Airbus SE (AIR) Earnings Call Transcript & Summary

Dear shareholders, ladies and gentlemen, on behalf of the Board of Directors and on behalf of Airbus, I want to warmly welcome you to our 2023 Annual General Meeting. It is a privilege to be here in person with you, to see you, to talk to you, to spend time on stage here with my wonderful colleagues and have the ability to engage with you in person. Thank you very much for taking the time to join us today to come here and make the effort. Before officially opening the meeting, pictures say -- speak a thousand words. We do have a video, a short video showing some of the highlights from 2022, and I would like to show that video first. [Presentation]

In order to start the meeting, let me first introduce you to the management team members. On my right side is Guillaume Faury, Chief Executive Officer and also Executive Board member. Guillaume will give an update on Airbus business in a few moments. Next to him is Xavier Tardy. He acts as our Interim Chief Financial Officer prior to Thomas Toepfer, joining as our new CFO on the 1st of September. Xavier, we are very grateful to you that you took this additional responsibility and workload on your shoulders. Thank you. John Harrison, on my left side, General Counsel, who will act as the secretary of the meeting; and Julie Kitcher, Executive Vice President for Communications and Corporate Affairs, in charge of sustainability who will give an update on Airbus sustainability journey. Furthermore, please allow me to introduce some of my fellow nonexecutive Board members who are here today and are seated at the front of the audience. At first, Amparo Moraleda. Amparo heads the Remuneration, Nomination and Governance Committee, and she serves as Lead Independent Director. She is also a member of our Ethics, Compliance and Sustainability Committee. Next to Amparo sits Ralph Crosby. Ralph is a member of the Ethics, Compliance and Sustainability Committee, whose renewal of mandate is submitted for your approval today. Mark Dunkerley, member of the Audit Committee and the Remuneration, Nomination and Governance Committee, whose renewal of mandate is also submitted for your approval today. Stephan Gemkow, member of the Audit Committee, whose renewal of mandate is also submitted for your approval. And it is a pleasure to introduce you to Tony Wood, who joined the Board of Directors last December. Tony's appointment as a nonexecutive director is being proposed as a replacement for Lord Drayson, who resigned on the day of last year's AGM. I will introduce you further to Tony a little later. For now, only a warm welcome to Tony. I would also like you -- I'd like to introduce 2 of the company's legal representatives who joined me on stage today. Paul [ Fombelle ], on behalf of [indiscernible], a legal representative of the company; and Edouard Eltvedt, our Internal Head of Legal Corporate Affairs. Nico Pul, a representative on behalf of EY as auditor of the company, is also present at this Annual General Meeting. Let me now hand over to John Harrison, our General Counsel, who will start with the legal formalities. John, over to you.

Mr. Chairman, shareholders, ladies and gentlemen, I'd like to draw your attention to some practical matters. In accordance with the company's Articles of Association, this meeting will be held in English. However, for convenience, a simultaneous translation into English in channel 1; French, channel 2; German, channel 3; Spanish, channel 4; and Dutch, channel 5 is available on your translation device. The use of mobile phones and recording devices is prohibited, and these devices must please be switched off from now on. Please note that this meeting is being broadcasted via public webcast until the end of the presentations. So shareholders who are requested to follow the meeting and are not in the meeting will have access to the entire meeting broadcast. In accordance with Dutch legal requirements and the company's Articles of Association, we've complied with all of the convening formalities. On the 8th of February, the date of the Annual General Meeting was published on our company website. And on 8th of March of this year, a convening notice, including the agenda and attendance procedures, was also published on our company website. The documentation for this AGM, which has been available for all shareholders, consists of the agenda, the text and the presentation of the proposed resolutions, the report of the Board of Directors for 2022, the audited annual accounts for 2022 and the report from the auditors for 2022. So this documentation has been available since the 8th of March at the company's registered office in the Netherlands and it's additionally available on the Airbus website. So the Board of Directors approve the agenda for today's meeting. Now taking into account growing expectations from investors, a discussion item on Airbus' commitment to sustainability has also been included on the agenda of today's AGM. I'd like to draw your attention to the inclusion of a particular item on the agenda for the meeting. In the letter dated 17th February 2023, TCI Fund Management Limited, as a discretionary investment manager of the Children's Investment Master Fund, and who I shall refer to as TCI, requested the discussion of the AGM of the potential long-term strategic and technological partnership agreement between Evidian and Airbus and the potential acquisition by Airbus of a minority stake in Evidian. According to information provided by TCI, TCI held 4.54% of Airbus issued share capital on the date of their request. This is over the 3% of issued share capital required for the addition of items to the agenda of the AGM. Therefore, this item has been included in the agenda for today. You'd have seen at Section 10 of the 2023 information notice an addendum which provides further information on this item, together with the list of 16 questions raised by TCI in its letter to the company. No other request to add a discussion item to the agenda for this meeting were made by any other shareholders representing at least 3% of the issued share capital. So the total number of issued shares of the company and the number of voting shares present or represented will now be shown on the screen. We can, therefore, say that this Annual General Meeting has been legally convened and can validly decide on all matters on the agenda. Now this AGM will proceed as follows: First of all, the Chairman will deliver a general introductory statement; then the CEO will give an overview of major events and the annual accounts for 2022. Then there will be a presentation by EY as statutory auditors on their audit for the financial year 2022. Our next item will be leading the journey to clean aerospace, which is a specific item focused on Airbus commitment to sustainability that I was referring to earlier. We'll then turn to the agenda item relating to the potential long-term strategic and technological partnership with Evidian. And this will be followed by one combined Q&A session covering all the items in the agenda. Finally, we'll proceed to vote on the 14 resolutions. And the resolutions will be submitted to the vote one by one without further discussion. So I'm going to read you the agenda as quickly as I can. Point number one, opening general introductory statements; two, presentation by the Chairman and the CEO, including the report by the Board of Directors with respect to the corporate governance statement, report on the business, financial results of 2022, leading the journey towards clean aerospace and policy on dividend; three, discussion of all agenda items, including the report by the Board of Directors, leading the journey towards clean aerospace and the potential long-term strategic and technological partnership with Evidian. We will have, number four, vote on resolutions in respect of the accounts; for #2, the approval of the result allocation distribution; resolution #3, release from liability of the nonexecutive members of the Board of Directors; resolution #4, release from liability of the executive member of the Board of Directors; #5, the renewal of the appointment of Ernst & Young; #6, approval as an advisory vote of the implementation of the remuneration policy for the financial year 2022. Number 7 will be the renewal of Ralph Crosby as a nonexecutive member of the Board of Directors for a term of 3 years; #8 will be the renewal of the appointment of Mark Dunkerley as nonexec member of the Board of Directors for a term of 3 years; #9 will be the renewal of the appointment of Stephan Gemkow as nonexecutive member of the Board of Directors for a term of 3 years; and #10 will be the appointment of Mr. Anthony, but we'll call him Tony Wood, as nonexecutive member of the Board of Directors for 3 years in replacement of Lord Drayson. #11 will be the delegation to the Board of Directors of powers to issue shares, to grant shares, to subscribe for shares and to limit or exclude preferential subscription rights of existing shareholders for the purpose of employee share ownership plans and share-related long-term incentive plans. Number 12 will be the delegation to the Board of Directors of powers to issue shares, to grant shares, to subscribe for shares and to limit or exclude preferential subscription rights of existing shareholders for the purpose of funding the company and its group companies. #13 will be the renewal of the authorization for the Board of Directors to repurchase up to 10% of the company's issued share capital. And #14, the last one, would be cancellation of shares repurchased by the company. Thank you, Mr. Chairman.

