AMG Critical Materials N.V. (AMG) Earnings Call Transcript & Summary

[Audio Gap] the Advanced Metallurgical Group. My name is Steve Hanke. I am the Chairman of the Supervisory Board. I would like to extend a warm welcome to all of you who are attending this Annual General Meeting of Shareholders. I realize that this meeting is placed under special and difficult circumstances. It is the coronavirus pandemic. In the beginning of this year, we all have been affected heavily by the coronavirus, both in our private and business lives. Directives given by the Dutch government have caused us to organize this meeting as a virtual meeting, allowing you as shareholders to participate by listening to the audio webcast. We truly regret that we are not able to meet you in person, but we hope to see you in Amsterdam next year. The members of the management board and supervisory board and other participants to the meeting are all at different locations on different continents, which made us decide to have an audio conference only. I am very pleased to introduce you to speakers who will address you during this virtual meeting: first, Dr. Heinz Schimmelbusch, our Chairman of the management board and CEO of AMG; also Mr. Jackson Dunckel, our Chief Financial Officer; and Mr. Eric Jackson, our Chief Operating Officer. They are all participating from the United States. Furthermore, I am pleased to introduce to you my fellow members of the supervisory board: Mr. Willem van Hassel, Vice Chairman of the supervisory board and member of the Selection and Appointment Committee, is participating from Amsterdam; Dr. Donatella Ceccarelli, Chair of the Audit and Risk Management Committee, is participating from Vienna; Mr. Herb Depp, Chairman of the Remuneration Committee, is participating from Montana in the United States; Mr. Frank Löhner, a member of the Audit and Risk Management Committee, is participating from Frankfurt; and Ms. Dagmar Bottenbruch is a member of the Remuneration Committee and is participating from Berlin. Also present is Mr. Ludo Mees, AMG's General Counsel and Corporate Secretary. He will act as Secretary for this meeting. Mr. Mees also participates from Amsterdam. Also present at this meeting is our Dutch legal adviser, Professor Martin van Olffen of the law firm De Brauw Blackstone Westbroek, who participates from Amsterdam; as well as our external auditor, Mr. Tom van Heijden (sic) [ Tom van der Heijden ] of the accounting firm KPMG. He is also participating from Amsterdam. Mr. van der Heijden will provide insight into the auditor's report and his audit activities regarding the company's 2019 financial statements. Further, Mr. Johan Scholten of the Compushare (sic) [ Computershare ] and Mr. René Clumpkens of Zuidbroek notary are present at this meeting. Mr. Scholten has administered the technicalities in relation to the electronic voting procedure, and Mr. Clumpkens has voted on behalf of the shareholders who have issued voting instructions prior to this meeting. Please be informed that the proceedings of the meeting will be recorded only for internal purposes and use to -- or to facilitate the preparation of the meeting -- minutes for the meeting. The official language for this meeting is in English. Mr. Mees, can you confirm the number of shares represented at this meeting?

Thank you, Mr. Chairman. And there are 6,832,782,000 (sic) [ 6,832,782 ] shares represented at this meeting that represents 24.01% of the issued share capital that is eligible to vote.

In connection with the ordinary conduct of this meeting, I hereby inform you that as for each specific agenda item, as announced on the website of the company, only questions that have been submitted in writing prior to this meeting by shareholders will be answered by the company. Furthermore, only shareholders who have submitted a question prior to this meeting are allowed to ask a follow-up question during this meeting by using the operator service following the instructions of the operator. As explained in the update notice about the annual meeting as posted on the company's website, since April 23, the voting on all agenda items has been completed prior to this meeting. The shareholders have had the opportunity to use the electronic as well -- proxy voting and cast their votes online. AMG has used its electronic voting platform administered by ABN AMRO as described in more detail in the notice for the 2020 Annual General Meeting. For each agenda item that is a voting item, the text of the proposal that has been voted on will be shown on the screen. For each voting item, we will provide you on screen with information as to how many votes have been cast in favor of the proposal, how many votes have been cast against the proposal and how many votes have abstained from voting. After that, I will inform you whether or not a specific voting item has been adopted. The next item on the agenda is a report of the management board for the financial year 2019, including the discussion of the annual report 2019 in case questions have been submitted prior to the meeting. I would like to invite first Mr. Jackson Dunckel, AMG Chief Financial Officer, to provide a summary of the company's financial affairs and first quarter results. Then Dr. Schimmelbusch will give a presentation on AMG's activities in 2019, AMG's current state of affairs and AMG's strategy.

Thank you, Mr. Chairman. This is Jackson Dunckel, the Chief Financial Officer. In my remarks today, I would like to cover a review of our results in 2019; a brief update of our first quarter 2020 results, which we announced yesterday; and conclude by touching on some key operational initiatives we undertook in 2019 and year-to-date 2020. Divisional financial highlights. This page is a summary of our 2019 financial highlights split by our 2 reporting divisions: Critical Materials and AMG Technologies. On the top left, you can see that our revenue decreased by 9% in 2019 versus 2018, but that this result was comprised of 2 different results: a decrease in revenue of 13% in Critical Materials and only a 2% decrease in AMG Technologies. The revenue decrease in Critical Materials was driven by a combination of significantly lower vanadium prices as well as price drops across most of our Critical Materials portfolio. On the top right, AMG's adjusted gross margin in 2019 decreased to 18%. As you can see from the graph, this decrease in gross margin was due mainly to Critical Materials, which was affected by lower vanadium prices in 2019. In the lower left corner, you can see EBITDA decreased to $121 million in 2019. Again, the decrease in Critical Materials was largely driven by lower vanadium prices in addition to lower prices throughout the portfolio. The decrease in AMG Technologies was mainly caused by the receipt of a large payment due to a customer cancellation in Q4 of 2018. In the lower right corner, we summarized our capital expenditures for the year. We spent $79 million in 2019 versus $73 million in 2018. The expenditure was driven mainly by our lithium and vanadium expansions in Brazil and Ohio. On this slide and the next one, we will show you our 5-year development across some of the key financial metrics. As you can see, EBITDA in 2019 fell back to the level it was in 2017 after a record year in 2018. While we were strongly affected by this fall in vanadium price, the rest of the portfolio performed well despite lower prices. In terms of return on capital employed, the combination of 2 years of significant capital investment and lowered results produced a much lower return on capital employed. Continued high spending on our vanadium and lithium projects is likely to continue to impact this metric for the next few years. On slide -- on the next slide, we show net debt, which increased to $163 million due to the share buyback we completed in 2019. We finished the year with $47 million of operating cash flow, down significantly versus prior years. Much of our cash flow in 2019 was impacted by vanadium inventory cost adjustments. Despite the increase in net debt, it is important to point out 2 items: one, we are comfortably in compliance with our bank covenants; and two, we enjoy significant liquidity, thanks to the cash on our balance sheet and access to $170 million of our credit -- of revolving credit facility. This liquidity is additionally supported by our $307 million 4.3% municipal bond, which will fully finance our vanadium project in Zanesville, Ohio. It is important to note that this bond is not part of our covenant calculation, and it is not due for 30 years. Q1 financial highlights. Yesterday, we announced the results of our first quarter performance. Our revenues were down 20%, driven by a significant metal price decline across AMG's entire portfolio versus the prior year. EBITDA decreased by 56%, driven by decreased profitability in our vanadium business and our titanium alloys and coatings business, offset by increased profitability in graphite and silicon. On the next slide, we have some more details in terms of our 2 divisions. Critical Materials gross profit was down 56% versus Q1 2019, but it did execute on cost cutting and reduced SG&A by 13%. Technologies gross profit decreased by $7 million versus Q1 2019, which was driven mainly by our titanium alloys and coatings business. In terms of our net debt and cash positions, we finished the quarter with $209 million in cash, $372 million in total liquidity and $192 million of net debt. Finally, on the next 2 pages, as we detailed in our annual report and in some of the news flow this year, I wanted to enumerate some of our key operational achievements that we show on this page and the next one. We signed an agreement with Glencore to sell 100% of our production from both the existing and future ferrovanadium facilities. We negotiated, signed and started to operate a JV with Shell to expand our catalyst recycling services outside of North America. We began engineering for a lithium hydroxide plant to be located in Zeitz, Germany. We completed the acquisition of international specialty alloys from Kennametal to enhance our titanium alloys business. And we completed the successful installation of the customer site of the first ceramic matrix composite vacuum furnace, representing a very significant milestone in AMG Engineering's ongoing new product development program. All in all, despite challenging economic conditions, AMG continued to pursue its strategic expansion goals. Many thanks. Mr. Chairman?

