Good evening, everyone. Thank you for joining the presentation of our '26 H1 results, which I will present with Edouard de Pirey, Valeo's CFO.

Over the next 20 minutes of our presentation, you will see that we have had a good H1, solidly in line with our guidance and with our Elevate '28 trajectory. Indeed, the first 2 engines of our trajectory, profitability and cash, are now confirmed on and running on an upward trend.

And the third engine is ready, the return to growth from '27. On top of that, thanks to our cash generation, we have reduced our debt, which is remarkable for the first half of the year.

Naturally, I will first walk you through the highlights, then Edouard will share more on our H1 performance. This presentation will be followed by a Q&A session that we will handle with Edouard.

So to start on Slide 4, you will see that we are perfectly in line with our guidance with continued improvement in profitability and cash flow. The group sales totaled EUR 10.4 billion, our operating margin stands at 5%, which is 0.5 points higher than H1 last year.

It's also 0.3 points higher than the full year '25, as well as from the bottom of our guidance. Free cash flow after net financial interest amounts to EUR 242 million.

That's more than double H1 '25, and more than half of our minimum full year guidance. Assuming stable conditions, we expect our H2 operating margin and free cash flow to be at least in line with H1.

In this context, we reaffirm our guidance for the year. Moving to Slide 5 now.

Our performance in H1 is proof of the 3 engines powering our Elevate '28 strategic plan. As a reminder, the first engine is profit, which has steadily increased since '22.

The second engine is cash, also increasing structurally since last year; and third, a return to growth from '27. Let's look at this in more detail.

Moving to Slide 6. We have sustained profitability improvement since '22 despite volatile market conditions, which you are very familiar with.

And our operating margin has increased year-on-year. We've held the line and continued this improvement by doing exactly as we said, by right-pricing our technologies with higher margin orders through rigorous and systematic compensation from our customers when needed and through reduction of our costs and of our breakeven point.

Moving to Slide 7. We have also improved our cash generation year-on-year since '22.

In H1, we had strong structural cash generation amounting to EUR 242 million, which, as I already said, is more than half our minimum '26 guidance. Thanks to this strong cash generation, we have been able to structurally reduce our debt by around EUR 200 million versus the end of '25, and by around EUR 350 million versus one year ago.

It's the first time in 10 years that net debt decreases in H1, thanks to free cash generated by operations. We made cash generation our top priority, and we are now starting to see the fruit of that.

Increased structural cash generation and debt reduction show the effectiveness of the cost reducing measures we have put in place over the last 3 years. Our H1 order intake.

It is at EUR 12.1 billion, up from H1 '25, and this is consistent with our Elevate '28 trajectory. Order intake is 1.4x OEM sales in H1, equal to our cumulative level of order intake of the last 3.5 years.

Overall, order intake remains well balanced with our POWER and BRAIN divisions each making up a little more than 1/3, and LIGHT accounting for 25%. On Slide 9, I'd like to highlight a few milestones we hit so far this year in the 3 key regions of our plan.

These achievements prepare the return to growth in '27. In North America first, we broke ground of a new plant in McAllen, Texas.

The site supplies the central compute unit for General Motors software-defined vehicle architecture. This, by the way, is one of the largest orders in Valeo's history.

China, as you know, is a highly volatile market, but thanks to several new large contracts with leading Chinese OEMs, we see a return to growth in H2 with Chinese automakers. Note that our orders are now largely skewed towards Chinese OEMs, more than 80% of the order intake in the country, and a remarkable 5x order intake ratio with Chinese OEMs that will support growth in China.

In India, we continue our strong momentum with the investment in a new 3-in-1 e-Axle production line for Mahindra. And we also have a new line for High Definition Surround-View camera for local OEMs.

We expect sales in India at EUR 700 million in '28, 3x our '24 sales, and we are on the right track. Finally, some words on beyond automotive opportunities.

There are no borders anymore between the various industry verticals because what counts more for companies is not their experience in automotive or in other fields, but the technologies behind AI, software, cybersecurity, power electronics, sensing, thermal management and the ability to scale up. As a great technology and industrial company, Valeo has a lot of opportunities in other fields than auto.

We have already been working on some of them for several years, understanding the markets, creating technology differentiations, developing an exciting product offer. These opportunities are not factored into Elevate '28 financials, but they are indeed increasingly promising.

