positioning of the CEO's remuneration in relation to the 2 benchmark groups. A European benchmark group comprising 17 international companies and a French benchmark group comprising 21 listed companies. These 2 benchmark groups were reviewed by a specialist independent consultancy firm and represent comparable companies in terms of market capitalization, total turnover area of activity and geographical location. The last does not have a working contract in alignment with the recommendations of Article 23 of the [indiscernible] code. Now to illustrate this principle, the slide compares to Barnabas remuneration structure with the new policy proposed for Laurent Remont for the 2026, 2027 financial year. The aim was to rebalance the composition of the remuneration so that it its consent to a breakdown of 1/3 fixed remuneration, 1/3 short-term variable remuneration and 1/3 long-term variable remuneration, which is in accordance with the benchmark I mentioned. Laurent Remont's target remuneration is the split between 28.5% fixed remuneration, 28.5% short-term variable remuneration and 42% long-term variable remuneration. Consequently, the total variable component short and long term represents approximately 2/3 of the total target remuneration. The proposed overall remuneration places achieved executives total target remuneration, i.e., 1,750,000 compared with EUR 2,285,000 for the former Chief Executive slightly above the median of French companies in the benchmark group and slightly below the median for European companies in the benchmark group. So here, you have the gross amounts and ceilings for the 2026, 2027 financial year. The gross annual fixed remuneration is EUR 500,000. Short-term variable remuneration is set at a target of 100% of the fixed component with a strict cap of 50% in the event of our performance. Long-term variable remuneration is also capped and may reach a maximum of 150% of the fixed remuneration. With regard to pension and benefits, the policy includes membership of the PERO scheme, the provision of a company car, relocation allowance and private unemployment insurance. Finally, upon taking up space, Laurent Remont is granted 8,012 shares, free charge under the Onix 2028 scheme, representing the equivalent of 85% of his fixed remuneration. It should be noted in conclusion that should Laurent Remont see to hold a post of CEO, he might be eligible for a severance payment and a noncompetition allowance and would not receive in accordance with our corporate governance principles, any additional remuneration for his seat on the Board of Directors. Having looked at the overall figures, we will now examine in detail the specific performance criteria, which are simplified and aligned with the company's strategy and market standards, that determine these variable components for the 2026-2027 financial year. Let us begin with short-term variable remuneration on the left. This strikes a balance between financial and nonfinancial goals. Financial targets account for 60% of the target and up to 90% in the event of outperformance. They are based equally 20% each on revenue from the Photonics business, current EBIT and free cash flow. Nonfinancial targets account for 40% of the target up to a maximum of 60% and are divided equally 10% each. They cover commercial strategy i.e., key agreements with the major accounts, customers and product portfolio management strategy, reducing the carbon footprint, scope 1 and 2 as well as talent redemption and organizational structure. With regard to long-term variable remuneration on the right, the assessment is based exclusively on quantitative indicators. Financial criteria account for 75% measuring on the one hand. Adjusted net current profit per share, 35%; and on the other hand, total shareholder return, TSR, 40% compared with the European sector benchmark index. ESG criteria, they account for the remaining 25%, divided equally between specific water recycling targets and diversity indicators. And this set of specific indicators allows us to link the Chief Executive remuneration directly with Soitec's operational, financial and sustainable success.

Thank you, Emmanuelle. I shall now hand over to Benjamin Malherbe of Ernst & Young Audit and Laurent Genin of KPMG, and they will now present the conclusions of their report.

Ladies and gentlemen, in fulfillment of the mandate entrusted to us by our Annual General Meeting, we are pleased to present to you the reports we have prepared for the financial year ended March 31, 2026. These reports cover the annual accounts, the consolidated accounts, the regulated agreements, the sustainability statement included in the group's management and the capital transactions provided for in Resolutions 15, 16 and 17. As is customary, we propose to summarize the key points and conclusions for you. With regard to our reports on the annual and consolidated financial statements which are the subject of the first and second resolutions. We hereby certify that the annual and consolidated financial statements for the financial year ended 31st of March 2026 are in order and true, and fair in accordance with their respective accounting standards and give a true and fair view of the results, financial position and assets of the group and the company at the end of the financial year ended March 31, 2026. The key areas of our audit focused on recognition of turnover in the annual consolidated accounts. tax compliance in the annual and consolidated accounts and valuation of financial fixed assets in the annual accounts. As part of our mission task, we also verify the fairness and consistency of the information provided in the Board of Directors' management report with the annual and consolidated financial statements. This includes information relating to remuneration, benefits and commitments, paid or granted to corporate officers. Finally, we would like to point out that our work was carried out in accordance with the professional standards applicable in France, and that we conducted our audit in compliance with the rules on independents.