Thank you. Dr. Schimmelbusch?

Yes, Mr. Chairman. Dear shareholders, in the name of the AMG management board, I want to welcome you to this AGM. It is unusual to do this from my home in Pennsylvania. We will nevertheless try to answer whatever questions you might have and hope that next time, we can look at each other in the dialogue between shareholders and management. The number of AMG employees under COVID-19 self-quarantine is now 5, coming down steadily from over 30 a while ago. Today, the number of confirmed COVID-19 cases is 0. We have one active case at AMG Titanium and Coatings in Nuremberg. The employee is now free of the virus and back at work. As we have over 3,200 employees in 33 sites in 15 countries, we are very lucky to report this. We have been confronting the crisis in a decentralized way given the diversity of circumstances and regulatory regimes. Our central environmental health and safety group has been giving a framework, advising and running a daily reporting system in direct contact with the unit CEOs. As reported regularly, we relentlessly pursue health and safety of our employees, with a target of 0 incidents. In 2019, our progress achieved year after the year was slightly interrupted, not as a general trend, but largely due to special cases. Countermeasures have been implemented to avoid that these special cases would repeat themselves. By the way, compared to the primary metal manufacturing industry average, we are 68% better in total incident rate and 71% better in lost time incident rate compared to that index. On the last 12-month basis, we slightly were better compared to 2019 in both rates. 0 incident over a year is possible. Several AMG sites have achieved that. We just received the governor's award for a 6-year 0 incident performance in our aluminum alloy plant in Kentucky. So the -- in summary as to COVID-19, at this moment, I want to state the impact is not on the health of our employees, the impact is on the markets into which we sell and from where we buy. As you know, we commenced construction of our Zanesville, Ohio recycling plant, which essentially will double the recycling capacity for spent catalysts of the existing plant in Cambridge, Ohio. That was the one transformational development of 2019. The second was the preparation of the building of a lithium-experienced management team, the building of an elaborate lithium battery laboratory outside Frankfurt and the feasibility study for the construction of a lithium battery materials plant in Germany. The third was the formation of AMG Technologies combining AMG Engineering and AMG Titanium and Coatings; the acquisition of ISA, its work; and the exploration of a potential IPO of AMG Technologies. When you look at this from today, the first 2 strategic projects, vanadium and lithium, are proceeding as planned, not interrupted by the COVID-19 crisis. The expansion of the vanadium recycling activities has accelerated by the way of the formation of Shell AMG Recycling BV Amsterdam, a 50-50 joint venture with Shell Catalysts & Technologies. Shell AMG offers recycling services wherever a customer of fresh catalysts provided by Shell Catalysts & Technologies needs to find a home for spent catalysts, applying the highest environmental standards. In lithium, we have started engineering and permitting for the construction of a battery-grade lithium hydroxide plant in Zeitz, Saxony-Anhalt, Germany. The third project, the potential IPO of AMG Technologies, has been put on hold and is now out of the strategic horizon of AMG given the dramatic events characterizing the aerospace sector. Shortly after the formation of Shell AMG Recycling, the new company, at the time still subject to receiving regulatory approval for its formation, signed a memorandum of understanding in Riyadh, Kingdom of Saudi Arabia with SAGIA, the Saudi Arabia government investment authority (sic) [ Saudi Arabian General Investment Authority ], for the construction of a large recycling facility for the recycling of vanadium containing refinery residues in the Kingdom of Saudi Arabia. The picture shows smiling faces. It was prior to the corona crisis. AMG is deeply embedded in what is called the circular economy, both as engineering service provider, remelting of steel, titanium scrap, tantalum scrap and so on, even including the recycling of plutonium and as the world's leading producer of vanadium from spent catalyst. As shown in this slide, vanadium is used in steel as ferrovanadium and in titanium as alloying material. The upcoming third use of vanadium is in vanadium batteries. Stationary vanadium batteries for the use of electricity storage for grid stabilization is an upcoming high-growth market. Renewable energy cannot reasonably expand without expansion of battery-based electricity storage capacity. The vanadium battery is a leading contender to supply the very large market potential. As a leading vanadium producer, we have the intention to grow into this area. As announced repeatedly, we have developed an elaborate methodology to measure the impact of our product and engineering offerings on the CO2 emissions of our customers because these CO2 savings enabled CO2 reduction. We are qualifying additional offerings in this area. However, we will lose certain savings given the contraction in aerospace. We have a strong liquidity, and our focus is on cash preservation by cost cutting, CapEx restrictions and working capital reduction. Our business model is resilient. We have 9 business units: 7 in Critical Materials segment, 2 in AMG Technologies. It is important to note that all 9 units were EBITDA positive in 2019, albeit at a historically low level, given the extremely low price levels in this space. In our forecast for 2020, the same is true. Thank you for your kind attention.

