Alstom SA (ALO) Earnings Call Transcript & Summary

Welcome. Welcome to this combined Ordinary and Extraordinary General Meeting of Shareholders of Alstom. The floor is with Henri Poupart-Lafarge.

Thank you. Good afternoon, ladies and gentlemen. I hereby declare the combined Ordinary and Extraordinary General Meeting of Shareholders open. The emergency measures related to the COVID-19 pandemic adopted by the French government have led us exceptionally to hold this meeting behind closed doors at our headquarters. I would like, therefore, to thank all the shareholders who have been kind enough to log on to attend this meeting remotely. I'm joined by Mrs. Emmanuelle Petrovic, General Counsel; and Laurent Martinez, Chief Financial Officer. In accordance with the law, I am now responsible for setting up the committee. In view of the closed session imposed by the health crisis linked to COVID-19, I call on Mrs. Emmanuelle Petrovic and Mr. Laurent Martinez, members of the assembly present who have accepted this position to act as scrutineers. I propose to appoint Mrs. Emmanuelle Petrovic as secretary to the bureau of the assembly. Also participating in our meeting, but remotely, are the statutory auditors of our company, Jean-luc Barlet from the firm Mazars and Edouard Demarcq representing the firm PricewaterhouseCoopers Audit. I'm now going to give the floor to Emmanuelle Petrovic.

Thank you, Chairman. The agenda of the combined Annual General Meeting appears on Page 3 of the notice of meeting published on our website. It is also included in the notices of meeting sent to the shareholders or published in accordance with the law. The meeting will take place as follows: The Chairman would present the highlights of the '19 -- 2019-'20 financial year review, will review then the first year of deployment of Alstom in Motion strategy. Thereafter, our Chairman will outline the impact and adaptation measures that have been taken in response to the COVID-19 crisis. He will also present the rail market. Finally, our President will provide an update on the ongoing acquisition of Bombardier Transport. Laurent Martinez will comment on the group's results for the financial year. Henri Poupart-Lafarge will report on the compensation of the Board of Directors following this meeting. Yann Delabrière, Independent Lead Director, will present the activity of the Appointments and Remuneration Committee, which he is the Chairman, as well as the overall report on the remuneration, the elements of remunerations of Henri Poupart-Lafarge for the past financial year and the remuneration policy for corporate officers. Ms. Sylvie Rucar and Kandé de Beaupuy will present the work of the council committees they chair. The statutory auditors will present their reports. In view of the closed session, there would be no debate or questions. We will conclude with the results on the vote on resolutions set out in the Notice of Meeting on Pages 44 to 59. The report of the Board of Directors on the resolution is included in the same document. The statutory auditors report have been made available to you. You have the folder here on the desk and the list will be included in the minutes of this meeting. All these documents have been made available to shareholders at the registered office. On the registration date of the shares at -- to which at least 1 voting right is attached, the share capital is composed of 226,859,500 shares with a par value of EUR 7 each share. The voting took place exclusively remotely. Shareholders could vote until yesterday at 3:00 p.m. On this day, shareholders voted remotely had 163,046,300 shares with voting rights, as 71.87% of shares with voting rights. The quorum required for this general meeting is 20% for the ordinary part and 25% for the extraordinary part. The meeting may act validly. And the report is in the notice Page 8 to 28. In order to not lengthen the duration of this General Meeting, I'm not going to read out this report.