Thanks, John. Let me give you an overview on Airbus in '22. As you know, this was another year of considerable economic uncertainty, but also geopolitical uncertainty. Russia's brutal invasion of Ukraine has been a wake-up call for Europe. It has highlighted the essential role that defense plays in society, and that European nations need to get their acts together for higher levels of strategic autonomy, the sooner the better. The lingering effects of the COVID pandemic, combined with the war in Ukraine, led to global disruption. It underscores the need to ensure a robust supply chain. Soaring energy prices and inflation impacted the global economy and forced central banks to raise interest rates sharply. Heightened geopolitical tensions outside of Europe also compounded the complex operating environment. Nevertheless, passenger traffic continued to recover globally, demonstrating the vital role of air traffic -- of air travel for connecting people and driving international trade. At Airbus, commercial aircraft deliveries increased year-on-year although fewer aircraft were delivered than we originally targeted amid the adverse operating environment. Some important defense contracts were signed that can strengthen EU nations sovereignty over the coming decades, including the Phase 1b, the next phase of the development of the so-called Future Combat Air System, or FCAS. SCAF as it is called in France. Meanwhile, the helicopter business had another successful year. And overall, the company reported increased revenues, free cash flow and EBIT adjusted figures. Against this backdrop, the Board and its committee or its committees met frequently during 2022. There were dedicated sessions to discuss topics of note, including the defense strategy, safety matters and cybersecurity. The Board also closely monitored developments in various legal proceedings. And together with the Audit Committee, supported management as it adjusted the '22 guidance during the year. The Remuneration, Nomination and Governance Committee supported the search for a new CFO, Chief Financial Officer, and new nonexecutive directors. Recruiting people with key skills and retaining those people, for instance, in emerging technologies or cybersecurity, was a topic that we revisited several times. I'm sure you all know, digital transformation is accelerating in almost every industry, certainly also in the aerospace and defense sector. Real-time connectivity, cloud and edge computing, analytics, AI, cyber, et cetera, all of that has a great importance in our businesses as we are moving from systems to data. A leading position in digital transformation in commercial aerospace and defense is key to our future success. Sustainability was, is and will be a key theme for us and, of course, for the Board and for its ethics, compliance and sustainability committee in particular. Ethics and compliance matters, our decarbonization agenda, our objectives, our methods and reporting, topics on human rights, inclusion and diversity were frequently addressed. Airbus is dedicated to leading the journey towards sustainable aerospace and coalescing a supportive ecosystem that embraces alternative fuels and enables disruptive technologies. We can't do this alone. The right frameworks and incentives at the government level will be needed to improve both the appetite and the capacity for sustainable aviation fuel. However, the direction of travel is clear. At the 41st International Civil Aviation Organization Assembly, member states achieved an historic alignment with aviation industry bodies such as the International Air Transport Association and the Air Transport Action Group adopting the long-term aspirational goal to reach net zero carbon emissions by 2050. In relation to this, the Board has decided to include a specific item on the agenda for this year's meeting relating to Airbus' commitment to sustainability. And as mentioned by John earlier, this is called leading the journey toward clean aerospace; and Julie Kitcher, our Exec Vice President for Communications and Corporate Affairs in charge of sustainability, will be presenting Airbus' progress in the area as well as our commitment to build on what we have achieved so far. From that, let me come to the financial part of the world. In '22, Airbus resumed paying dividends after a 2-year hiatus that was necessary to maintain the company's liquidity, its financial strength during the COVID crisis. At this year's AGM, we will propose a payment of a higher gross dividend of EUR 1.80 per share, reflecting our commitment towards sustainable dividend growth and towards yourselves. I would now like to focus in more detail on some particular topics of relevance for today. Let me start with the renewals of directors' mandates and the director appointments, which are being proposed for your approval today. In terms of governance, as you may remember, we introduced in 2016 the concept of staggered Board terms, with 1/3 of the directors being reappointed or replaced every year. At the 2022 AGM, the mandates of 3 directors were renewed, Guillaume, Catherine Guillouard and Claudia Nemat. At that AGM, Irene Rummelhoff was also appointed as a Nonexecutive Director at this AGM. At this meeting, as mentioned earlier, we will ask for the renewal of 3 Board members and the appointment of Tony Wood. With respect to the renewal of current mandates, the 3 directors proposed for reelection at this meeting are Ralph D. Crosby, Mark Dunkerley and Stephan Gemkow. All 3 are standing for reelection as nonexecutive directors. Let me give you some brief details on those 3 directors. Ralph Crosby first. He currently serves as a member of the Board of Directors at Excelitas Holding LP, and he has 30 years of executive experience in the international aerospace and defense industry, including general management of major defense and commercial businesses for companies like EADS or Northrop Grumman Corporation. Ralph is not only an excellent colleague, but he provides important operational insights to the Board of Directors. And his U.S. expertise has been instrumental in navigating the international sanction regime involving the U.S. over the past years and is highly valuable in the current complex geopolitical environment. Ralph, as I mentioned earlier, is also a member of the Ethics, Compliance and Sustainability Committee. Turning from Ralph to Mark Dunkerley. Mark currently serves as a member of the Board of Directors of Spirit Airlines, which is a NASDAQ-listed U.S. airline. And since 2018, he also serves on Volotea Airlines Board, which is a privately owned low-cost airline operating in Europe. Given his long and varied career in the commercial airline and aviation industry, including as President and CEO of Hawaiian Airlines, which he brought from bankruptcy into one of the world's most successful airlines, Mark has gained comprehensive expertise in airline industry developments in markets like -- in Asian markets, in finance and in governance. Mark is also a member of our Audit Committee and of the so-called ReNGo -- Remuneration, Nomination and Governance Committee. Next, I'll turn to Stephan Gemkow. Stephan currently serves as a member of the Board of Directors of Amadeus IT Group, which is a major IT provider for the travel and tourism industry; and Flughafen Zurich AG, which is a Swiss-listed company, which owns and operates Zurich Airport. Stephan possesses strong and long executive leadership experience, comprehensive expertise in finance and extensive knowledge of the airline industry, which he gained over a 22-year career at Deutsche Lufthansa, where he held various management positions. Stephan is also a member of our Airbus Audit Committee. And now to Tony Wood. We are asking you at this AGM to approve the appointment of Tony Wood as a new nonexecutive Board member. Tony was Chief Executive of Meggitt plc from 2018 to '22 having joined the company in 2016. He is also a member of the Board of Directors of National Grid plc, one of the world's largest publicly listed utilities focused on transmission and distribution of electricity and gas. And he is a director of the ADS Group Limited, the trade association for the aerospace, defense, security and space sectors in the U.K., having served as its President from 2020 to '22. Prior to joining Meggitt, Tony spent 15 years at Rolls-Royce plc, where he was a member of the Executive Committee from 2009 to 2016, latterly serving as President of Aerospace from 2013 to 2016. Tony has lived in the U.K., in France as well as in Canada. Tony replaces Lord Drayson, who resigned on the date of the AGM in 2022. In accordance with our internal Board rules and following a decision by the Board of Directors, he joined the Board as a temporary replacement of a Nonexecutive Director with immediate effect of December 14 in '22, awaiting his recommended appointment at this AGM. Tony's decades of experience in the aerospace industry, notably in the defense sector, will be of particular benefit to Airbus and will increase our Board's breadth and depth of expertise. With his strong aerospace industry knowledge, with his strategic focus and deep insight into the field of geopolitics, the Board of Directors believe that Tony will contribute to our activities across a wide range of issues from strategy definition, capital allocation to oversight of major commercial, defense and helicopter programs and technological developments. I would invite since he's new, and maybe you haven't met him before in his formal roles, I would like to invite Tony to say a few words to you, himself, if I may suggest to give him a microphone.