Thank you, Dr. Schimmelbusch and Mr. Dunckel. Dr. Schimmelbusch and Mr. Dunckel will now respond to questions submitted prior to the meeting, specifically those by the VEB. I think those are on the board right now by -- and numbered.

Page five?

Yes.

So Dr. Schimmelbusch will respond to question #1.

Operationally, we are responding decisively to the dramatic impact of the global pandemic and the related upheaval in the aerospace and automotive industries. We are focused on the things that we can control. As I stated, we are aggressively reducing operating costs, managing working capital and cutting SG&A expenses across the company. We have implemented the hiring freeze, reduced starting levels where appropriate, adjusted production levels to meet lower end market demand and furloughed employees where necessary. We have reduced professional fees and research and development costs, and we have renegotiated supplier and service provider contracts where appropriate. We continue to be primarily focused on driving operating cash flow and have reduced and eliminated or deferred capital spending on nonstrategic capital projects. Question number two. We experienced increased risks in 2019 around metal price volatility. All other risks in 2019 were the same or similar in 2018. Question number three. Given the speed and velocity with which the COVID-19 situation is developing, we would say that risks have only increased. Specifically, as a result of the coronavirus crisis, some of our production facilities are operating below capacity, reflecting reduced demand levels. Our financial results reflect the lowest price environment we are experiencing, and we continue to operate in an austerity mode and focus on things we can control such as operational efficiency, capital expenditures and overhead costs. This focus on expenditures will help to preserve our solid liquidity positions. Question number four. The aviation sector is not a primary driver for the vanadium price, and we do not speculate on the direction of prices. The aviation industry is obviously suffering, and this will impact primarily our technology segment. For this reason, we have postponed the IPO of AMG Technologies. Question number five. We cannot comment on the price structure due to competitive reasons, but we are extremely pleased with the Glencore contract. And it's very profitable -- and it is very profitable at current market prices. Question number six. As previously stated, due to the speed with which the COVID-19 situation is developing, there is uncertainty around the ultimate impact. Therefore, updated guidance will be announced once the global industry economy begins to stabilize. Question number seven. Despite the positive impact of AMG Engineering on...

There's the response.

The response. The depressed conditions, question number seven, in the aerospace industry due to COVID-19 has forced us to postpone the pursuit of the public offering of AMG Technologies. Question number eight. As a 50-50 joint venture, it will be consolidated into our accounts utilizing the equity method. Question number nine. Adjusted earnings before interest and taxes divided by average operating capital employed. Question number 10. Our strong liquidity and balance sheet become more valuable as uncertainty increases in the market. Question number 11. We do not currently foresee any delays related to the lockdown. Question number 12. AMG compares itself to the industry average for primary metal manufacturing. The industry average total recordable case was 4.6, and the lost time rate was 2.8. AMG is proud that its safety performance is significantly better than the primary metal manufacturing industry average. This is 2019 total recordable case rate of 1.46, 68% better, we, AMG, 68% better; and a lost time rate of 4.80, 71% better. Of AMG's 33 locations, 10 achieved 0 lost time incidents in 2019. Question number 13. In an annual report, AMG mentioned the 3 tailings dams in Brazil were investigated by a third party. According to AMG, this study concluded that the dams were legally compliant and technically sound.

That was the question.

The question is, are there other critical facilities? To clarify, we invited third parties to investigate our tailings dams and confirm that they are sound. We did this in order to make sure we were operating safely. No facilities were or are currently under investigation. Question number 14. AMG's net carbon dioxide emissions, operational emissions of 540,000, enabled CO2 reduction of 67 million in 2019, negative by 66.4 million tons. So our net carbon dioxide emissions -- we are carbon negative. In 2019, we could have operated at 124x the operational carbon footprint of AMG and still have been carbon neutral. All industrial businesses should aspire to operate with a negative carbon footprint of the AMG magnitude.

Well, with that, thank you, Dr. Schimmelbusch. Are there any follow-up questions from the VEB?

Mr. [ Prescott ].

[ Just a follow-up to ] the question number seven. Will the strategic rationale of separate listing [ then come from then on ]?

The strategic rationale of the separate listing was to open further expansion rules into operating furnaces for the aerospace sector instead of selling furnaces to the aerospace sector only.

But if you keep it in your total company, you will have what you see in the first quarter, and you also see in the 2019 result that it is dampening the cyclicality of the -- yes, the main part of your company.

That is correct. And that would have been also the case have we expanded that activity through the equity raised and invested into the company. But since the market has been to the surprise of -- to our surprise, and I also think to your surprise, has been severely curtailed. Your observation is backward-looking. Forward-looking, we are not expecting expanding aerospace backlog.

Okay. Then a question on eight. I didn't hear your answer. What was the answer for the question eight?

Question eight, we have a 50-50 joint venture with Shell Catalysts & Technologies. It enters into accounts utilizing the so-called equity method.

What do you mean by that?

That means that the sales and operations will not be consolidated into our results. You'll see a single line item in the asset such as investment in minority joint venture or investment in joint venture.

It would be not appropriate to fully consolidate that because both parties would have to fully consolidate, and that would be a so-called over-consolidation.

Yes. I agree, sir.

If there are no further questions, I conclude that item and move to the next. The next item on the agenda is the remuneration report of the supervisory board for the 2019 financial year. In accordance with Dutch governance rules and practice, AMG believes it is important to be transparent about its remuneration policy and the implementation of that policy. Mr. Depp is the Chair of our Remuneration Committee. He will now make a presentation on AMG's remuneration report for the year 2019. I pass the floor to Mr. Depp. At the end of his presentation, Mr. Depp will respond to the questions that have been submitted prior to the meeting by shareholders, which relate to the remuneration report 2019.

Thank you, Mr. Chairman. Mr. Chairman, can you hear me?

Yes, I can.