I'm now going to take the floor regarding the other reports, our report on regulated agreements. We inform you in this report that no agreement authorized -- was authorized by our Board and signed and in the second part of the report, we summarized the agreements which were previously approved and had an effect on the 2026 year. The memorandum understanding entered into with [indiscernible] microelectronics International NV, which now expired in which resulted in invoicing of USD 10.4 million for the financial year with the CEA. Also, there was a multiyear framework agreement for collaboration on research and development. On the one hand, as well as the license agreement covering patents and the transfer of know-how for the manufacturing and sale of substrates. And finally, the third agreement was Shanghai [indiscernible] technology, an agreement to supply raw materials to that company to manufacture SOI wafers. And furthermore, under agreements relating to licensing and technology transfer as well as supply of SOE wafers. Now the purpose of these agreements is to enable Shanghai SIM technology as part of the expansion of its SOI wafer production capacity to manufacture these products in China and sell them exclusively to your company for the global market using Soitec smart cart technology. The next report regards the certification on sustainability information. This is the sustainability report. It's part of a report on the group's management. It is a limited assurance report that covers compliance with the ESS European Sustainability Reporting Standards and European regulations on the process implemented by Soitec to determine the information disclosed, which means the setting up of the [indiscernible] The second part of the report covers the sustainability information included in the report. And finally, taxonomy on the sustainability indicators for each of these checks and based on the procedures we carried out, we did not identify any material errors emissions or inconsistencies regarding compliance with the SRS and European regulations. I will close with the last 3 reports in support of the extraordinary resolutions, which are recurrent every year. First of all, a report on Resolution 15 regarding authorization to issue ordinary shares or securities with the preemptive right being waived in favor -- the right in favor of categories of persons meeting specific criteria being waived. We confirm that, subject to a subsequent review of the terms and conditions of any issue that might be decided upon. We have no comments to make neither on the method used to determine the surprise, not on the user. And if we -- the Board decided to use this, we would include a supplementary report in the next general assembly. As regards to 16 resolution, it concerns authorization to issue shares and/or securities reserved for members of the company savings scheme. Again, we have no comments to make regarding the method for determining the issue price of the equity securities to be issued. Again, if the board were to use this right, we will release a complementary support during the next general assembly. Finally, this will be the last for Resolution #17 relating to the authorization to reduce the share capital by canceling shares. We have no comments to make on the reasons for and the terms and conditions of the proposed capital reduction. Ladies and gentlemen, shareholders, thank you for your attention.

I would like to now open the question-and-answer session. Before we move to -- we proceed to the vote on the resolutions. We have received no written questions from the shareholders. And I would like to give the floor to Alexandre Petovari, who is in charge of Investor Relations to manage the Q&A session.

Thank you, Frederic. Ladies and gentlemen, if you would like to ask a question, please raise your hand, and you will be given a microphone. And before you ask your question, please introduce yourselves. And this is a Q&A session only for the company's shareholders.

The 4 individual shareholder -- it's the first time I attend the meeting. It's quite interesting, but I'm a little concerned regarding the 2026 2025, 6 results. obvious decrease in the profitability since 2025, even in comparison with the previous years when it was very high. But compared with the international competitors who still have sustainability that has now dropped in 2025 and 2026. So I am concerned about the inventories. You said you had inventories issues for your customers, yourselves, -- is there an issue with the provisioning on the constituted inventories? What is the age of the inventories? And how do we restore the loading charge of the factories, the usability is 50% currently. This is my first question.

Well, maybe we will answer the first question before you ask the second question because you already have some sub questions in the first question.

With regard to the strength of our company, the debt is very limited. The lever is limited. And then the -- really, the question is -- can we -- is the financial structure sustainable? And the answer is yes because the free cash flow is back in positive territory and the debt has decreased over the last financial year and the actions taken, starting in November and even last summer, have born their fruit, and we'll continue doing so for the next closing accounts closing. So there is no real issue and I would not worry about the company's strength. Now the second part of your question, inventories. The inventories level and both for our company's balance sheet and our customers' balance sheet. Well, it is true that the inventories for the company quite high. But right now, the trend is that the inventories are decreasing rather quickly. I cannot tell you -- give you any figures, but I can tell you that the inventories are going down very quickly, and the trend will continue in the near future. Why? Why is that? Because last year, we wanted to improve on the basic rule. Adjust production to deliveries to the customers. We don't produce what we can deliver with -- so we adjust the production to the demand from the end users, the end customers, and we also adjust our raw material procurement to production. And by aligning our production in such a way, we have decreased our inventories. I'm not done with the inventories. Obviously, this has a cost. The factories, as you rightly pointed out, being yes, utilized. And therefore, our workload is has decreased and the cost of under activity has increased. Obsolescence of the inventories, we don't really have enough [indiscernible] issue. Our products are not fungible. And we have many different products and maybe some product references are not being sold enough. And in that case, while we increase, we take the necessary provisions for impairment. And in 2026, we've conducted a rigorous analysis, and we did take consideration provisions for impairment. Regarding our customers' inventories downstream, Laurent Remont described the situation excessive inventories are specifically for RF SOI products. And I can tell you that our current turnover level, 50%, it accounts for Well, 50% of the final demand of the market means that the inventories are resolved every 6 months and by improving the logistics chain, we will bring this problem to an end sooner or later. I think you had a second question?

