Wendel (MF) Earnings Call Transcript

Ladies and gentlemen, good afternoon. It's a great pleasure to welcome you here in this building where we now have our headquarters. Thank you very much for coming all the way over here. By my side, we have Laurent Mignon, who is Chairman of the Executive Board; David Darmon, Member of the Executive Board and General Director; and Caroline Bertin Delacour, who is the General Counsel for Wendel. And I would like to thank all the members of the Supervisory Board who are here as well as the shareholders and the statutory auditors. Thank you very much for coming over. I am now going to chair this meeting. And I suggest that we appoint as tellers Ms. Priscilla de Moustier, who is a representative of Wendel-Participations, and Mr. Jean-Paul [indiscernible], who is representative of 8 Points Limited. Thank you very much, Jean-Paul. So they are shareholders who are in the room and who represent themselves and by proxy the greatest number of shares, and they're both kindly accepted to take on this role of being tellers. And if they are agreeable, I suggest that we appoint Caroline Bertin Delacour as Secretary of this assembly. Before I give over the floor to my colleagues, I'd like to talk about the recent developments at Wendel. The Executive Board and the Board has rolled out a new strategy that we believe is going to create a great deal of value. We are moving towards a dual model with our historical management of our own investments. And then on the other side, we'll be managing third-party accounts. And that's the acquisition of IK, which was closed on Tuesday, but that's only one step on our journey. This business is going to allow us to make recurring incomes. IK, in fact, is 3 things. First of all, they're a management company, and we believe that the value of this company will increase over time. Of course, it will depend on the fundraising. And therefore, we're going to make sure that we can grow this management company, with greater AUMs as time goes by. And then as a management company, it is a company that is going to make management fees. And with costs which will be the payroll of IK in its 7 or 8 offices across Europe, and then benefits that we will enjoy as shareholders. And these profits or the fee-related earnings for this year, make up EUR 60 million. And then thirdly, at Wendel, we are going to invest in the funds that are managed by IK. And we believe that they are good investments. If you look at their track record, IK partners have had very good results in the past, although it might not predict the future. But every discussion that we've had with them has made us extremely confident in the activity that IK runs. So that's it for the management fees, the capital that we could entrust with them. All of this is very positive. So over the last year for our main business, our proprietary asset management, we've had the acquisition of Scalian, an IT specialist with 5,000 engineers; the disposal of Constantia Flexibles in -- with a very favorable outcome and also 4 new investments made under Wendel Growth. So 2023 was a very good year for the group. Now let's take a look at value creation for Wendel. Value creation for shareholders is something that we constantly strive for at Wendel, especially the Supervisory Board. And we also keep a close eye on the share price discounts in relation to our NAV. This discount was very high, and it's a bit discouraging because we believe that the intrinsic value of Wendel is much higher than the actual share price. Our financial situation is very robust, which allows the executive management to offer a EUR 4 dividend for 2023 -- for the fiscal year 2023, sorry, 25% up compared to the year before that. And then finally, on governance, we're going to suggest that you renew for a 4-year term Thomas de Villeneuve's term, whose experience is extremely useful for the strategic evolution of Wendel. I'm now going to hand over the floor to Caroline to talk us through today's proceedings.

Ladies and gentlemen, dear shareholders, this is an ordinary and extraordinary meeting in regards to the nature of the resolutions that will be voted. Mr. [Simona], who is a judicial officer in Paris, will be making sure that everything runs smoothly. The agenda was published on the [ bellow ] on the website of Wendel and is also in the convening notice, where you also have the different businesses of your company as well as the resolutions and the rules and regulations. All the documents and information have been made available, in keeping with French law and regulation, and are on the desk right next to me. We have not received any requests to amend the agenda from our shareholders. I also suggest that we don't go through all of the reports nor the whole reading of the resolutions so that we have a bit more time for a Q&A session at the end and some more time also for the presentation. You can also ask your questions out loud before we start voting on the resolutions, but you need to keep to your speaking time. Regarding the quorum, currently for the number of shares either in the room or by proxy, we have a current total of 69.84% of shares with voting rights. 30,615,000 shares. And the final quorum will be shared with you before the vote. We're going to be voting on 30 resolutions. And if you haven't voted before the resolution, you can use the handset, the tablet that you've been given at the entrance, and we'll tell you how to use that just before the vote.