These beyond automotive opportunities stand at different development stages. The production for charging solutions 2 and 3 wheelers as well as agriculture is starting.

We have taken orders already in battery energy storage systems as announced in February and in defense. And you saw our announcement this week regarding a first order for new electric motor for drones, free of critical rare earths.

Regarding data centers, different proofs of concept are ongoing with potential customers whose names I cannot reveal at this stage. And lastly, we have recently added humanoids as an interesting business potential, and we presented our first component mockups at the Beijing Auto Show.

Let me finally remind you that these opportunities do not incur any important investment or costs to us, they stem from our existing technologies and expertise. I will now hand over to Edouard, who will give more details on our performance in the first half.

Thank you very much, Christophe, and good evening, everyone, and thank you for being with us tonight. Let's move directly to our financial performance for H1 '26.

As a reminder, you can find the detailed figures, including the stand-alone Q2 data in the appendix of this presentation. I will start with our top line performance on Slide 12.

Total sales were up 0.7% on a like-for-like basis at EUR 10.4 billion, consistent with our full year objective. OEM sales performed largely in line with the global automotive market, down 0.6 points like-for-like in a market that contracted itself by 1% over the same period.

Aftermarket remains a steady pillar, delivering 2% like-for-like growth. This was supported by solid performance in North America and in Asia and the rollout of new services with distributors.

Finally, miscellaneous sales grew by 16% like-for-like with the bulk of that growth concentrated in Q1. Moving to Slide 13 with the performance by region.

As I said, we performed largely in line with the market, and we benefited from 0.5 point of favorable geo mix. North America was a standout driver, growing 6% like-for-like and outperforming the market by 7 points.

This was mainly fueled by our POWER and BRAIN divisions. Asia, excluding China, also delivered robust growth, up 6% like-for-like and outperforming by 3 points.

As Christophe pointed out, India continues to enjoy strong momentum, keeping us perfectly on track to triple our sales in the region by 2028. In China, the market is highly dynamic with Chinese OEMs setting the pace.

Our sales contracted by 9% like-for-like resulting in a 4-point performance gap, essentially due to international OEMs. In parallel, we are making great strides with Chinese OEMs.

This semester, we recorded 53% of sales and over 80% of orders with Chinese OEMs in China. Lastly, Europe underperformed by 3 points as the outperformance of LIGHT and BRAIN was offset by the performance gap at POWER.

Now moving to our divisions with POWER on Slide 14 to start with. The main takeaway here is clear.

The division is successfully executing its profitability turnaround. Sales reached EUR 5.1 billion, performing in line with the global market.

North America was strong throughout the semester and e-technologies performed well, most notably in India where we started production of a complete e-Axle system for Mahindra. The major highlight is the operating margin, which surged by 1.3 points to 4.8%.

This confirms the success of POWER's strategy to restore its cost competitiveness. Moving to BRAIN on Slide 15.

Overall, the division's performance is strengthening. Sales were flat at EUR 2.5 billion, outperforming the market by one point.

This was mainly driven by solid results in displays, telematics and vision systems. Momentum in software-defined vehicle continues to build.

As Christophe mentioned, we've broken ground on a new site in Texas to serve a major order for General Motors, and we are seeing significant good successes in China with new orders for autonomous driving control units, or ADCUs. Operating margin stood at 5.6%.

While this is down year-on-year, it is up sequentially. This reflects sustained investment in R&D, supported by a solid and profitable order book to prepare for the upcoming growth.

Turning to LIGHT on Slide 16. Sales reached EUR 2.7 billion, up 1% like-for-like, outgrowing the market by 2 points.

The division delivered a solid performance across Europe and China fueled by new EV production launches with local Chinese champions. The operating margin improved to 4.7%, which is 20 basis points better than last year, driven by more profitable product launches.

Moving to Slide 17. Let's now focus on the group's profitability, the first engine of the Elevate 2028 plan.

As mentioned by Christophe, in an overall challenging environment, we have held the line and continue to drive improvements in our profitability, confirming that the first engine of the Elevate '28 plan is on. Our operating margin for the first half '26 stands at 5.0% at the midpoint of our full year guidance and 50 basis points up year-on-year.

There are 3 points I would like to emphasize here. First, the gross margin.