Okay. Slide 1. Once again, it is my pleasure to address the AGM with our annual remuneration performance for 2019. As in the past and as the foundation of the plan, we pay for performance. Performance has been the key driving parameter for years. And as in the past, we employ and are advised by the world's largest executive compensation consulting firm of Willis Towers Watson. Slide 2, table of contents. A quick review of the agenda in which I will discuss the compensation system, bonus results, long-term incentives and information provided by our executive compensation firm of Willis Towers Watson. Slide 3, components of management board remuneration 2019. There are 3 components that comprise the remuneration package for each member of the management board. First, there is the salary. In the case of the CEO, the base salary has not changed since 2008. The base salary for the COO was increased $200,000 during the calendar year 2019, and the base salary for the CFO has not changed since he was hired in 2016. The second component is the annual bonus or short-term incentive based on meeting certain financial and personal objectives. And finally, the long-term incentives, which includes stock options and performance share units. We use Willis Towers Watson as our adviser to ensure that not only does our compensation fall within the range of comparable companies but that it meets certain competitive hurdles compared to those companies. In this manner, we adhere to the guiding principle of our compensation, and that is to pay for performance. Slide 4, peer group. The peer group, with inputs from the management board, was created by Willis Towers Watson in 2016 and updated in 2018 as one of the group was acquired by another company. These are companies that we compete against in the world market for both our products and personnel. We will be using the same method for 2020, but the group once again has changed slightly. And we have removed 4 companies for various reasons and supplemented them with 5 other similar companies. Our total compensation target versus our peer group is the 50th to 60th percentile. In most cases, we are smaller, and therefore, have to pay more to ensure we keep the top talent we need to be a truly successful global company. As has been discussed in previous years, our executive compensation has a more U.S.-centric approach because the management board is located in the U.S. even though our business is fairly split between Europe, the United States and the rest of the world. I would like to have Dr. Schimmelbusch address the next slide and say a few words on our peer group. Heinz?

Thank you, Mr. Chairman. In a market economy, there are many markets active for supplies and products for intellectual property. The most important market is the market for personalities, which can direct production and sales and purchasing affairs and can lead companies into the future. That market is, therefore, the key market for having a feeling for executive compensation because that's where one competes for the key resources of each company. We have given this a great deal of thought since many years. We look at companies which we are supplied of, where we are a customer. We are looking at companies where we are a competitor, so either we are supplied or we are selling to. So we have strong commercial relationships. We compete. In many instances, the supplier and customer relationship overlap with the competition. And we have companies which are in similar industries or in a similar industry but where we do not or not yet have commercial relationships, as I said, and/or we are not competing yet. That are the companies where we can be confident that we will find executive talent and that other companies who are looking at our executive talent to steal them from us. Therefore, this is our key metrics for compensation. And as we have -- for example, we have hired, Mr. Chairman, recently 5 key executives from that group. So that is my comment on that issue.

Thank you, Heinz. Slide 6, short term incentives. Our short-term incentive program consists of the annual bonus, and this bonus is based on the annual budget presented by the management board and approved by the supervisory board at the end of the prior year. We have used and continue to use 3 metrics that determine our short-term incentives for each year. There is return on capital employed, which is a measure of capital efficiency, and this is weighted 40%. The second metric is operating cash flow, which ties the operating performance to the balance sheet and includes working capital and cash generation and also receives a 40% weighting. And finally, there is the individual personal targets of the management board with a weight of 20%. The supervisory board, through the budget process at the end of each year, sets the numerical targets for the 2 -- first 2 objectives and then approves the individual personal targets based on the long-range plan for the following year. For the CEO, the target bonus is 85% of the salary, while the target bonus for the COO and the CFO is 65% of their salary. These targets represent approximately the 50th percentile of the peer group. The outcome of the metrics is then multiplied by the weighting and then multiplied again by the target bonus percentage for each individual on the management board. This provides us with a numerical bonus payout. Slide 7, 2019 bonus results. Here are the bonus payouts for 2019. As you can see, it was a difficult year. Therefore, the payout is quite low compared to 2018 when the metrics allowed the management board members to achieve a 300% payout. This year, return on capital employed was less than the target but more than the minimum and received a 63% amount. We failed to meet the hurdle rate with the operating cash flow, but the individual performance in this difficult environment was stellar. And that metric received the highest payout of 300%. Let me expand on some of the key accomplishments that the supervisory board felt deserved recognition. Dr. Schimmelbusch led the negotiations with Shell to form a joint venture that will expand AMG's catalyst recycling footprint outside North America. Dr. Schimmelbusch also hired a new team of lithium scientists in Germany and reoriented the lithium strategy towards the emerging electric vehicle battery market in Europe. Eric Jackson negotiated the Glencore offtake agreement for ferrovanadium, which materially improved our working capital position in that business. Jackson Dunckel raised $325 million and a 4.3% muni bond for our ferrovanadium expansion in Ohio. The supervisory board felt strongly that achieving this kind of fundamental strategic changes while managing the business through a challenging year was truly remarkable and deserved a maximum payout for that metric. Slide 8, actual dollar amount of payouts. Target bonus times performance results in the payout percentage. We then multiply the payout percentage with the salary to obtain the total dollar amount of the yearly bonus. You can then read the actual bonus per individual in the far right column. Slide 9, long-term incentives. As in the past, we use Willis Towers Watson to review our plan and ensure that our long-term incentives as a percentage of total compensation aligns with our peer group. We split long-term incentives into 2 groups: the first are the stock options and represent 20% of the long-term incentives; the second are the performance share units, and they represent 80% of the package. Stock options. These options can only be vested if they can pass through a 3-year average threshold return on capital employed gate of our peer group. Once they pass through this gate, then they vest 50% at 3 years and 50% at 4 years, and they have a 10-year life in which to be cashed. The price at which the stock options are granted is the average stock market price for 10 days after the publication of the annual report. Next, our performance share units and represent 80% of the long-term incentive package. To vest, these share units must pass through 2 tests. The first test is the same as the stock options mentioned above. The second test is a measure of total shareholder return versus the Bloomberg World Metal Fabricate/Hardware Index. To pass through the second gate, you need to have at least a 30 percentile ranking, which would provide a 30% payout. And you'll receive 100% payout if you reach the 50% comparable ranking. The higher AMG's total shareholder return versus its peers, the higher the payout becomes. The payoff tops out at 175% if AMG scores at or above the 90th percentile ranking in total shareholder return. Slide 10, performance share units. The payout for the PSUs is quite volatile. In 2013, only 25% of the award paid out. In 2014 and 2015, the total stockholders' return was below the 25 percentile required to vest, so none were vested. In 2016, the company's return was above the 60th percentile, and therefore, was awarded a 115% payout. In 2017 through 2019, the company's return was above the 90th percentile, and therefore, was awarded the maximum payout of 175%. For 2020, you can see that the total stockholders' return as a percentage of the Bloomberg index was at 40%, which yielded a 75% payout. Slide 11, CEO earned pay versus total stockholder return. This slide was prepared by Willis Towers Watson, our executive compensation consultant, and it compares 3 years of total compensation for AMG's CEO versus the CEO of our peers. We call this the fairway slide. On the top left, the CEO pay is off of the fairway, and this signifies that the CEOs are overpaid versus the total shareholder return. Likewise, there is a pay-for-performance gap at the bottom right. And there, the CEOs are underpaid. AMG strives to pay for performance and be within the fairway. And at 80 percentile total shareholder return, you can see that our CEO pay achieved that for the last 3 years. Slide 12, total shareholder return performance. Here, Willis Towers Watson compares total shareholder return versus our peer group. This slide supports the 80th percentile shareholder return shown on the previous graph. Slide 13, relative performance metrics. Here, Willis Towers Watson compares proxy adviser metrics to our peer group metrics, again, over the last 3 years. And while AMG does not score well at income statement measures, its return on capital measures are well above medium, and the total shareholder return is in the top quartile. Mr. Chairman, that concludes my remarks. Thank you.

