Compagnie Générale des Établissements Michelin Société en commandite par actions (ML) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders, I'm particularly delighted to welcome you here at the Clermont Zenith for this general meeting, your, our general meeting. I do hope it will give us the opportunity to exchange again after 2 years with no participants on what brings us together, the life and future of your group, Michelin. We're going to do this in international context, which is marked by the conflict in Ukraine. And before we start this general meeting, our thoughts go to all victims. May they continue to do all they do. And again, we condemn in the strongest terms this breach in international law. As always, Michelin stands by its employees and their families to ensure their security in the best possible way. And our entire community has rallied to face these difficult times united. I now declare our general meeting open. I'd like to thank you for coming in numbers here in this new venue. I'm joined by Yves Chapot, the General Manager and CFO of the group; Eric Andrieux, who is the Corporate General Counsel; as well as Jean-Christophe Georghiou and Frederic Gourd, who are sitting quite so far from us, but we'd like you here, though, who are, respectively, statutory auditors for PricewaterhouseCoopers and Deloitte & Partners. We also have in the first row members of the Group Supervisory Board, Mr. Vincent Montagne, the Chief Executive of Sages, its Chief Executive, who is also here as a non-general managing partner. We're now going to constitute the bureau. As Chair of the General Meeting, I designate as scrutineers, Mr. Pierre Michelin, the Chair of Mage-Invest; [ Mr. Olivier Degrange ], who is the Chair of the Supervisory Board of the Manufacture Michelin [indiscernible] Employee Savings Fund, which holds and represent -- well, they held and represent each of the largest number of votes in this auditorium, and they have accepted these duties, and like to thank them for this. The bureau, which has now been constituted, designates Benoit Balmary as Secretary of the General Meeting. The attendance sheet suggests that we've reached the quorum. The final count will be specified just before we vote on resolutions. The general meeting can now validly deliberate on the agenda items contained in the notice sent to you. This ordinary and extraordinary general meeting is convening on first call. I suggest we now have a look at a summary of the group's activity in 2021 and the prospects for 2022. And I'm going to hand over to Yves Chapot.

Ladies and gentlemen, dear shareholders. Michelin's business model rests more than ever on a balance between our different stakeholders. People's development, respect for the planet are unseparable from the financial and economic performance of the group. The idea is that in everything we undertake, we seek to further these 3 dimensions simultaneously. Now for each pillar: people, planet, profit, economic and financial performance, I'm going to illustrate Michelin results in 2021 and its ambitions for 2030. Michelin is mindful of its impact on people. Of course, I mean, Michelin employees, but also our customers, our suppliers and communities that live around our sites. First of all, Michelin wants to be a global reference for its employees' engagement. Each year, we measure our employees' engagement and well-being in the workplace across the world with a questionnaire which is conducted by an independent institute. This questionnaire addresses various topics about the lives of our employees. Responses to these questions allow us, amongst others, to compute Michelin teams' engagement rate. We reached 80% in 2021, and we are aiming at a rate above 85% by 2030. We want to be a global reference for security in the workplace. In any company, but more specifically in an industrial company, employee security is paramount. Michelin is keen to ever reduce occupational accidents, particularly in plants and in offices. Our improvements in this area is measured by the number of occupational accidents and diseases for 200,000 hours worked. In 2014, this figure was 2.8. It went down to 1.29 in 2021. In 2021, the Michelin Central Security team conducted an in-depth analysis of the most serious accidents over 2 years. The findings of this study help us avoid new accidents, help us further the security culture, and build the security and ergonomics road map to reach the group's ambition by 2030 and a TCIR lower than 0.5. Michelin also wants to be a global reference for diversity and inclusion within its teams. Your group is very much involved in this topic. And all components of the IMDI indicator, which is diversity and inclusion indicator, went up in 2021: gender diversity, identity, the multinationality of the management, disabilities and internal promotion. As regards to gender diversity, the share of women went up in management to 28.9%. We intend to raise it even further to reach 35% by 2030. Last, we want to be the best-in-class in our industry in terms of value created for our customers. Professionalism, product benefits and quality remains some of the main strengths of the group's, as underlined in our customers verbatim statements. They are also increasingly positive on 2 points that have been identified as improvements, responsiveness and effectiveness. Let's now move on to the second dimension, our planet. In terms of environment, in 2021, the group continued its efforts to reduce the impacts of its activities despite the crisis. In this regard, I'd like to draw your attention on 4 specific indicators that we monitor at group level to assess the results of the measures we take and the intensity of efforts we undertake to make all our activities more -- ever more sustainable. And our first ambition is to reach carbon neutrality for the industry and in terms of energy by 2050. The 2021 results marks a further progress as regards our CO2 emissions, thanks to the robustness of actions to improve energy efficiency, which have allowed us to return to the 2019 levels despite the impact of the COVID-19 crisis and the integration of a third production site for synthetic rubber. Besides, the share of renewables used by the group has moved from 13% in 2019 to 18% in 2021. This was possible thanks to the installation of photovoltaic panels across several sites and the purchase of electricity of guaranteed renewable origin, specifically in Brazil and in some European countries. By 2030, all identified -- all technical levers identified in the road map will allow us to reach our targets. There will be a presentation later on, on this fascinating topic. Michelin wants to contribute to or wants to reach carbon neutrality in its uses. In 2021, there was a number of new products that were introduced that have yielded significant gains in terms of energy efficiency, such as the MICHELIN e.Primacy and the MICHELIN CrossClimate 2 in passenger cars. The projects initiated support our road map for a 10% gain in energy efficiency by 2030. We also want to be a global reference for the environmental footprint of industrial sites. Besides the materials that we extract from the environment, we also follow an indicator that measures the environmental impact, the overall environmental impact of our production sites. In 2021, all 5 components of this indicator went up. For example, a 7% improvement in the water component was reached, mainly with the introduction of water reuse and recycling solutions across the group's different sites. These results illustrate a positive start for this indicator to reach the reduction target by 1/3 by 2030. Last, the sustainable materials rate. As you know, and we all do, natural resources on this planet are scarce, therefore, it is our responsibility to ever -- to constantly innovate to increase the share of renewable, biosourced and recycled materials in the products we sell, without -- of course, however, without ever compromising on quality. In 2021, this sustainable materials rate was 29% at group level. This is mainly due to the use of natural rubber in our products. By 2030, our ambition is to raise this to 40% and 100% by 2050. This means that besides natural rubber, we are also considering to considerably reduce in the coming years our dependence on all petroleum derivatives. Again, as regards to the environment, I have to attract your attention on an initiative that we launched last year, and that came under a specific scrutiny from the CSR Committee. The Chair of the Supervisory Board will shed some light on this later on. Any human activity has effects on the environment, the society and the economy, which are not subject to financial assessment, what we call these externalities can be positive or negative. In order to better integrate them in the group's control and management, Michelin has decided to express these externalities in euros. We started to assess 3 negative externalities: the CO2 emissions of our own operations as well as those that come from the transport of semifinished and finished products as well as materials; the consumption of solvents that generate volatile organic compounds, VOCs and net water obstruction. This first assessment was established on the basis of the 2019 volumes, the last year prior to the health crisis. It's based on avoided costs, and it was EUR 508 million. It gives you a rough idea of this externalities relative to our operating profit. By 2023, Michelin tends to reduce by 7.5% of these 3 externalities despite the expected rise in our volumes, thanks to several levers: reduction in consumption and transition towards clean energies; an organization of our supply chains that would be more local and increased used of multimodal transport; and last, water and water recycling and reuse, the adaptation of products and -- of processes for solvents and the digitization and deployment of best practices. Generally speaking, the group is investing approximately EUR 300 million per annum between 2021 and 2023 to make its operations and products more durable. Let's come to the last dimension, economic performance. For your information, Michelin generated very good results in 2021 despite very difficult conditions. The year was marked by a sustained rebound in demand that led to a disorganization of supply chains, mainly due to tensions in shipping. It led also to labor shortage in some regions across the world and inflation in commodities and logistical costs. However, our sales went up by 16% to EUR 24 billion due to the growth of tire volumes by approximately 12% and non-tire sales of approximately 8%. Non-tire activities of the group will grow by 5% per annum between now and 2030 and should account for 20 -- between 20% and 30% of our revenues by 2030. The other indicator we monitor to illustrate our economic performance is the segment operating income, the SOI, which reached EUR 3 billion, 12.5% of sales. We are back on the par with 2019. The main levers to improve things are an OE and RT activity mix that's very favorable in the Automotive segment, mainly because OE was strongly penalized by the shortage crisis of semiconductor. We also had some gains -- market share gains in 18 inches in our premium tires. This performance confirms the technological innovation leadership of the group, the dynamic control of prices based on the power of the brands, which allows us to offset inflation. Structural cash flow, free -- structural free cash flow of the group is EUR 1.8 billion. And our ROCE is 10.3%. This reflects the group's progress in terms of profitability, but also as regards to the optimization of its capital employed. As a result, Michelin ends 2021 with a sound financial structure and a net debt ratio of 18.6% against 28% at the end of 2020. With these results, the group demonstrates yet again its sturdiness and its resilience and is confident about the further rollout of its Michelin in Motion strategy. Now let's focus on the breakdown of the value created by your group. You can see in this chart that the added value created by the group once we've paid our suppliers was 10 -- EUR 11.3 billion in 2021. This added value is -- can then be broken down as such: 57% for employees; 15% to finance our investments to ensure the sustainability and development of our activities; 9% for direct taxes and levies; 8% will be used to pay our shareholders, with a dividend that we'll offer to pay out at the end of this meeting; 9% for debt reduction; and last, 3% for the payment of financial expenses. As regards prospects, I'd like to dwell some time on -- I'd like to dwell shortly on the current context, as Florent Menegaux explained in his opening remarks. In the first quarter of 2022, operational disruptions and inflationary pressures were exacerbated by the conflict in Ukraine and the resurgence of COVID-19 in China. In Ukraine, we had a sales branch of 12 people, and we employ approximately 1,000 people in Russia. These 2 countries as well as Belarus accounted in 2021 for approximately 2% of our revenues. The activity of our Russian factory has been suspended since March 2022. We sourced important commodities from Russia, such as black carbon or synthetic rubber. Within a few weeks from now, we will have fully replaced these supplies with other supplies. In China, the pandemic is again strongly disrupting economic activity. We had to close our plants because of COVID. But they -- our plants are currently reopening in May. We have very little visibility on the evolution of the economy in China at the moment. In this disrupted environment, Q1 sales are however up by 19% to EUR 6.5 billion, thanks to a dynamic control of prices, the dynamism of the replacement market in PCLT despite a more difficult performance in March -- context in March and strong growth in non-tire activities. Our forecast for the year for our volume growth seems to be in line with the expected growth of markets. It will probably be less dynamic than our initial forecast. In this scenario, excluding the intensification and systemic effects, Michelin maintains its guidance with an annual SOI in excess of EUR 3.2 billion at constant exchange rates and a structural FCF in excess of EUR 1.2 billion. As you've understood, with our capital allocation policy, we want to reach a fair balance between reinvesting part of cash generated by the group into the financing of its growth and maintaining reasonable debt. And of course, we want to pay the different stakeholders. So for FY 2021, we propose a dividend of EUR 4.50 per share. It is substantially up against the pre-COVID period in 2019, plus 22%. This dividend equals 42% of our consolidated net profit. Once it's been approved by the general meeting, this dividend will be paid out on the 19th of May. Eventually, we wanted to reach a payout ratio of 50% of the net profits before nonrecurrent items. Let me finish with some stock market data. The total shareholder return, that is the total profitability for shareholders that factors in the reinvestment of the annual dividends, it's 51% over 5 years and more than 300 years -- or 300% over 10 years. Besides, we also put to your vote today the possibility to divide the face value of the Michelin share by 4 in order specifically to make it more accessible for employees to acquire shares of your company. Thank you very much for your attention and for your trust.

Thank you very much, Yves, for this very clear presentation. I should now like to turn to Mr. Frederic Gourd, representative of the statutory auditors.