Thank you, and good afternoon, everybody, and thank you, Rene, for your very warm and generous welcome to the Airbus Board. I'm delighted to join a company that I've had an awareness and a fascination with the industry since I was very young, actually back to the formation of Airbus for those that can remember it in 1970. I've had the privilege to work for and to lead businesses across the aerospace and defense sector over the last 35-plus years or so that form significant parts of Safran, Rolls-Royce and Parker Meggitt latterly. And I've lived and worked, as Rene says, in the U.K., Canada and in France. And these are businesses that supply many of the technologies and the capabilities that are drawn upon, but that are integrated so effectively by Airbus today in delivering its many platforms, including gas turbines, landing gear, propellers, wheels and brakes, electronics and sensing systems. I'm very much looking forward to bringing up pan aerospace and defense industry perspective to the Board to support Rene and Guillaume and the team in shaping the strategy for Airbus and ensuring that it continues to create the great value that it's done for its stakeholders over many years through leading the way on the path to sustainable aviation and the technologies and systems that are needed in the defense and space sectors for the ongoing protection of our freedoms and our prosperity. And I very much look forward to serving on the Board in the coming years and the delivery of these objectives. Thank you, Rene.

Thank you very much, Tony. Let me give you some highlights of the Board's activities in '22. 13 Board meetings, including ad hoc calls, were held in '22. The average attendance rate at these meetings was 96%. In addition, as it is the case every year, the Board of Directors was informed in due time of any relevant developments through reports from the CEO in between meetings. And regular nonexecutive sessions took place at the end of the meetings of the Board of Directors. Throughout the year, the Board discussed all matters of importance for the company's activities, and there was a continual focus on geopolitical issues, including the Russian invasion of Ukraine and its impact on the company's operating environment as well as the situation in China and in the United States. Convened on an ad hoc basis early in April '22, the Board dedicated a session to performing a comprehensive review of the potential impacts of the Russian invasion of Ukraine on our business and more generally on the aerospace industry. Regular updates on relevant developments in that regard were provided to the Board during the year, and the Board continued to review and discuss the operational and the commercial status of programs as well as the overall financial situation of the company. During the year, the Board reviewed the company's financial results and forecasts. After 2 consecutive years without dividend payment, the Board decided to submit a dividend proposal to this AGM. The Board maintained an emphasis on both corporate audit and enterprise risk management and reinforced its emphasis on internal controls. With regard to the commercial aircraft business, in May '22, the Board reviewed and supported the evolution of the single-aisle industrial footprint to a rate of 75 foreseen in 2026 for the A320 family, including the creation of a new single-aisle final assembly line in Mobile, Alabama in the U.S. The Board received regular updates on the status of the production ramp-up of the different aircraft families and on supply chain issues. In that context, the Board notably discussed and supported the revision of the company's '22 target for commercial aircraft delivery in July and the decision to withdraw that target in December '22, as recommended by management. In addition, in-depth analysis on commercial aircraft sales contracts, approval processes and relations with customers were presented to the Board and extensively discussed. In relation to the defense and space, the Board regularly reviewed the financial situation of the division, the key status of key programs -- of the status of key programs, including the progress of the FCAS, the Future Combat Air Systems program. And there were in-depth discussions about the company's strategy in defense, in Space Systems and Connected Intelligence and on critical skills identification and management. For Airbus Helicopters, the Board focused its review on the financial situation on the division -- of the division, on competition, on progress made on major projects, including military programs and next-generation rotorcraft. The Board dedicated several sessions in '22 to reviewing the strategy implementation of the group and new aspects of the company's strategy, particularly in Defense and Space, as I mentioned earlier. As we usually do, we had a strategy offsite meeting. In '22, this took place in Airbus U.K.'s [ Bruton ] premises, where we met with the local teams and we visited the industrial site. There, the focus was on Airbus single-aisle operations with the presentation of the wing assembly industrial system. The Board also visited the innovation-based facility, where key initiatives on people and engagement were presented. And the single-aisle pre-equipping flow line where the progress of the Airbus safety journey was addressed. The Board also saw the advanced manufacturing research center that is the home of Airbus flagship Wing of Tomorrow program, a crucial part of Airbus research and technology portfolio to develop the new technologies, materials and skills to enable the next generation of decarbonized aircraft. In addition, the newly appointed Board members, Irene Rummelhoff, Tony Wood, joined by other members of the Board of Directors, including myself, Stephan Gemkow and Mark Dunkerley, followed the Airbus induction program, which is aimed at providing relevant information to support them in their nonexecutive director roles. Throughout '22, the Board of Directors frequently discussed the company's people strategy, and this included critical skills, competencies, identification and management, remuneration and retention schemes, employer attractiveness as well as inclusion and diversity. In parallel, the Board performed regular talent reviews, including in-person meetings with a number of talents identified as part of the top management succession planning. Although we hope that's a long, long way from now, just a side remark. Also, on the recommendation of the Remuneration, Nomination and Governance Committee, the Board approved the increase in the CEO remuneration announced and implemented in 2022 in the context of the CEO's renewal and reviewed that of the nonexecutive directors for implementation in 2023. The Board also discussed several sustainability matters of major importance to the company, such as safety, where the Board performed a biannual review of product safety-related issues. It received updates at meetings of the Board of Directors and ad hoc updates on relevant developments in between. In addition, the Board visited the newly created Airbus safety promotion center in Blagnac in France. In relation to climate, the Board also approved the company's engagement with the science-based targets initiative for the assessment of its greenhouse gas targets, including the establishment of a science-based target for its so-called Scope 3. In addition, an update on Airbus cybersecurity matters, including the cybersecurity governance model, was presented to the Board and discussed. Following the settlements reached to the French, U.K. and U.S. authorities in January 2020, in relation to the Serious Fraud Office, Parquet National Financier and U.S. Department of Justice and U.S. Department of State investigations, the Board of Directors and its Ethics, Compliance and Sustainability Committee remained fully committed and provided support throughout the year to the post-settlement activities. The agreements resulted in the suspension of prosecution for a duration of 3 years. This deferral period ended on 31st of January 2023. And the company awaits the formal determination by the authorities that it has complied with the agreement terms throughout the period, whereupon it expects the closure of the prosecutions in line with the procedural requirements of each country. On February 13, '23, the SFO gave notice to the company discontinuing the prosecution. And on 17th of March '23, the PNF gave notice of the same with receipt of the so-called [indiscernible]. The Board continued to pay close attention to the company's active engagement with its shareholders. An Airbus approach to governance, compliance and sustainability should be well understood and reflects shareholders' expectation to the extent possible. That is our commitment. In '22, in addition to the former General Meeting, Amparo, as the lead independent director, and myself, as Chairman, together with the Airbus team, sought regular engagements with major shareholders in order to understand their views, their feedback, their criticism, in particular, on governance, remuneration, key sustainability matters and performance against the company's strategy. We find those interactions extremely useful, and I hope that we will be able to continue this intense dialogue going forward. Let me turn to the Board committees now, which had a busy year as well. Audit Committee, to begin with. In '22, the Audit Committee met 5 times with an attendance rate of 100%. It fully performed all of its duties, and it discussed all of the items within its remit. In particular, it performed reviews of internal controls, corporate audit, including major findings and audit plan for '22, full year and quarterly accounts, operative planning and forecasts. In addition, regular enterprise risk management, legal and compliance updates were presented to the Audit Committee and discussed in meetings. Turning next to the Ethics, Compliance and Sustainability Committee, which I will refer to going forward as ECSC. In '22, the committee met 4 times, in total, with an average attendance rate of 95%. In particular, following the settlements reached with the authorities in January 2020, the committee maintained a sharp focus on post-settlement activities, including compliance and export control reviews. The committee was notably provided with regular updates on the status of the monitoring of the Agence Francaise Anti-Corruption and on the activities of the international traffic in Arms Regulations, Special Compliance Officer, appointed under the consent agreement with the U.S. State Department. Regarding sustainability, half of the company's work -- committee's work, was dedicated to sustainability topics. In