Well, thank you, Chairman Depp, for an excellent presentation. Now we will respond to questions that were submitted by the VEB, specifically questions 15 and 16. Mr. Dunckel, CFO of AMG, will respond.

Thank you, Mr. Chairman. On question 15, the target return on capital employed was derived from the AMG budget for 2019 and sets both a threshold and a maximum. The 64% is the result of the actual return on capital employed achieved compared to the target. We consider 64% as significantly below the target of 100%. On question number 16, the return on capital employed and operating cash flow targets derived directly from AMG's budget for 2019 and are not disclosed as AMG considers this as competitive sensitive information.

Thank you, Mr. Dunckel. Are there any follow-up questions from the VEB?

No.

In that case, as all the questions have been answered, I now conclude this agenda item and will read the voting results. Before doing so, I wish to clarify that this item concurs an advisory vote only and that the outcome of the vote does not affect the validity of the remuneration report or the remuneration of 2019. Ladies and gentlemen, for this item, the total number of votes cast was 6,832,782, of which 3,324,516 are for, whereas 3,508,266 are against and 0 are withheld. This means that this agenda item has not been approved since approval for this item needs a majority of more than 50% of the votes represented voting in favor of. The next item on the agenda is a discussion on the dividend policy. In accordance with the Dutch corporate governance code, AMG proposes to discuss AMG's dividend policy, which has been amended most recently in 2018. I now invite Dr. Schimmelbusch to explain the change in dividend policy.

Mr. Chairman, AMG's dividend policy has been consistent until 2015, when all earnings were retained to improve the strength of the balance sheet and finance the development of its business. In 2015, AMG started paying dividends as a result of AMG's strong balance sheet liquidity as well as the Board's confidence in our long-term ability to generate solid cash flow. In 2018, the Management Board with the approval of the Supervisory Board decided to further develop the company's dividend policy as initially revised in 2015 and continued in 2016 and '17. The new policy adopted in 2018 targets an annual dividend payout of between 20% to 40% of net income attributable to shareholders. This year, the Management Board with the approval of the Supervisory Board has adopted an addendum to this policy, which includes the year-on-year changes shall not deviate more than plus or minus 20%.

Thank you. As there are no questions submitted on this issue, I now conclude this agenda item. The next item on the agenda is the adoption of the 2019 financial statements. We can see those on the screen, I believe. The company's financial statements have been audited by KPMG Accountants, the company's external auditor. The unqualified audit opinion may be found in AMG's annual report. [ Mr. van der Heiden ] of KPMG will now give a brief presentation about KPMG's audit activities.

Thank you, Chairman. I would like to provide you with a short overview of our audit of the 2019 AMG financial statements. Our audit primarily focuses on the consolidated and company financial statements, as also highlighted in our long-form auditors report, which you can find on Page 119 through 124 in the annual report. Our objective is to plan and to perform the audit to paint sufficient and appropriate audit evidence for our opinion that the financial statements give a true and fair view. We perform our audit at a high but not absolute level of assurance to conclude that the financial statements do not conclude material errors. The independent auditors' report reflects the conclusions of the order performance. On March 11, 2020, we've issued an unqualified opinion on the 2019 financial statements of AMG. This means that the financial statements provide a true and fair view and are prepared in accordance with IFRS and the Dutch Civil Code. And with respect to the Management Board report, we determined that the report has been prepared in accordance with this law and that specific information therein is consistent with the financial statements and does not contain material misstatements. Our audit approach and the key order matters. Our audit approach contains a number of elements, risk assessment. As part of our audit, we conduct a risk assessment to determine the areas in the financial statements that are most sensible to error, generally, most risks are in a larger account balances and transactions with evolve estimates. In 2019, additional audit efforts were directed in response to the rapid decline in the vanadium price and resulting inventory write-down, the construction and the financing of the new vanadium plant and a lithium concentrate plant in Brazil. Two, materiality. The materiality applied to the audit is both relevant in planning our audits and in evaluating the effect of the identified misstatements. Based on our professional adjustments, the [ asset ] materiality for the financial statement as a whole at USD 3.5 million. The materiality represents 4.5% of the average and normalized profit before income tax. We agreed in the audit committee that we report any identified misstatements to them above 175,000. There were no unadjusted order differences identified. Three, top-down approach. In order to achieve as much efficiency as possible, we have identified a number of areas that are ordered centrally by the group audit team. The group audit team performed audit procedures on the valuation of goodwill, the tax position for the Netherlands and the U.S., valuation of investments, the U.S. environmental provisions, share-based compensations and financial instruments, including management estimates. In other areas we use to work of the component auditors. In our audit, we have ensured that the local KPMG offices are involved in the audit for the foreign subsidiaries. Based on the size and the risk associated with the subsidiaries, we have selected 11 components where procedures were performed. 10 components in Germany, France, the United Kingdom, the United States and Brazil have performed an order of a complete reporting pack, and in addition, an audit of specific items was performed for 1 component in the U.S. and for 1 corporate equity in Germany. We send detailed instructions to all component auditors, covering significant areas, including the relevant use of material misstatements. And for all components or scope of the group audit, we held conference calls and our physical meetings with the auditors of the components. And on a rotational basis, we perform site visits to larger components and specific locations. The visit component located in Germany, U.S. and Brazil, and we performed reviews on the audit files on these locations. And during these meetings and calls, the planning, the risk assessment, the procedures performed, the filings and the observations reported to the group auditor were discussed in more detail. Involvement of specialists for technically complex areas, we use KPMG specialists. We have used the work of KPMG forensic specialists and involve specialists in areas for acquisition, taxation, pension, share-based compensation and financial instruments. Coverage. The mentioned procedures performed resulted in a coverage of 98% of revenues and 96% of total assets through the full scope audits and audit of account balances. The audit coverage is reported in 2 categories. The first category audit of complete reported packages shows the audit coverage obtained through components that were allocated to a full scope audit. The other category audit of specific items refer to the components that have been in scope for specific account balances. The total coverage in 2019 has remained the same as in 2018. The split between the 2 categories has changed compared to 2018. This change is a result of the significant restricted cash balance on date through the municipal bond offering, which changed the relative composition of the assets of the group. This balance has been subject to full scope audit procedures and thereby increasing the audit of the coverage obtained in this category. I conclude no audit coverage change from '19 to '18. In our audit, we have considered the risk of management override of controllers, a presumed risk. Our order procedures in response to this risk include the evaluation of the design and implementation of relevant internal controls related to the financial reporting and revenue recognition. We performed inquiries of management and substantive order procedures such as testing of high-risk journal entries. For example, post-closing journal entries and an evaluation of key estimates and judgments by management for managed advisers, such as inventory valuation, impairment testing and evaluation of Level 3 financial instruments. We also have inquired the company's compliance officers regarding reporting incidents and/or speak-up reports and in accordance with the principles 1.2.3 and 2.6 of the Dutch corporate governance code, AMG has established a speak-up and reporting policy that allows employees to anonymously report questions or suspected violations with AMG values of code of business conduct. It's common practice as part of our audit procedures to take notice of incident and speak-up reports that had been reported during the period. From a confidentiality perspective, we cannot comment on the content of the report. We therefore further defer to these questions to management of the company. I would like to stress that included in our audit report of our procedures in respect of the fraud, I have no results in any key audit matter. The independent audit report contains an elaborate disclosure on responsibilities with respect to fraud and noncompliant laws and regulations. For more information, I refer to the disclosure provided in the independent auditors' report. The last bit is the key audit matters. Key audit matters are those matters in our professional judgment were most significant in our audit of the financial statements. These matters, for instance, could relate to perceived increased risk of error, significant areas of judgment or estimates and significant one-off transactions. We have communicated the key audit matters to management and the audit committee. The key audit matters are not a comprehensive reflection of all matters discussed. For the current year, we determined the following key audit matters. The inventory valuation of AMG vanadium, the valuation of the lithium concentrate plants, investment in recoverability of the vanadium plant and the related financing and revenue recognition on the sale of goods and projects. For a description of these key audit matters, including our response, observations and conclusions, I will refer to the extended reporting in the financial statements. This concludes my short overview of the highlights of the audit. I have already incorporated the questions raised by the VEB in my presentation, but I'm happy to answer any audit questions you may have. Thank you, Chairman.