Thank you very much, Caroline. Now I suggest that we follow what is written here on this slide. First of all, Laurent is going to be talking about the highlights of 2023, the performance of the portfolio. Then David will talk about 2024 and recent events. And then Christine Anglade will take the floor, and she'll be discussing ESG performance. And then Gervais Pellissier will come up on stage. He's Vice Chairman of the Supervisory Board and also sits at the compliance committee, and he'll be talking about governance and compensation. Then Caroline will walk you through the resolutions, and then we'll hear the report from the statutory auditors. And then finally, before we vote on the resolutions, we will answer the questions that we have previously received in writing, but also of course the questions that will be asked here in the room. Laurent, over to you.

Thank you very much, Nicolas. I am going to talk you through the main highlights of 2023 and we'll be talking about recent events as well with David. 2023 was a year with significant strategic changes. As Nicolas said earlier, we outlined our strategy in March 2023 to the financial markets, and we started rolling it out in that same year. That strategy is based around 2 pillars and also a broader reflection on return for shareholders. The 2 pillars are, first of all, our proprietary account management, which is our long-standing expertise, i.e., long-term investment in quality companies with a view to receive a significant amount of return on the capital that we invest. And we want to invest in companies where we have a good degree of control, to help these companies grow, and we focus mainly on nonlisted companies with investments that go between EUR 300 million to EUR 800 million. So this proprietary account management business is very significant. As Nicolas said, we bought up Scalian last year, disposed of Constantia Flexibles and for Wendel growth 4 new acquisitions. But we also bought some stakes through Stahl in ESG at the beginning of 2023. And it's a company in the Performance Coating, which allows us to transform the company. And in 2023, Stahl paid EUR 85 million to Wendel with an exceptional dividend. So our portfolio has grown by 6.4%. And our stakes in all these companies have grown satisfactorily. And we're going to continue to redeploy our capital in high-growth assets, with a view to have a return on investment higher than 12%. So that's the first pillar, our kind of historical pillar that we are recalibrating a little bit, but it is very much in keeping with what we've always done. The second pillar now is a bit newer. We are preparing a new business. We are investing, but for third parties. So we are using our ability to invest and to receive management fees for that, which would allow us to have a recurring flow of income. Now this new business can be achieved by going out to find investors who will entrust us with their money, or we can also buy up players who have this credibility, and that's what we decided to do. And then we help them grow to create a true fully fledged platform for third-party account management, which will allow us to have a recurring flow of income and will allow us to drive also the amount of money that we can share with shareholders. We're going to focus on nonlisted companies. We believe it's a very interesting avenue to go down and we believe that we are fully legitimate in going there. So this strategy, we articulated it in March 2023, and we started rolling it out in October 2023 with the IK partner buy-up project that was completed on Tuesday or Wednesday -- Tuesday, I think, where we signed off on the agreement. IK Partners, as you know, is a very good management firm. They manage EUR 12 billion for their clients, all investors, and they operate in 6 European countries. And historically speaking, it's a company that has a huge footprint in Northern Europe and a company that has also recorded strong performance especially on the small cap and mid-cap across Europe. We've bought up 51% of this company, and we'll buy the 49% remaining in the future, since this will allow us to line up the interest of managers, shareholders and investors for the long term. And what I can tell you is that between Tuesday and today, so when we signed them today, we have full confidence that this was a shrewd move. And we are sure that the partnership between the teams of IK and Wendel will be good. They already actually are. Our objective is to reach objectives of fee-related earnings of EUR 150 million in 2027, which will allow us to have a recurring income for Wendel. And all of this, of course, implies a return for shareholders, hence our [indiscernible] on the dividend policy. And for that dividend policy, we decided to give shareholders some certainty on that dividend policy. In