particular, the committee discussed the company's Scope 1, 2 and 3 targets and the company's successful engagement with the science-based target initiative for their approval and Airbus's human rights policy as well. The ECSC committee also reviewed the sustainability road map, including towards a sustainable supply chain, and reviewed the '22 key priorities, dashboard and key performance indicators. In addition, the ECSC committee reviewed stakeholders' expectations on sustainability issues, including in relation to how environmental, social and governance matters affect defense. Let me turn to the Remuneration, Nomination and Governance Committee, which I will refer to as RNGC. The RNGC met 5 times in '22 with an attendance rate of 95%. In particular, assisted by a specialized firm, the committee carried out on the search process for a successor for the position of Chief Financial Officer, following the announcement of Dominik Asam's decision to resign, evaluating both internal and external candidates. The RNGC also held regular discussions on the executive committee succession road map, on talent management, development, engagement and retention, and diversity at top management levels. In light of a benchmark performed by third-party experts, the RNGC further discussed the structure and level of the CEO remuneration in the context of the CEO's renewal in '22. The RNGC also worked on the Board of Directors' succession plan with a strong focus on diversity, including gender diversity and skill mix. The RNGC, its work notably led to the appointment of 2 new board members in '22, including one new female Board member. The committee noted the evolution of the role of nonexecutive directors over the years. In particular, the committee observed an increase in workload and responsibility and complexity of the matters at stake and in related time commitment required from all nonexecutive directors since the last change in remuneration, which dates back to the year of 2016. In parallel, attracting the best talent, meeting qualification requirements while ensuring diversity within the Board has become a very challenging task in a very competitive market for those talents. A benchmark performed by a third-party expert confirmed that the remuneration of nonexecutive directors at Airbus was significantly undervalued and thus not competitive. Therefore, in line with the company's remuneration policy, the RNGC and Board eventually decided to increase the remuneration of nonexecutive directors for implementation in 2023, as announced in the information notice of this Annual General Meeting. Besides these 3 permanently established Board committees, AC, ECSC and RNGC, 2 meetings of an ad hoc committee of the Board were held to address specific strategic topics, including the Future Combat Air Systems program and potential strategic partnerships and also disputes. The next item I'd like to highlight, and I'm coming to an end rather soon. I want to highlight relates to the Dutch Corporate Governance Code. Our company is incorporated in the Netherlands, and applies the Dutch Corporate Governance Code, which includes non-mandatory recommendations for listed entities. Airbus complies with the vast majority of the provisions of the Dutch Code. In accordance with Dutch Law and with the provisions of the code on the occasions where when we do not comply with this code, we explain why we have not done so in our 2022 Board report. Let me move to the remuneration policy. The policy in the form set out in the Board report was adopted by the AGM held in 2020 with effect as of 1st of January 2020. Shareholders endorsed at this 2022 AGM, the implementation of the remuneration policy during the financial year '21 and following a review of the voting results, the Board of Directors decided not to propose any specific changes to the remuneration policy this year. Therefore, for this year's meeting, the Board is submitting to you an advisory vote only for the implementation of this policy in 2022 based on its strict application. At the next 2024 AGM, a revised remuneration policy will be submitted to shareholders for a binding vote. A comprehensive review process has been launched and your and the investors' feedback in general will be duly considered by the Board during this process. I would like to highlight that the Board has not revised the variable remuneration and long-term incentives target defined at the beginning of the performance period. The company works with top company objectives to measure its performance as disclosed in the Board report. The individual targets of the CEO are comprehensive, and they are shared with all employees via the top company objectives. So there's full consistency. The individual component is based on the CEO's performance and behavior as disclosed in our report. Finally, I would like to speak very briefly about the dividend proposal. This year, the Board proposes the payment to shareholders of a dividend of EUR 1.80 per share. This proposal is underpinned by the company's solid 2022 financial performance and underpinned by our confidence in our future. The proposed dividend increases the payout ratio from 28% for 2021 to now 33% for '22, and it demonstrates our commitment to a sustained dividend growth. So finally, it only remains for me to express a big thank you to the great Airbus team in all divisions across the world for their continued dedication, for their hard work to deliver the company's objectives. On behalf of the Board, but also I'm sure on behalf of yours -- of yourselves, I would like to underline our support to the management team who, in my view, continue to do an outstanding job in navigating the increasingly complex and challenging world in which we live. The Board, in general, in its entirety, is very grateful to the management performance, to Guillaume, under his leadership, and to his team colleagues. I would like to thank you as well, our Airbus shareholders, for your commitment and support for our great company. With your support, we will continue to pursue our purpose to pioneer sustainable aerospace for a safe and united world and to deliver our targeted results. Thank you very much for coming this year to this AGM, and thank you very much again for your continued support. I would like to hand over the floor to Guillaume, our CEO. Please join me in welcoming him in his presentation.

Thank you, Rene, and hello, ladies and gentlemen. Let me start by thanking you for your continued support and trust in our company and for your presence today in particular, for those who are here in the room. Let's begin with a look at the highlight of 2022. Throughout the year, we faced an adverse operating environment with multiple disruptions, mainly driven by the cumulative impacts of COVID and the Russian invasion of Ukraine. International sanctions and the energy crisis aggravated already existing tensions on logistics, materials, components and skilled workforce. But 2022 also resoundingly confirmed that people want to fly. And they do so even at higher ticket prices, enabling airlines to return to long-term fleet planning. In this context, we decided last night to ramp up our A320 family to a monthly production rate of 75 by the middle of the decade, 2026, as highlighted by Rene. However, our supply chain, impacted by the adverse operating environment, did not recover at the pace we had anticipated. Consequently, we had to adapt our operations and the associated production plan for the year. And in December, we had to withdraw our commercial aircraft delivery target for 2022. The situation was obviously quite frustrating last year, and we were not satisfied with the 661 aircraft we delivered in the end, significantly below the 720 aircraft initial guidance for the year. Nevertheless, we met our financial targets. This solid financial results with a net income of EUR 4.2 billion and confidence in our future financial performance underpin our dividend proposal for 2022. Moving to commercial aircraft considerations. In 2022, commercial air traffic continued to recover with domestic and regional markets leading the way, and international traffic progressively closing the gap. Air travel demand came back even faster than we expected during the summer. The trend was confirmed by the strong activity around the end of the year with global traffic already trending close to previous levels. The ongoing reopening of China is proving to be a strong positive driver for air traffic as it progressively recovers. And all regions should now converge towards normalized levels or even higher levels than before COVID. The net orders reached 820 commercial aircraft last year, taking our backlog above 7,200 aircraft at the end of 2022. On the A380, we have adapted the ramp-up trajectory to match supply, and we are now progressing towards the rate 75 in 2026. On A220, we also continue to ramp up and target to achieve rate 14 by the middle of the decade. The wide-body production is expected to increase to rate 4, to 4 aircraft per month in 2024 for the A330 neo, and from around 6 to up to 9 at the end of 2025 for the A350. And the recent large commitment from Air India confirms the increasing commercial momentum for the wide-body market around the world. In Helicopters, we achieved a book-to-bill well above 1, including the Tiger MkIII Upgrade program. And for Defense & Space, 2022 turned out to be a difficult year in a complex geopolitical and macroeconomic environment. Following the loss of access to the Russian Soyuz launchers, the Ariane 6 delays and the Vega C grounding after its launch failure in December, Europe lost most of its capacity to access space. However, we also had some important successes. The Airbus built ESM, the European Service Module, successfully bought NASA's Orion spacecraft safely around the moon and back home. And we achieved a book-to-bill above 1, securing important orders, including the FCAS, the Future Combat System Demonstrator Phase 1b, and the Eurodrone, 2 very important defense programs for the decades to come as mentioned earlier by Rene. At group level, the backlog in value increased to EUR 449 billion, also reflecting the strengthening of the U.S. dollar. Now on to our financial performance. Our full year 2022 revenues increased to EUR 58.8 billion as we delivered 661 aircraft and benefited from higher contributions from our divisions as well as from the appreciation of the U.S. dollar. Our EBIT adjusted increased to EUR 5.6 billion. It is mainly driven by the commercial aircraft delivery increase, partly offset by a slightly less favorable hedge rate versus year 2021. It also includes some nonrecurring elements. We recorded a positive element of EUR 0.4 