Ladies and gentlemen, dear shareholders, on behalf of the auditors, statutory auditors, I would like to introduce the reports that we have drafted for your benefit. For the ordinary part of this shareholders' meeting, we have drafted 3 reports: our report on consolidated accounts, our report on annual accounts and our reports on the regulated conventions. We have also issued 3 reports under the extraordinary resolutions you are being asked to vote on. These reports deal with: proposals to delegate to general partners or one of them the task of issuance of shares and/or various securities under Resolutions 19, 20, 21, 22 and 23; the increase in share capital reserve for employees with a corporate savings scheme for Resolution 26; finally, the reduction in share capital under Resolution 28. These reports, you will find in the universal registration document, which are available on the website of the company. Now I would like to introduce these reports, starting with the report on the accounts. Our report on the consolidated accounts can be found in Pages 391 to 395 of the universal registration document and our report on the annual statements from Pages 410 to 412. These reports were issued on February 18 of this year. First of all, we have confirmed in our reports that we have complied with the rules of independence. We are bound to uphold as per our professional code of ethics as well as the European regulation applicable to the auditing of the accounts of public interest entities. Then the audit that we've carried out aimed at gaining reasonable assurance as to the sincerity and accuracy of the accounts and of the financial information therein. Our approach has integrated this -- reflected miscellaneous specificities, i.e., large international footprint, the integration of recent acquisitions, as well as an internal control organization and information system tailored to the challenges at hand. In our work, we've had to coordinate the efforts of teams throughout the world to carry out the audit of the group's various subsidiaries. Not being able to travel this year yet again, we had to oversee the work remotely. Finally, we provided the group's top management and Audit Committee with regular updates as to the progress and outcome of our work. Our reports on the consolidated accounts and the annual accounts lead us to certify without reservation. In both reports, we substantiate our assessment with the same observation. The statements were finalized in the evolving context of the COVID-19 crisis, which implied particular conditions for the preparation and auditing of this year's statements. Our reports also include a description of the key elements of the audit that deal with the significant risks of anomaly, which we believe are most important for the auditing of the statements of fiscal 2021. For each of these key elements of the audit, we both describe in our reports the reasons which have led us to account for them, the nature of the risk identified and the auditing response that we brought. Under the financial year ending December 31, 2021, these key points are: for consolidated accounts on the assessment of goodwill and intangible fixed assets; the assessment of the staff benefits under defined benefit scheme; and the assessment of the risk on the tax dispute in Germany. For annual accounts, they deal with the evaluation of equity stakes. We also indicate in our reports for specific verification purposes that we don't have any observation to make regarding the sincerity of the information given in the Managing Chairman's report as to the management of the group. Likewise, we confirm the presence in the report of the Supervisory Board on corporate governance of all the information required by law. On the basis of our work, we concluded the presentation of the consolidated accounts to be included in the annual financial report complies in all significant aspects with the required format. Let us now move to the special report on regulated conventions, that you will find on Page 413 of the universal registration document. We indicate in our report that we received no notice of any new convention authorized during the past year or in prior years and -- that would have extended into 2021. Now regarding the resolution -- the extraordinary resolutions, we have drafted 3 reports. One first report under Resolutions 19, 20, 21, 22 and 23, regarding the proposals to delegate to managing partners or one of them for the issuance of shares and/or various securities. You will find this report on Page 463 of the universal registration document, and there's no particular mention or observation. We have drafted a second report under Resolution 26 regarding the proposal to delegate to a managing partner for the competence to carry out through cancellation of company shares -- with the cancellation of company shares reserved for employees with corporate savings schemes. You will find this report on Page 465 of the universal registration document. It does not carry any particular mention or observation. Finally, we have issued a report on Resolution 28, regarding the proposal to delegate to the management partners or one of them for a duration of 24 months to decrease the share capital by cancellation of company shares and the limit of 10% of the share capital. You will find this report on Page 466 of the universal registration document. And there is no specific mention or observation. Which brings us to the end of the presentation of our reports. Ladies and gentlemen, on behalf of the statutory auditors, I would look to thank you for your attention.

I would like to thank Frederic Gourd for his presentation. I would now like to yield the floor to Barbara Dalibard, Chair of the Supervisory Board, for her presentation of the report on the activity of the Board and the projects of resolution.

Ladies and gentlemen, dear shareholders, it is an honor for me to report for the first time since my appointment as Chair of the Supervisory Board of your company regarding the activity of our Board throughout the troubled period we just experienced. Before starting, I would like to thank once again Michel Rollier, who is with us today, for his support and valuable advice during this period of transition. As you know, Michelin's governance rests on 3 robust pillars: the managing partners who run your company, Florent Menegaux is the Chairman of the Board, assisted by Yves Chapot; the Sages Company, a general partner, whose Chair is Vincent Montagne, is a key player in the stability of your company, in particular, through the role that it plays in developing the Managing Director succession plan; finally, the Supervisory Board who is tasked with the essential role of reviewing the management of the group and assessing its quality with the support of the 3 committees. I would like to spend some time on what we do as a Supervisory Board. We have a key role to play in reviewing the group strategy, to which we devote a very lengthy session each year, complemented by updates made necessary by an environment that is buffeted by more and more uncertainties. We also review any external growth or divestment operation, any significant investment. And we make recommendations to the managing partners. For instance, in 2021, we have addressed the partnership with Altaris to accelerate the growth of Solesis in the field of health as well as the complete buyout of Allopneus. We also addressed the development of new skills and operations in the group. For instance, in 2021, we scrutinized its development plans in hydrogen. We monitor how well the company is managed. We draw conclusions and lessons to determine and modify the criteria that will allow us to assess its performance, and therefore, the compensation of its managing directors. To fulfill its responsibilities, the Board met 8 times in 2021 with, as you can see, an attendance rate of 100%. In the universal registration document, you can find a detailed description of our business. I would just like to underline some of the highlights of our works. We -- like each year, we have reviewed the independence of the Board members. We have -- also have far-ranging discussions on the inner workings of the Board by integrating the elements coming from the executive session organized by Thierry Le Hénaff. And we have given La Sages our agreement for the renewal of our 2 managing partners. On this, you will find the membership of our Board. Please note that we have further reinforced the criteria, ensuring a balanced membership. Except for the 2 Board members representing the employees who have joined us 1.5 years ago and who make an extremely valuable contribution to our proceedings, we went from 78% to 89% of independent members. There are 45% women on the Board and 30% of non-French members compared to 22% before, which we believe better reflects the territories in which Michelin is doing business. So as to remain relevant, we need diverse and complementary skills on the Board. Here, you can see all dimensions, that all dimensions are addressed. These are the competencies which we believe are fundamental for us to play our role. All dimensions are addressed, and each year, we are keen to regularly revisit the set of criteria and skills which we use to appoint new Board members under a precise process run by the Compensation Committee. I should say that our 2 employee Board members who are not here because of specificity of the mode of recruitment for them, also have very diversified skills and experiences, which comes as a further benefit to our discussions. Let me now turn to the work of each of our committees. The Audit Committee is chaired by Patrick de La Chevardière. They met 4 times in 2021, with attendance rate of 100%. All of its members are independent. The details of its activity, you can find in the universal registration document. It has audited many key figures in the group. The risk review, we've deepened the IT risk review. And our skills in this field was further reinforced by a new board member coming from the IT world. The Board scrutinized the potential impacts of global warming in terms of group risks. We have also reviewed our new ethics and compliance organization as well as the rolling out of the anti-bribery program as well as the 2021 report on the group's ethical track record. I will -- later Jean-Pierre Duprieu, the Chair of the Compensation and Appointment Committee, will present the details of the activities. The Committee met 3 times, with an attendance rate of 100%. Except for Delphine Roussy, a representative of employees, they are all independent. I would now like to spend a bit more time describing the activity of the CSR Committee. You know that we created it 2 years ago. Monique Leroux is its Chairwoman. It also has independent members, except Jean-Christophe Laourde who represents the employees of the group. It met 3 times last year, again, with an attendance rate of 100%. It is tasked with reviewing the group's strategies, ambitions and commitments in the field of CSR, corporate social responsibility, broadly defined, because it deals with the extra financial performance of the group, decarbonation detailed plans as well as the wage policy of the group. As you can see, they had a very eventful year in 2021. And we know how relevant it has been to dedicate such an important part of the Board's business to these questions. Top management commitment, evidenced by Mr. Chapot's earlier intervention, is a great boost to our work. We are regularly adding topics to the work of the committee and are also in the process of connecting the work of the CSR Committee with that of the 2 other, the Audit Committee for risk analysis and the Compensation and Nomination Committee, especially in questions of diversity. As regards environmental responsibility now, the CSR Committee has reviewed the details of the group's decarbonation plan, of course, marked out by 2 milestones, 2030, 2015 -- and 2050, we are aiming for carbon neutrality. Please note that the greenhouse gases emission reduction objectives have been reinforced and now in line with the Paris Accord on climate. We have also reviewed the environment -- negative environmental externalities as well as their accounting for in the group's results. Finally, we have reviewed the reporting duties for next year. More precisely, the committee has reviewed the group's ranking in sustainability, which deserves to be more widely known. We've reviewed the alignment of the group on the climate task force principle. The group strategy in this field features 2 aspects: climate transition on the one hand and adaptation of the group to climate change on the other. The committee has reviewed and keeps monitoring the developments of taxonomy at the European level, which is a particularly complex subject, as well as regulatory developments through the work of the International Sustainability Standard Board, or ISSB, and sort of a Task Force on Climate-related Financial Disclosures, or TCFD. The CSR Committee has addressed the indicators which it believes are most relevant for these topics. You will see with Jean-Pierre Duprieu that some of these indicators have already been taken into account for the calculation of short-term variable parts. It was already the case for the long-term variable parts. Finally, we pored over the so-called double materiality, internal and external aspects for risk analysis. Regarding social and societal responsibility, the committee has reviewed the decent salary policy of the group, applied everywhere in the world. We have reviewed the diversity and inclusion policy of the group. And we have carried out for nonindustrial activities a risk analysis regarding the risks to people's safety as well as corresponding action plan. I hope this gives you an idea of the breadth and width of the committee's work. The scope grows with each new meeting and feed into our Board discussions. I would like particularly to thank at this point group's management for the transparency with which we exchange on these topics, which are difficult topics, but very important ones for our future. Now I would like to address the resolutions that you are asked to vote on. First of all, the financial resolutions. The Board has approved group management throughout the year. We have appreciated the excellence of its results, financial results, but also operational results. Amongst these authorizations, under Resolution 31, we suggest to divide by 4 the nominal value of the share. That way, it facilitates access to the group's capital. We also suggest that we renew our statutory auditors. PricewaterhouseCoopers and Deloitte & Partners, we believe should be renewed for a duration of 6 years. No -- none of these consultancy have to be rotated under this renewal. And the Audit Committee assess the quality of their work and the work of the statutory auditors as well as their support in -- for internal control. We are keen also to ensure that the new auditing approach will take into account the developments in the group, specifically the acquisitions. And the rotations and reallocations of audit cycles occur between the 2 consultancies have to have different visions of the entities of the group. Jean-Pierre Duprieu will go through the resolutions on the compensation of corporate officers. He will also present the resolutions for renewal for 3 of our colleagues: Monique Leroux, Thierry Le Henaff and Jean-Michel Severino, who each -- for each of them, with very different profiles, bring a lot to our Board. Then I would like now to conclude on insisting again the fact that 2021 was an excellent year for Michelin. The Board expresses its gratitude to all employees for this performance. As Yves said, we have now entered a new period of crisis, which is being steered with a lot of intelligence and pragmatism by the group's management. We obviously all hope that this situation will stabilize in the coming month. I thank you for your attention. And I should like to give the floor now to my colleague, Jean-Pierre Duprieu. Jean-Pierre?

