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

Ladies and gentlemen, dear shareholders, good morning to all of you. It's a real pleasure for me and for all of the Michelin teams to welcome you here once again, for this Annual General Meeting. It's always an important moment for us. And I would like to thank you for being with us today. This meeting is also broadcast live on our website. And I'd like to wish a warm welcome to all those of you who are following us online. The Annual General Meeting is an important time for decision-making, but also for information sharing and discussion about what brings us together, i.e., your group, Michelin. Without further ado, I declare open our 2023 Combined General Meeting. Present with me are Yves Chapot, General Manager and Chief Financial Officer of the group; Benoit Balmary, General Counsel of the group; Mr. Jean-Christophe, Georghiou and Frederic Gourd, representing, respectively, the statutory auditors, PricewaterhouseCoopers and Deloitte. Also present the first row, the members of the Supervisory Board of your company. Mr. Vincent Montagne; representing in his capacity as Chairman of SAGES, a non-managing general partner. We're now going to proceed to the constitution of the bureau. I am now appointing as the scrutineers, those who are representing the largest number of shares we have accepted this function. I'm talking about Mr. Pierre Michelin, Chairman of Mage-Invest; and Mr. [indiscernible], Chairman of the Supervisory Board of the Michelin manufacturers, Employee Savings Fund [indiscernible] . The bureau that's constituted appointed Benoit Balmary, President as Secretary of the assembly. The attendance sheet shows that the quorum requirements have been met. And the final count will be given to you before the vote of the -- on the resolutions. The assembly may, therefore, validly deliberate on the issues on the agenda set out in the notice of meeting sent to you. This general assembly of an ordinary and extraordinary nature meets on its first convening. I would now like to give you a summary of your group's activity in 2022 and then outlook for 2023. For this, I give the floor to, Yves Chapot.