billion related to retirement obligations. We made progress on our compliance-related topics, which allowed us to release provisions for an amount of EUR 0.3 billion. And these positives were partly offset by a EUR 0.1 billion negative impact resulting from international sanctions against Russia and the loss of 2 Pleiades Neo satellites which resulted in a negative impact of EUR 0.2 billion. That was part of the Vega C crash I was mentioning before. Our fiscal year 2022 R&D increased to EUR 3.1 billion. Our EPS adjusted was EUR 5.15 per share. And using an average of 787 million shares, and our EPS reported was EUR 4.40 per share. Our full year free cash flow before M&A and customer financing was a record EUR 4.7 billion, supported by working capital, including a positive impact from the timing of recipient payments and by the appreciation of the U.S. dollar. Let's now quickly look at our dividends. In December 2013, Airbus formalized a dividend policy demonstrating a strong commitment to shareholder returns. This policy targets sustainable growth in the dividend within a payout ratio of 30% to 40%. As mentioned by our Chairman, Rene, the Airbus Board of Directors proposes to the Annual General Meeting, the payment for 2022 of a dividend per share of EUR 0.1 on the 27th of April 2023, corresponding to a payout ratio of 33%. And this represents a 20% increase from the EUR 1.50 for the previous year and reflects our solid 2022 financial results together with our confidence in our future financial performance. Now let's have a look at how the share price progressed in 2022. We started the year in positive territory, supported by 2021 orders and deliveries performance. However, the Airbus share price suffered together with global equity markets from the overall supply tensions, inflationary pressures and the COVID-19 resurgence in China. This was then aggravated from mid-February by the Russia's invasion of Ukraine, which we clearly see on the slide. This macro environment continued to impact global equity markets that were volatile throughout the second quarter. Global markets partially recovered in the third quarter before retreating on inflationary pressures, Central Bank's monitoring policy decisions and growing fears of recession. In that context, Airbus share price retreated broadly in line with peers. Signs of cooling inflation in the last quarter supported an upward trend of global markets. Airbus was further boosted by the free cash flow guidance increase before experiencing turbulences after rumors about delivery delays in 2023 and following the withdrawal of the delivery guidance for 2022 alongside the ramp-up adjustment announcement. Overall in 2022, Airbus share price outperformed the CAC 40 and the DAX 40 but underperformed the aerospace and defense sector. And you see with the start of the war in Ukraine, and there was a huge gap between aerospace and defense, and we only partially closed the gap between the two. Despite turbulence in the banking sector once again illustrating the complexity of this macro environments, Airbus share price increased in early 2023, supported by the solid 2022 financial results. Let me now remind you our 2023 guidance. As the basis for its 2023 guidance, the company assumes no additional disruptions to the world economy, air traffic, the supply chain, the company's internal operations and its ability to deliver products and services. The company 2023's guidance is before M&A. And on that basis, the company targets to achieve in 2023 around EUR 720 commercial aircraft deliveries and EBIT adjusted of around EUR 6 billion, and the free cash flow before M&A and customer financing of around EUR 3 billion. This guidance reflects the adjusted growth trajectory of our commercial aircraft business, taking into account the phasing of PDPs or predelivery payments, the investments we are making to prepare our future and the adverse operating environments that we continue to face. 2022 was another important year with regards to the progress made on our sustainability journey. During the year, we set a target for our scope free use of sold product commercial aircraft to improve the carbon efficiency of delivered aircraft by 46% in 2035 compared to the 2015 reference. This permitted us to engage with the SBTI for them to assess our Scope 1, Scope 2 and Scope 3 targets, which they validated in January. Julie will provide you with more details in a moment. In 2022, we overachieved the decarbonization target we had set for the year for our own operations. We reduced our emissions by more than 8%. This can be explained by several factors: The acceleration of energy saving investments, the increase of SAF, sustainable aviation fuel usage in our own operations and the deployment of additional energy saving measures in the context of the energy crisis. Compared to plan, the performance also reflected the deliveries that were lower than planned as well as clement weather conditions, especially over the last months of the year. All in all, the progress in our comprehensive decarbonation journey is also reflected in our CDP rating maintained at A- in 2022. At the last AGM in 2022, I was pleased to announce the release of our first human rights policy. We are now moving forward with the integration of human rights due diligence in our supply chain and in our own operations. We also see a positive trend in female representation and gender diversity. 27% of women were hired, up from 22% in the previous year. The proportion of women in the Board increased to 33%, up from 25% the previous year, while the proportion of women in the Executive Committee is 25% in 2022. Still work to be done, but improving significantly. Safety remains a priority. Safety is my chief priority, and we achieved a close to 30% reduction in the frequency of last time injuries in 2022 in our premises with our own workforce. We consider driving cultural change as a key element for achieving this goal. We have, for instance, deployed safety box to raise awareness about risk prevention across our sites. These are dedicated spaces where employees can express and engage on relevant safety topics. Awareness campaigns are frequently organized. For instance, campaigns to support a safe return to work after a long break such as summer holidays. Finally, we have strengthened again our training offering with, among other things, the deployment of formal leadership health and safety training for which the candidate examinations are set and moderated by the U.K. National Examination Board for occupational safety and health. Under the terms of the deferred prosecution agreement, DPAs; with the French Parquet national financier, PNF; the U.K. Serious Fraud Office, the SFO; and the U.S. Department of Justice, the DOJ, signed on 31st of January 2020, the authorities agreed to suspend prosecution of Airbus for 3 years. This provision period ended on 31st of January of this year 2023. As said by Rene, on 13th of February 2023, the SFO gave notice to the company discontinuing the prosecution. On 17th of March 2023, the PNF gave notice of the same with receipt of the Constat de l'extinction de l'action publique. Airbus will continue to meet its obligations under the consent agreement extending until October 2023, as mutually agreed with the U.S. Department of State. We have implemented a benchmark ethics and compliance program and a strong culture with respect to ethics and compliance, approaching this in the same way as safety and quality. The company remains committed to upholding the highest ethical and compliance standards in all our activities worldwide as we maintain and grow safety and quality moving forward. This included in 2022 continuous efforts to digitalize and simplify the export control program and processes on both, anticorruption and export controls. And with regards to the progress on our supply chain efforts, in 2022, we launched the first Airbus Supplier Sustainability Council, establishing the framework to step up collaboration within our supply chain on sustainability and fostering a new model of engagement with suppliers. The target is to launch concrete improvement initiatives called by representatives of the company and of member of the council. The council will focus on areas such as decarbonization, transparency and engagement, acting as key enablers to accelerate specific initiatives from industry bodies such as the IAEG and to share best practices across the full supply base. IAEG stands for International Aerospace Environmental Group. Now a few words to wrap up and address our key priorities. This year, more than ever, our main priority is to ramp up production, including single-aisle aircraft as we progress towards rate 65 by the end of 2024. 65 is what we had. We were close to 65 just before COVID. And as we progress towards the rate 75 in 2026. Our recent decision to increase capacity in changing with the second FALs for the A320 family, will contribute to achieving this objective after the decision we took last year to put together a second FALs in Mobile, Alabama. It will generate more production flexibility for the Airbus global industrial system, which will eventually consist of 10 A320 family FALs, all capable of assembling the A321 as we sell more and more A321s. We will continue to closely collaborate with our suppliers to match our production with supply. In parallel, we'll continue the long-term transformation of our company to digitalize and decarbonize our processes, our products and our services. The geopolitical disruptions of 2022. First and foremost, the war at Europe's doorstep have clearly demonstrated the need for a strong and sovereign Europe, in particular, in defense and high-end technologies. This also extends to space. Space is a key pillar of defense. Space is also only present in our everyday lives for communication, for navigation and others. Space is at the forefront of the study of climate change. It even goes beyond that as we have just seen with the Jupiter Icy Moons Explorer, in short Juice, built by Airbus, which was successfully launched last Friday, demonstrating what the best of Europe can deliver when it comes together. It's an IM5 launch of Juice. At Airbus, we are proud of contributing to Europe's ambition by taking a leading role, both in major defense and space programs. When it comes to sustainability, we endeavor to set the agenda for the aerospace sector. We see ourselves in the leading role. Our focus is now to transition together with a broader ecosystem from ambitions to actions. Julie will come back to our journey, pioneering sustainable aerospace in a moment. But before that, I will hand back the floor to you, Rene. Thank you very much.