Ladies and gentlemen, dear shareholders, I'm delighted to see you again in the traditional format of your general meeting after the painful interlude of the health crisis that we went through. First of all, well, I do hope that you and your relatives were not hit too hard by this crisis. In compliance with the corporate governance code of the AFEP/MEDEF, I'd like to present today the compensations proposed for managing partners and for members of the Supervisory Board. I will also address their -- the compensation policy for 2022 for them. And then I will end with the proposed nominations for the Supervisory Board. You will see on this page a recap of managing partners compensations for 2021. I will focus each -- specifically on each managing partner. As we said during the previous general meeting, the annual variable compensation of Florent Menegaux, the Managing General Partner, is based on the following quantitative criteria: the SOI segment operating income; the target of EUR 2.8 billion was overshot, which is 8% that have to be attributed; an outstanding performance for the FCF, which allows us to reach the maximum results, that's 8%; and last, the net income group share, which is also markedly up, for which the managing general partners receives 4%. As regards to the more qualitative but however quantifiable part, the deployment of the 6 strategic transformations was fully delivered during the difficult context that we are aware of. The CSR objective and staff security was not reached even though it's improving. And the objective of acquisition synergies was reached, which is a significant improvement against the amount achieved in the previous year. All in all, the result is 18.3% of 20%, the maximum that can be attributed on the net profit, which is markedly higher compared with the previous year, which means that for the variable share of EUR 2 million, which -- it exceeds the cap set at 150% of the fixed compensation, which is limited to the cap, EUR 1.35 million. For Yves Chapot's, the General Manager, for his variable compensation, the criteria is the same as for Florent Menegaux. The achievement of these objectives, as presented earlier, lead to an achievement rate of 91.6%, which is a variable share of EUR 824,000. Besides Mr. Menegaux and Mr. Chapot, benefit from LTIs that expire this year or that mature this year, which have been attributed for FY 2019 and that were approved by your General Meeting on the 13th of May 2020 with more than 95% of votes. It is the last scheme attributed in euros. Next schemes will be performance shares. As you remember, this criteria relates to the Michelin share performance relative to CAC 40 companies. They're related to the group's environmental footprint measurement as assessed by the MEF indicator, staff engagement level, which is very high at Michelin, and the group's operational profits. All these criteria were exposed to the group's performance on -- in 2019, '20 and '21. As you can see on this recap, each criteria was partially reached. No adjustment was made due to the consequences -- the economic consequences of the COVID crisis. Overall, the general performance for these objectives is slightly over 1/3, which will lead to the payments in 2022 of EUR 1.3 million for Mr. Menegaux and EUR 228,000 for Mr. Chapot. The amount owed to Mr. Menegaux results from his position as Managing Chair, but also his specific status as a general partner who has in this capacity personal and limited liability for corporate debt with his personal assets. As regards other benefits for managing partners, they haven't changed or they didn't lead to any payment in 2021. As for Mrs. Dalibard, the Chair of the Supervisory Board, since your last general meeting and Mr. Rollier who chaired the Supervisory Board till then, their respective compensation for 2021 is, respectively, EUR 91,000 and EUR 48,000. They result from their membership of the Supervisory Board, one for the fixed compensation for 2020 for the annual variable compensation and for 2018 for long-term incentives. In compliance with say-on-pay requirements, we are presenting today the pay equity ratios that measure the pay gap between Executive Directors of Michelin and the average and median pay of employees, which shows the scope of the MFPM, which concentrates 90% of French employees. For the Chair of the Supervisory Board, this ratio is 2.1 relative to the average compensation of the group and 2.8 relative to the median. For the Managing Chairman, these ratios are, respectively, 42.9 and 55.9. Last, for the General Manager, 31.5 and 41. These ratios remain fully acceptable. As regards members of the Supervisory Board, compensate '21 was 60% of the 2021 pays based on regular attendance, which was 100% in 2021. It varies between EUR 34,000 and EUR 91,000, depending on the participation in committees and also chairmanship for one of these committees. As regards compensations paid in 2021 for FY 2020, these compensations vary between EUR 9,000 and EUR 120,000 for the same reasons of participation and chairmanship as well as compensations -- pro rata compensations for the start of or the end of the term. Let's now look at the presentation of the 2022 pay policy. As for managing partners, it takes into account the respective roles of the Managing Chairman and the General Manager. It is adapted to the role of the Managing Chairman, Florent Menegaux, his responsibilities and his status as a general partner. First of all, we propose to update the amount of the managing partners' fixed compensation. When they were determined in 2018, the Remuneration and Nomination Committee found that this fixed compensation was already lower than the fixed compensation median of Executive Directors of the -- of the friend of the main French listed companies. In 2020, given the efforts requested of Michelin Group's company's employees as well as of other stakeholders during the COVID crisis, the fixed compensation paid to managing partners have been cut by 25% when the company used short time in 2020. In 2021, we took into consideration the economic crisis and specifically the wage restraint policy decided in 2020 and 2021 for the Michelin Group employees. Well, managing partners had told the committee that they did not want to see their fixed compensation change in 2021. The Remuneration and Nomination Committee had accordingly proposed to the Supervisory Board and to the non-managing general partner, SAGES, to retain the amounts set in 2018 and to recommend for 2022 an update. The Supervisory Board and the SAGES considered that this update is justified considering the track records of managing partners during the first term, especially the very good delivery on the management succession plan, the strengthening of the governance process with the Supervisory Board and the non-managing general partner, the good handling of the COVID crisis consequences, and the preparation and launch of the group's new expansion strategy around and above tires and the launch of the group's transformation initiatives. We also need to remind you that this update should be regarded not only as regards the period of the first term that has expired, during which, there was no rise, but also as regards the period that will run until 2026 when the new term expires. During which, there will be no review of the fixed compensation. This change is of the same magnitude as the average increase of the basic compensation of the Michelin Company's employees over the same period. This -- the implementation of this update would only take place after the start of the second 4-year mandate for Managing Partners, which is after the -- today's general meeting. As a result, the fixed compensation of managing partners would be for Mr. Menegaux, EUR 1.1 million, which would be at the level of the CAC 40 general managers median compensation, for Mr. Chapot, EUR 770,000 at the level of the CAC 40 deputy general managers median compensation. The 2022 policy proposed for managing partners annual variable compensation retained its objective, which is to align as much as possible quantitative criteria, financial and extra financial criteria, with criterias applicable to Michelin employees. This criteria are proposed by the Supervisory Board, approved by general partners and monitored by the Supervisory Board. Besides the continuation of quantitative criteria, the group's net profit, the SOI, the structural FCF and qualitative criteria that were applied in 2021, the continuation of the group's transformation deployment, employee security, the synergies related to acquisitions, this year 2 new qualitative and quantifiable criteria are introduced in societal and climatic terms, the percentage of women in senior positions and CO2 emissions level for -- CO2 emissions levels for Scopes 1 and 2 and for the upstream, downstream transportation activity of Scope 3. Last, Mr. Menegaux's and Mr. Chapot's annual variable compensations remain like in '21, capped at 150% of their fixed compensation. As regards the long-term compensation component of managing partners, the company will attribute to performance shares which mirror those attributed to group's employees. This attribution is subject to performance criteria aligned with financial and extra financial criteria applicable to Michelin employees that related to 3 financial years in compliance with the AFEP/MEDEF code recommendations. It is decided after a proposal by general partners and after the Supervisory Board has determined the performance criteria and requirements. The criteria would be as follows: performance of the Michelin share relative to Europe STOXX 600, performance of CSR actions, environment, employees engagement, growth in the adjacent territories activities, revenues and change in the ROCE. It is subject to a double cap for managing partners, an individual cap for their fixed annual compensation and a collective cap of 0.05% of the capital for the duration of the resolution passed by your assembly. Last, this attribution is subject to the obligation to retain throughout the term 40% of shares effectually -- actually received. Now you can see on this page a recap of the 2022 compensation policy elements. First, as regards the fixed compensation, then the annual variable compensation, and last, long-term incentives. Besides, there are no changes in allowances and other benefits relative to 2021. Now as regards to the compensation policy for the Supervisory Board for 2022, we recommended to the council to propose to you a reassessment of the annual -- maximum annual compensation of the Supervisory Board members in order to take into account, amongst others, of the rise in 2020 of Supervisory Board members from 9 to 11, of the creation of a new committee in 2020, the CSR Committee, and the involvement of its members in the very intense activities of this committee, which held a number of meetings which is similar to that of the Board's other committees. Also want to take into account the increasingly horizontal nature of activities of the different committees, which make it necessary to analyze a growing number of topics, just for example, risk analysis in societal and climate areas or even the group's policy in terms of diversity and inclusion. The overall cap for the compensation of Supervisory Board members that will be paid in 2023 as from FY 2022 would move from EUR 770,000 to EUR 950,000. The attribution rules of this compensation amongst the Supervisory Board members will not be changed in 2022 and would remain identical to those defined in the 2021 compensation policy. Last, 60% of these amounts depend further on regular attendance. Now let me come to appointments at the supervisory -- within the Supervisory Board. We propose this year to renew the terms of Thierry Le Hénaff, Monique Leroux and Jean-Michel Severino. Thierry Le Hénaff has been an independent member of the Board since he was appointed in 2018. And after being a member of the Audit Committee, he's been since 2021 a reference member, the supervisory member and member of the Remuneration and Nomination Committee. The Board reviewed his candidature for the first renewal of his term for 4 years, taking into account, amongst others, regular -- his attendance, his experience as an executive within an international group, also his approved capacity to support the transformation of an industrial group and to make it a global leader in its main activities. Monique Leroux has been an independent member of the Board since she was appointed in October 2015. She's been a member of the Audit Committee since 2020 and is Chair of the group's CSR, Corporate Social Responsibility Committee. The Board reviewed her candidature for the renewal of her term for 4 years, taking into account her attendance, her involvement in the work of the Audit Committee, and since December 2020, in the management of the CSR Committee as Chair. Also, the Board reviewed a good understanding of the group's challenges, her skills in accounting, financial -- internal audits matters, and also the diversified experience she's gained as a partner of EY Canada and Chair of the Board and Head of Management of the Mouvement Desjardins between 2008 and 2016. Jean-Michel Severino was co-opted as a member of the Board in November 2020. His co-optation was ratified by your last general meeting for 1 year until the end of the term of the member he replaced. He's a member of the company's CSR Committee. It was set up in 2020. Further to his recent appointment, the Board reviewed his candidature for the renewal of his term for 4 years, taking into account, amongst others, his attendance, his expertise, particularly in the areas of social environment, HR and governance, his good knowledge of the industrial community and his international experience. This is the end of my presentation. I'd like to thank you for your attention.

Thank you very much, Barbara. Thank you very much, Jean-Pierre. We also wanted to thank the Supervisory Board, which has been wise enough to place its trust again in us. Even myself are extremely moved and revamped to focus on Michelin's development. And we are very proud to be able to contribute to our company. Now as you know, each year, during our general meeting, we try our best to help you to know Michelin by addressing topics related to your company and its activities. And for today, we picked 2 things which we hope will fully attract your attention. The first one relates to the decarbonization of Michelin's activity. We already mentioned this several times this morning with Yves, with Barbara's presentation, the positive contribution to our planet, our environment and its inhabitants, which is one of our -- the fundamental aspects of our action, the fight against climate change specifically, which today is one of humanity's major challenges, to our -- it's one of the major challenges to our humanity. Loyal to its history, Michelin is eager to provide solutions and take concrete steps in order to reach carbon neutrality by 2050. Now we're going to be joined by Jennifer Bravinder, who is an expert in environmental matters within the sustainable mobility department. And we're also going to be joined by Claire Bourlange who's going to present the decarbonization of Michelin activities.

Thank you, Florent. Good morning, everybody. Hi, Jennifer. A few minutes ago, Barbara Dalibard mentioned the climate strategy, which is based on 2 priorities: climate transition and adaptation to climate change. As part of our climate transition, Michelin has defined a decarbonization plan for all its activities. So before we address this, Jennifer, could you maybe tell us what are the group's CO2 emissions? And what scope are we talking about?

Well, first of all, good morning, everybody. Good morning, Claire. Today, decarbonization is a major challenge for society and business. It is under close scrutiny and must meet international accounts standards. A stocktake of carbon dioxide emissions, also known as CO2 emissions, is updated every year. Emissions are distributed between 3 scopes. The first 2 scopes are emissions that come from the company's activities, which are under its direct responsibility. For the Michelin Group, CO2 emissions come from the energy used in plants, but also the energy purchased. In 2021, emissions linked with our industrial sites were slightly in excess of 2.7 million tonnes of CO2. In the third scope, we're talking here about indirect CO2 emissions that come from activities from all across the group's value chain. These emissions are our shared responsibility with other players. Each company within the Michelin Group must take action and campaign to reduce emissions that come from its activities in its value chain. In 2021, these emissions accounted for approximately 144 million tonnes of CO2. 88% of which came from the use of tires sold by the group.