other words, our objective is to have a yield on assets of plus 12% and to be a long-term investor. So, important about -- of this return needs to be invested back into the company and the rest needs to be shared with shareholders. So we decided an 80-20 split. So 20% of 12% is 2.5%. So 2.5% is what we would pay out to our shareholders. And then further on down the road, we will add a significant part of the flow that will come from third-party account management. And the aim is to reach 3.5% in the midterm. So it will allow us to pay out a dividend on a regular basis and allow our shareholders to capture a part of the value that we create. And the other part of the value that will be created will be invested back into the companies. So this is the main points I wanted to share with you. And in 2023, we had a very robust year. Therefore, we bought back, or currently in the process of buying back, EUR 100 million worth of share. And we might have similar buyback programs in the future. But with the current discount, we thought that it was the right move to make. Now let's talk about performance. The consolidated turnover for last year stands at EUR 7.1 billion plus 5.7% for publish to data. But there's also foreign exchange effects to take into account. If you take underlying growth, organic growth, it stands at 6.4% for 2023, which shows that the companies that we invested in are very dynamic. 6.4%, that's much more than the growth of the economies in which we have invested. Margins are robust. And the total contributions to our subsidiaries increased by 4.7%. Our liquidity is very high, more than EUR 2.2 billion. That has increased since then, but we'll discuss it with the disposals and with Bureau Veritas, which gives us a huge margin to invest in new opportunities and potentially invest in 1 of the 2 prongs of our business, other for proprietary accounts or for third-party accounts. And for our portfolio companies, the debt level is quite low, which means that the risk level for our companies are quite low as well. We've worked on the liability of Wendel and also of our portfolio companies quite a lot, and that has definitely brought its fruit. Now the NAV for 31st December sat at EUR 162.2 per share, a small drop of 2.7% compared to last year by -- and taking into account the dividend that was paid out last year. The share price went down because of Bureau Veritas. But since the 31st of December, the share price of Bureau Veritas has gone back up and increased by more than 20%, I think that was the reading for yesterday. And Tarkett's share price dropped a lot in 2023 and is now more or less stable. IHS, unfortunately, their share prices have continued to drop but the relative weight of IHS in the NAV is only 2.5% and Tarkett at 0.4%. So what is really important here is Bureau Veritas share price. As you can see, it's gone up, and we'll look at the end of March figures, and you can see how this has driven up our NAV overall. That's it for the nonlisted assets performances with a growth rate of nearly 10%, which drove the NAV. As you can see, EUR 10 of drop per share, which was attributable mainly to Bureau Veritas, and then good performance of nonlisted companies, plus EUR 8.8 per share. And then there are other elements. So all the financial outlay for the company, that's minus 2.8%, and the dividend paid out last year. That's the minus EUR 3.2 per share. And if you reintegrate the dividend, you reach that minus 2.7% that I mentioned earlier. Now we are proposing a EUR 4 per share. Now this dividend is one that you can vote on later on. So EUR 4 per share. It's the 2.5% of the NAV that I mentioned earlier, and it's up by 25% compared to last year. And on 23rd of February, it represented a yield of 4.4%, probably 4.1% now with the share price that has dropped somewhat since then. Okay, that's pretty much all I wanted to say. There's also the share buyback program where we are nearly at EUR 40 million. You can see here the performance of the different portfolio companies. You can see the strong dynamic in terms of sales for each of these companies, with significant organic growth, 8.5% for Bureau Veritas and nearly 16% for CPI, and a slight drop for Stahl, although the foreign exchange effects were positive for Stahl. That's pretty much all I could say on the group's performance for 2023. Now the loan-to-value ratio gives you a good idea of the financial health of the company. You can see that we have very little debt at the end of last year. And currently, after the different operations, we have a negative LTV with minus 5% at the minute. So a moderate debt level. Here, you have the different transactions that took place last year, the time line. I'm not going to go into detail. I am now going to hand over the floor to David to tell us about the Q1 highlights.