Yes I did. I have 2 more questions actually. I was taking notes of your previous reply. So second question. Second question. You announced a tax agreement with the French government. You were actually reducing over a loss for EUR 3 million -- and the loss that would be postponed. And I find it difficult to understand how you could be happy to loss to be postponed. I mean the statutory auditors said that you underwent a tax control from the French government, but you never mentioned the agreement with the French state on this EUR 320 million loss of a deficit that can be postponed and the publication is recent. I mean I only read about it a few years ago -- a few days ago, sorry.

Well, we're not rejoicing, I mean we're simply not showing any motions. It doesn't -- but we're not happy. The CEO in his presentation talked about a fiscal tax check from the government for 2021, 2022 financial year. But it was really due to 2 things. The way in which the company was restructured and the fact that we limited solar activities. These operations were conducted in 2018, so it was even before 2020. And also the way -- the different interpretation of our assets value for the securities transfer in our company in Singapore that belongs to the group. But what is really the heart of the matter. The company deducted in France losses that were incurred abroad. So it's not really black and white because we did not reach an agreement with the French tax administration. The sanctions actually were based on a much higher amounts. So it's not black and white. The initial amounts were much higher than the agreement we finally reached. And actually, we reached an agreement afternoon. Following the discussions that took place a few weeks ago, that was started a few weeks ago. And the final decision is protecting us from a significant risk that was bearing down on our company. What, EUR 320 million, I mean, it's a big loss. It's almost a years worth of financial results for 2025 and 1 year in the previous years, considering that the previous years, the turnover was EUR 1 billion, and profitability was approximately 10%. That's precisely what I mean because the amounts were high, we disclosed the agreement in the hours following signature of the agreement.

Okay. I'm still concerned. I don't feel we are short. Third question that the Chinese are very good for open source, especially Kimi 3 the new Kimi 3 model that was just released like 10 days ago. I think it's going to created a real turnaround in the R&M industry, it's going to be a game changer. And is there anything you can think of in your own industry, how can you influence this on the markets you are currently developing for data centers, for afference and computation capacity because the model -- the new Chinese models, Kimi 3, more specifically, [indiscernible] is apparently as good as chat GPT and the Entropic table 5, although that is supposed to be the gold standard on the market at a very low price, they will cost 90% less. So that kind of product will definitely be a game changer in the industry for data centers. And more specifically, for us as Western companies on this market because they're just changing the rules on the market. And I'm a user and the users will think, okay, we might as well adopt a new Kemit model and inserted in our data centers, in our new Shark PCs because the new Shack PCs allowed to host directly in our own premises in our own offices, a data center, which is directly allocated to AI for approximately EUR 10,000. So it is really a change in the industry. And I really would like to understand -- what do you think you can do? Are you thinking you can have an impact on your own production with regard to those markets?

There are several parts to the answer. Your question is, which is exact currently, in the AI industry. The race is to reduce the cost of tokens to ramp those up in scale. Now today, the value of is demonstrated in various use cases. The question is no longer that. The question is how do you ramp up and scale and ramping up in scale has a cost. So all of the industry now is orientated towards reducing the cost of a token to ramp up. And there are several levers to get there. One that you mentioned was the type of large language model in optimizing the model itself, that's one lever. So yes, in China, they're working on that. everybody involved and not only the Chinese are working in that direction. That's one of the levers with not the only one. There are deliveries on processes. Having dedicated processes anagenic processors. That's another lever and the third lever, which is the one that we're interested in. is how can we connect the various processes. So there's is one area, and that's for reducing the cost for token. So what we're doing is going exactly in that direction and reducing the cost of tokens by reducing the energy consumption and making it possible to better use the various processors, whether they're waiting for data. The more you use to, the more you reduce the cost of the solution. So we are totally involved in that dynamic, whether it be with American players or European players or Asian players, we cover that whole pellet.

Thank you, Mr. Chair. Hi, everyone. Individual shareholder, 3 questions. What are the opportunities of SOI for AI, separating it out as it was just done, AI perception and generative AI and agent AI and physical AI?

Today, in AI, we observed mainly in data centers, this has started more with model training. And now it's moving more towards inference, using models in specific use cases for enterprises. So for us, the real opportunities for us are essentially in terms of data centers and connectivity between GPUs in other words, photonics. So today, SOI photonics and related technologies, which makes it possible to have better integration and to develop a road map based on that usage in data centers. So that covers model training. It involves insurance, inference and the genetics which you were speaking about. However, the data centers we see today, that's what buoys up our growth in the short term. In middle term, there are opportunities there as well, more in edge AI. And as you said, physically, AI closer to users, basically and use cases today are mainly companies, but they will be increasingly migrating towards individual users. And we believe that this will draw forward a certain amount of growth for us because most of these physical AI use cases require very low consumption technologies, consumptions that will include analog and digital. And one of the technologies that we have is FD-SOI is very well positioned. There is no equivalent of that for this type of low consumption technology. So this will be one phase of growth for later that we're planning on when physical AI develops further.

The second question was about Photonics. Globally, -- this is broad optical interfaces. Could you give us a bit more indications of the SOI content for GPU or per CPU or XPU, [indiscernible] flow rate in terabits per second or something like that. Do you have -- do you have anything for at least for Cook? Are you in the NVIDIA blueprint?