Thank you, Jennifer, for this clarification. Today, people talk a lot about carbon neutrality and zero net. But what does it mean in concrete terms? And what are the activities concerned by the decarbonization plan?

Well, actually, these terms, carbon neutrality and zero net, designate the same thing, to reduce as much as possible CO2 emissions right now and then plan sequestration. That is the absorption of CO2 residual emissions to reach a balance. Michelin is aiming for carbon neutrality by 2050, with an intermediary stage in 2030. The 2030 group's decarbonization plan focuses first on the reduction of CO2 emissions across all production sites, in logistical operations, in the supply chain with suppliers of raw materials and components. Michelin also contributes to a low carbon mobility of people and goods with 3 priorities: first, the design of high-tech or very energy-efficient products throughout their life cycle; the second priority, the development of services and solutions to optimize the use and management of vehicle fleets; the third priority, new low-carbon mobility solutions, thanks to ecosystemic innovation, mainly with the development of the hydrogen industry.

Right. So as we've understood, Michelin has defined and published a decarbonization plan and objectives for 2030. Jennifer, can you tell us what are the objectives and actions taken to decarbonize our industrial tool?

To reach carbon neutrality by 2050, the group is seeking to halve the CO2 emissions of its industrial sites between now and 2030 relative to 2010. In order to reach this target, we have 2 levers. First, we need to use less energy by capitalizing -- building on best practices and relying on technical levers. We must improve energy efficiency, the energy efficiency of the industrial tool, for example, with better installation of our equipment, particularly curing presses, which accounts approximately for 25% of the group's industrial tools' energy use. But we must also recycle energy, particularly in heating systems. Second, we must consume better by evolving our energy mix, by using renewables and doing away with the use of coal, which is still in use today in 5 of the group's sites. Michelin already buys renewable electricity for its plants in Europe, for its plants in Asia and its plants in Brazil. There are many projects under review to increase the share of renewables.

Right. Well, if you're okay with this, Jennifer, now let's talk about indirect emissions of the group. What is the contribution of Michelin to the low-carbon mobility of people and goods, considering that the use phase, as you just said, accounts for 88% of CO2 emissions?

Well, did you know that 20% of the energy use of a passenger car and 30% for the heavy goods vehicle come from rolling resistance? The challenge for the group is to reduce even further rolling resistance of tires across all our products to improve their energy efficiency during the use phase. Michelin is continuing to innovate in the design of highly energy-efficient products and aims at 10% improvement by 2030 relative to 2020 whilst improving all key performances of tires. In order to ensure continuous progress in the reduction of the environmental footprint of its products, Michelin has chosen a comprehensive approach with the use of life cycle analysis tools.

Jennifer, what about residual emissions or remaining emissions? Does that pertain to logistics, operations, the group's supply chain and tires at the end of their life cycle?

Well, let's start with logistics. So we're talking here about the transportation of natural rubber and of our semi-finished products to the group's industrial plants and also the transportation of our finished products to -- into stores or to our customers. The group plans to reduce by 15% emissions from logistical operations by using various levers. First, we want to reduce our needs in transportation by positioning production as close as possible to our customers. Then we want to optimize transportation. Last, we want to use decarbonized modes of transport.

So Jennifer, we've started with logistics. Let's continue with supply chains. What can you tell us about that?

Well, as regards emissions that relates to the purchase of raw materials and components, well, they account for approximately half of remaining indirect emissions. That is why for several years, we have encouraged our suppliers to set themselves ambitious reduction targets in order to cover 70% of CO2 emissions related to our purchasing.

Right. And tires at the end of their life cycle, what about that?

Well, dealing with the tires at the end of their life cycle would account for only 1/4 of remaining CO2 emissions. The group plans to reduce that by 15% in 2030 relative to 2018. For Michelin, tires at the end of their life cycle have to be processed appropriately in order to ensure that they will not end up in the environment and that resources will be properly reused. The group is in favor of low carbon recovery solutions. As you know, thanks to recycling technologies, tires that are considered as used can give birth to new qualitative raw materials. But in this area, there are many challenges, and this requires partnerships. For example, Michelin manages a major R&D project in Europe on technologies to recover tires at the end of their life cycle. Michelin has also partnered up with Enviro, a Swedish company, to develop and industrialize on a large scale an innovative pyrolysis technology that can recycle tires at the end of their life cycle.

Well, Jennifer, maybe we can disclose the name of this European project you've just mentioned?

Yes, absolutely. It's the BlackCycle project.

Well, thank you. So in short in summary and by way of conclusion, Jennifer, what does characterize, according to you, the emission group's approach?

It's a long-term commitment. Emission reduction targets for CO2 emissions follow the Paris Accord of 2015 on climate. The group reasserted its commitment last year by joining the Race to Zero campaign that aims zero net by 2050. For more than 15 years, the group's approach has been based on the principle of transparency in our commitments, our methodology, our resources and our results, and this allows us to meet the growing requests of information on our climate strategy from customers, investors, NGOs and other stakeholders.

Thank you, Jennifer, for this very interesting presentation on decarbonization objectives of Michelin.

So thank you to the both of you. I wanted to say that you'll be able to take a breather now because I know that when we speak on this stage, it's quite impressive to speak to such an audience. And Jennifer, you might have heard, has a slight accent. She spoke not in her native language. So I would like to extend my gratitude to you for doing that. This reflects extremely, honestly, well on our group. Thank you. As we've heard, as we've seen, Michelin has started on its own decarbonation path and contributes through its technological leadership and the quality of its products to low-carbon mobility of people and goods. The quick rise of EVs, electric vehicles, bears a lot of promises. The Michelin Group has long anticipated this trend for decades. And for decades, we've been innovating to accompany this major transformation in mobility. To illustrate all this, I would like now to yield the floor to Bruno de Feraudy, who is the Head of the Automotive business line for Original Equipment. He's going to tell us how we are developing our offering to seize the opportunity of electric mobility.

Ladies and gentlemen, dear shareholders, the main indicators show us that global warming is on a much steeper increase than the 1.5 degrees objective that the Paris Climate Agreement was hoping for. All industries will have to work towards reducing CO2 and becoming more responsible as to their use of commodities. The automotive market also has a very important part to play to limit the impact on our environment. But what about the developments that we've observed over the last few years? What about the forecast and the estimates for the 10 years? Since the beginning of 2020, the global automotive market has been through major crisis, a series of crises, first of all, COVID; then semiconductors, which is still affecting most markets; and finally, the war in Ukraine, which undermines consumer confidence. Although the auto market has in crisis for close to 3 years, the sales in electric vehicles have been booming moving from less than 2 million cars in 2019 to close to 10 million EVs this year. Many factors explain this exponential growth, but let's highlight 4 of them, which confirm this irreversible [indiscernible]. First factor, during COP26, 30 countries reaffirmed their determination to phase out internal combustion engine as early as 2035 on many markets and in 2040 globally. Anticipation by carmakers of tightening of standards and this phase of penalties is triggering massive investment on their projects. Second factor, consumers confirm their interest for -- in electric solutions, which are very attractive and which, in addition, are heavily subsidized at the moment. Third factor, with electric vehicles, Chinese carmakers are given the opportunity to sort of circumvent their lack of experience with ICEs compared to their global competitors. And so they are able to compete immediately with European and North American leaders on their markets, first of all, and then globally. Finally, fourth factor, the new players coming from high-tech industries such as Tesla, Lucid in the U.S. or Xiaopeng and NIO in China are currently transforming the EV offering into an incomparable connected experience to the benefit of consumers. The market cap of these new players confirms that financial markets are now convinced that this transformation is afoot and will only accelerate from now on. Tesla and the new players benefit from considerable cash injection and are becoming a real threat for conventional companies. They will have to transform the industrial organization and as well as many of their vehicle platforms. So electric transformation has begun, even though certain questions are still unanswered regarding charging stations, the geopolitical aspects of critical materials and the recycling of millions of batteries. Finally, will states agree to subsidize a general rollout of EVs when we know that the cost could be around EUR 500 billion per year? However, clearly, for vehicles used for average travels with a reasonable load, electrification is the best decarbonation solution. So it's good news for our planet because all scenarios confirm that less than 10 years from now, 50% of new cars sold throughout the world will be all electric. Therefore, for a company like us, it is essential that we are ready to capture the value deriving from the exploration in the 19-inches-and-above market, which is going to travel to reach about 150 million in 2027. Then we have to understand the technological differentiation capability that we need to achieve if we want to meet the specific criteria of EV tires. Finally, the new service offering, we will have to develop because in 2030, close to 40% of first replacements will be on electric vehicles. Therefore, tire makers must meet new expectations from carmakers, distributors and consumers. What's the first expectation? A change in the performance of tires themselves. Electric vehicles are really refocusing the attention of consumers and carmakers on the global performance of tires. Four elements of performance will be particularly highlighted and will be a differentiating factor for premium players. First of all, wear and tear. Wear and tear is challenged by a higher weight of batteries, range from 200 to 700 kilos per vehicle and also by regenerative braking use to reload batteries. Without an improvement in the performance and life cyle -- performance, the life cycle of tires could be reduced by more than 20%. Then rolling resistance. The relevance of rolling resistance is increased for carmakers because they can claim longer battery range, but it is also important for consumers because they will get a better idea of the direct impact of the quality of tires on the range of the car. Third criteria, the load capacity of tires. It is fundamental to allow to carry the weight of batteries without generating bulkier equipment, which would limit the space available and/or would impact the design of the car and, therefore, the cost of transforming vehicle. Finally, noise. Rolling noise represents more than 70% of the acoustic level generated by an EV. One of the characteristics of the experience of EV users is acoustic comfort, therefore tires must be part of the solution in terms of reducing the noise. Obviously, all these performances have to be optimized without undermining the other performance criteria of tires, such as safety. Higher expectations will mean that only companies mastering all these aspects of the performance will profit from the trend. The second expectation on the part of users has to do with service continuity. For consumers, ease of access to an efficient charging station network is one of the determining factor in the experience that one has within an electric vehicle. However, tires will become the first and most important maintenance operation on vehicles. For carmakers, their ability to follow the -- and to meet the changing needs in terms of tire maintenance and tire maintenance requirements will therefore become a fundamental criteria to ensure user satisfaction and loyalty. The third expectation has to do with what I would call environmental consistency. We are hard put to imagine that we could decide to use EV, electric vehicles to protect the planet. And then at the same time, it wouldn't have the same level of requirement regarding the whole of the life cycle of all of the components in the vehicle. And the good thing about this is that the impact of more virtuous tire solutions can be shown and traced. Conventionally, consumers and carmakers have had competing expectations, but the shift to electric is reconciling those. On the one hand, carmakers will find it difficult to claim that they are environmentally responsible if they don't insist on the better wear and tear of their tires. On the other hand, for consumers, rolling resistance, which was a bit of an abstract concept, will become a much more concrete criteria because they know that it will have a direct impact on the range of their batteries. So these expectations on the part of carmakers, of consumers, of fleet operators constitute a unique opportunity for the Michelin Group to showcase its technology and its expertise. As far as wear and tear is concerned, Michelin is the undisputed leader on the market. The accelerated wear and tear of tires on EVs means that consumers will become more demanding on that front, and that is objectively good for us. On the one hand, we want to convince carmakers that the added mileage delivered by Michelin is a performance to advertise widely. But also, we want to differentiate ourselves from competitors who do not offer sufficient mileage overall. So to retain our leadership on rolling resistance, Michelin has launched 2 ranges of EV tires with Michelin e.PRIMACY and Michelin Pilots for EV, which offer the best in terms of rolling resistance without ever compromising on the other aspect of performance. These ranges have been recognized by main carmakers and further entrench our market share, which is 3x as high for EVs. The noise abatement solution marketed by Michelin is called Acoustic. It's a high-technology foam stuck inside of the tire. This solution reduces the noise level significantly within the [ habitat]. It is being adopted today by most carmakers, including Hyundai, who I first thought that it would develop their own system. So now with the Acoustic system, Michelin is the undisputed leader on acoustic performance in China, in Europe and in the U.S. Now the load capacity. With the so-called high load capacity tire, Michelin now has a solution to increase the load capacity of a vehicle by more than 300 kilograms without changing the external size of the tire nor increasing pressure. The solution allows carmakers to turn ICE vehicles into EVs by limiting the structural changes that they have to bring to cars. All these technology breakthroughs are made possible by Michelin's expertise in simulations. They make for shorter time to market, making it a product of choice for our clients. But increased tire performance will be attractive only if we can ensure service continuity, and this should have an important impact on the OE loyalty of Michelin's because it means a lot of aftermarket business. And increased tire performance will be attractive only if we can ensure service continuity for buyers of new cars during the whole life cycle of cars. With EV care, Michelin offers an embedded algorithm, which will ask consumers to know the wear-and-tear condition of their tires and to connect themselves to the most relevant servicing center adapted to their needs. This service brought to consumers will also help us strengthen existing partnerships with the carmaker networks and distribution in general. With more connected electric vehicles comes the possibility for us to use the data collected and to create new services for fleet operators, facility managers and even insurance companies. Our leadership in EV tires is in line obviously with our environmental strategy and with our determination to be a responsible company throughout the whole life cycle of our products. We must show our expertise but also make it indisputable so that our clients think of us as the supplier of choice. We have to prove our expertise. ADAC is the largest automotive [indiscernible] in Europe. Their latest tests have concluded that Michelin products emit 30% less particles compared to our premium competitors, therefore, proving once more our expertise on these questions. We must achieve undisputable performance -- environmental performance. By committing to fitting all of our products with RFID chips, Michelin commits itself to being more efficient in managing its flows and to tracing, proving and valuing our environmental performance. The shift to EVs is the perfect opportunity for us to become leaders in the 3Ps: people, profit, planet. We have the technologies and associated service capabilities. We have the global reach and the skills to fulfill Michelin's ambition to offer for the planet environmentally sound solutions, which our clients can in turn use to convince consumers. I suggest we now turn to the history of the Michelin Pilot Sport EV product, as told by our engineers. [Presentation]