It reached 20.7% of sales, matching its 2017 peak. This level is consistent with our ambition to stay sustainably above 19%.

This achievement is driven by the same factors that we highlighted in previous results calls, namely strong pricing discipline, robust productivity and industrial efficiency. Second item, SG&A expenses remain tightly managed, down 3% compared to H1 '25.

Finally, R&D spending. Net spending was up 2% to 11% of sales.

This reflects 2 opposing trends. On the one hand, gross R&D spending decreased by 3%, consistent with our objective not to grow anymore after the 2024 peak.

On the other hand, the IFRS impact was up 0.3 points lower than our guidance for the full year of 1.5 points. This is related to an impairment of capitalized R&D for EUR 85 million following contract cancellations.

For the second half, we expect the IFRS impact to be under 1.5 points, resulting in a full year impact of less than 1 percentage point. Turning now to net income on Slide 18.

Two main points to note. First, we recognized EUR 78 million in order income and expenses for restructuring costs, consistent with our plans, including the final leg of our 2024 self-help program.

Second, the effective tax rate was at 48%. This reflects temporary impacts from our restructuring program in Europe and our ongoing dividend repatriation policy.

All in all, net income came in at EUR 105 million, essentially in line with last year. On Slide 19, with a free cash flow of EUR 242 million for the semester, more than double last year's figures, we are confirming that the second pillar of Elevate 2028 the cash engine is also clearly on.

Free cash generation improved in absolute terms and in quality. If we look at the main levers behind this improvement.

First, profitability. The topic we have already addressed the H1 '26 results provided further evidence of our progress in this area, which is key to strengthening our cash generation capabilities.

Second, we maintained tight control over investment spending with both intangible and tangible CapEx down this semester. Specifically, capitalized R&D was down 5% versus last year, tangible CapEx dropped 12% to 3.6% of sales.

As we noted during our full year '25 results, this improvement is structural. We expect to sustain this for the full year '26.

We confirm our potential to again keep the CapEx intensity below the long-term objectives of 4.5% to 5% of sales. This performance allowed us to reduce our net debt by EUR 194 million over the first 6 months.

As Christophe noted, this is the first time in a decade that we have achieved a net debt reduction in the first half based on free cash flow from operation. And contrary to last year, ForEx had a positive effect of EUR 87 million.

To conclude the financial review, Slide 20 focuses on our financial structure. Net debt decreased to EUR 3.8 billion, down from EUR 4.0 billion at the end of '25.

Our leverage ratio improved sequentially to 1.2x adjusted EBITDA, down from 1.3x in December and safely below our 3.5x covenant. Our liquidity remains robust with EUR 3.0 billion in cash and EUR 1.6 billion in undrawn credit lines.

Finally, the net proceeds from the EUR 600 million bond raised last June gives us the flexibility for an early redemption of our outstanding May '27 bond and thus optimize our long-term debt profile. Thank you for your attention.

I now hand over back to Christophe for his concluding remarks.

Thank you, Edouard. As you've seen in these results, our Elevate '28 strategic plan is actively delivering, and we reaffirmed our guidance.

Before we take your questions, there are a couple of takeaways I would like to leave with you. One, our financial discipline is paying off.

The first 2 engines of our plan, profit and cash are fully running. We have increased our margins.

We have achieved a historic H1 debt reduction without relying on any asset disposal. Two, we are ready for return to growth from '27 with a EUR 12.1 billion order intake and major milestones achieved in North America and China and India, our core automotive business is resilient.

And three, we are unlocking low CapEx, potentially high upside horizons in beyond automotive. Thank you for your attention.

Edouard and I are now available to answer your questions.

Congratulations on the results, Edouard and Christophe. Christophe, can you comment a little bit around the opportunities you see to win orders in 2 segments, humanoids and data center.

Can you comment around the expertise that Valeo brings across both divisions. And geographically, any color where you do expect first to win orders.

And second, when it comes to margins, and I believe the comment that second half margin should be at least with the results we have seen in H1. What gives you the confidence of what are the key drivers to deliver this result in the second half?

Thank you very much, Jose. Thank you for your 2 questions.

I will give the second one to Edouard. I will answer the first one.

Well, you mentioned data centers, and you might know it as growth opportunities for Valeo, and they are, and they are indeed, as I explained because I believe that, of course, our expertise in automotive is extremely strong. We are an automotive supplier.