Ladies and gentlemen, dear shareholders, more than ever, Michelin's business model is based on a balance, a balance between our various stakeholders. The development of people and respect for the climate of the planet are inseparable from the group's economic and financial performance. The group continues to deploy its Michelin emotion strategy presented at the April 2021 Investor Day and then updated in March of 2022. Over the past 2 years, while navigating a highly disruptive environment, the group has achieved good results in each of our pillars, people, planet and economic performance. And this is illustrated as follows. Michelin cares about its impact on people, not only our employees, but also our customers, suppliers and the communities living around our sites. We want to be a global benchmark in terms of employee engagements. The engagement rate expresses the confidence of employees in the Michelin Group. It has increased by 3 points to reach 83% in 2022. The engagement rate is increasing in all employee categories and all regions have improved. And our target for 2030 is 85%. Michelin also wants to be a global benchmark in the field of safety in the workplace, which is, of course, valid for any company, but especially fundamental in an industrial company. And 2022 marks the return to a dynamic of the progress in line with our objectives. All the prevention, actions in the industrial sector have borne fruit and we're confident of achieving the group's ambitions for 2030 with a total case incident rate of less than 0.5. Michelin also wants to be a benchmark in terms of diversity and inclusion with its teams. The group is very much involved in this area with the majority of the components of the indicator that we are following, which is called the IMDI on diversity and inclusion have improved in 2022. For example, the share of women continue to increase the management to almost 30% with the intention of reaching 35% by 2030. Finally, we want to be the best in the industry in terms of value created for our customers, professionalism, product and service advantage and the quality remains the group's main strength. Our customers are increasingly positive about 2 identified areas for improvement: responsiveness and efficiency. Let's now move on to the second dimension, i.e., our planet. From an environmental point of view, the group continued its efforts to reduce the impact of its activities in 2022 despite the disrupted environment. In this respect, I would like to come back to 4 indicators that we are monitoring at group level to assess the results of the measures we are implementing and the intensity of the efforts we are making to make all of our activities increasingly sustainable. Our first ambition is to achieve a zero net CO2 emissions from industry and energy by 2050. The reduction of CO2 emissions amounted to 17% in 2022, reflecting the robustness of the improvement actions implemented. For example, the supply of guaranteed renewable electricity to our factories. This share has risen from 42% to 52%. Thanks to the purchase of certified green electricity in China and Thailand. But also the implementation of good practices regarding the way tires are cured and the management of air in buildings. Looking ahead to 2030, we're confident that the technical levers identified in our road map will enable us to achieve our target. Michelin wants to contribute to achieving zero net CO2 emissions in terms of use. In the passenger cars and light trucks, progress is being made with the e-primacy, Privacy 4s and pilot sport EV products in heavy goods vehicles, the success of the X Incity EV Z electric bus range demonstrates the group's determination to support the decarbonization of urban mobility. The ongoing deployment of the eco design approach is a robust lever in the progress dynamic. Finally, Michelin is accelerating the deployment of its Watèa by Michelin offer designed to support the electrification of light commercial vehicle fleets and has announced its plan to open Watèa Capital to the Credit Agricole leasing subsidiary. And we will shed some light on this fascinating subject in a moment. We also want to be a global benchmark for the environmental footprint of industrial sites. In addition to the material we take from the environment, we also track an indicator that measures the environmental impact of our production site. Our target for 2030 is to reduce this impact by 1/3. Finally, Michelin wants to achieve the full circularity of its products by 2050. As you know, natural resources exist on earth only in limited quantities. It is, therefore, our responsibility to constantly innovate to increase the proportion of recycled and renewable bio-based materials in the products that we market without ever compromising their quality, of course. The result for 2022 is close to 30%, so up 1% versus 2021. And this is in line with our road map to reach the target of 40% sustainable materials by 2030. In 2022, the group improved the maturity of specific technologies and its R&D projects increase the use of certain sustainable materials in the current tires and also improve the traceability of its supply chains with certain suppliers. And our ambition will be explained later. Now let's move on to the last dimension, i.e., the economic performance of the group in an environment marked by a series of the crisis, Michelin delivered robust results in 2022. With our long-term ambitions in mind, we've maintained all our investments in industry and R&D. And I would like to mention 4 indicators to illustrate the activity in 2022 sales, up 20.2% to EUR 28.6 billion in 2022 despite a 2% drop in tire sales volume, our rigorous pricing policy and the mix effect reflecting in particular the priority given to the Michelin brand, all of this has had a positive impact on sales. Non-tire business is expected to grow by around 5% a year between now and 2030 and should account for 20% to 30% of our revenue by 2030. The second indicator now, operating profit from the sectors was EUR 3.4 billion, in line with our commitment, i.e., 11.9% of sales. Our very proactive price management has enabled the group to maintain its margin in the face of historically high inflation factors, rising raw material and energy prices and in particular, in the half -- first half of the year, transport costs. Third indicator, free cash flow was negative this year at EUR 180 million, reflecting the one-off impact of inflation on working capital requirements. And finally, the return on capital employed which measures value creation. So it was 10.8%, up 0.5 points versus last year, reflecting the group's progress in both profitability and optimization of capital employed. Finally, I'd like to underscore that your group benefits from a solid financial structure with a net debt ratio limited to 25%. And now let's have a look at the sharing of Michelin's added value. The group has long been committed to sharing the added value generated by its activities fairly. You can see in this diagram that the added value created by the group once we've paid our suppliers around EUR 16 billion. This will amount to EUR 12.7 billion in 2022. This added value that was distributed as follows. And you can see that this increase between '21 and 2022 was generated fairly. If we look at 2022, EUR 12.7 billion distributed as follows: 55% to our employees, 17% to finance our investments, ensuring the sustainability and development of our activities, 9% and 3%, respectively, to the states in which we operate through taxes and to the banks that help finance our growth. 8% will be paid to our shareholders through the dividend proposed in the framework of this meeting. And then finally, 8% to various items, including exceptional items in 2022, especially the costs incurred in Russia to maintain the remuneration of our team's pending sales agreement. Let us now zoom in on our tax policy and the group's commitment to guaranteeing transparency and tax matters to the administrations of the countries in which we operate. It is important to understand that our fiscal responsibility is consistent with the group's core values. But we have illustration. The group's geographical locations are driven by industrial and commercial operational needs and not by tax considerations. In addition to publishing our tax strategy and golden rules internally, we've detailed the main elements of our tax policy in the universal registration document 2022. We support the European initiative to make country-by-country reporting public by 2026, and we are working to anticipate this publication. To this end, we plan to produce in 2024, a tax transparency report based on our 2023 financial statements. Let's have a look at our activity as at the end of the first quarter of 2023. In an environment of declining market sales for the first quarter of 2023, were up 7.4%, reaching EUR 7 billion. They testify to the relevance of our business model and our pricing discipline despite a slowdown in the European and North American passenger car and truck markets in a context of economic uncertainty and inventory reduction. And we've been able to generate a growth of our sales. Our non-tire business continues to grow strongly approximately 15%. During the year, we believe that will be a slight decrease versus last year. And in this scenario, the group confirms its annual forecast for 2023 was an annual operating profit from the sectors in excess of EUR 3.2 billion on a like-for-like basis and a free cash flow before acquisitions in excess of EUR 1.6 billion. As you can see through our capital allocation policy, we aim to strike the right balance between reinvesting part of the cash generated by the group to finance its growth, maintaining a reasonable level of debt and remunerating our various stakeholders. We are, therefore, proposing for 2022 a dividend of EUR 1.25 per share, up 11%, which represents a payout ratio of 44%, in line with our ambition to gradually raise it to 50%. It should be noted that over 10 years, the total return to shareholders, taking into account the evolution of the Michelin share price and the reinvested dividend is close to 100%. I would remind you that the group automatically creates a dilution in its shares with new shares created as a result of the employee share ownership plans and the free share allocation programs in order to neutralize this dilution. The group buys back shares on the market. And the shares are purchased in this way are canceled, i.e., they simply removed from the stock market. Michelin does not aim to support or increases the share price when implementing these share buyback programs, but simply to safeguard the unit value of the share for its shareholders. And finally, I would like to take a moment to look at another mechanism that illustrates the sharing of added value. Employee ownership. Employee ownership or shareholding is a strong indicator of employee confidence in the group's future and the strategy. Today, more than one employee in 2 is a Michelin shareholder worldwide, which represents 2.2% of the group's capital. Our goal is to reach 4% by 2030, which means that doubling the share of employee shareholders in our capital and encouraging the subscription of our agents. 2022 marked an important turning point for employee share ownership. We worked on several levers of attractiveness and accessibility. The first of which was the division of the nominal value of the share by 4. This is something that you approved during our Annual General Meeting in 2022. This operation made it possible to rethink the subscription offer while maintaining the possibility for each shareholder to express his or her opinion on the management of their group. Also, their shareholding plans are now annual, and we are proposing to extend our performance share plans to more employees. And dear shareholders, I would like to thank you for your attention and your trust.