Thank you very much. Indeed, I suggest that we talk about events since January 1. Laurent talked about 2023. The beginning of 2024 is also quite robust with 11.5% of growth, 6.9% of that is organic. I'll give you a breakdown later on. But as you can see, there is a good performance for most of our assets, especially from our locomotive, Bureau Veritas. The NAV stands at EUR 178.1, a 11.2% increase compared to what Laurent mentioned earlier for last year. And there again, Bureau Veritas was the main driver, because the share price has gone up by 23% since the beginning of the year. And most of that growth was generated through the increase of our stake, or the value of stake, in Bureau Veritas. Now we're continuing to deploy our new strategic orientations with a disposal of 9% of Bureau Veritas share capital, generating EUR 1.1 billion. the disposal was made at a price of EUR 27.1 per share, so a 3% discount and 1% versus March 31, 2024, for the NAV. We've also completed the acquisition of IK Partners, an acquisition that we announced in 2023, and gradually we were able to make progress on this transaction. especially with the competition authorities. And we've continued to make progress on our share buyback program that we announced in October. We are at EUR 39 million out of the EUR 100 million that we've announced. Now let's talk about the sales, and this plus 11%, you can see on the bottom line, with a breakdown, you can see that 8% of organic growth for Bureau Veritas with a negative foreign exchange impact. Stahl is back in the swing of things. With growth with a good volume effect. And then there's the acquisition of ESG that we did last year. We are very happy with this acquisition and this integration and with the results to date. Scalian is the latest arrival in the portfolio. Now the fiscal closing date is somewhat different. So the first line that you can see, the [ EUR 147.5 million ] -- that's the last 3 years of 2023. The first 3 years is the EUR 26 million that you can see underneath. We thought that the sector in engineering and digital for consulting would slow down, and it seems to be confirming quarter after quarter. The company continues to outperform its peers, but we do see that the business is slowing down. So growth is positive, but much slower than the previous quarter. CPI is still making good progress with strong growth, with a slight negative foreign exchange impact. For ACAMS, it's very much a varied quarter. We have new market shares conquered in Europe, Normal America, in the banking sector. And then we have also some clients that we hope to sign off with in the second quarter, which should probably help us make up some of the lost ground during the first quarter. And we expect to catch up later on in the year. The growth is slightly negative for ACAMS. Organic growth is at 6.9% for the group. Now NAV, as I mentioned earlier, we are at EUR 178.1 at the end of March 2024, and that was prior to the sale of our stake in Bureau Veritas. The Bureau Veritas transaction took place at the beginning of April. So for pro forma, you have to remove EUR 1.4 million to the EUR 4.4 million and add it to the cash flow that you have underneath to have the real effect of that transaction. NAV for 31st December is EUR 178 or a discount of 48% -- sorry, I said 31st of December, no, 31st of March. In any case, it's a 48% discount when compared to the 20-day share price average. Now this NAV is down to the change in value of our listed companies. Bureau Veritas suffered quite a lot in 2024, but then recovered quickly in -- sorry, suffered in 2023, but recovered in 2024. And you can see that Bureau Veritas has driven up the increase in the NAV for the other nonlisted assets. They haven't changed much since the end of the year. So a very strong situation. As you can see, we have a strong equity, more than EUR 2.3 billion in cash. And you can add to that EUR 875 million of undrawn credit facility. So we have enough means for new operations, whether for our proprietary accounts or for third-party accounts. We have also done the work for other entities. You can see that here, but we've launched a refinancing for CPI that allowed us to push back maturities by 6 years and lower the cost as well. So a very strong statement, good cash flow, very -- quite low average cost. We have good credit ratings from Moody's and S&P. And so a loan-to-value ratio that's very weak at 0.6%. And if we look at that pro forma with the operation that I mentioned, particularly Bureau Veritas, then the -- and also the CPI dividend and the IK investment, this ratio then becomes negative, minus 5.1%. To conclude, what you need to recall from this first quarter is a solid activity of your portfolio for almost all entities, We're still deploying our new strategic directions that were presented to you, looking for new opportunities, also closing on IK. We have a very good financial statement with long maturities, a great rating. And so we have many projects that we still carry out to work on our goal of a 2-digits TSR that Laurent mentioned earlier, both for our proprietary accounts and for third-party account management. Now I'll give the floor to Christine Anglade, she will talk about the ESG performance of the group, and I remain at your disposal for any questions that you might have at the end of our session.