Thank you. Thank you very much. I am going to move on to the general presentation. We are going to start with the highlights of the year 2019-2020. We are going to detail them. For highlights, first, it's the first year of Alstom in Motion. Then, we were impacted by the COVID-19 crisis, and we took the appropriate measures to cope with it. Then this rail market was impacted, but we believe that the fundamentals are extremely robust. And finally, we continued our acquisition project of Bombardier Transportation. First of all, the year 2019-2020, first year of our strategy, Alstom in Motion. As you remember, we announced this strategy last June. Let me recall, the main pillars of this strategic plan after 10 years of globalization of the company throughout the world on all continents, we wanted to refocus our company on solutions, which are greener and smarter. Three pillars for this strategic plan. We want to continue to grow as we did in the last 10 years in growing more rapidly than the market, and we're going to grow by offering new solutions to our customers. Solution with greater value to our customers, not necessarily new customers in new geographies. We want to continue innovating, of course. But we are going to focus our innovation towards green mobility, smart mobility, digital mobility in order to improve our efficiency, our environmental efficiency and cope with climate change. We have a very robust order book, over EUR 40 million. We have to deliver efficiently, and it should be satisfactory for our customers. So we insist on the Alstom teams, and we want this team to be agile, inclusive and responsible, which is in line with the businesses we are in, business in favor of environment and for public transportation for transportation of citizens, and therefore, we have to be inclusive and responsible. If we have a look at the results of this fiscal year 2019-2020, they are in line with the expectations we had as we launched Alstom in Motion. We knew that we had first year for which the growth of the revenues would be rather limited. It is 1%. It was impacted by COVID-19. So the revenues are EUR 8.2 billion, slightly up versus last year. It is supported by an order taking EUR 9.9 billion, let you say, book-to-bill between -- book-to-bill above 1, which is the sign for future growth, slightly smaller than last year. But last year, we had exceptional orders in France with the TGV of the future or in -- well, outside of France. The margin will keep on increasing, 7.7% versus 7.5%. Thanks to our efforts in terms of project implementation and competitiveness and the deployment of our new platforms and standards of new metros, regional trains, tramways and very high-speed trains. Free cash flow, plus EUR 200 million -- EUR 206 million. So major increase versus last year, reflecting the efforts deployed by the company to control the capital -- working capital requirements and to speed up the delivery of the products. Net income, plus 3%, EUR 446 million. Let me come back to those different points rapidly. First of all, in line with the growth of the group, we had significant orders booked in -- on various continents, EUR 9.9 billion. As you can see here on the slide, you see the photographs of some of the orders in Australia in Perth or Sydney, in the United Kingdom for maintenance activities. In Europe, many regional trains -- the market of regional trains in Europe is extremely good and continues to be good, but also in Spain, metro or in Marseille in France, metros as well. So an order book which is diversified from a geographic point of view and from a product point of view. We insist in our new strategy on digitization, be it within the group but also for products. And we are quite satisfied we have first year, which is successful as to our strategy implementation for signaling. As you see, plus 14% for orders; and for sales, plus 13%. You have a few examples of orders in Marseille, an order regarding the metro; Sydney, where the ERTMS, the line Paris-Lyon, this line is saturated, and instead of 13 trains per hour, we'll have 16 trains per hour, thanks to this new signaling system. And by the way, if you take into account the new very high-speed trains with 20% -- with a capacity greater by 20% and this investment is modest compared to the cost of new lines. We increased the capacity of Paris-Lyon by 40%, while combining the signaling system and new trains. Innovation. Innovation is at the heart of the strategy of Alstom. This is part of the DNA, and we refocus this innovation on clean technologies. Of course, we have to take into account the fact that 1/4 of the fleet of regional trains is still made up of diesel trains. And all operators, including us, would like to reduce this fleet. And by 2040, we are going to exit this fleet from our operations. We developed automotives. Our hydrogen train, quite successful, be it in Germany, but tests were passed in the Netherlands, and we recently signed an agreement in Italy. We continue our efforts in France to launch the hydrogen train in France, and the year was marked by an acceleration of the hydrogen tests in Germany as well for hydrogen. And for shorter distance as well, we are developing a battery train. We had a first order in Germany for train with battery with an autonomy of 80 to 100 kilometers. It's shorter than hydrogen going up to 1,000 kilometers, but according to the usage, it might be an extremely good solution. So therefore, we have a complete range of trains which are autonomous in terms of energy. In the delivery of our order book, 1 train, which is the most technological -- technologically advanced is our very high-speed train in the U.S. It is extremely advanced from a technological point of view, combining the very high speed, which is first breakthrough in the U.S. It doesn't exist in the U.S., and it combines the tilting process as well. So the [ modular ] tilting trains, like in Italy going quicker in the curves. So it combines both technologies, which makes this train extremely complex. We are testing this train. I can tell you that the tests are going very well. And this is an anecdote, but reflecting the commitment of our teams. They took place during the lockdown period. And our experts, as you see here on the photograph on this slide, could remotely control the test of the