Guillaume, thank you very much for this comprehensive and good presentation. The next item is the presentation of our external auditors. And before we listen to Nico Pul from EY Airbus external auditor for the year 2022. I would like to make the following statements in respect of the company's and EY's legal obligations. First, for the purpose of this AGM, the company has waived EY's obligations of confidentiality. Second, EY has the obligation to correct any materially incorrect statements and/or announcements in relation to the 2022 financial statements or the independent auditor's report. And third, EY will present the audit process and procedures in relation to the financial statements before adopting the 2022 financial statements contained in the 2022 Board report. Nico, the floor is yours.

Good afternoon. My name is Nico Pul. I'm representing Ernst Young Accounts LLP. For fiscal year 2022 of Airbus SE, I have been the statutory auditor. Our audit and audit results are described in our independent audit report issued February 16, 2023. Our report is included in the 2022 annual report. In The Netherlands, there is a common practice. This is that the statutory audit presents a high-level overview on the audit and the audit results to the AGM. I would like to present to you briefly our audit plan, including materiality used in our coverage, the key audit matters and our conclusions. The scope of our audit of the consolidated and company financial statements is shown on this slide. The scope of our procedures regarding the so-called other information included in the annual report is shown too. These scopes are unchanged when compared to last year. We prepared our audit plan and presented it to the Audit Committee and the Board. We based the plan on our understanding of Airbus, and we included the information gathered during the previous years. We consider the relevant factors in the environment Airbus operates in. Our audit plan included our planned audit response in the light of COVID and the Russian invasion of Ukraine. During the year, we consider the impacts of rising inflation and interest rates. We also took into account the impact of the euro-dollar exchange rate movements. Our audit plan provided information on the scoping, on the coverage and on the materiality levels. We had 44 operating entities in scope. These represented 94% of total consolidated revenues, 92% of total consolidated assets and 93% of total consolidated EBIT. The other operating entities each represent less than 1% of revenues or EBIT. For those entities, we performed, amongst other analytical procedures. This was to corroborate our assessment that the group financial statements are free from material misstatement. As mentioned on the previous slide, we audited the financial statements to give a true and fair view. To assess the true and fair view, we apply a materiality level of EUR 280 million. This is 5% of EBIT adjusted. 5% is a common percentage and the same as in previous years. In previous years, we used normalized EBIT adjusted. We considered normalized -- normalization no longer needed as the COVID impacts were much less than before. Of course, our audit procedures cover many more than only amounts exceeding EUR 280 million. The conclusion to reach is whether the financial statements give a true and fair view. We designed the aggregate of our scope and audit procedures such that we have sufficient and appropriate basis for our conclusion. The reporting threshold for those -- to those share governance for other differences was determined at EUR 13 million. In our audit, we involve specialists for various audit areas. These include specialists regarding IT, risk of fraud and corruption, hedge accounting, actuarial, taxes and ESG. Our specialists possess knowledge of the sector and are independent too. They satisfy all relevant training requirements, both regarding the specialism and to be able to provide audit support. We consider the risk of material misstatement due to fraud. We paid specific attention to the following elements: the risk of management override regarding margin and completion and recoverability of program assets, the risk of fraud and revenue recognition, and the risk of noncompliance with anti-bribery, anticorruption requirements. We paid specific attention to when reported specifically upon the so-called key audit matters. Key audit matters are those matters that are our professional judgment, were of most significance in our audit of the financial statements. Our key audit matters related to revenue recognition, estimations related to contract margin for the accounting of owners contracts, recoverability of key program assets and accounting for derivative financial instruments and hedge ineffectiveness. With respect to the first three key audit matters, we focused on key programs. We reviewed the underlying processes and controls that are used to account for the programs, discovered assets and liabilities, including work in progress and related revenue. We challenge management on the assumptions used, and we also looked at the historical accuracy of previous year's estimates. We specifically consider the impacts of the improved COVID outlook. This includes assessment of the updates by management on the ramp-up of production rates, future sales scenarios and their impact on valuations and revenue recognition. As part of the audit of the financial statements, we consider the impact of climate-related risks. We evaluated whether the possible effects of the energy transition are taken into account in estimates and in significant assumptions. This is described in a key audit matter recoverability of key program assets. The fourth key audit matter includes hedge accounting. We tested the highly probable assessment of future aircraft delivery as performed by the company. And we challenged key management assumptions pertaining to audit cancellation, airline default and aircraft rescheduling risks. Based on our work, we drew our conclusions. We concluded that the 2022 financial statements give a true and fair view of the financial position of Airbus as of December 31, 2022, of which result in cash flows for 2022, in accordance with IFRS as adopted by the EU and with Part 9 of Book 2 of the Dutch Civil Code. We have read the so-called auditory information included in the annual report. This includes the report of the Board of Directors. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we concluded that the audit information is consistent with the 2022 financial statements, and we did not identify any material misstatement. The annual report is an ESEF format. In our opinion, it complies in all material respects with the regulatory technical standards. Thank you for your attention.

Thank you, Nico Pul, for your presentation. I would come to the next item on the agenda, which is a presentation of Julie Kitcher, titled with leading the journey towards clean aerospace. And Julie, the floor is yours.