Thank you, David. Ladies and gentlemen, shareholders, good afternoon. So I wanted to talk to you about our ESG performance over the past year. We have been developing a new ESG strategy since 2021. So we look at every company that we're interested in and looking at it with this ESG perspective, and we carry out action plans with goals and KPIs, and we have a strong monitoring of those elements. So after 4 years of this new strategy, you can see that we have been rewarded for our ESG performance. You can see we have a great nonfinancial results. For the fourth consecutive year, we are part of the Dow Jones Sustainability Index. And [indiscernible] Bureau Veritas is first of its sector in this indicator. We've also made some progress on most of those ratings. I particularly want to mention the Sustainalytics rating. We are top 1% of our sector here. And we've also improved for the CDP rating, we went from B to A-minus. So these are key progresses, and we are being rewarded by a nonfinancial monitoring agencies. Here on this slide, you can see a consolidated portfolio on the 4 priorities. Basically the consolidated performance of the different entities. So first, we have the first pillar, the employee health and safety. This is something that's always been very key for us because of our industrial past. We've managed to decrease workplace accident frequency by 15%. We also have a second pillar, that's products and services with environmental added value. Today, these products and services amount 53% of Wendel's consolidated sales. So that is our products and services that have an added value environmentally speaking. So it can be on the carbon footprint, anything that has a good impact on the environment or [ society ]. Equity and diversity is also a key for us. So 31% women on Board of Directors. That's up 2% compared to the previous year, so that is a good result, encouraging result. It is still a priority for us and something that we'll keep looking out for. Then we have decarbonization. That's probably our main priority. And now we've launched a very ambitious decarbonization strategy, particularly with SBTi, which is the reference standard that monitors decarbonization strategies. And basically, you ask to be part of this organization, and it took 3 months for us to get approved. Now we are SBTi approved. Bureau Veritas is as well and Stahl as well. What does that mean for Wendel? That means that every time we will want to buy a company, that means we'll commit to making sure that this company is also approved, is also on that transformation path, and that's within the 2 years following the closing. So that's a lot of work, and right now Scalian is working on its SBTi trajectory. I've said everything. So what I also wanted to talk about is the pragmatic perspective that we have when it comes to ESG. We're not putting everything on the same level. We're looking at what matters for this company and for that company. And so here, we wanted to present to you a case study, something that shows what we're able to do with Constantia Flexibles. So over 7 years, what have we done? We realize that this company had 3 main challenges that need to be tackled. When we bought this company, there were way too many accidents, and that is quite relevant because it is an industrial company. And so if you're below a certain threshold, that means that there is work to do. So we did a lot. We incentivized the management with KPIs. And between 2014 and 2022, as you can see, we managed to reduce the accident frequency rate by 84%. Another topic was the recyclability of products. Constantia Flexibles is the company creating packagings. It's the protective packaging. What that means is that's the first layer of packaging for drugs, for food. So it's useful packaging. It's packaging that we can't do without. It's not about marketing or anything. So what we thought was, this company is useful. Obviously, there are some environmental issues that need to be tackled, but we can transform it. We can make it more -- make it better for the environment. So we worked on the recyclability -- we worked with the R&D teams to find some recyclable alternatives. We also had a -- we have a great system at Wendel. We worked with operating partners. That's someone that goes on the field and helps our management and finds a way to actually implement those projects. And so in 2022, 85% of Constantia's products were recyclable or has a recyclable alternative. So I think that's a great example of what we do in terms of ESG. There was also another pillar on climate. And I think that what Constantia did was great, because they were in 2018, first to be approved by the SBTi, with the 2 degrees trajectory, with adaptation plans and resilience plans, and they managed to decrease their greenhouse gas emissions, Scopes 1,2 and 3, by 17% over 7 years. And they have been -- they've received good ratings: A-minus by CDP and Gold Medal by EcoVadis. That matters also for customers. And when we disposed of this company, that was key because buyers were very interested in those elements. So you can see it has a business impact, tangible business impact. To conclude, I mean it was a very short presentation, obviously. In the months to come, we are going to be focusing on a regulatory challenge, which is the new European directive, the CSRD. This is quite significant. We help our companies. We have a team that's specialized at Wendel on that. And so we'll be able to talk more about that next year to see what happens in the first implementation year.