train, which was in Colorado in Pueblo in the U.S. So to say that we continue delivering our order book in spite of the COVID-19 crisis. The operational efficiency now, an increase in margin by 4% from 7.5% to 7.7%. We focus on the project management efficiency. We take into account our globalization, and we benefit from it with a specific effort on India. This is a footprint and base for further development throughout the world. And digitization of our processes internally, management processes with a unique system, covering over 80% of the turnover managed in one IT system only, which is very useful in our businesses. A train or the production of a train relies upon at least 10 different sites worldwide. And therefore, it is necessary to coordinate all those sites. The fact that it is covered by only 1 system, that's key. We also have robotization. As you may see here on this small photograph, one problem with the robotization of our business is the size of our product, the size of trains. We need to have welding robots, which are extremely robust, and we have the highest capacity welding robots in the rail market. And we start the robotization of our trains. It is not easy to do. We are having this highest capacity welding robots. Now another important factor that's in the forefront of our strategy and our DNA is, indeed, our social and environmental responsibility. We do want to be a socially responsible and environmentally responsible company. And in terms of the environment, we do have objectives regarding the products that we deliver. The ones we deliver must, of course, be energy-sober and be eco designed, that would be totally recyclable, but as well as that, we want to be sober ourselves in the way in which we produce these different pieces of equipment. So here are some of the objectives that we set ourselves. Energy reduction objectives. The fact that our electricity comes from renewables, we've got projects to do with solar panels and wind farms in our different sites. And also, as I said, the fact that our solutions will be eco designed, that's for the purely environmental side of it. And also, what is close to our heart is the safety of our employees. We brought down the accident frequency rate over the last 10 years. Now we are very proud of that. We are also improving our diversity picture, perhaps too slowly. 4% of women in operational management positions. We want to bring it up to 20%. We're an engineering company, and we're trying to have more women on board in those posts. And we are very proud that we were accredited as top employer for the first time in Europe. And we want to have that ranking in other countries in the world, too. That's our intent. So we have the Alstom Foundation, of course, that is growing in size. We are aiming at 100,000 beneficiaries from local actions for this foundation. And also we abide by CSR and ethics and compliance criteria when it comes to total purchasing volume. That's evaluated as per those criteria. So as such, obviously, these objectives cannot but be beneficial for the environment and for society at large, and that's our aim. So regarding the stock price, you see there were periods when we outperformed the SBF 120 index. It's a combination of the business performance we had and also the fact that our business activity is going the way history is bringing us, be sparing of our natural resources, take care of the planet and be sustainable. Now the more recent past was marked particularly by the COVID-19 crisis, of course. Even though from a strict perspective, the crisis impacted us at the start of this financial year now because, as you know, we closed our financial year on the 31st of March, so we didn't have a huge impact in the last financial year due to this crisis, but it's absolutely essential to talk about these things, and I'll tell you how we've been reacting to that crisis. So our immediate obvious reaction was to make sure that we bolstered health and safety of our employees at all times. So we had to mobilize people all around the world. Crisis units were set up so as to come into line with the new standards and requirements in respect of this. So sometimes we have to pause and mark time and set up the requisite measures to enable people to do their job normally again. So here you see a picture from India in Madhepura in India, where we're checking temperatures at the site entrance. So that kind of activity that took place in our different sites around the world. So people who could, of course, obviously, started working remotely. That was 24,000 employees out of the 40,000. So when the health crisis was at its peak, we had 24,000 people out of the 40,000 working for us, working remotely, and 8,000 working out on sites. There were operatives. Obviously, transportation was an essential, so 8,000, therefore, availed of short-time working arrangements or took holiday, took leave and so on. And others then stayed on the job because they were an essential service. So it was very, I would say, disrupted month of April, but in May, people started to go back to work again. And when lockdown measures were eased up and throughout June and then coming into July, in nearly all of our sites, we got back to more or less normal activity. Apart from some parts of the world where there was a huge impact, still felt like in Brazil and in India and Kazakhstan, where the health crisis is indeed very much present. So apart from the purely health-related aspects, we also had to come to terms with a drop in traffic, therefore drop in maintenance activity for us, drop in production too and a drop in inflows of monies into the company. So we had to make cost savings efforts. And those savings were to be seen in the light of a very full backlog. We didn't want to stop our working tools. We wanted to speed up and so far as we could, the delivery of our orders. And we think that the market is resilient and that the future of the railway market is indeed very positive. So we don't want to trim our sales renting. Just come into line with current requirements and enacting or furlough or holiday measures, ask people to take their annual leave, part-time working, that kind of measure taken during the containment period. So we, therefore, suggest that we should not be out of dividend this year. So everybody shares in this general