Thank you, Mr. van der Heiden for that presentation. Would the representative from VEB, be satisfied the question 17, 18 and 19 have been answered. If so, I would ask if there were follow-up questions.

Mr. Ritskes [indiscernible]

You can -- you cannot give any more information about what you say on a further comment on this.

No, I think I've answered all the questions you've raised.

And in that case, are there any further questions from VEB?

No. Thank you.

Okay. Thank you. Ladies and gentlemen, for this agenda item, the total number of votes received was 6,832,782, of which 6,809,876 are for, 0 or against and 22,906 are withheld. I confirm that the majority of the votes is in favor of the proposal and that the proposal is adopted. The next item on the agenda is a proposal to resolve upon the final dividend distribution. In line with the revised dividend policy as discussed earlier, the management board with the approval of the Supervisory Board propose us to declare a dividend of EUR 0.4 per ordinary share over the financial year 2019. On August 16, 2019, the interim distribution of EUR 0.2 per ordinary share was effectuated. This will be deducted from the total dividend distribution, making the final dividend equal to EUR 0.2 per ordinary share. The final dividend of EUR 0.2 per ordinary share will be made payable on or about May 13, 2020, to shareholders of record on May 11, 2020, the ex-dividend date will be May 8, 2020. Are there any questions on this item? If not, ladies and gentlemen, for this agenda item, the total number of votes received was 6,832,782, of which 6,396,087 are for, 436,695 are against and 0 are withheld. I confirm that the majority of votes cast is in favor of the proposal and that the proposal is adopted. The next item on the agenda is the discharge from liability of the members of the Management Board in office in 2019 and for the 2019 financial year. There are no questions that have been submitted from shareholders on this item, so we shall move to the voting results. The total number of votes received was 6,832,782, of which 6,809,776 are for, 0 are against and 23,006 are withheld. I confirm that the majority of votes cast is in favor of the proposal and that the proposal is adopted. The next item on the agenda is the discharge from liability of the members of the Supervisory Board in office in 2019 for the 2019 financial year. There have been no questions submitted prior to this meeting by shareholders, so we shall go to the results of the vote. The total number of votes received was 6,832,782, of which 600 -- excuse me, 6,809,776 are for, 0 are against and 22,006 are withheld. I therefore confirm that the majority of votes cast is in favor of this proposal and that the proposal is adopted. The next item on the agenda is the reappointment of Jackson Dunckel as a member of the Management Board. And in this regard, I am pleased to, as Chair of the Selection and Appointment Committee to make a report with regard to Mr. Dunckel's reappointment as a member of the Management Board and as Chief Financial Officer. His term ends on May 6 -- May 2020. And Mr. Dunckel was appointed for the first time in 2016. The Supervisory Board proposes by way of a binding nomination pursuant to Clause 14.4 of the company's articles of association to reappoint Mr. Jackson Dunckel as a member of the Management Board, with effect from May 6, 2020, until immediately after the Annual General Meeting in 2024. This is in accordance with the regular 4-year term for which members of the Management Board are appointed under the company's constitutional documents. An excerpt of the terms and conditions of his employment contract with Metallurg, Inc., a subsidiary of AMG can be found in AMG's corporate website as well as Mr. Dunckel's resume. The Supervisory Board proposes to reappoint Mr. Dunckel in view of his excellent performance during his past 4 years as Chief Financial Officer, as proven by his significant contribution to the implementation of AMG's growth strategy and as Head of AMG's finance and accounting team, and given his broad international and highly relevant experience that he brings from the banking and chemicals industry and his expertise in financing and treasury matters. There were no questions on this item submitted by shareholders, so I'll move to the vote. The total number of shares received were 6 million -- pardon me, the total number votes received were 6,832,782, of which all votes were cast in favor of. There were 0 against and 0 withheld. I confirm that the majority of votes cast is in favor of the proposal and that the proposal is adopted. And I would like to congratulate Mr. Dunckel on his reappointment and his excellent performance in the past. The next item on the agenda concerns the adoption of the remuneration policy of the Management Board. AMG's current remuneration policy for the Management Board was adopted by the general meeting of shareholders in 2013 AGM and is effective -- has been effective since 2013. Since the implementation in the Netherlands of the EU Shareholder Rights Directive of 2019, the remuneration committee of the Supervisory Board, has stepped up its regular review of the remuneration policy for the Management Board and did so most recently with the assistance of Willis Towers Watson, executive compensation consultants. This most recent review focused specifically on whether the existing remuneration policy supported the overall executive compensation philosophy of the company and whether corporate governance developments in general and in the Netherlands, specifically, including the recent adoption of the EU Shareholder Rights Directive would merit an adjustment of the remuneration policy. The resulting proposed remuneration policy is in substance, similar to the remuneration policy, which has been in place successfully since 2013 and which has proven to be a solid framework for remuneration of the Management Board members in support of the strategic objectives of the company. The proposed remuneration policy has further been adjusted where necessary to respond to the increasing demands for transparency and clarity resulting from the EU Shareholder Rights Directive. The new remuneration policy continues to fully meet the standards of international good corporate governance practices, and it meets the requirements set out by the EU Shareholder Rights Directive. Specifically, among other things, how the remuneration policy forms a necessary tool for enabling the company to create long-term value and reach its strategic objectives. The Supervisory Board, who is responsible for the formulation of the amended remuneration policy as recommended to the shareholders to vote in favor of adopting this remuneration policy for the Management Board. It's a solid framework for the company's remuneration practices for the Management Board going forward. We will now respond to questions that have been submitted prior to the meeting by the VEB on this particular item. Before that, the VEB has asked me to read the following statement, which reads, in our view, AMG continues to have an overly aggressive remuneration policy, while in general, VEB attaches more importance to the structure of the remuneration policy and the applicable performance criteria, we consider the maximum payout to be too high, for example, relative to the company's size. Furthermore, the VEB is not supportive of the inclusion of stock options in the remuneration policy. For the above-mentioned reasons, the VEB has voted against the remuneration proposal. Nevertheless, we, as VEB, have the following questions. Now these particular questions will be answered by Chairman Depp. We have question 20. Would you like to respond, Chairman Depp?