Thank you, Christine. Now I'll give the floor to Gervais Pellissier, Vice Chairman of the Supervisory Board. and he will talk about governance and compensation. I just want to mention that the Supervisory Board is made of 12 members, two members that are representative of the employees and 4 independent members and 6 are part of Wendel. We work closely together. We have 2 committees in this Board. We have a Governance Committee chaired by William Torchiana -- unfortunately, he is in the U.S., he cannot be with us today -- and the Audit Commission headed by Gervais Pellissier. Those 2 committees are shared by members -- independent members of the Supervisory Board, not members of the family. And I have to say that they do work completely independently. [Presentation]

Thank you, Chair. Ladies and gentlemen, I'm really glad to present to you the governance at Wendel and talk about compensation. First, for the Board, you can here see the names and the pictures of the 12 members of the Supervisory Board: 40% of independent members, 40% of women, and 50% of women if you include our colleagues who are representatives of employees. And we have 4 nationalities as well within this Board. This year we have the potential renewal of Thomas DeVilleneuve's term, and we ask you to please vote for his term renewal. Those 2 committees, Nicolas mentioned them, so we have the Audit, Risks and Compliance Committee and the Governance and Sustainability Committee. Here, you can see on the screen how that works out, and we try to comply with the rules, and we've tried to make it work as best as possible. When it comes to the Executive Board, it is obviously -- it includes, obviously, Laurent Mignon, our Group CEO; and David Darmon. That will end on April 6, 2025. Now we can talk about the Executive Board 2023 compensation. The compensation policy that was approved by your assembly last year was implemented. You can see here the fixed compensation and the variable compensation for the Executive Board members as well as all the other items and benefits of all kinds. When it comes to their variable compensation, it was determined depending on predefined objectives. First, on financial objectives, after analyzing the performance of the main companies of the portfolio, the council -- the Board determined that those objectives were reached at 85.7%, and when it comes to nonfinancial objectives, the Board looked at all the different successes of the year and decided they were reached at 100%. The members of the Board will then receive 90.7% of the variable compensation, depending on your vote as well. When it comes to the long-term compensation for 2023, it is also compliant with the policy that you had approved last year. That's for the stock options and for the performance conditions and presence conditions that are here on the screen. To conclude, we have a resolution on compensation. The short-term compensation for Andre Francois-Poncet, who was a member of the Executive Board until the first of December 2022. It is about the compensation that were paid to him in 2023 for his variable portion for 2022 and gross profit share for 2022. Now the Executive Board 2024 Compensation Policy. Here, I just want to say that the compensation structure hasn't changed since 2021. As you can see in the first graph, it is balanced between annual compensation and long-term compensation. On the second graph on the right, you can see that it is also demanding, because of 3/4 of the compensation depend on performance. So this policy is still being implemented for 2024. On the next slide, you can see the main elements that make out the 2024 compensation. So it's unchanged compared to 2023, a fixed compensation of EUR 1,300,000 for Laurent Mignon and EUR 770,000 for David Darmon and variable compensation amounting to a maximum of 115% of the fixed compensation. And then the other elements as last year. When it comes to the variable compensation for 2024, the goals here are aligned with last year's goals with some adjustments that you can see in green on the screen, and they match what -- they match the strategic orientations that were detailed to you earlier in our meeting. So you can see the dual model of Wendel. So now we have 4 criteria. First, the performance of Bureau Veritas was at 20%. Then we have the performance of the proprietary account management. Now we said it goes from 20% to 10% now. It has evolved to take into account the scope changes, particularly the integration of Scalian and the disposal of Constantia Flexible. Now we have this performance for the third account asset management, with the closing on IK. So that's 10%. And obviously, maintaining the investment-grade notation of Wendel, now weighted at 15% instead of 20%. The nonfinancial objectives were renewed with the same criteria, strategic plan, human resources and ESG with a new goals and -- updated goals. Now for the 2024 long-term compensation with the stock options and performance shares that could be allocated. We have the same condition of 4 years, the 4-year presence condition. For the stock options, they are -- we -- they are linked to the S of the ESG, with a training course on generative artificial intelligence, this performance condition with the one that is part of the yearly variable compensation. And that means that it amounts to 16.1% of the total remuneration being based on ESG criteria. Then for performance actions, we have the evolution of the TSR, and for 25% the dividend evolution as well. Finally, the maximum allocation would be identical for both members of the Board, amounting for 95% of the sum of the maximum fixed and variable shares of their yearly remuneration. Now for the Supervisory Board's compensation. The 2023 compensation for Nicolas ver Hulst, the Chair of the Board, is compliant with the policy that was approved last year. When it comes to the compensation of the members of the Supervisory Board for 2024, you can see it here, same policy as the previous year. So unchanged at EUR 900,000, and that's the same since 2017. The remuneration structure guarantees the prevalence of the variable share linked to presence compared to the fixed share. Thank you very much. I'll give the floor back to our Chair.

Thank you, Gervais, for this very comprehensive presentation. We spent quite a lot of time on compensation, so I just wanted to say that our compensation policy is guided by 2 main elements. I'm talking about the Board's compensation, but also that obviously has an impact on compensation for other collaborators. Those 2 elements, those 2 goals that are key to us, are as follows. First, we want to recruit the best people, and we want to retain talent. And so we have to be competitive on the investment markets. The second element, the second constraint or concern, is that there needs to be an interest alignment between managers and shareholders. What I mean by that is that managers get more money as shareholders get more money as well. So this is -- this leads to a revision every 4 years, and now the time has come to after the 2021, 2025 period to redefine a new compensation policy in 2025, and that will be a key work led by the Supervisory Board. There might not be great changes, but this compensation issue is very, very key for the Board and for all people that work at Wendel.

So thank you very much, Gervais, for this very comprehensive presentation. Gervais is not the Chair of the Governance Committee. He's rather Chair of the Audit Committee. And so I want to also thank the members of the Supervisory Board and particularly Gervais and all the members of the Audit Committee for all the work that they've done, because they're do incredible work. And particularly when we [ stock ] the NAV, and [ I'm going to ] try to publish something that can be as just and justifiable as possible, something as exact as possible. We're not trying to be too careful. We're trying to be as close to the truth is possible. And a lot of work is being done by the Audit Committee, and I just want to express my gratitude to Gervais for the work that is being carried out by the committee. We can move on to the next point on our agenda, which is the presentation of resolutions by Caroline.