effort within the company. And in that context, we're -- we've proposed that we should not pay out a dividend in respect of the last financial year. That will be put to the vote later on. So obviously, everything in the future will depend on the innovation we do now. So we've got to pick up challenges, indeed new challenges. In the light of this health crisis, you got to work side-by-side with our clients, with operators, so as to suggest to them how they might mitigate the effects of this crisis by social distancing measures, for example, to know where the coaches or the wagons that are full, where are the ones that are rather empty plus the occupancy rate. So we have an IT-based system to tell passengers where they should board a train, for example so as to have more social distancing possible. And also disinfection, simple cleaning and cleansing measures and also the antibacterial anchor bars that we've made available. In the very short time, we made such solutions available. And in the more medium term, we think we should take care of how we can upgrade the conditions in which people will travel going forward. So we are a stakeholder in our collective efforts to come to terms with this crisis. So to that end, we have donated masks, 200,000 masks, and protective materials and equipment donated in all countries around the world that we're present in to hospital people, hospital staff. Also, we helped to purchase masks for the railway segment in France. And we helped the French value chain in the railway industry to come to terms with this also. We increased the budget of our foundation from EUR 1.5 million up to EUR 1.9 million worth. So we increased the budget for the foundation, partially funded by the reduction of the Q1 compensation of the CEO and the members of the Executive Committee in Alstom. And also, we made available to hospital administrations different tools like 3D printing equipment to produce facial shields and ventilator valves in Spain, Argentina, France and the U.S.A., for example. So we are putting in our best efforts to overcome this health crisis. It's not over yet. But within Alstom, we have got back to a more business-as-usual context, relatively speaking. Now we've got to look at the status of the market and see the impact of this crisis on our market and on the fundamentals of this market. So there are 2 effects that are not contradictory, but that are fairly different, let's say, that we see on the market. Firstly, the first impact is the sudden drop in rail traffic, which entailed a strong dip in income for our clients, of course. And this is behind us at this point. Traffic is picking up more or less normally and resuming at a more or less normal pace. And of course, the rolling stock is resuming service faster than passengers are getting on board. So the occupancy is not, of course, 100% renting. If you look at the figures here, 100% of trains are off and running in many places, Shanghai, Shenzhen and so on, in Europe as well. But the trains are there, but the passengers are -- there isn't a full occupancy. There are fewer passengers using these services in the main. So our clients have lost 1 or 2 months' worth of ridership, and that makes a dent in their books. In certain regions of the world, we've got to be more attentive to what's going on, especially in the Middle East because of the oil price plummeting. And that, of course, has nefarious impacts in the medium and longer term in that region of the world. So they are immediate impacts. Very shortly after that, we saw another impact going in the opposite direction, I would say, which is the stimulus packages set up by the different states. Now the different states have enacted measures very quickly, very early on in the United States, in The Heroes Act, CARES Act and so on, a lot of money being earmarked for public transportation, for mass transit. In the U.K., a lot of support supplied to franchisees. And the idea is that the systems should be supported in the different parts of the world, and states have enacted measures accordingly. Now in some cases, the stimulus packages have been postponed a little bit, but a lot have been confirmed, the very high-speed rail link in the U.K., for example. And if you look at Spain as well, Renfe restarting tenders and rolling stock. And then stimulus packages in favor of sustainable mobility here in Europe or in other countries outside of Europe, these plans take longer to shape up. They're not immediate support measures, but they will indeed generate additional incremental demand later on. For example, the fact of not having airplanes supplying a service when there can be a train connection in less than 2.5 hours. Possible bans on airplane connections. In the U.S. as well, there's been a debate on the setting up of a very high-speed network that didn't exist in the past. And in Germany, Germany, they're doing a lot actually in favor of the climate, EUR 130 billion worth of a stimulus package for climate-friendly industries. Among -- in that figure, EUR 9 billion on the hydrogen plant. That's very important for us, of course. And these are fine initiatives being taken in Germany and other places in favor of sustainable mobility. So a couple of words about the acquisition plan for Bombardier Transportation. Firstly, obviously, transportation -- rail transportation has, as a major player, Bombardier as well as Alstom. So they cover a whole gamut of products and services. They've got decades of experience. And they're a global player too. Bombardier Transportation, they have a footprint in all of the continents. And this Canadian company grew by acquisition a lot. So basically, the center of gravity is mainly in Germany and the U.K. now just as well as in Canada. So why then do we wish to make this acquisition? Firstly, first and foremost, because we feel that the market is a buoyant market. Green mobility, the ecological transition will push people to use trains in the future more than anything else. And if we can bolster our presence in that industry, it's very good. Also, Bombardier is really a good fit with Alstom. Geographically speaking, because of their origins, Bombardier is very much present in Northern Europe, for example. In the U.K., they had made the acquisition of a long-standing player. Germany, they're present in, as I