But we have developed over the last 100 years, I should say, 3 years an amount of incredible technologies that are, in fact, common to many different industry verticals. And we have identified data center infrastructure, and we have identified humanoids as potential ways to use these technologies developed for automotive in these fields.

So when it comes to data centers expertise, there are 2 areas on which we've been working now for 3 years. One is cooling, specifically liquid cooling.

As you know, we handled an expert call a few weeks ago, and we explained that the data centers are going from air cooling to liquid cooling and we have a lot of expertise in liquid cooling, as you said, because that's what we do in automotive. Basically, we have the technology.

Basically, we have the capacity. I think we have all it takes to succeed in this area as the data centers are translating -- transferring from air cooling to liquid cooling.

But in data centers, infrastructure as well power electronics because the voltage that data centers are using are also going to 800-volt. They're going to 48 volts.

Well, these are voltage on which Valeo has developed an unbelievable expertise coming from automotive. So we are developing as well a full range of products in these areas that can play a role in the future of data centers' infrastructure.

Relative to humanoids, we've been starting this effort later maybe 1 year, 1.5 years ago. To the point that at the Beijing Auto Show, we have already showed a few of the key components that we believe have a role to play at value.

These are mainly motors. These are mainly actioners.

Do you say actioners?

Actuators.

Actuators. Sorry, I was missing the English word.

Actuators and motors. There are motors and actuators from many different kinds, depending on the move, but we have these technologies, and we're developing the products accordingly.

The geographies are the geographies of data centers. It means everywhere.

It has a lot of advantages for us. It's about growth.

It's about potential margin because, obviously, the margins we see in this business is not the same as the margins we usually have in automotive, although our margin is getting better. But it's as well no investment because we have the capacity.

We have these plants all over the place, all over the world that we can deliver from and sovereignty as well because in this case, people are asking us whether we are capable to do it from Europe, from India, from China, from U.S. because these orders are important or are using public money in some cases, and therefore, there's a need for sovereignty.

So it's all over the place. Second question for you, Edouard.

Jose, thank you for your question, and happy to answer to it. As you mentioned, so we said that H2 margin would be at least equivalent to H1 and where does it come from?

Actually, naturally, the market is volatile, is complicated to read and it's changing. But basically, as we said earlier at your conference, by the way, we do see stability in the [call-offs] from our customers for H2, and we are confident regarding volumes.

This thing could happen. But today, we see no change [in the call-offs] from our customers for H2.

As usual, we build step-by-step efficiency during the year with our suppliers, with our own activities while we give our efficiencies to our customers usually at the very beginning of the year. This is why we consider that H2 should be okay.

And finally, inflation is, at that stage, very well managed by our teams. They are doing a fantastic job to secure that, on the one hand, we get lower pressure or we counter the pressure from our suppliers.

And on the other hand, what has to be passed through the customers is passed through at the end. This is why we could say or explain our ambition of H2 being at least equivalent to H1.

Yes, Michael Foundoukidis, ODDO BHF. Congrats on the results.

2 questions on my side. First, to come back on the margin side.

You had like an R&D impact of 30 basis points in H1, and you're saying it's going to be below 1.5% in H2, but close to that, if we look at the full year guide, that implies roughly 4.7% margin underlying in H1 and close to 3.5% in H2. So the other way than what Jose said, why should we be more cautious in H2 versus what you already realized in H1.

That's the first question. And maybe on the second one on adjacent market.

So I fully understand the opportunity for you, and it makes total sense, but completely what sets you apart from your automotive peers in your field on data center or humanoid, for example? Because you said auto is a great expertise and clearly, it probably is.

But what is different versus your usual peers in the automotive area.

Thank you, Michael. I will take the second question and leave the first one to Edouard.

Well, I think it's a question of time to market. It's a question of determination.

It's a question of speed. As usual, everything is competition.

Automotive is competition, beyond auto is competition as well. So at the end of the day, it's going to be about Valeo being quicker, being better, being more agile, making sure that we develop the right technologies.

Nothing is for sure. Nothing is granted, but I can tell you that within Valeo, there's a unique determination.

There's a unique ambition to take part of these adjacent markets where the Valeo technologies can play a role. And we'll see at the end of the day who wins, who does not win.