So we have 30 resolutions for today. I want to present them to you with main themes. Fiscal year, governance, financial authorizations and powers for legal formalities. So the first is the approval of Wendel financial statements, net income of EUR 197 million and the consolidated financial statements show a net income of EUR 142.4 million. The third resolution is about the dividend. So the distribution of a EUR 4 per share dividend, as Laurent Mignon said, up 25% compared to last year's dividend, and that would be for a payment on May 23. The fourth and fifth resolution are about the probation of the new regulated -- related party agreements. So one was concluded with corporate officers, another one with Wendel-Participations. The statutory auditors will tell you about this later on. Now for governance, with the sixth resolution, the renewal of Thomas DeVilleneuve's term, as Gervais already mentioned to you, as a member of the Board, and that is for a 4-year term. The seventh resolution is new this year. It's about the appointment of statutory auditors that will be in charge of the certification mission for the compliance with the Corporate Sustainable Reporting Directive of the European Union. We propose to appoint Deloitte & Associates and Ernst & Young audits, who are currently statutory it is for Wendel for the account certification. This appointment would last as long as their current term, which is one remaining year until next year's general assembly. Now for the resolutions on the compensation, the eighth and -- from the 8th to the 12th resolution, we're looking at the compensation policy. No, sorry, let me start again. From 8th to the 12th resolution, it's about the 2023 compensation, particularly compensation for Laurent Mignon, David Darmon, Andre Francois-Poncet and Nicolas ver Hulst. From the 13th to the 15th resolution, we're looking at the compensation for the Executive Board and the Supervisory Board for 2024. Then last theme is financial authorizations, and there are many of those. So we start with the share buyback program. That's the 16th resolution. We are proposing to allow the Board to buy back shares of the Societe, up to 10% of the share capital. The 17th resolution is about the share capital reduction, up to 10% of the share capital by the 24-month period. Any reduction of the capital should be authorized by the Supervisory Board. Now for the share capital increases, that's resolution 18, a cap of 100% of the share capital not looking at the sub caps that I will mention now. Resolution 19 to 22 -- it's about the end of the subscription rights that would allow the company to be flexible by raising the share capital also with the authorization of the Supervisory Board. They are not usable during public offers and they can only work through 26 months periods. So the share capital increase with preferential subscription rights can only happen up to 40% of the share capital. And if that is then without preferential subscription rights, then the cap is 10% of the share capital. You can see the modalities on the screen. For the -- resolution 23 to 25, they can be done through the incorporation of reserves, profits, premiums or other items, and that's up to 50% of the share capital. Now for employee shareholding, we have 3 resolutions. Resolution 27, renewal of the capital increase reserved for members of the group savings plan. That is to develop long-term employee shareholding, and that could be for an amount of EUR 200,000 and a price -- share price discount of maximum 30% in compliance with legal regulations. Resolution 28, 29 allow the Board to allow stock options and performance share grants to corporate officers and employees. But there are some presence conditions and performance conditions that were already detailed by Gervais Pellissier in his presentation. And 30th and final resolution, powers for legal formalities. This presentation has now come to an end, and Nicolas, back to you.

Thank you very much. The floor is to Mr. [ Massour ] for the statutory auditors.

Thank you very much. Good afternoon, one and all. On behalf of Deloitte and Associates, I'm happy to take stock of the 2023 report. Take a look at the next slide. Here, you have the findings of our mission for 2023, for fiscal year 2023. The summary of the report as well as our report for the extraordinary meeting for the social capital -- your company. These reports are made available to all of you and help you vote on the resolutions later on. I'm going to now sum up these reports. Next slide, please. Now for the annual financial statements. You can find them Page 293 to 298 and 319 and 322 in the universal registration document. Our mission is to make sure that everything has been done abiding by the rules. We haven't noticed any significant mistake. There is a high level of compliance with accounting rules, standards and regulations. We've looked at different entities of Wendel, both in France and abroad. We've adapted and calibrated our audit to the specificities of Wendel. We've looked at recurring events, but also one-off events like disposals and acquisitions. We presented our findings to the executive management in February 2024. In our report, we'd like to draw your attention to the fact that there is no particular risk for the accounts of 2023. The key points for 2023 are the following. First of all, the disposal and the acquisition of new entities and then the mechanisms of the management's [indiscernible] involvement. Now for annual accounts, like last year, we assessed the shares and stakes and the debt of the entities, and for each of these entities we share our findings. We discuss the risks and also discuss the work that we have undertaken. In conclusion of our report, we have certified the consolidated accounts and the annual accounts that closed on 1 December 2023. We also checked all the information in the management report, and we have no particular comment or observation to make. They are sincere and in keeping with the other Wendel documents. Now here you have the detail of our reports on related party agreements. And in that report, we talk about the different agreements that we've reviewed and also why they are relevant for Wendel. We were made aware of these agreements, which was approved by your Supervisory Board, with Mr. Laurent Mignon, David Darmon, Ms. Harper Mates and Sophie Tomasi. There is an agreement relating to co-investments in Scalian and [ Kenya ], with amendment to the sublease contract for [ Workspace Group ] [indiscernible], agreements that were not previously authorized but approved afterwards, that we have no comments to make on that. And finally, we were made aware of agreements previously approved by the Annual General Meeting with Mr. Laurent Mignon, Mr. Darmon, Ms. Harper Mates and Ms. Sophie Tomasi, agreements relating to co-investments. On the 26th of October 2023, your Supervisory Board decided to approve this agreement after the fact. Our special report shows no other observation. Next slide, please. We're now going to look at the extraordinary general assembly. Under that part of the meeting, we have 5 reports that we have published. And as you know, you'll be voting on these matters. We are looking at pages 353 to 358. It is, in other words, the operations for the resolutions from 17th to 29th resolution. These operations were outlined by Caroline Bertin Delacour earlier, and we have no particular comment to make on these operations nor on the information in the report. Next slide, please. Regarding the 27th and 28th resolution, we have no opinion on these matters, be it on the increase of the share capital for the issue of shareholder securities or the authorization to grant stock subscription or purchase options. And finally, I'd like to talk about the report for the nonfinancial elements. Now this is in Page 211 and 213, and our report informs us that we haven't identified any significant anomaly likely to call into question the fact that the declaration of nonfinancial performance complies with the applicable regulatory provisions. Thank you very much. We're now going to move on to the Q&A session.