I'd like to thank Bruno, who can now take a breath air as well. Presentation was excellent, as always. Bruno is in charge of our relationship with carmakers. They are going through a radical revolution of their own at the moment, which explains that we are seeing a lot of ups and downs in the market. But the magnitude of the restructuring of the auto market or the auto industry happening at the moment is just mind-blowing. So thank you, Bruno. Ladies and gentlemen, dear shareholders, I would like to extend again my gratitude for your presence here today -- physical presence here today for our shareholders' meeting 3 years after the last physical edition. So this annual meeting is always a high moment in our company, but being actually together for this is much better. So for more than 2 years, as Yves has evidenced earlier on, your group, our group, your group has been through a succession of crises without precedent: the health crisis, then the disruption of supply chains and the resulting inflation and now the conflict in Ukraine with its systemic consequences rippling through the world. These are very different crises, but they have produced cumulative effects and they are profoundly transforming the world in which we live. This is a challenge for your group. And it forces us day in, day out to be brave, to be resilient and to be agile. Regarding COVID, our absolute priority from day 1 remains to protect the health and safety of our staff whilst ensuring the continuity in the future of our business. At a time when Europe and the world experiences very serious events, the Michelin Group is committed to support its employees and to taking up challenges in the world today. In this turbulent environment, your group is doing better than just resisting. It is faring very well. I'd like to say how proud I am as CEO of Michelin when I see the way our teams are addressing the situation day in and day out. Thanks to everyone's commitment, thanks to the solidity of our brand, the robustness of its strategy, Michelin remains a very solid company. In this very difficult context in the face of unpredictable events, we are deploying the Michelin in Motion strategy, which I had the pleasure to unveil last year. At the heart of everything we do is the permanent quest for a right balance between the interest of people, the business performance and the protection of the planet. This balance lies at the heart of our DNA and has since the beginning of our company. It is our hallmark. With Michelin in Motion, we were keen to reinforce the strategy by putting it at the heart of everything that we do so that Michelin tomorrow becomes an all-sustainable company. We want to reconcile and grow the development and fulfilling of people to the benefit of our customers, the business and financial performance, which is essential if we want to invest and innovate the positive contribution to our planet and its inhabitants. Without whom, obviously, nothing can be sustainable. So value for people, financial value, value for the planet, 3 interconnected challenges which, together, in the past and guarantee today and will guarantee in the future, the sustainable growth of Michelin. This permanent quest for a new and better equilibrium and balance is also our compass for our future, tires and beyond tires. In tires, we want to remain leaders and keep capturing growth on the market. This means that we have to keep investing, imagining, creating to integrate more and more innovations to our tires day in, day out, we move a little bit closer to our vision of tire of tomorrow, smart about air, safe, reloadable and sustainable from A to Z. This is also what it means to be a leading company encouraging transformation and show the way forward towards more sustainability for all the industry. Michelin is ready for the great EV revolution because we've been readying ourselves for the last 30 years, thanks to the clear-sightedness of our forebears. Like Bruno de Feraudy just demonstrated, electric vehicles are much harder on the tire than ICEs. Michelin has already invested and already has not only all the technological expertise but also, and this is also very important, all the production capabilities to already offer the products that are most suited to these types of vehicles. This is a genuine opportunity for Michelin. Michelin's market share is 3x higher for -- in the market of EVs than internal combustion engine cars. The large investment that we've made over the last years put us in a favorable position to prepare for the next developments of the mobility market. In our second area of growth around tires, your Michelin Group offers a global connecting mobility offering for its service and solution offering. Our fleet clients know that they can rely on our intimate knowledge of their needs and on the expertise of the group to improve their operational performance. Thanks to the services brought by Michelin, they optimize their costs, they make their operations safer, and they, in the meantime, reduce their impact on the environment. Our services will be augmented and made even more efficient, thanks to the data that we can collect from the use of tires because -- and you need to know this, starting in 2024, all Michelin tires will be either connectable or connected. This unique combination of expertise and digital know-how already allows our clients to reconcile their business, human and environmental dimensions. Finally, beyond tire. Material expertise that we've developed -- that our researchers have developed over the last 130 years are finding a transition in many new areas and markets. Manufacturing composite to the most advanced expression, being the tire, requires to design, assemble and implement materials with very specific know-how. Thanks to the exceptional property that we can give them, the scope and the field of application of these composites is infinite. We find them in the critical components like seals or transmission belts, glues, resins or high value-added glues or in biosourced, sustainable or recycled material. These are composites that also allow for the combination of oxygen and hydrogen to create electricity in hydrogen fuel cells that our subsidiary, Symbio, is currently developing. Composite flexibles also allow for many different applications in the field of health. We provide innovative components in regenerative medicine, cell therapy. Our subsidiary, Solesis, is a leading actor on the market. For instance, we can create new ways to deliver medicine within the human body and to maximize its health effects. In each of these areas, and there are many, we keep acquiring and forging partnerships to do better and faster by combining skills, expertise and by exploiting complementarities. So we will succeed in an ever more complex world in an ever more technological world, provided we can transform ourselves from the inside at the same pace as our environment is changing. We are doing so and we will keep doing so by bearing in mind always the best interest of our clients because, in the end, it is they who will tell us if we've been successful. We have also defined 6 major levers of transformation for the whole of our company. First of all, if you had to take away only one, it is I am Michelin. As you know, we are adapting our organization so that everyone is empowered to be the own -- the actor in their development, to be at the helm of their fulfillment. Second of all, client focus. We want to make sure that working with Michelin is always easier and more satisfying for our clients. For instance, in Mexico, we are jointly designing the solutions that meet their needs. We are also more and more adapting our information systems to that of our clients so that they can have access to relevant real-time information. The third lever of transformation is called Agile Michelin. We are streamlining everything that can be in order to become more agile. We want to drive down our costs and optimize the way we operate to the benefit of all stakeholders in the company. We've already made structural progress. Our supply chain is improving and the control over our inventory and the quality of our inventory is also improving. The fourth lever of transformation is called accelerating innovation. There's no order of importance in the transformation. We are accelerating innovation by extending the scope, I would say, of innovation, by relying on open ecosystems to go faster. Therefore, our ResiCare subsidiary specialized in biosourced resins, now sells a new generation of glues, which has -- which is very efficient and has no more impact on health and the environment. And the fifth transformation is that we profit from a great wealth of data that we collect. And we use it to make better decisions to the benefit of our clients and partners. We marshal the whole power of artificial intelligence to anticipate market fluctuations, to reduce our delivery times, to improve price management, to improve market knowledge, market intelligence, et cetera, again with a view to protecting people. Data itself becomes a resource that we can sell. With the data-driven intelligence initiative, we are using the user data that we are collecting to improve safety onboard vehicle but also the safety of road infrastructure and to improve road -- behavior of drivers on the road. And finally, the last lever of transformation is that we are reducing our footprint and the environmental footprint of our products and operations. We are working with our clients and partners. We're investing in circular economy, in zero emission solutions, and we are reinforcing our positive impact on the planet. As an example, we -- over the last 2 years, we have increased the share of renewable energy to -- from 13% to 18% of our energy mix. And we are in line, as Jennifer told us earlier on, to reach 40% on average of sustainable material in all of our products by 2030. As you've understood, the Michelin in Motion strategy is well on its way and is already producing its first results. More than ever, we are betting on collective intelligence and an ecosystem-based approach for us to find better ways to move ahead. I fully trust in our company's capability to weather all present and future crises, to fulfill its ambitions and to stay the course in hard times. Dear shareholders, your group is changing, is on the move. You -- I hope that you've understood this and seen this. Michelin is a robust, efficient, value-creating company despite the current environment. Rest assured that we will keep acting tirelessly to make Michelin an all-sustainable company. We will take up the challenges that the world throws at us. And I thank you because your trust and your confidence is essential at this juncture for the company. And thank you also for your attention. As you know, this is a shareholders' meeting. So I would like to turn to Eric Andrieux who is going to give you the highlights of the 30 resolutions you are being asked to vote on.