said. We are more present in Western Europe and France and Spain and Italy, for example, in Alstom. So a good fit, geographical complementarity in Europe. If you look at the Americas, we're present in Mexico, Brazil, both in China and India, and they are a good fit with us. And quite naturally then, there is a good fit in terms of products because very often, the products are made for a certain geography. And if you look at single truck, people movers, like you see in the picture in Bangkok, Bombardier produces such people-mover vehicle that we don't. So a very good fit there, too. We know that Bombardier faces operational difficulties. And one axis of this acquisition is precisely to restore the Bombardier's margins. And we believe that we can do it because of the scheduled proximity. We do understand them well. We do understand their challenges and difficulties. And we have a positive experience as to the margin recovery, and we do not underestimate the challenge ahead of us, but we think that it is possible really to take up this challenge. Finally, Bombardier fits into our strategy, Alstom in Motion. Through signaling, we should not neglect the fact that Bombardier has signaling expertise, especially in -- on key markets, especially in Germany. We are not that present in the German signaling on the ground, and Bombardier has this technology. And for services, Bombardier has a fleet of trains, which is quite large. So the combination of 2 installed bases will allow us to put forward new and efficient -- more efficient solutions. Altogether, we believe that this acquisition will create value for our shareholders. It's a long-term acquisition, a strategic one, strengthening our operating profile. It will be more competitive. We will provide even more innovative solutions for our customers. The operators will restore the margins. And the synergies are assessed at EUR 400 million. It will take 4 to 5 years post-closing. So it will take some time to get all these synergies. But of course, we do this acquisition in the long-term perspective. The impact on our shareholding structure, as you may know, the CDPQ, Caisse de Dépôt Québec has a major portion of the Bombardier Transport shareholding, and they bring this portion to Alstom. They will be then the first shareholder of Alstom accounting for about 18%, and Bouygues will be mechanically diluted by the rights issue related to this acquisition, and Bouygues will be at about 10%. The acquisition is structured in such a way as to have a very strong balance sheet for us and rooms for maneuver. So we are in a long-term approach. We have to invest in long-term projects. We need to have a solid balance sheet, and everything is done to keep this strong balance sheet. Where do we stand in terms of the acquisition itself? We secured the funding. We are discussing with all regulatory authorities worldwide to see -- and with our competitors, sorry, to see whether there are objections, and this process takes place very well. And we notified Europe on the 11th of June, and the dialogue with the European Commission is quite fluid. Of course, we have to ask for the opinion of the staff representative. And they said that they were going to express their opinion during the summer of 2020. So this is the time line. The signature of the contract itself of the deal will take place after the obtention of this opinion. So it will be during the second half year of 2020. There will be probably a general meeting to approve this deal at the latest end of October 2020. And we confirm our expectation I think that the closing of this deal should take place during the first half year of 2021. This is it in few years this fiscal year. I'm going to give the floor to Laurent Martinez, our CFO, to detail the income statement.

Thank you, Henri. So this year, we achieved for 2019-'20 a turnover of EUR 8.2 billion, up 2% compared to last year. Despite, as Henri said, an impact of approximately EUR 100 million on our turnover in March, and it's related to the COVID-19. The adjusted operating income reached EUR 630 million, 7.7% of operating margin compared to 7.5% in the previous year. This improvement in operating performance was driven by an increase in sales, combined with industrial efficiency -- greater industrial efficiency, and we are benefiting from the implementation of our strategy, Alstom in Motion. Below the adjusted operating margin, the restructuring charges, EUR 18 million, in particular in Latin America and in Germany. Also included our additional and nonproductive costs related to COVID-19, EUR 24 million, for example, cost linked to the management of the crisis, like purchasing sanitizers, masks and so on. EUR 43 million of other expenses includes EUR 38 million of mechanical reversal in EBIT of the CASCO contribution, which is recognized in our adjusted operating income. On this basis, our EBIT increased by 34% to 6.6% of sales. And our financial result of minus EUR 76 million was mainly due to borrowing costs and the net cost of foreign exchange hedges. Our income tax expense amounted to EUR 118 million. That is an effective tax rate of 25% compared to 22% of the previous year. The share of net income from equity affiliates amounted to EUR 102 million comes from our investments in the Russian company, TMH, as well as the CASCO signaling joint venture in China. And last year, we had an exceptional contribution of EUR 195 million, including EUR 106 million related to the joint venture transaction with GE. Net income from continuing operations after deduction of minority interest amounted to EUR 446 million compared to EUR 433 million in the previous year. So as far as the balance sheet and the liquidity, we generated EUR 206 million of free cash flow compared to EUR 153 million last year, positive performance in that we have been progressively increasing our share in our main rolling stock contracts. We have strong liquidity resources, EUR 2,175 million of available cash and EUR 400 million of unused credit lines and an additional credit line, EUR 1,750 million obtained in April 2020 in the context of COVID-19. Our shareholder equity amounted to EUR 3.3 billion compared to a dividend payment of EUR 1,234 million last year. So all in all, Alstom has solid balance sheet credited and confirmed with BAA2 rating by Moody's. Thank you.