Thank you, Rene. Hello, everybody. It's a pleasure to talk to you today about our Airbus sustainability journey. Guillaume presented the progress we made in 2022. On our sustainability journey. And now I'm really pleased to share an overview of our global approach to sustainability and more precisely, on how we're leading the journey to clean aerospace, one of our four sustainability commitments. So at Airbus, we are and always have been a company driven by innovation, known for pioneering new technologies that have redefined the aerospace industry. And what we do as a company is essentially bring people and cultures closer together physically, which help to create value and drive social and economic growth. That's our purpose. It's our North Star and that really sits above our company strategy to guide us. So sustainability is firmly embedded in our corporate strategy. It's at the core of everything we do. And to make it easy to people to relate to, we break it down into three key themes: Respecting the planet, valuing people and enabling prosperity. These are interconnected and equally important. And we cannot achieve one without the other. So of course, we need all three to deliver on our sustainability commitment. We're now accelerating, really driven by our purpose. And conscious of the strategic importance of sustainability, we defined the governance at the highest level. Oversight has been established at the Board of Directors level with the Ethics, Compliance and Sustainability Committee responsible for assisting the Board of Directors to oversee the company's culture and commitment to ethical business, integrity and sustainability. Ethics and compliance program, organization and framework, the sustainability strategy and effective governance to ensure that sustainability-related topics are taken into account and the company's overall strategy and objective. So if I go quickly one by one, respecting the planet is really centered in our commitment to leading the journey towards clean aerospace by delivering and continuously improving our products. The aircraft -- commercial aircraft products coming off our production lines today are already significantly contributing to our climate targets, reducing CO2 emissions by 20% to 25% when replacing previous generation aircraft. We've committed to really ambitious science-based targets, setting us on a clear path to decarbonization. And as Guillaume said, these targets have now been validated by the independent organization, SBCI, the science-based target initiative, which is acknowledged as the gold standard in CO2 target-setting methodology. It's really an important milestone, which demonstrates Airbus' willingness to set climate targets aligned with those science targets and hold ourselves accountable. We're improving the environmental performance of our operations and developing a circular model across our value chain to optimize the use of resources. We're helping to manage global threats such as deforestation, biodiversity loss, wildfires and rising levels, monitoring, for example, with our space business. And of course, we're also committed to bringing a hydrogen-powered aircraft to market in 2035. Valuing people. This is all about our deep awareness of the responsibility we have to society and to future generations. We're respecting human rights throughout our value chain. And of course, that brings us directly to our defense business. There's no sustainability without security. We're driving a safety and business integrity culture. We're creating an inclusive workplace where all can fulfill their potential. And we're taking global action to support communities and in particular, on the most vulnerable, the environment and use, and enabling prosperity. So let's be very clear. You can't have sustainability without prosperity. We're committed to being a profitable, competitive company that meets customer expectations and one that has the financial strength to invest in the future. It requires strong governance that prizes safety, quality, integrity, compliance and security. So let's take a closer look into the decarbonization journey. Starting with some numbers, global CO2 in 2022 was around 35 billion tonnes. And the aviation industry represents 2% to 3% of that figure. So we recognize that aviation emits CO2, and we genuinely believe that aviation is part of the solution to global CO2 emissions. Of course, the biggest impact comes from our products and services, and we're very focused on CO2 because of its cumulative effect. So CO2 equivalents are categorized into three scopes. Scope 1 and 2 are related to our own activities linked to greenhouse gas emissions. We're, of course, also monitoring and targeting waste and water usage reduction. Scope 3 includes all the other CO2 emissions from our products and services in our value chain. So this means at Airbus, we're reporting the total CO2 emissions for the aircraft we deliver. But of course, that's a collective responsibility to solve. So this chart really shows our emissions in 2022. And you see the figures clearly. 0.2% of our emissions were originated from Scope 1 and Scope 2, that's around 800,000 tonnes. 2.5% came from upstream Scope 3, that's in our supply chain of 9 million tonnes. And 97% of our emissions, around 445 million tonnes arose from the use of sold products and services. We want to be transparent and our progress at Airbus is really measured against strict recognized standards. For example, we've been a supporter of the task force on climate-related financial disclosures, TCFD, since December 2000. We're working on a climate risk and opportunity mitigation plan to fulfill the TCFD requirements, and that was also reflected in our CDP rating, which was maintained in 2022 at A-. We want to be transparent. We want to show the progress we're making and how we're meeting our commitments. So let's go a bit deeper now into how we're addressing them, starting with our Scope 1 and 2. Next slide, please. Thank you. So in 2021, we set a new target to reduce Scope 1, Scope 2 emissions by 63% by 2030 compared with the 2015 baseline, aligning our ambition with a 1.5-degree trajectory. We've also set a target to remove all residual emissions by 2030 through the use of permanent carbon removal solutions such as offsetting and direct air carbon capture and sequestration or DAC. As you can see here, we include also our CO2 targets in our top company objectives. And Guillaume mentioned those earlier, in particular with respect to our overachievement in 2022. These yearly targets are set consistently with our longer-term plan for 2030, in line with the prioritization of projects over the decade and their lead time to deliver savings. Although the yearly targets are not linear. We're pursuing a range of projects and investments to cover our production sites which is around 70% of that footprint. And our transport and other mobile activities, for example, Beluga, flight test and oversized transportation represent the remaining 30%. The CapEx or OpEx for these activities is included in our annual operating plan cycle. So some quick examples then of projects. We're accelerating our ambition to at least 90% direct supply of renewable or low-carbon electricity for all Airbus sites in Europe before 2030. And of course, we're investigating possibilities to do the same in China, and the United States. We've also introduced biomass instead of steam for heating and lighting, and using lead for outdoor lighting systems at several sites. All these generating sizable reductions in energy consumption. Our flight test and Beluga operations account for most of our transport or mobility emissions. And we will increase the use of sustainable aviation fuels in these operations, so that they supply at least 30% of flights by 2030, with an interim target of 10% by the end of 2023. We began using SAF on our Beluga flights in 2020 and actually in our flight test operations in the course of 2022. And we've now created SAF hubs in Toulouse, Bremen, Hamburg, Chester, that's brought in our U.K. facility. We see the use of SAF in our own operations as highly significant to align our own carbon roadmap with that of the industry as a whole. And it enables us to make immediate concrete progress on our decarbonization road map now, which is really the great advantage of SAF. So when we look at our Scope 3 emissions, we really committed to a near-term target of reducing Scope 3 by 46%. That covers the emissions from all our aircraft and products that we delivered to our customers in 2035 compared with 2015. And of course, our product line is already delivering significant CO2 reductions with the latest generation of aircraft. But clearly, we need to accelerate rapidly. That's 445 million tonnes collectively that need to be addressed. So we're investing significant amounts in research and development and annually, more than EUR 3 billion, a significant amount of which is going towards our decarbonization efforts. And our entire aviation ecosystem needs to arrive at the same place at the same time to get there. So if we look at the five building blocks to get there, these are really the relevant decarbonization building blocks in our strategy to achieve the objective. And it includes improved aviation operations, technology improvements, sustainable aviation fuels and new energies alongside market-based measures, including negative emissions or carbon removals. So I already talked about the latest generation aircraft, but it's important to say that only 75% of the global fleet today is flying on prior-generation aircraft. Only 25% flying on the latest technology. So the first lever is fleet renewal, and that's a substantial reduction mechanism. Next, we're working continuously with the engine OEMs, of course, to improve engine efficiency. And we're looking at disruptive engines, such as the open firm. And that's what we're doing with CFM and their RISE engine. The wings are, of course, also responsible for significant savings. And here again, we have several projects with the wing of tomorrow in the U.K. to further improve in-flight performance and manufacturing efficiency. And we're looking into hybridization of aircraft propulsion systems to be one of the enablers to reduce fuel consumption over time. Operations and infrastructure basically, some of those solutions can reduce by 5% to 10%, and that's really about optimizing flight trajectories and on ground transportation. And we're obviously looking to secure the infrastructure in airports for the next generation of aircraft to ensure their compatibility and energy availability. We've mentioned SAF a lot. It's really a short-term solution to decarbonize flights today. Our aircraft can take a 50% drop-through solution with sustainable aviation fuel mixed with kerosene today. But the reality is less than 1% of flights are using sustainable aviation fuel today. And we're working on the capability to increase that to up to 100% by 2030. Over the last few years, we've flown several commercial and military aircraft as well as helicopters with 100% SAF and most recently, an A321. So we're continuing to progress rapidly. Carbon offsetting even temporarily will play an important role in the decarbonization journey of aviation. Direct air carbon capture holds great promise for CO2 removal, and we need to work on its recognition on the regulatory side to ensure that it's recognized as a permanent CO2 removal technology. And at Airbus, we've introduced a compensation mechanism since 2019, actually, so that all of our business travel is compensated through gold standard carbon offsets. Finally, we're engaged with industry partners and policymakers. Rene talked about the ICAO assembly in 2022, where the nation's adopted a net zero 2050 targets. And obviously, Airbus is working actively with policymakers be able to support a global level playing field for a global industry. The next slide talks about the strategic partnerships we have for sustainable aviation fuel, and we're working with regulators, customers and producers on a global scale. So you can see some of the partners on the screen here. It's really about stimulating the ecosystem around the production and uptake of SAF. So we're also preparing the future by researching, testing and gathering data on alternative fuels, providing analysis to fuel working groups, for example, around the globe in order to prepare the industry for 100% SAF as a certified aviation fuel. So it's really about working with the entire ecosystem. We're doing exactly the same approach with hydrogen. If you go to the next slide, please. And you can see here, again, working on a global level with hydrogen partners across the globe. Hydrogen hubs at airports. This is being developed worldwide. And in February, we announced a unique consortium in New Zealand gathering for the first time, all the key active at a country scale. And on the R&D and technology side, we're also partnering with the best industrial partners and universities, research and development centers to understand the different elements for consideration, working with ArianeGroup as well on hydrogen management, the ground operations with their 40 years of experience in using hydrogen, in rocket launch vehicles as well as other partners. We're also looking at contrails and their performance. So that's the so-called non-CO2 effects in aviation that need to be addressed for global emission reduction. So finally, to wrap up, 2030, 2035, 2050, they're key milestones ahead of us, and we're acting now. At Airbus, we're really committed to taking a leadership position to decarbonize aviation, engaging with the entire ecosystem to make the decarbonization of the industry possible. We're focusing our innovative portfolio of projects towards these targets. So ladies and gentlemen, we're pushing and accelerating to decarbonize the industry. Thank you for your time.