Yes, Mr. Chairman. Question 20a, as stated in our executive remuneration philosophy, AMG competes for superior talent with corporations of considerable scale and global presence, in many cases, larger in size than AMG. Therefore, AMG must provide top talent with roles that are challenging and motivating in a fast-paced environment and offer very competitive reward opportunities. Question 20b, we understand that turnover rate relates to turnover of senior management within AMG. That turnover is low, and we believe that is a clear sign of the success of AMG's remuneration policies. Question 20c, AMG uses a peer group carefully selected that is used to benchmark compensation. Turnover levels at other companies are not readily available and may be only partially relevant as a metric to benchmark compensation. Question 20d, AMG regularly reviews the compensation levels of its senior management that is based in a variety of countries with different cultures and compensation practices. Retention levels of key staff is always part of that review process. We have a very fairly good knowledge of the various reasons why key staff work for AMG and its subsidiaries worldwide. Remuneration is obviously a part of that. Mr. Dunckel?

On question 21, our AMG's remuneration report for 2019 is compliant with the regulations of the recently implemented shareholder rights directive. As stated earlier, disclosing specific financial or individual targets may reveal competitive information that we believe should remain confidential. So we will be carefully reviewing whether such disclosure is merited.

Question 22. Indeed, we have introduced an STI metric concerning the maximization of CO2 reduction by AMG's suite of enabling technologies, Dr. Schimmelbusch, can you provide more details on how this metric might work?

Well, AMG has developed over the years a very sophisticated method to measure the CO2 reduction enabled by our products and services at the customer level, and this has been revised and amended by outside consultants, that it is fair to say that this method now is an industry-leading metrics. We have been partly announced that these measurements have led to a rise in our effectiveness to enable customers to reduce CO2 at a level which is significant compared to the size of the company. We are broadening these efforts not only by increasing the recycling part, the circular economy part of the CO2 reduction where we directly reduced CO2 as compared to primary extraction or mining, by the way of recycling. We are also mostly focused now on that enabling portion of CO2 reduction. It is fair to say that these methodologies are on the way to become auditable. And our third-party verifications of these methods are making progress in a big way. It's even now their efforts in certain pilot programs to have our enabling CO2 savings, including mitigation savings listed on CO2 exchanges. That's Mr. Chairman is my remarks.

Thank you. Go ahead. Mr. Depp, 23, please.

Yes, sir. Question 23, we disagree that stock options have a flawed payoff structure. It is well-known and well tested long-term incentive mechanism that aligns the interest of the Management Board with those of its shareholders in a publicly listed company, that is a good thing. Mr. Dunckel?

Thank you. Question 24, the Bloomberg Index has been used since 2013 by AMG. AMG has built up as a portfolio company of various specialty metals, chemicals and materials, combined with the technology group, aiming at aerospace and automotive-related customers makes a wide index like Bloomberg's world metal fabricate hardware index attractive. We continue to review regularly where the index is still the right one.

Question 25. That can depend on many factors. We do not go into hypotheticals as the reality will always be different. The Remuneration Committee and the Board as a whole are appointed, amongst other things, to use their judgment for matters like this. The quality of the Board should provide adequate assurance that these matters are dealt with properly. Mr. Chairman?

Well, thank you, Chairman Depp, and also Jackson Dunckel for responding to those questions as well as your presentation. Let me invite VEB to ask any follow-up questions that they might have in this item.

None. Thank you.

Okay. In that case, let us move to the vote. The total number of votes received was 6,832,782, of which 3,324,516 are for; 3,508,266 are against and 0 withheld. I confirm that less than 75% of the votes cast are in favor of the proposal and that the proposal is therefore rejected as this proposal requires that the majority of at least 75% of the votes cast are cast in favor to adopt this particular proposal. The next item on the agenda concerns the adoption of the Remuneration Committee for the Supervisory Board. The text of that is shown on the screen. AMG's current remuneration structure for the Supervisory Board members was adopted by the General Meeting of the Shareholders in the 2013 AGM and is effective since 2013. The new legislation implementing the revised EU Shareholder Rights Directive also contains new rules on remuneration policies, the most recent review by Willis Towers Watson, the company's executive compensation consultants in 2019 confirmed that the remuneration, both in structure and content of the Supervisory Board members still fully supports the overall compensation philosophy of the company and fully meets the standards of international good corporate governance practices and requirements set by the EU Shareholder Rights Directive. The proposed remuneration policy is in substance similar to the remuneration structure and practice for the Supervisory Board that has been in place since 2013 through 2019. The Supervisory Board who is responsible for the formulation of the remuneration policy for the Supervisory Board has recommended to the shareholders to vote in favor of adopting this remuneration policy of the Supervisory Board as a solid framework in order to be able to continue to attract high-quality new candidates and to adequately reward its current members. We will now respond to the questions that have been submitted prior to the meeting by the VEB. Before we do that, however, the VEB has requested that I read the following statement on their behalf. The statement reads, the VEB does not support the granting of AMG shares to Supervisory Board members, combined with the Dutch corporate governance code, we are of the opinion of the Supervisory Directors may not be awarded remuneration in the form of shares and/or rights to shares. For this reason, the VEB has voted against the remuneration proposal. Now I would like to invite Chairman Depp to respond to question 26 and 27, please?