The characteristic of these markets as well is to be huge. Most of the 8 markets I showed on my slide, beyond auto, are extremely significant markets.

So there's not room for one supplier for one company, there's going to be room for others that Valeo is absolutely determined to take part in this story.

As far as your first question is concerned, Michael, and thank you for this question. Actually, you have in mind that the IFRS impact is low in H1 at 0.3 points, as I explained because we had some impairments and I mentioned EUR 85 million of R&D impairments in the first half.

And you have well in mind that we always said, and we continue to say, and I confirm today again that any cancellation is fairly compensated by our customers. And you definitely know what fairly compensated means when I speak.

So at the end of the day, the global impact is zero. It is dilutive at the end of the day because limited margins, but the impact overall in operating margin is rather limited when you have these kind of cancellations.

Now you're fully right. Yes, today, we said that H2 would be as a minimum or equal to or better than H1, it doesn't prevent us to do better in H2.

I'll stick to the 2 questions. Yes, nice quarter.

Two questions for me, specifically on China and the second one on POWER. So firstly, on China, you talked about this 5x book-to-bill with the local OEMs, which is obviously a very nice number.

How should we think about how that shapes across divisions and maybe by OEM, if we were to monitor retail sales for the Chinese OEMs. Is there a specific player or maybe 1 or 2 players that, that order bank really skews into.

And then linked to that, do you think that will allow you to outperform light vehicle production in China maybe from 2027? And then the second question, just on POWER, obviously, unusual to see such a big margin upswing on down revenues.

So just maybe if you can help give the building blocks of that upswing in the POWER margin. How much is cost savings, how much is customer mix or maybe some pricing benefits?

And then if there's any one-offs in that POWER margin that we should think about as it relates to the second half. Would be really keen to understand how we should think about second half POWER margins given that big beat in the first half.

That's it.

Well, thank you very much, Ross. Two very interesting questions.

The first one on China. Yes, I think the performance of Valeo in China in H1 has been outstanding.

I mean, frankly speaking, 5x order intake versus sales. It's a tremendous achievement.

It means that on the technology side, on the competitive side, we are here. We are where we need to be in order to be a key player in the Chinese industry.

Remember, my strategy, we want to be strong in China because we learned so much over there in terms of technology and how to be competitive and how to meet the Chinese pricing in the Chinese market price, then it benefits Valeo all over the world. So the stronger we are in China, the stronger we will be in the rest of the world because we are exporting to the rest of the world, the knowledge, the competitiveness, the optimization of the design that we learn every day being in this business center.

If you look another way at the order intake in H1, 25% of the order intake of the group has been with Chinese OEMs,. 25% of the order intake of the group has been with Chinese OEMs.

This is 25% what the Chinese OEM represent in the automotive industry. So for the first time, we are matching in terms of order intake the share of the Chinese OEM in the world.

We are matching this share in the share of order intake, which is an extremely important milestone that we have achieved in H1. Now your question is which OEMs and my answer will be all Chinese OEMs.

So we don't want to bet on one or the other, We're working with all the Chinese OEMs. And I think that the past is telling us as a lesson that this is what we have to do because you see from one semester to the next, you see from 1 year to the next extremely volatile dynamic from the different customers, so we better work with most of them and try to convince each of them that we are the right partner.

Your other question is which division? Well, all divisions.

The strategy I'm telling you it's to be strong in China, to be strong in world. So it cannot be one division strategy.

The 3 divisions are following the same strategy. They want to grow in China.

They want to be strong in China so that we benefit, it benefits these 3 divisions in the rest of the world. Coming to your second question, maybe Edouard will complement what I said.

The recovery of POWER is remarkable. It's a true remarkable recovery, and I want to thank in front of you all the performance of the teams of POWER for what they have achieved, not just this semester, but if you look at it over the last 2 years, and it's a mix of a lot of different actions.

Of course, cost decrease, cost reduction. And you know that we have allocated most of the EUR 400 million restructuring plan of the group we have allocated it to POWER because POWER was the division that was lagging behind in terms of profitability.

So we have decided to put most of our effort in POWER, and we now see the results of it. I think it's as well better orders with better margins.

This is valid for all the group, but this is particularly true when it comes to POWER because you remember that the first orders, the one that we got at the time of Valeo Siemens were not great orders. We said it, we worked on it.