Thank you, Laurent. We're going to move on to governance. First of all, for Resolutions 5 and 6, the renewal of the mandate of Yann Delabrière, who is the lead independent director and Chair of the Nominations and Remuneration Committee as well as the appointment of Frank Mastiaux, who is an independent board member, who has just arrived, and I'm going to give the floor to Frank Mastiaux so that he can introduce himself.

Thank you, Henri. Ladies and gentlemen, I was born in Essen, Germany. My name is Frank Mastiaux. I'm 56 years old. I have 4 children. I'm happy to be here with you and to introduce myself to you. After having studied chemistry, I started my professional career in the oil and gas industry. I occupied various positions for several years, among which BP in London. In 2007, I decided to turn to the natural gas and electricity industry. I started with E.ON, and I set up the renewable energy business. Then, since the 1st of October 2012, I have been acting as CEO at EnBW, the largest energy company in Germany, EnBW. I would be very happy to contribute to Alstom, if you support my appointment this -- today. Thank you very much for your attention.

Thank you, Frank, and we would like to welcome Frank Mastiaux here and to have him on the Board. He's got a long experience energy in the sustainable development. After this general meeting, the Board will have 10 Directors, 70% of independent directors, 40% of women, 3 Board member will be having a foreign nationality. Mr. Frank Mastiaux is German. And lead independent director, Mr. Yann Delabrière. I'm going to give him the floor to comment on the Nomination and Remuneration Committee.

Thank you, Henri. Ladies and gentlemen, the shareholders, I'm going to show you the activity of the committee, nominations and remunerations, and the recommendations. First of all, what are the missions of this Nomination and Remuneration Committee of the Board of Directors of Alstom. It's unchanged versus last year, this composition of the Board of Directors and of its committee, the succession plans of the management of the company, governance and the remuneration of the Executive Committee members and corporate officers of Alstom. Next slide. In terms of activities, our committee had 2 working groups, governance and remuneration. For governance, first, looking for new board members, it was done in a very satisfactory way, and it led to the proposal of Frank Mastiaux. So the review of the composition of the management bodies and the committee, it was done with an external consultant, the setting up of a system-enabling employee directors to be a part of the Board members from next fiscal year, the regular review of the composition of the management bodies. And the fourth bullet point is the review of the governance roadshows, led by the shareholders and their representatives to assess the practices of the group and to be assessed by the shareholders and then the review of the regulatory evolutions in terms of governance, the PACTE law. For the remuneration, as usual, the setting up of the remuneration policy of the corporate officers of the CEO and the Board members, the review of the elements of remuneration related to the past fiscal year, including the new provisions coming from the executive decree of the 27th of November 2019, Resolution 7. And then the setting up of a long-term plan, pre-allocation of shares for the employees of the Alstom Group. Slide 37. The review of the operation and the efficiency of the Board and the committees, a number of action plans decided by the Board with 2 main objectives: first, we want to strengthen the involvement of the Board of [ evaluation ] in the policy of corporate social responsibility on 3 major topics: sustainable developments, ethics and compliance of the group, with the reorganization of the committees and the reinforcement of reorganization of the agenda so that the Board is fully involved in the implementation of this policy. The second objective of this action plan follow up to the assessment carried out on the operation of the Board. The frequency of the executive sessions is well determined now. And we -- and the various items to be addressed during the executive sessions. As I said, new directors representing the employees will join us from the next calendar year. And therefore, the committee has examined the process of choice and the appointment modalities of those new provisions. I'm going to comment on the resolutions regarding the remuneration policy, started with resolution #7. I have already said that this resolution comes from the new decree enforced upon us during this fiscal year, and it will be submitted to your vote. We saw the remuneration conditions of the corporate officers, those granted to the Board members, to the CEO and the elements comprising the remuneration ratios. As far as we are concerned, we have put that into place on a rather broad basis. We compare the compensation level of the CEO of Alstom with almost all the average and the medium level of the employees