Okay. We're going to start with the questions in writing. We've received some -- a question in writing by Mr. Arnaud [indiscernible], shareholder. By way of introduction, I'd like to say that this question was sent late in the day or after the deadline, but we decided to answer it to be as transparent as possible. And an answer has been put on the website of Wendel this morning, and we're going to sum it up for him now. Mr. [indiscernible], our alert or whistleblowing system did not work, apparently, or was not triggered in a company where there was an event of sexism but before we invested in it. So the question is, when are you going to change the whistleblowing system? And how are you going to better keep in check [indiscernible]? And our answer is the following. The facts that are mentioned by Mr. [indiscernible] are, of course, not what we want at Wendel nor in our portfolio companies. We have a robust whistleblowing system that is open, public and in keeping with the latest regulation. Any report that we receive in that framework is reviewed and, if necessary, leads to an investigation. When the facts have emerged, then we have an action plan. When it happens in a subsidiary, we make sure that the proper solutions have been implemented by the company in question, which was the case in this particular matter, and there was no problem with the way in which governance handled the matter. Now for financial and nonfinancial matters. We've worked with statutory auditors with our own department in-house, and the Audit Committee also supervised all of these matters. On governance, the executive and nonexecutive actions are separated and entrusted to the Supervisory Board and to the Executive Board. We stick to the best practices, with 40% of independent members, and make sure that everybody can do their work properly.

Thank you very much, Caroline. I suggest. So we now move on to questions in the room.

I have a double question on your investments as a company. We see that you've got a good track record in the U.S., but struggling a bit more in Africa. Is the company going to invest in far-flung markets in Asia, Latin America or not? And second question, do you have a sectoral or geographical approach to these investments or a little bit of both?

Well, I'm going to leave the Executive Board answer that question. But for the regions, the Supervisory Board is fully in agreement with the Executive Board. Well, thanks for this disclaimer. It's true that we had long discussions on this. But your comment is absolutely right, sadly, about Africa, but quite fortunately for the U.S. And so the conclusion that we've drawn from all of this is that we wanted to focus our investments where we believe that we've got a good ability to assess the quality of our investments and then track them over time and where we believe that the economy is favorable and going to grow. And when you cross these 2 elements, you end up with a lot of investments in Europe and in Northern America. Now, it doesn't mean that there are not other economies are growing in Asia, Latin America or even for that matter, in Africa. But it's also down to our ability to have teams out there who understand the ecosystems, and at the moment, we don't have that, and we are not able to secure investments there. So this is why we are focusing on these 2 areas, Europe and North America. And I think that it allows us to already find a great deal of companies that we can invest in. And actually, it will be the same answer for third-party account management. We're going to focus our efforts in the same locations. Now regarding our strategy, is it more about sectors or about regions? Well, my answer is that on top of our regional approach, we've got a sectoral approach. We focus on a number of sectors that we know really well. If you want to be a good investor, you need to well know the sector, the companies that are at play, the dynamics also that are at play within the sector. There's also the B2B services sector, which is quite large, that we know really well, the technology sector as well as the education sector and the energy transition, just to share with you a few of the sectors that we're going to be focusing our investments in. So education, it means education and training, as you know, with CPI and ACAMS in the U.S. Do you want to add anything?

Yes. So you talked about Western Europe and the U.S. They might be located in these countries, but they are very global companies. CPI, for example, they're in Milwaukee, but they have people working for them all around the world, same thing for Bureau Veritas. So the headquarters might be in Europe or in North America, but we make sure that they are also properly global players. Do we have other questions?