Thank you, Mr. Chair. Ladies and gentlemen, dear shareholders, let me remind you that all this material was published within legal deadlines. I'm going to give you a brief summary of resolutions as the entire text was already published under the general mandatory legal notices. The entire text of resolutions with the detailed reports of the managing chairs -- with the managing chair at the Supervisory Board were already published on our Internet site on the 1st of April and sent to each shareholder in the notice. In accordance with regulation, we gathered your votes -- your paper votes until the 11th of May midnight and electronic votes until yesterday, 12th of May, 3 p.m. We will first put to your vote ordinary resolutions and then extraordinary resolutions. As regards ordinary resolutions, resolution 1 pertains to the approval of FY 2021 annual statements, which show a profit of EUR 584,192,000 for the holding company, Compagnie Générale des Établissements Michelin. Resolution 3 pertains to the approval of the group's consolidated statements for 2021, which show a net profit of EUR 1,845,067,000. Besides, as no new regulated agreement was signed in FY 2021, in resolution 4, we propose to acknowledge that there's no such agreement to approve. With resolution 2, we put to the vote of shareholders the payout of EUR 4.5 per share, which is a payout ratio of 42% of the net profit, excluding nonrecurring items. The dividend will be paid out on May 19, 2022. In order to avoid dilutive effect on shares, no payment in shares is being proposed. Resolution 5 pertains to the renewal of the authorization given to the company to use its own shares as part of the redemption scheme for less than 10% of the share capital for 18 months. The maximum unit purchase price was brought from EUR 180 to EUR 220 in order to take into account the strong rise in the share price. The description of this new scheme is in Chapter 657 of the 2021 Universal Registration Document. The proposed authorization will not be able -- will not be -- cannot be used in times of public offering. The implementation during FY 2021 of redemption -- effective redemption authorization in FY 2021 is detailed in Chapter 656B of the Universal Registration Document of 2021. The Chair of the Remuneration and Nomination Committee, Mr. Jean-Pierre Duprieu, presented earlier on the pay policy for executive directors established by the managing partners and the Supervisory Board of the company for 2022. As a consequence, we put to the vote of the Ordinary General Meeting of the compensation policy of managing partners, on the one hand, the resolution 6; and of the Supervisory Board, resolution 7, for FY 2022. The main characteristics of this policy are detailed in the corporate governance report reproduced in Chapter 33 of the 2021 Universal Registration Document. The Chair of the Remuneration and Nomination Committee also presented earlier on the elements of compensation owed or attributed to all corporate offices of the company. In 2022, the general partners and the Board of -- the Supervisory Board of the company put to the vote of the Ordinary General Meeting in resolution 8, information pertaining to the element of compensation of corporate officers paid in 2021 or attributed during the same FY. In resolutions 9, 10, 11 and 12, individual elements of compensation paid in FY 2021 or attributed during that year to the executive directors of the company for the term held during that year. These resolutions pertain to Mr. Florent Menegaux, the general -- the Managing General Partner; Mr. Yves Chapot, the Managing Partner; Mrs. Barbara Dalibard, the Chair of the Supervisory Board since May 2021; and Mr. Michel Rollier, Chair of the Supervisory Board until May 2021. These compensation elements were established in accordance with the principles described in the compensation policy presented in 2021 for this FY in the report on the corporate governance -- the report on corporate governance that is included in Chapter 3, 4 of the reference document for 2020. As the Chair of the Compensation Committee and -- the Chair of Compensation and Nomination Committee said Mr. Thierry Le Hénaff, Mrs. Monique Leroux and Mr. Jean-Michel Severino's terms have matured, will expire at the end of today's general meeting -- Ordinary General Meeting. The review and selection process of candidatures and the presentation of candidates will be detailed in the report of the Supervisory Board of draft resolutions. In accordance with the company's Articles of Association, only the Supervisory Board, the nonexecutive body of which 89% of members are independent, can only this -- only can recommend to the General Meeting, the candidatures of members that will represent as shareholders in the Board. This is an essential guarantee of the separation of powers. None of the general partners will be involved in these choices and can't take part in the votes of nominations during the General Meeting. At the end of this process, the Supervisory Board decided to unanimously recommend, and members concerned did abstain, recommended to ask the Managing General Partner and to propose to the general meeting in resolution 13, the renewal of Mr. Thierry Le Hénaff's terms; in resolution 14, the renewal of Mrs. Monique Leroux's term; in resolution 15 the renewal of Mr. Jean-Michel Severino's term. These nominations are proposed for 4 years, that is until the end of the general meeting, which will have -- to be pronounced on the financial statements of the year that ended on -- that will end on December 31, 2025. The Supervisory Board proposed -- wanted to propose the general meeting reassessment of the compensation for members of the Board in order to take into account a number of evolutions, as described by Mr. Jean-Pierre Duprieu, mainly the rise in the number of Supervisory Board members with the 2 new members, the creation of a new committee, the Corporate Social Responsibility Committee, the CSR Committee. The annual amount would move from EUR 770,000 to EUR 950,000 for FY 2022. And that will be paid in 2023, main -- a large share of this would depend on the regular attendance members to meetings of the Board and its committees. Resolution 17 and 18 pertain to the nomination of statutory auditors such as recommended by the Audit Committee. Mrs. Barbara Dalibard reminded you earlier on in her presentation the activities of the Supervisory Board, the process implemented for these appointments. Likewise, as for the nomination of Supervisory Board members, the managing partners are not part of the nomination process for statutory auditors. After resolution 18, I'm now going to sum up the other extraordinary resolutions. Resolutions 19 to 22 pertain to the delegations of authorities or authorities pertaining to capital increases, which maintain shareholders' preemptive subscription rights with the evolution of the shareholders' preferential subscription rights as part of offers defined in the first paragraph of Article L4112 of the Financial Monetary Code pertaining to private investments, and which includes the setting of issuing price for capital increases with the evolution of the preemptive subscription rights. These delegations and authorizations will be effective for 26 months as from today and will nullify any previous delegation. The detailed information pertaining to these projects are included in the report of the Managing Chair, are in the draft resolutions included in the Notice of the 2022 General Meeting and in Chapter 71 of the 2021 Universal Registration Document. Resolutions 23 to 26 pertain to the delegation of authorities related to capital increase, in other words, increase in the number of securities in case of excess demand, capital increase with incorporation of retained earnings, profits or bonuses, capital increases to compensate contributions in securities in case of a share exchange offer or contributions in kind, capital increase in seller securities reserved for employees, members of corporate savings schemes. These delegations and authorizations are effective for 26 months out from today and nullify any previous delegation with the same subject matter. The previous resolutions presented little information, and this is to be found in the Managing Chair's report. Resolution 27 sets a nominal amount of EUR 125 million which, for your information, is nearly 35% of the share capital with a limitation of the overall capital increase amounts that could be carried out by virtue of resolutions 19, 20, 21, 22, 23 and 25. Besides this resolution sets EUR 2.5 billion, the overall capital debt securities issuance, that give access immediately or eventually to the share capital that could be carried out by virtue of resolutions 19 to 23. This resolution renews the caps that were decided by June 2020 general -- Combined General Meeting. Resolution 28 authorizes for 24 months managing partners to reduce the share capital by canceling shares acquired as part of the authorized share redemption scheme. This delegation replaces the identical resolution granted by the Combined General Meeting of May 21, 2021, which was not exercised during FY 2021. Resolution 29, divide by 4 the face value of the CGM share, decreasing it to -- from EUR 2 to EUR 0.50, thereby multiplying the number of shares by 4. This division of the share nominal value would allow us to continue the diversification of our shareholder base. The reduction of the face value would become effective as from the date set by the management within the 12 months following this meeting, would have no consequences on the double voting rights attached to shares within the conditions defined by the Articles of Association of the company. Last and would have -- would lead to no formalities and no cost for shareholders. Last, resolution 30, pertaining to powers to complete formalities in relation to this Combined General Meeting does not require any specific comments. Thank you.

Thank you for this -- that is quite a feat, and I can see that you're relieved that it's over, and I can understand. Thank you, Eric. I would like to now open the general discussion part of this meeting, and we are going to take your questions. And I inform you that as per the law, the answers to the written questions that we received prior to the meeting have been published on the internet website of your company. I suggest we start with the questions from the room, and we will then respond to the questions that we received on our dedicated e-mail address. First of all, I'd like to turn to the members of the Shareholder Committee of Michelin. I think we have roaming mics in the room.

Good morning, Mr. Chair. I am Emmanuel Zanca. My question is the following: high-technology materials are a differentiating criteria for the Michelin Group compared to their competitors. What are the most promising technologies at this moment?

Thank you. Thank you for your question, sir. I suggest we turn to Maude Portigliatti. In the front row, I mean, we've mentioned the Supervisory Board with Sages, the scrutineers, and you have the ExCo members that I would like to turn to, to answer some of your questions. Maude Portigliatti is in charge of the high-technology material business line.

Florent already mentioned some of the more promising technologies, and we've seen them in the pictures on the screens. I think we have a whole range of products that are promising because we are a very demanding technological company, demanding in our research. Our tires must have exceptional properties because tires require drastic requirements. And same goes for our resins, glues, the resins composites that we have developed, which can be our great assets for other demanding applications. And we have another range of technologies which, I guess, are the result of our innovative boldness when we work on the polymers which are biocompatible and biodegradable. When we -- we started from scratch and we contributed to additive metal manufacturing, which is a technological industrial breakthrough really appending the industrial flows. And when we've created the -- our own kind of fuel cell, these were real breakthrough. So these are the ones that I wanted to highlight.

Thank you, Maude. Do we have other questions?

Good morning, Mr. Chair. Several factors such as the war in Ukraine and the predictable nature of the pandemic contribute to making the market an uncertain environment. Coupled with the uncertainty in interest rate, will it affect Michelin's strategy regarding its debt, its debt ratio?

Thank you. Thank you for your question. I would like to turn to Yves for an answer on this question.

The current situation obviously needs us to being very cautious in terms of the volatility of the market. But I would just like to remind you that at the end of 2021, our debt ratio was 18%, less than 1 year of our cash flow generation capability. And most rating agencies rate us A-, so very robust. Furthermore, our financial debt -- current financial debt has a residual duration or maturity of more than 9 years. So we have the means to weather fluctuations -- strong fluctuations in the market, as we showed in the spring of 2019 when COVID hit and a lot of global markets just floundered.

Thank you. New question?

Good morning, Mr. Chair. I am Carine Poty. Mobility as a whole and especially cars are going through major changes with car-sharing schemes, obviously, new energies being used. In such a context, what are the decision criteria that you're using to guide your research and innovation?

Thank you. I would like to turn to Eric Vinesse, who is our Head of Research and Development. He's going to answer this question.

Thank you. Mobility, as we know it, is changing. As you said, the shift to electric of cars means that we need evermore efficient tires, as was described earlier on. So our research effort aims at being more innovative from a technological standpoint. From a material standpoint, we want to bring solutions that can guarantee radical changes in wear and tear, rolling resistance, load capacity and the overall resistance of our products. Beyond the shift to electric, there are other transformations afoot, shared mobility, connectivity. So we are keen to have a compass that will guide our research and innovation work, that's the video concept here in the room. Around this focus, we have a certain number of programs such as Uptis on the resistance of tires against punctures. The notion of sustainability -- of sustainable material as well with our 2030 objective of 40% of sustainable material -- biosourced material and 50% by 2050 of biosourced or recycled material. So that means a huge change and a huge transformation of how we do things. And the last element is our ability to re-impress new material on the face of the -- part of the tire that is in contact with the road. That's to ensure its longer life, so that's yet another challenge for us.

Thank you, Eric. If we have other questions from the room, let us hear them. I would like to ask you to raise your hand so that the people who are distributing the microphones can see you. And then I would like to ask you to rise and please state your name when you're given the mic. I saw a hand raised here. You can stand up in advance because we have several mics.

Mr. Chair, ladies and gentlemen, I am [ Mr. Daturi ]. I'd like to know Michelin's current position or standing compared to the other major car tire makers in the world. Is the gap being bridged with your main competitors?

Well, there are several answers that we can give you to your questions. So I guess I'll answer part of your question, and Yves will answer the other part. When we compare our group to our competitors in tire making, Michelin is a leading company, depending on the foreign exchange rates with Bridgestone -- we are co-leading the market with Bridgestone, the Japanese competitor. Now regarding the other parts of the market, it's difficult to know who is a competitor for high-technology material or technologies or solutions. Michelin is kind of a unique player in the market because the competition landscape is very fragmented and is currently in the process of being consolidated. So that's one answer I could give you. Now in terms of market shares on the various markets, it's a very diverse landscape. I mean we have large positions on our historical markets or on rather young markets, young geographies, such as China, where Michelin is making headways very quickly. And there are other regions of the world where our market share is much lower because we've been there for less time and because the markets are not receptive as of yet to the talents and products that we have to offer. So that's maybe part of the answer that we could provide you with. And then Yves if you want to add to this?

Well, the tire industry is still very fragmented, deconcentrated business. I mean only in China, there are about 100 companies, tire-making companies. Bridgestone, obviously, is, I guess, the most similar, the most comparable company because they're on the same markets as we are. So -- and our performances in 2021 were slightly better than Bridgestone. We stood at 12.5% of operating margin. Bridgestone was 12.1%. So we are 2 equivalent companies, and we've been the 2 leading players in the market for a number of years. The other significant players, such as Goodyear, Continental, who are doing business throughout the world, who are less present in specialties, but then you have other players who are much more specialized because of the regional presence or because of their business sort of specialization.

Question 7 and then question 6.

Thank you for organizing this meeting. I am [ Mr. Valentin ], I live in the [ Artois ] County of France. I have 2 questions. The technical words that you use are always in English. I like to speak English and -- but I'm French. And when I'm in France, I'd like to speak French. So the second part to my question is the following one. So as we know the Presidential election just happened in France, we've talked a lot during the campaign about the electric vehicles, about the energy transition. But we know that 10 to 20 years from now, the rise in the number of EVs will mean that we will need that much more electric energy. So I'm sorry for those who do not it see my way, but I think that the nuclear generation of energy or electricity will always be part of the French energy mix and landscape. Earlier on, you showed us films of electric vehicles. But where I live, I was almost run over twice by an electric vehicle because it was extremely silent. So I remember, I was walking watching a window pane and I was almost run over. So silent is good, but complete silence can be dangerous.