We improved a lot and the new orders that we take, eTech technology are much better to the point that now when we look at eTechnology, electric technologies within POWER and, let's say, classic technologies, they have the same gross margin. And this is a remarkable achievement.

We have the same gross margin for eTech technologies and classic technologies because we worked on the cost side, and we worked as well on the -- I mean, the cost for sure, but the move to better margins, better orders margin, as I said. So these are the 2 most important elements.

I don't know, Edouard, if you want to complement with other factors.

No, nothing just to -- well, thank you, first, Ross, to pointing out the amazing job done by the teams because I'm also very impressed with what they did and confirming, first, what Christophe just said that gross margin on eTech and traditional technologies is at the same order of magnitude. And second, they are naturally one-offs like everywhere, but it is balanced in H1.

So there are positive and negative one-offs. So globally, this is the actual structural profitability level of POWER in H1 this year.

It's Thomas Besson, Kepler Cheuvreux, I will start with a couple of questions, please. I'd like to come back to China.

If I look at your numbers, I'm very impressed by the orders, but I've noticed that the relative performance to the market seems to have decelerated in Q2. Could you explain why and whether you're still seeing that you'll be able to do better than the market in H2 and 2027?

And to continue on this China question, having looked at the company for a while, I can't refrain from having a look back at the disclosure you were making between 2019 and 2022 on your China order intake. And in particular, 2016, 2017.

So 10 years ago, you had EUR 7 billion of average orders, and we saw that for different reasons. So what's your degree of confidence that today's huge orders with these China customers will effectively translate into revenues this time around.

The first question on China. Second question is about Europe.

We've seen a lot of announcements by European automakers that are not specifically encouraging for the prospects of their performance and their production in Europe looking forward. Could you tell us whether you believe that you won't need to make a new massive restructuring plan in '27, '28 to just reflect the fact that there is still no local content definition that meets what you are looking for on one hand and the fact that your main customers are losing ground.

Thank you very much, Thomas. Relative to the first question, I had the opportunity to confirm in this call that we are expecting a growth of Valeo China in H2 with Chinese OEMs.

This is what we see in the call of our customers today. So I do confirm that.

There's a lot of volatility. You see Q1, Q2, yes, there's a lot of volatility between the quarters.

I think BYD was like minus 15% in Q1, plus 15% in Q2. So you see a lot of volatility in the market.

Our strength is to be working as I was answering the question on that before, is to be working with all customers. You know that we don't have any customer-specific joint venture in China.

This is not the way we operate. We operate with Valeo-owned companies, and we wish to enlarge our customer base as widely as possible not to be relying on the success of one or the other customer.

So there's volatility across the OEM, there's volatility across the models within an OEM. Anyway, when we look at H2 and what we have in our hands in terms of EDIs, in terms of call-offs from our customers, we see growth coming with the Chinese OEMs in H2.

Your question on order intake, it's not the first time that you're asking this question. Now you're asking it for China specifically, but I know that you have this concern for the full group.

And I had the opportunity again in this call to say that we expect return to growth for Valeo overall in '27. We know that it's coming, and we are preparing for it every single day through the investment that we make, through the R&D that we have, through the project management that we have.

These projects are coming. These investments have been made.

The start of production are being done, and we definitely confirm the return to growth in '27 for the full group and with the Chinese OEM as early as H2 '26. The next point on Europe.

I'm not pessimistic at all for Europe. I know it's your idea or it's your theory, there will be, in my opinion, there will be local content regulation in Europe.

It's going to come. It was one of the conclusion of the French German council or meeting between the Chancellor and President Macron last week.

If you read the conclusions of their meeting, both countries are now supporting a strong IAA. Well, I know the devil is in the detail, and there's a lot of detail to be determined, but I believe that we have never been as close as today from a solid and efficient IAA, Industrial Accelerator Act to protect the European market and jobs.

Are we going to need another set of restructuring in '27, '28? I don't think so, at least not in the magnitude of what we have done in '24.

But remember, that in the CMD Elevate '28 on November 20, we have said that we will increase the yearly spending of restructuring costs that used to be in the past EUR 50 million per year to EUR 100 million per year. So we have made this provision in our plan, and we know that with this kind of spending, we are reducing the debt of the company.