of Alstom in France. Next is Resolution #8, which we'll be voting on later on, is the usual resolution put to the vote at shareholders meeting concerning the remuneration for the Chairman and CEO, Henri Poupart-Lafarge, in the past financial year, fiscal year 2019-2020. The items of compensation or remuneration in cash for start 3 of them and then 3 parts, well, the first -- the fixed compensation stemming from the remuneration policy approved at the last AGM that brought to EUR 850,000, the annual fixed remuneration of Henri Poupart-Lafarge. And the second component is variable remuneration in respect of the financial year stemming from policy that's unchanged in terms of setting the principles governing the variable component of his remuneration. Now to determine that remuneration, the principles used are set down in the universal registration document, Page 186 and the following pages, comes out as a proposal of EUR 906,015 for the past financial year. So we use recurring items for previous fiscal years, as you see here. And also regarding the share-based payment, share-based payment performance shares allocated in line with the policy that remained unchanged for the last several years coming out subject to conditions to be determined over a 3-year period -- to be evaluated, rather, over a 3-year period, coming out of 34,000 Alstom shares, if these conditions prevail up to a maximum of 51,000 shares, if these performance conditions are actually overshot. So you have then the governing principles set down here, 3. The first 3 principles are the usual ones. We use the margin -- the EBIT margin of the company, the conversion ratio of the income into cash and then the total returns for the shareholders, that's the third main principle used that is we look at the trend of the stock price and the dividends paid. Now that's the total shareholder return. There's a new condition, however, that's been included here this time concerning a main focus of the Alstom in Motion plan as Henri outlined a couple of minutes ago that is concerning the contribution of the equipment supply by Alstom to the reduction of energy consumption, and that is important in our plan. And therefore, that's one of the prerequisites too in terms of granting these performance shares to the Chairman and CEO, decided upon in this fiscal year that will, therefore, reflect the success of these policies over a 3-year period. Now the last item that's unchanged in the remuneration policy, noncompete undertaking. Well, this didn't come into play in the last fiscal year and supplemental pension scheme that reflects what's granted to all of the senior managers of the Alstom Group. No particular arrangements, therefore, for the Chairman and CEO. So that sums up what we're asking you to approve in Resolution 8, that is the remuneration for Henri Poupart-Lafarge in respect of the last fiscal year. So I'll move on now to resolution #9, setting down the remuneration policy of the executive corporate officers for the coming financial year. Now it's mainly unchanged compared with the policies that were put to you for approval and that were approved in the last few financial years. So I won't detail of the text here, but I'd just like to limit my remarks to one item where there is a change that we're putting to the vote here this afternoon. That is the variable annual remuneration. The amount and criteria for the granting would be unchanged, but your Board would like to have discretionary power to ensure that such remuneration would properly reflect the group's performance. And the maximum scope would be more or less 15% so that if necessary, it can take account of new unforeseeable conditions that might affect the conditions prevailing in the fiscal year. For example, it will be the case this year, with, of course, the impacts, not yet totally quantified or quantifiable, of the health crisis that we are going through. So apart from that, discretionary power is limited. The other items concerning the remuneration policy remain unchanged. So I'll move on then to resolution #10, which is also a new one. This is the remuneration policy of the Board members. The members of our Board of Directors put to the vote at this shareholders' meeting. This policy sees no change compared with what we've had in previous financial years in the Alstom group. The annual package of EUR 1,300,000, that's the total package, so to speak, available to the company to remunerate the members of the Board of Directors as presented in the universal registration document. We're far from utilizing this, the package in full. And therefore, the details may not change as you see here, concerning the remuneration granted to the Board members. So there are fixed amounts for the members of the Board to attend Board meetings and the chairpersons of the 3 Board committees. And then variable remuneration, subject to attendance conditions at meetings of the Board and the Board's committees. That, Henri, sums up the items I wanted to explain to the shareholders this afternoon.