So regarding the first part of your question regarding the use of our -- of acronyms, it is true that we use English acronyms, but do bear in mind that Michelin is an international company. And the language that is used a majority of times internationally is the English language. So there are a number of things that we drive -- that we write in English and even though we are here in France, as shareholders, we represent a company that is a French company, which is also profoundly international. Just as a reminder, 15% of the business of the group is in France, but the rest of it is international. So as you know, the international language is English. Your second question regarding electricity. Well, I'm not sure that Michelin is the best stage where you can deliver your message. I agree when you say that the shift to electric will mean a revamping of the whole infrastructure to distribute electricity and will mean also that we need to have access to green decarbonated energy. And we're not there yet, even though in France, we have decarbonate -- access to decarbonated energy through nuclear plants, however, we're still insufficiently equipped to accommodate a rise in demand and the shift to electric vehicles. Now regarding the last part of your question regarding the accidents that can happen because of the silent electric vehicles, it is certain that we are going to have to change the way we interact with cars on the street because the sound of cars of engines has always been something that we've been aware of and now it's going to be a very different acoustic environment. I think that we'll have to adapt rather than turn our backs on electric vehicles because I think they do bring a lot of benefits. But I agree with you, we have to remain safe. So we'll have to think about a new architecture for public space, for cities. We'll have to see how each and every one of us has to behave maybe differently in public spaces. Michelin will make a contribution, but I think we have to remain humble because Michelin cannot solve it all. Question number 6, and then number 2.

I'm [ Bob ] I'm a former employee of Michelin. And I would like to have some explanations as to the fact that you are showcasing here, the tire of the future on the stage, and it has no more air in it, and air is the most frequent and cheapest material to make tires at the moment. So I wonder what has led Michelin engineers to design an airless tire. Does this new structure present a higher performance potential than current tires?

Scott Clark, could I turn to you for further explanation on this topic? But you're right. Air, I mean tires, it's an envelope around air and air works for us inside of a tire.

Good morning, everyone. You're right. I mean the good thing about current production is that air is free, and widely available. However, an airless tire is a great opportunity to avoid puncturings and to ensure mobility in a secure and safe way. But it is true -- it is a difficult topic. Our engineers are working on very innovative material to try and achieve security and performance, safety and performance whilst limiting mass in order to have good rolling resistance with a lighter tire. It is a technical challenge, and it is a great motivation for our technical teams, but we are greatly encouraged by the progress made with Uptis. As I'm used to saying, if we can make an airless tire then Michelin will be the one to do it.

Thank you, Scott. I forgot to introduce you. Scott Clark is in charge of the #1 business division. So all global and regional brands of cars. Just to add to what Scott said, this -- the picture that we showed is the addition of all technologies that we're working on wrapped up in one object. But this object is not going to replace all tires. However, we are going to find one or several of these technologies in most tires. So the anti-puncture module that you can find in this tire, I mean, we'll still for decades have tires with air because, as you said, this is the cheapest and surest way, safest way to manage a certain number of elements of performance. We have question numbers 2, 7, 8 and 6.

My name is [ Dominique Borgo ]. I'm an employee and shareholder. I wanted to ask you about the group's decarbonization objectives. We saw in the presentation that on industrial sites, the agenda is to reduce between now and 2030 CO2 emissions by 50%. And that this is combined with a number of plans of action, which is very good. You're going in the right direction. However, as regards to transport, even though it's part of Scope 3, which is more difficult to address, we can see that the group's ambition is only 15% of emission -- CO2 emissions reductions. My question is, is that enough considering the urgency of the situation, as pointed out in the last IPCC report?

Well, the Head of Supply Chain activities is going to answer. Yves?

Well, minus 15% is our ambition for the shipment, the transportation of our products. This mainly reflects levers that we have at our disposal. That means shipping less product. So because our products go through stores, they're not delivered directly on our customers' premises, so we want to abolish intermediary inventories. We want to use more intermodal mode of transport. We want to use the rail when possible. And we want also to [ ride ] on the loading processes of trucks in order to transport more goods in lorries. And this does not even include progress that will be made simultaneously by [indiscernible] themselves because, of course, between now and 2030, vehicles will use increasingly cleaner or clean energy, that will be fully carbon-free or decarbonated or will be used fuel cells or batteries. So this will come on top of it. 15% results from the levers that we have in our own hands. Yes. And also for your information, we use natural rubber to make our products. But unfortunately, we won't be able to do away with transport service, except if global warming has tragic consequences, but rubber grows in tropical areas. Unless the South of France becomes a tropical area, we will need some shipping, some transportation to get our products.

Question 7, I think.

Hello. I'm an individual shareholder. I'd like to know why you decided to scrap Formula 1 in competition because you seem to benefit from the progress made in these tires, especially the Pilot.

Scott Clark. So for Formula, Scott Clark is also in charge of competition activities. He is going to answer you. Well, ideally, we would need microphone to stay here at the front. That would be good.

Thank you for your question. For us, the key element of motorsports is to be a laboratory for sustainable mobility going forward. We use motorsports today to showcase our sustainable materials in tires and also their longevity. And quite honestly, well, it was our objective to decarbonize Formula 1 to Formula E. This was a strategic value for us. But sometimes, we have competitors that are ready to pay a lot or too much to be sponsors of series like this. So we decided to give up on this, but we will find other forms of motorsports that we can use as laboratories for -- as a test bench for innovation. We do this with the Le Mans 24 Hour race [indiscernible] in order to show the innovation of our products until the end of their life cycle. We'll do this with other forms of the sustainable motorsports going forward.

Thank you very much, Scott. Question 8.

Thank you, Mr. Chair, [indiscernible]. I'm a small individual shareholder. I was not an employee of the group. Now you might say that COVID has had consequences. Well, it's nearly over now. But 2 or 3 years ago, because we're talking about the life of the company, 2 or 3 years ago, some site visits were organized around the head office. And I read in the press that for employees, there were visits of the new head office of the Ladoux site, which had been reorganized, but nothing for us. So are you considering reintroducing all the traditions? I know that after every general meeting in the past, there were always sites visits.

Well, thank you very much. Let me hand over to Adeline Challon-Kemoun in charge of engagement for the group.

Good morning, sir, thank you for your question. It is indeed because of COVID mainly that reduce -- we reduced the number of visits. Now we're starting to welcome again some visitors across a number of our sites. And obviously, we'll still take into account your request for individual shareholders.

Very well. Well, you probably saw that -- I'm sure that with the Shareholders Advisory Committee, we can make arrangements. Just a specification about COVID, in Western Europe and in France, specifically, we are sort of coming out of the crisis, but it's really at its height in China. So COVID is far from over across the globe. Question 6.

Good morning, Mr. Chair. [ Philippe Vase ], I'm an individual shareholder. Just 2 quick questions. First, about the steps that your company probably took to secure its suppliers. I'm thinking here of rubber. I'm not -- I'm no tire specialist, but like you, I suppose, rubber is still used to make tires. Second question, what about your P&L? How sensitive is it to currency swings, currency fluctuations? And what steps did the group take in this area?

For the second part of your question, I hand over to Yves. For the first part, concerning the -- the securing of our supply chains, we have an ongoing process, sorry, but yet another English acronym, business continuity management, which means that we are constantly looking at how we can guarantee the continuity of the group irrespective of our supply circumstances. Another specificity for more than half of our business, we now depend on fossil industries to make synthetic rubber and not natural one. Natural rubber remains still a substantial part of our activities. As regards to the -- well, securing our supplies, we constantly reassess them to ensure that we don't have only one supplier in one geographical area for one type of component that could make us extremely vulnerable in terms of operations. But something that we did not really anticipate the fact that modern world could again be a scene of violent war. So we have to respond very quickly to find alternatives. As Yves said, for black carbon -- carbon black that mainly came from Russia, to supply all our European sites. So today, structurally, we are desensitized to Russian supplies, so to speak. We now have a choice between several sources of supply. However, as we operate in 174 countries across the world, we are by far the most globalized company of the CAC 40, French CAC 40. We depend on a world which works or functions like one single entity. So today, we do feel pressures, tensions in various geographical areas. Well, this can exacerbate or drive up costs. And this may encourage us to operate differently. We depend very much on the fact that the world operates and it is not limited to only 1 or 2 geographical areas.

As regards to currency fluctuations, well, first of all, we are very much exposed to the U.S. dollar. More than 35% of our invoicing is denominated in dollars. And we buy commodities, raw materials, that also have an underlying value in dollars. So we have a strategic natural hedge. So we manage this strategically. A few years back, well, quite some time ago, the group decided to localize its second tire producing plant for mining in the United States because the market was in dollars. As regards to the tactical aspect of things, for example, our American subsidiary, where our American subsidiary will pay us -- will payout substantial dividend. Well, we've been hedging this since October. Then in terms of operations, all group's subsidiaries hedge their accounting positions with our group financial center, which also hedges our net position with the markets.

Thank you, Yves. Unfortunately, I'll have to take the last question from the floor and the auditorium because to ensure fair treatment of shareholders, we also have to take questions that were asked on website as this general meeting is digital. This is no English acronym, physical and digital. So question 9, it came before the other ones. And if we have time, we'll come back to questions 1 and 3.

[ Francois ], thank you very much, Mr. Chair, for this very interesting meeting indeed. With the current context and the war in Ukraine and some potential risks in China relative to Taiwan, a country where you rightly built plant with some prospects for the future. So the fact that a country like China is perfectly comfortable with not abiding by Western Democratic rules and sometimes trade rules -- so no regard for rules. Don't you think that's a risk for the company going forward?

Thank you for your question. I'll give a short answer. It's a different way of addressing the previous topic. Well, certainly -- well, first of all, you need to know that ethically, the group only starts operations when international rules allow it. That's for starters. Second, we only sell to democratic militaries for military activities. You mentioned one country. I know other countries that are democracies, but which themselves do not abide by international rules. So we -- this is always in our minds, this question. So we keep this under constant scrutiny and we try to assess when it's desirable, and that's something we constantly do with the Supervisory Board and the Board of Directors, the Audit Committee, we try to ensure that the way we operate is conformed to our values, but also to the way the world changes. As regards to China, we are aware that there's an inherent risk with being in China. We believe that this is an acceptable risk today. Of course, it may change, and we'll adapt. Right. Let's now take questions. Well, unfortunately, we'll come back to questions 1 and 3 once we've exhausted questions -- digital questions. I read the question. What are you doing to recruit and retain your digital talents. I'd like to turn to Jean-Claude Pats, who is the Head of HR for this question.

Good morning, everyone. Obviously, digital skills are new for Michelin, and these are talents that are quite different from people that we've been used to hiring. So it means going to places that we need not necessarily go before. And in a certain number of cases, we need to offer them pathways through the company that are a bit different from what we used to offer. So this is a general answer, but more concretely, what does it mean? Throughout the world, well, several places in the world, we have set up divisions that are completely dedicated to digital, Lyon in France, Charlotte in the U.S., we've really created so-called dedicated skill centers for the digital skills. And so far, when I see the way that these teams are growing and developing, I think we've been able to recruit and retain the right people.

Thank you, Jean-Claude. Another question, the IPCC just released an alarming report on climate. Can the group accelerate its investments to reduce its environmental footprint? I'd like to ask Jean-Christophe Guerin to shed light from the industrial angle on this question, then Yves and I will give additional information on the other activities of the group.

Good morning, everyone. The question of accelerating our investments into the decarbonization of our plants is something that we are contemplating. We have created the so-called electric curing press technology. We've been hard at work on this for 15 years. It's a very complex technology that we've patented, that works very well on car tires, heavy-duty vehicle tires, for 2-wheel vehicles, for engineering work tires. So it reduces by 5 -- factor of 5 the consumption of energy for the curing part. So this is really a sea change, and we are seeing how we can roll this out more globally because the energy prices have been multiplied by 5 lately in Europe.

Also, additionally, if you bear in mind that we always want to strike the best balance between on the one hand investing and on the other preserving the cash position of the company. And so what with the current inflation rate, this is a tricky balance to strike, and we're always in the process of striking this balance to strike the right pace and to be ambitious on decarbonation and on the generation of cash flow. Another question. What is Michelin's vision regarding the industry, the future of the industry or the manufacturing industry, sorry, in France? Well, it has to be buoyant and promising. France has a great many assets. It has [ core ] infrastructure, very qualified workforce. The experience one often tends to forget that we have a considerable cumulated experience. We've had manufacturing industry in France for centuries. It is true that in Europe, France is one of those countries where the manufacturing industry has not been regarded as importantly as before. And we are coming to realize that not everything can be digital, not everything can be service based, we have to [indiscernible]. There are concrete things. The very concrete matter are matters for the manufacturing industry to ensure. We are investing in France. Michelin is investing to develop hydrogen fuel cells. The 3D digital printer -- our activity for 3D digital printing is happening right here in Clermont-Ferrand. We keep investing, developing through young industrial start-up companies, we mentioned engineering schools earlier on. I'm looking at [indiscernible] and about glues and industrial glues, the first innovative -- the next generation of innovative glues of our group will be manufactured in France. So Michelin is very present in France. Michelin hires 18,000 -- has 18,000 employees in France. Also, the nature of the activities or the operations that we carry out in France may evolve. We have to take into account that the cost of labor in France, which means that we cannot produce everything in France. Also in Europe, regulatory and market developments in Europe mean that we are constantly adapting our production in Europe and in France, but we are fully committed to France. It was the last question online. Okay. So coming back to the questions in the room. I think we had questions 3 and 1. Question 3.