We are increasing the cash generation of the company despite spending in the future, EUR 100 million per year versus what we used to spend at EUR 50 million per year. Note as well that our order intake is strong in all regions of the world, including in Europe.

So we expect that we're going to grow in Europe because we have managed to increase our content per car, including in European cars, especially because of the SDV coming. First program was BMW.

It's now in production. As you know, [iDrive X], and there are many other programs to come.

A couple of clarifications and then another question, please. The first one, just following up on Thomas question on China.

Now I think you're stressing in this call that you are returning to growth in H2 with Chinese local OEMs. Is that different to what you said before.

The way I read it, it was more like the group will grow in H2 in China, not only with the local OEMs. But clearly, the market has deteriorated over the recent months.

So a change in that communication would make sense. I just wanted to check if it was basically the same thing you were saying with Q1 and before or if there was a slight change.

And then just on the compensation payments of the OEMs and the related impairments. You mentioned there is net 0 in H1.

Is there always the same timing of the recognition of the impairment and the compensation? Or can there be a timing difference between the 2?

Because it seems that for some of your peers, at least there can be timing differences, and they could be in 1 quarter or half actually a onetime positive and another one, the respective negative. I just wanted to check if it's always basically net 0.

And then last question on the recoveries of the OEMs or from the OEMs. Could you just comment what you've achieved in H1 so far and what is still to come compared to your target?

Thank you, Christoph. I will take the first and third one, Edouard, will take the second one.

When it comes to China, I think your question is quite interesting. What we've done is clarifying our objective.

The market is extremely volatile, as we said. And I can return to you the question?

Do you know? And can you tell me what's going to be the volumes of the global OEMs in China in H2?

I mean this is very, very difficult to answer this question with the kind of volatility that we have seen in H1. So I think we have decided to focus and concentrate on what is really important and what is really important in China are the Chinese OEM, they are 71% of the Chinese market in H1.

They are 78% of the market in the last month of the semester in June, In June, 78% of the market was in the hands of Chinese OEMs. So I cannot really say and take any commitment when it comes to global OEMs and our sales with global OEMs in H2 because I have no idea of what their sales are going to be.

But when it comes to Chinese OEMs, I can say because they have the momentum because they're growing their volumes. And again, looking at their call-offs, looking at their EDIs that I trust for the second semester, I see growth.

So that was a very important clarification of how objective -- our objective has to be understood in China. You take the second one, Edouard.

Christoph, thank you for your question. So definitely, when a program is canceled, our teams are laser-focused to get the compensation directly.

And frankly speaking, usually, our customers themselves, they have to impair according to normal accounting rules. And therefore, it is quite clear for them to respect their commitment towards us.

So most of the times, we get the compensation as a minimum, the commitment to compensation in the same period, then we recognize the impairment. And this was actually the case in H1.

We got in H1 the commitments from customer to compensate what we had to impair during the period. On the other hand, on a cash point of view, it is not necessarily the case.

If you remember last year, we said we had a working cap impact of EUR 300 million before -- because, sorry, compensations were to be paid throughout 4 years according to an official also communication from one of our customers. So basically, I do confirm here in H1, the impairments were compensated by commitments from the customer already in H1, but not necessarily cashed in, in the same period.

Relative to your third question on the recovery. So there's 2 waves of inflation going on.

One is linked to the Middle East that the price of oil, and it drives up copper, steel, aluminum, resin, basically raw material. And there's another wave, which is driven by the AI expansion, and that's about memories and some electronic components.

So the first one is something that we are very familiar with because these ups and downs on raw material quite -- all the time, there are indexes. When there's no indexes, we are used to work this with our customers.

I think it was more or less business as usual when it comes to this wave of inflation. Relative to the second one, that's more specific because we have never seen that before.

The price of memory is going up. The price of electronic components is likely to go up for some specific electronic components.

So we have to educate -- we had to educate our customers. We had to explain them the market, how it went.

And we had to book memories and components in quantities that are high enough to make sure that we deliver all our customers. And by doing so, by booking these volumes, you talk to your customers on a daily basis, it's quantity, it's price, it's commitment.

So we have these discussions. We had these discussions in H1.

And I think we made some outstanding progress when it comes to how the memory inflation because that was the first part of the second wave, how it was dealt in the way we work with our customers. So I think H1 was very important semester of progress in these discussions, and we will continue on the same pace in the second half of the year.