Thank you, Julie, for your clear and succinct presentation. I hope you all see that not only are we committed to this journey, but we're also making ourselves measurable and have specific targets here, which can be and will be followed through, I'm sure. We will continue the agenda with the next discussion item, which is relating to the potential long-term strategic and technological partnership with Evidian. And I'm sure you followed the developments, the acquisition of minority stake by the company Evidian, which was in discussion for some time for a few weeks earlier this year. But I will hand it over to Guillaume to present the status on the thinking behind this and what the situation actually is. Guillaume the floor is yours.

Thank you, Rene. And as explained by the corporate secretary, John, in a later dated 17th of February 2023, TCI requested the discussion at this AGM of the potential long-term strategic and technological partnership agreements between Evidian and Airbus and the previously announced and now terminated discussions relating to the potential acquisition by Airbus for a minority stake in Evidian that was then contemplated by Airbus. Therefore, this item has been included on the agenda for today. And TCI's questions have been appended as Section 10 of the AGM information notice. At the time, we indicated we would answer the questions at this AGM to the extent relevant possible and permissible, taking into account the then status of the potential transaction. In the meantime, on March 29, the company provided an update on our discussions with Atos. We announced that after careful consideration, Airbus had come to the conclusion that the potential acquisition of the minority stake of 29.9% in Evidian did not meet the company's objectives in the current context and under the current structure. Airbus, therefore confirmed that it would no longer pursue discussions. Announced in February 2023 with respect to the potential acquisition of the minority stake of 29.9% in Evidian. However, we indicated that Airbus and Atos will continue to discuss other potential options and pursue the work on the potential long-term strategic and technological partnership between Airbus and Evidian, which has the potential to create significant value for both companies. And this statement remains accurate in all respects today. However, this cannot be certainty at this stage that any such transaction or partnership will be entered into nor as to the final terms of any such matters. Given the current state of affairs, I will therefore focus on addressing the question from TCI, which remain relevant as of today. I will address the questions set out in the agenda in so far as they relate to the potential long-term strategic and technological partnership, our strategy for digitalization and our governance process. When it comes to the rationale for the potential partnership, consistent with our strategic priorities, we initiated discussions with Evidian in the context where digital is playing an increasingly important role with big data, connectivity, cloud-based solutions, cyber resilience and security, taking an even greater importance in our commercial and defense businesses. At Airbus, we are moving from platform to systems, systems to data, digital to cyber, which is, for example, driving a need for an increasing volume of high-power computing for various applications. Airbus has been undergoing a long-term transformation with two key drivers, digitalization and decarbonization. And digitalization, being also a key enabler for decarbonization. As a result, we continue to develop organically and inorganically, the digital competencies that are relevant to our business today and even more tomorrow. A potential partnership or other paths with Evidian could benefit Airbus and create value. On the basis of Atos public disclosure regarding its contemplated separation plan for Evidian, Evidian has the potential to be focused on reinforcing itself as a digital transformation partner and on big data, cloud, cybersecurity, smart applications and high-performance computing sectors with some selected leading European positions in each or in some of those domains. Based on Atos public disclosure, Evidian rebranded Eviden on the 5th of April would bring together two of Atos existing business lines, Digital and BDS, which is called big data and security. Digital, spanning across application modernization services, digital transformation and cloud solutions. And BDS, that is spanning across cybersecurity, mission-critical systems as well as high-performance supercomputing. So where are we now? What was the process as announced by Atos on the 16th of February 2023 and as confirmed during our annual press conference on the same day? We submitted an indicative offer to Atos with a view to enter into a potential long-term strategic and technological agreements and to potentially acquire a minority stake of 29.9% in Evidian. As we made clear at the time, this phase was intended to allow us to conduct for due diligence and to explore the possibility to attain mutually satisfactory terms. We've been explicit from the outset that there was no certainty that the transaction will occur now as to the final terms of any transaction. After careful consideration and after advancing in the due diligence and looking into more details into the profile of the Evidian business, we came to the conclusion that our conditions are not met for the acquisition of a minority stake of 29.9%. In terms of governance and absence of influence, it is important to be clear that our decision to enter into discussions or not to proceed with the acquisition of a minority stake in Evidian is the result of an independent decision by the Airbus Board of Directors and senior management and has not been influenced by outside pressures or parties. This is something that the Board and the management take seriously and as is to be expected in relation to any strategic transaction. The Board set up an ad hoc committee to oversee the project, with the involvement of the Chairman. The Board and the top management have acted and will continue to act in the best interest of the company and its shareholders, with a view to creating sustainable value over the long term for its shareholders and other stakeholders. We value investor dialogue, and we'll continue to engage with our shareholders and other stakeholders on and all relevant topics. When it comes to the so-called LTSTA, the long-term strategic and technological agreement. I will use LTSTA now, it's shorter. While we determined that we would not proceed with the acquisition of a minority stake in Evidian, we pursue the work on a potential LTSTA between Airbus and Evidian for the reason I have explained and with a view to develop our digital offerings and better serve our customers and support our existing businesses. In addition to the potential partnership, we would be open to exploring further potential strategic opportunities with Atos, only to the extent that it would support Airbus long-term digital transformation and create value, again, for both, our customers and shareholders. Airbus shareholders can be assured that the Board of Directors and senior management of the company are focused on delivering long-term sustainable value for our shareholders and again, other stakeholders. As a conclusion, we value this opportunity to discuss the matters with you. The Board of Directors and the management of the company are focused on the strategic roadmap of Airbus which includes addressing the aircraft backlog and delivering on our customers' commitments and also, the preparation of the next generation of commercial aircraft that will be decarbonized but also digitally enabled, connected and cyber protected. Thank you.

Thank you very much, Guillaume. That concludes the presentations, and we shall now proceed with the Q&A session.