I am [ Annan Greer ] I am an individual shareholder and have been for a number of years, but I've never worked for Michelin. However, I'm what you could call a sentimental shareholder not necessarily out of financial interest. And the sentimental attachment, I guess, because Michelin was always an advantage to me when I traveled the world. When I mentioned Clermont-Ferrand, people just didn't know what I was talking about, but when I mentioned Michelin, it lit light in the eyes of my -- people I was talking to. For instance, in the north of Quebec, I met people who carried me around like a Gallic fighter of your, because the people I met there were drivers in the north of Quebec and who are very proud to meet someone who is coming from the town of Michelin, the tires they were using. So Mr. Chair, I would like to say that I'm very impressed to see that you are holding this shareholders meeting here in Clermont-Ferrand. You paying a lot of attention to your town, to your city. And when we are in Clermont, mobility remains a problem. It is very difficult for me to have my friends come over. They tell me, "We'd like to see you, but it will be too long a trip for us." So thank you very much for keeping -- supporting your region through -- obviously this is your region of birth. And if you could do more to help us be less isolated, I think Michelin is a great hope for us to succeed.

What I can tell you is that we are extremely proud of our roots. And here in Clermont-Ferrand -- Clermont-Ferrand is part of our DNA. We are invested in the growth of our region. In the coming weeks and months, you will be -- you will see new developments in the Cataroux plant in Clermont-Ferrand. We've invested EUR 300 million in a state-of-the-art research center in Ladoux. So it's not exactly Clermont-Ferrand, but it's arguably close, that's for the local experts. But we're heavily invested. We're very proud of our roots -- be the family roots or geographical background. Now regarding the isolation of Clermont-Ferrand. Every time I meet with public representatives I tell them about the train lines. When I see the Head of the French Railway Network, he knows that I'm going to talk to them about that. When I meet with people from Air France, the airline company, I tell them that it's not normal that we only have 2 flights a day from Clermont-Ferrand to Paris, knowing that we are an international business. So every day, you have tens of people who leave Clermont-Ferrand, leave Michelin to go to fly to foreign countries. So I keep lobbying for this as much as I can, as much as we can. Question number 1.

I am [indiscernible]. I am retired. I have a question regarding the Davydovo plant. First of all, from the economic standpoint, do you know the impact of the end of business in the Russian market? And from a human standpoint, I would like to know how we can justify the brutal shutdown of that plant in the context of complete propaganda and disinformation in Russia. And what is the level of relationship that you would have still with the staff at Davydovo.

Thank you for your question. Please be aware that we've never acted brutally with our staff in Russia. It's Michelin staff, for one thing. I would like to turn to Benedicte Bonnechose, who is supervising the transport activities, but also in the European region overall, which Russia is a part of.

First of all, thank you, well, for your question, which really lies at the heart of our current concerns. This is a very difficult situation. We are eager to remain close to our staff, especially in Davydovo. I went to Davydovo in November of last year. I met with extraordinary workers, most of them spoke French. I was impressed. They are deeply attached to the company. And a few months after that, mid-March, I had to announce them -- in front of them that we had to suspend our operations there. I think you can imagine how emotional obviously I was, but obviously, how difficult and sensitive the situation was and is for those staff who have been working for Michelin for years. I have received a lot of questions from Michelin staff here in France, asking me how they were doing, how our people were doing in Ukraine. I will not say more. But please be aware that we are paying utmost attention to their fate in Ukraine and in Russia.

And currently, the operations are suspended. Yes, we have not cut and run, we have suspended our operations, and we keep paying the salaries of all of our people in Russia. So I'm being told that this is all the time that we had. We are now going to move to the vote of our assembly. And I would like to turn to Mr. Andrieux, who is going to give us the quorum and who's going to remind us how the electronic vote is working.

Thank you. Thank you, Mr. Chair. I will remind you that to be quorate, we need to have the legal part form of 1/5 of voting rights. So according to the report that I have, the meeting is quorate because out of 178,350,947, we have 99,642,969 shares. So we exceed the quorum by more than 35 million shares. Regarding our general -- our shareholders meeting in extraordinary formation, the quorum is 1/4 of voting shares. Therefore, we have a floor of 44,587,787 shares, which is well exceeded because we currently today have 99,672,070 shares. So under the circumstances, the meeting is quorate. So let me remind you that you will be voting through an electronic tablet. And we have a short video to remind us all how the vote is carried out. To vote, you have been given a tablet. It is your own tablet and can only be used during this meeting. When you hear the announcement of a resolution, the voting window will pop up immediately in your screen, even if it is on hold. [Presentation]

If your tablet is not working, please raise your hand and someone will give you a new one. All right. Let us turn to the vote of the resolution, starting with the ordinary resolutions, which needed to obtain the majority of votes, 50% plus 1. Resolution 1 approval of the 2021 annual statements. Voting is open. [Voting]

Do not forget to confirm your vote by pressing okay. Voting is closed. This requires some time. We're just waiting for the electronics to compute the results. Resolution 1 has been adopted at 99.99%. Resolution 2, allocation of the 2021 profits and definition of the dividend. Voting is open. [Voting]

Voting is closed. Resolution 2 is adopted with 99.82% of votes. Resolution 3, approval of the 2021 consolidated statements. Voting is open. [Voting]

Voting is closed. Resolution 3 is adopted with 99.99% of votes. Resolution 4, regulated agreements. Voting is open. [Voting]

Voting is closed. Resolution 4 is adopted with 99.99% of votes. Resolution 5, authorization for managing partners or one of them to allow the company to use its own shares, except in case of a public offering under the share redemption scheme with a maximum purchase price of EUR 220 per share. Voting is open. [Voting]

Voting is closed. Resolution 5 is adopted with 99.75% of votes. Resolution 6, approval of the compensation policy applicable to managing partners. Voting is open. [Voting]

Voting is closed. Resolution 6 is adopted with 94.70% of votes. Resolution 7, approval of the compensation policy applicable to members of the Supervisory Board. Voting is open. [Voting]

Voting is closed. Resolution 7 is adopted with 99.59%. Resolution 8, approval of information on the compensation of corporate officers. Voting is open. [Voting]

Voting is closed. Resolution 8 is adopted with 98.61%. Resolution 9, approval of Mr. Florent Menegaux's elements of compensation paid during or attributed for the financial year that ended on December 31, 2021. Voting is open. [Voting]

Voting is closed. Resolution 9 is adopted with 74.17%. Resolution 10, approval of Mr. Yves Chapot's elements of compensation paid during or attributed for the financial year that ended on December 31, 2021. Voting is open. [Voting]

Voting is closed. Resolution 10 is adopted with 98.97%. Resolution 11, approval of Mrs. Barbara Dalibard's elements compensation paid during or attributed during the financial year that ended on December 31, 2021. Voting is open. [Voting]

Voting is closed. Resolution 11 is adopted with 99.84%. Resolution 12, approval of Mr. Michel Rollier's elements of compensation paid during or attributed for the financial year that ended on December 31, 2021. Voting is open. [Voting]

Voting is closed. Resolution 12 is adopted with 99.65%. Resolution 13, the appointment of Mr. Thierry Le Hénaff as a member of the Supervisory Board. Voting is open. [Voting]

Voting is closed. Resolution 13 is adopted with 98.68%. Resolution 14, appointment of Ms. Monique Leroux as member of the Supervisory Board. Voting is open. [Voting]

Voting is closed. Resolution 14 is adopted with 99.65%. Resolution 15, the appointment of Mr. Jean-Michel Severino as member of the Supervisory Board. Voting is open. [Voting]

Voting is closed. Resolution 15 is adopted with 99.88%. Resolution 16, compensation of the Supervisory Board. Voting is open. [Voting]

Voting is closed. Resolution 16 is adopted with 99.57%. Resolution 17, appointment of a permanent statutory auditor. Voting is open. [Voting]

Voting is closed. Resolution 17 is adopted with 91.53%. Resolution 18, appointment of a permanent statutory auditor. Voting is open. [Voting]

Voting is closed. Resolution 18 is adopted with 95.9%. We are now going to vote on extraordinary resolutions. For your information, they must secure 2/3 of votes. Resolution 19, delegation of authority for managing partners or one of them to issue shares and/or equity securities providing access to other equity securities and/or marketable securities providing access to corporate equity securities to be issued with retention of the preemptive subscription share. [Voting]

Voting is closed. Resolution 19 is adopted with 95.92%. Resolution 20, delegation of authority for managing partners or one of them to issue shares and/or equity securities providing access to other equity securities and/or marketable securities providing access to corporate equity securities to be issued in a public offer different from those defined in Article L. 411-2 of the Monetary and Financial Code, with withdrawal of the preemptive subscription rights. Voting is open. [Voting]

Voting is closed. Resolution 20 is adopted with 93.63%. Resolution 21, delegation of authority for managing partners or one of them to issue shares and/or equity securities providing access to other equity securities and/or marketable securities providing access to corporate equity securities to be issued in an offer defined in Article L. 411-2 of the Monetary and Financial Code, with withdrawal of the preemptive subscription rights. Voting is open. [Voting]

Voting is closed. Resolution 21 is adopted with 90.44% of votes. Resolution 22, delegation of authority for managing partners or one of them in case of an insurance -- in case of an issuance of corporate shares without preemptive subscription rights and/or marketable securities providing access to the share capital under resolutions 20 and 21 in order to set the issuing price according to terms set by the general meeting, with a maximum of 10% of the share capital for 12 months period. Voting is open. [Voting]

Voting is closed. Resolution 22 is adopted with 91.34%. Resolution 23, authorization given to managing partners or one of them with a view to increasing the number of securities to be issued in the case of excess demand during increases in share capital carried out with or without preemptive subscription rights. Voting is open. [Voting]

Voting is closed. Resolution 23 carried with 89.90% of the vote. Resolution 24, delegation of competence given to managing partners or one of them with a view to increasing share capital by incorporation of reserves, profits or bonuses. Voting is open. [Voting]

Voting is closed. Resolution 24 carried with 99.82% of the votes. Resolution 25, delegation of competence given to managing partners or one of them with a view to increasing share capital through issuance without preemptive subscription rights of ordinary shares used to compensate contributions in shares in the case of public exchange offer or cash contribution. Voting is open. [Voting]

Voting is closed. Resolution 25 carried with 98.48% of the vote. Resolution 26, delegation of competence given to the managing partners or one of them with a view to increasing the share capital reserved for employees who have subscribed to a corporate savings scheme and/or to disposal of reserved securities with cancellation of preemptive subscribing rights. Voting is open. [Voting]

Voting is closed. Resolution 26 carried with 99.17% of the vote. Resolution 27, limiting the global nominal amount of share capital increases in issuance of securities and debt securities. Voting is now open. [Voting]

Voting is now closed. Resolution 27 carried with 96.96% of the votes. Resolution 28, authorization given to managing partners or one of them with a view to reducing share capital via share cancellation. Voting is now open. [Voting]

Voting is now closed. Resolution 28 carried with 99.46% of the vote. Resolution 29, dividing by 4 face value of shares. Voting is now open. [Voting]

Voting is closed. Resolution 29 is adopted with 99.86% of the votes. Resolution 30, powers of attorney for administrative formalities. Voting is open. [Voting]

Voting is now closed. Resolution 30 carried with 99.99% of the votes. I thank you for your attention.

Very well. Well, thank you very much, Eric, for walking us through the resolutions. Since there is nothing left on the agenda, I declare this shareholder meeting -- shareholders' meeting over. I thank you for coming down here today or connecting online, and I thank you for your confidence.