Yes, Mr. Chairman. Question 26. We use a peer group that has been carefully selected and benchmark compensation against that peer group. No Dutch companies are part of that peer group simply because there is no proper match. Total remuneration for Supervisory Board members has not increased for 8 consecutive years. You may call this compensation generous, we call it robust and appropriate. Question 27. AMG award shares as part of the Supervisory Board compensation since 2009. Shareholders have approved this in 2009 and again in 2013 with overwhelming majority. AMG extensively explains to shareholders why it believes that inclusion of shares is a necessary component as it aligns with the interest of AMG shareholders and since it competes on a global scale, allows AMG to recruit supervisory directors from a global pool of candidates rather than a Dutch European-centered pool. Thank you, Mr. Chairman.

Well, thank you, Chairman Depp, for answering those questions. Now let me invite VEB to raise any follow-up questions that they might have.

I don't agree, but that's your answer.

Okay. In that case, let's move to the vote. The total number of votes received was 6,832,782, of which 6,831,371 are for, 2 are against, and 1,409 are withheld. I confirm that more than 75% of the votes cast are in favor of the proposal and that the proposal is, therefore, adopted as this proposal requires that a majority of at least 75% of the shares cast be in favor of. The next item on the agenda concerns the reappointment of KPMG Accountants as the external auditor of the company for the years 2020 and 2021. The Audit and Risk Committee of the Supervisory Board has completed its annual review and assessment of the functioning of KPMG and effectivities for the financial years 2018 and 2019. The results of this review have been that the Supervisory Board and Management Board are more than satisfied with the quality of the services of KPMG as the external auditor, including the availability of its knowledge-based resources and the smooth cooperation between KPMG and AMG's financial community. On the basis of the result of this assessment and review of the performance of the auditor during the 2018 and 2019 financial years, it is proposed to reappoint KPMG as the external auditor of the company for the 2020 and 2021 financial years. There were no questions submitted by shareholders prior to this meeting, so we will go directly to the vote. The total number of votes received were 6,832,782, of which 6,832,782 were cast for. There was 0 against and 0 withhold. I therefore confirm that the majority of votes cast in this -- in favor of this proposal, and the proposal is therefore adopted with anonymity. The next item on the agenda is the renewal of the authorization for a period of 18 months of the May 6, 2020 -- as of May 6, 2020, to issue shares, grant options to acquire shares and to restrict or exclude preemptive rights for general corporate purposes and/or for the purpose of mergers, acquisitions and/or strategic alliances and/or financial support arrangements. The full text of the proposals is now shown on the screen. The authorization provides flexibility amongst others in financing the company and enables the issue of ordinary shares and grants of rights to subscribe for ordinary shares in respect to share-based compensation plans for employees and/or to act decisively in the case of M&A opportunities and/or strategic alliances and/or financial support arrangements. There were no questions on these particular items from shareholders prior to this meeting. So I will indicate the voting results first for Item 10.A. The total number of shares received was 6,832,782. Of those, 6,396,087 were for, 436,695 were against and 0 were withheld. I confirm that the majority of votes cast in favor of the proposal under Item 10.A and -- were in favor of and that the proposal is therefore adopted. Now let me go to voting results for item 10.B. The total number of share -- votes received were 6,832,782. Of those, 6,396,085 were for, 436,697 were against, 0 were withheld. I therefore confirm the majority of more than 2/3 of the vote cast were in favor of the proposal under Item 10.B, and the proposal is therefore adopted. Allow me to now proceed to the next item on the agenda. The next item is the renewal of the authorization to acquire shares in the company's share capital. The full text of that proposal is now shown on the screen. This authorization provides the Management Board with the flexibility necessary to manage net equity or to enter into financial support arrangements involving the company and to respond to any demand for shares in the company's share capital that may arise at any time. This authorization may, for example, be used if shares need to be acquired to hedge the company's share and option schemes. There were no questions submitted by shareholders prior to this meeting, therefore, I will move to the voting. The votes received in total were 6,832,782, of which 6,831,373 were cast for, 0 were cast against and 1,409 were withheld. I confirm that the majority of votes cast is in favor of the proposal and that the proposal is therefore adopted. Allow me to proceed now to the next item on the agenda, which is the cancellation of ordinary shares. On April 8, 2019, the company announced the start of a share buyback program for the purposes of funding future share-based employee compensation programs and returning cash to shareholders. On the 10th of August 2019, the company announced the completion of its share repurchase program. The company repurchased a total of 2,915,630 shares for a total consideration of EUR 72,234,898 from the 9th of April 2019 to the 9th of August 2019. It was also announced that on the 10th of August 2020, the company intends to cancel 2 million shares and is retaining the residual amount in treasury to satisfy employee compensation obligations. The Supervisory Board proposes pursuant to clause 9.1 of the company's articles of association to the general meeting of shareholders to reduce the issued share capital of the company by canceling ordinary shares in the share capital of the company held or to be repurchased by the company. This cancellation may be executed in one or more tranches. The purpose of the cancellation is to reduce the number of outstanding shares in the company's share capital. The number of ordinary shares that will be canceled will be determined by the Management Board. There were no questions submitted by shareholders prior to this meeting. Therefore, I will move to the vote. Total number of votes received on this item, 6,832,782, of which 6,832,782 are for, 0 are against and 0 are withheld. I confirm that the majority of the votes cast in favor of this proposal exceeded 2/3, and this proposal is therefore adopted. We have come up to the end of our agenda items right now, the shareholders have not submitted any further questions. And as there are no further questions, I conclude this item. And we'll proceed to close the proceedings. We have come to full completion of our agenda. Before I close this meeting, I would like to thank on behalf of the Management Board and the Supervisory Board, all employees and staff of the AMG Group for their dedication and performance, not only during 2019, but also particularly during the months of 2020 when we've been faced with the COVID-19 pandemic and lockdown. I also would like to thank all of you on behalf of the Management Board and the Supervisory Board for your attendance and your attention as well as contributions to this meeting. With that, the meeting is closed. Thank you very much.

Thank you, Mr. Chairman.