I cannot give unfortunately more detail because you understand it's a very competitive and sensitive information.

Understood. I was just about to ask for a comment on percentage versus plan that was given in the past.

But I take it that you don't want to share additional details.

I anticipated your question.

First, I just have one clarification regarding your expectations for China. So the wording has changed a little bit, as you've mentioned.

Does it mean that given your exposure to global OEMs in China, does it mean that we should anticipate no sales decline in H2, and therefore, your initial expectation of back to outperformance in 2027 is also revised down for next year?

Thank you, Stephen. Well, it's basically the same question that we had before.

It's a clarification. I have no idea of what the global OEMs will do and how they will perform in H2.

The only thing I know is that Chinese OEMs will continue to grow and to have momentum. This is why we clarified that we will grow with the Chinese OEMs in H2, which is what is extremely important for Valeo in China, of course, in H2 '26 but it's even more important for '27, '28 because these are the OEMs that will continue to drive volumes in the years to come.

We are very comfortable that's -- I think the second part of your question, we are very comfortable with the return to growth overall in '27 given all the order book that we have, all the launches that we are now foreseeing on SDV, on ADAS, on electrification. There's a tremendous amount of SOPs going on that make us comfortable that the return to growth is secured for '27.

So the first follow-up would be just trying to understand how we can reconcile the further decline in CapEx, which is remarkable. I think you're cutting your CapEx by 7% or 8% to 8.2% of revenues down from 8.6%.

With the rising order intake and the return to growth, how can we reconcile that? And do you expect to have to invest more again either in the second half or in '27?

Or do you think you can permanently go down to a substantially lower level of CapEx in the past?

Thank you, Thomas, for this follow-up question. I think we've already given this -- the answer in previous calls.

We made a lot of changes in the way we spend CapEx. We buy better, we reuse better, we standardize better.

And at the end of the day, that's less investment for the same amount of sales. And I think it's pretty spectacular.

And it's the same for R&D, by the way, as the question of investment, but it's even more important for R&D because we spend more in R&D than we spend in industrial CapEx, we develop better. We reuse better.

We standardize better as well when it comes to R&D. And that's the fundamental change that I explained during the CMD of the change in the business model of Valeo when we manage to keep our order intake above 19%, and it was, as you saw, even at 20-plus percent, 20.7% in H1 when we have this level of gross margin.

And at the same time, we can spend less in R&D. We have demonstrated it in '25 minus EUR 200 million, another time in H1 '26, minus EUR 40 million.

And we do the same on CapEx. At the end of the day, it's more cash.

And this is what we see in '25. This is what we see as well in the first half of '26.

So what we describe as a virtuous cycle of improving step by step, the cash generation of the group is happening. Despite the high order intake, despite the fact that we are going to grow, despite the return to growth, we need less CapEx and less R&D for the business model of the group.

We have a business model set up for CapEx between 4.5% to 5% of sales. This is what we put in our plan.

The reality is that we have spent in '25, 4.2% instead of 4.5% to 5%. So we've been better than our plan.

and we continue to be better in H1. I'm not changing the guidance.

The guidance, it's from 4.5% to 5%, but we are working like hell to make sure that we buy better, we reuse better, we standardize better. So that we generate at the end of the day, even more cash than what we have committed for.

Great. Finally, Edouard, can you help us gauging the tax rates for the year and for '27?

I think it's been disturbed by the dividend repatriations and -- the cash repatriation through dividend and by the restructuring level, should we expect the 48% to stay at that level in H2 in '27? Or should we anticipate that to decline progressively?

Thank you, Thomas. As far as the tax rate is concerned, definitely, 48% is very high.

It is clearly impacted by this repatriation of dividend policy. It will stay -- take some time still to do it.

You remember, I said last year, it would take something like 3 years. So you can count on a quite high level of tax rate for the years '26 and '27.

Nevertheless, it does not prevent us to continue to work and try to improve as much as we can this number. So I'm not promising any miracle here.

But clearly, the objective is to take this tax rate down in the future.

Well, thank you very much for attending the call. Thank you for all your questions.

Thank you for your interest in Valeo. We're going to meet soon for Q3, Q4, and have a good day.

Bye.