Thank you very much, Yves, for this very clear and very comprehensive presentation. So now I'd like to give the floor to Mr. Jean-Christophe Georghiou, who represents the statutory auditors.

Thank you very much. Ladies and gentlemen, dear shareholders, good morning. It's a great honor on behalf of the joint statutory auditors, represented by Deloitte & Partners and PricewaterhouseCoopers to present the reports that we prepared for you. So we've issued several reports in the performance of our assignment for the financial year 2022. Firstly, our reports on the annual accounts and the consolidated accounts as well as our report on the regulated agreements and commitments of your company. We've also issued a report on the 15th resolution to you on the reduction of the share capital of your company. Finally, PricewaterhouseCoopers audit has prepared a report on the consolidated nonfinancial performance statement. These reports are contained in the universal registration document, which have been made available on the company's website and on pages that will be shown on the screen in the following slides. So I propose to summarize our reports. So our reports on the consolidated and annual accounts were issued on the 17th of February 2023. These reports conclude that we have certified the accounts without reservation with regard to, first of all, the IFRS standards as adopted in the European Union for consolidated accounts and French accounting rules and principles for annual accounts. We've based our opinion on the work carried out or coordinated by the statutory auditors, which enables us to obtain reasonable assurance that the accounts and the financial information are fair and regular. Our work is adapted to the specificities and characteristics of your group. It covers both routine operations, but also special events in the year. We rely on internal control procedures and systems. And we deploy audit teams under our responsibility to the group's subsidiaries around the world and in France. The conclusions of this work were presented to the Management and Audit Committee of your group. Also, we stated in our report that we have no observations to make with regard to the specific verifications, in particular, with regard to, first of all, the fairness of the information given in the Chairman's report on the management of the group and also on the accuracy and the fairness of the information provided on the remuneration paid to the corporate offices. Now our reports also include a description of the key audit issues, i.e., those issues that relate to the risks of material misstatement that we consider to be the most important for the audit of the 2022 accounts. These were the main topics of discussion with the management and the Audit Committee. For each of these key audit issues in our reports, we describe the reasons why we've selected them, also the nature of the risk identified and the audit response that we've made. For the end of the fiscal year 2022 ended 31st of December, these key issues relate to the valuation of goodwill of the most sensitive units and also the valuation of employment benefits under defined benefit plans for annual accounts on the valuation of equity securities. Now let's move on to the special report, which concerns regulated agreements. We stated in this report that we've been advised of no agreements, which were authorized during the past financial year or in previous financial years and which would have continued during financial year 2022. Now for extraordinary resolutions, we issue reports when this is required by law. This year, we have, therefore, issued a report on the 15th resolution, which proposes that you delegate to the managing partners for a period of 24 months the power to reduce the capital by canceling shares of the company purchased up to a limit of 10% of the capital. Our report does not concern any specific references or observations on this. Finally, to conclude, PricewaterhouseCoopers audit as an independent third party has issued a report on the consolidated declaration of nonfinancial performance, which is included in the management report and which contains social, environmental and societal information. This report concluded that there were no significant anomalies. Thank you all ladies and gentlemen, I've now finished with our reports. And I thank you on behalf of the [indiscernible] of auditors for your attention.

Thank you very much. Thank you Jean-Christophe Georghiou for your intervention. So now without further ado, I'm going to hand over to the Chairman, Mrs. Barbara Dalibard, who's the Chairman of our Supervisory Board. She's now going to present the reports on the Board's activities and also on the draft resolutions, which are submitted to you today.

Ladies and gentlemen, dear shareholders. So this is the second time that I've reported to you as Chairman of the Supervisory Board of your group of this general meet. So it's a great honor, but also a great responsibility. So I'll do so on behalf of all of the members of the Supervisory Board who are present today and who I'd like to thank for our work, which has pursued one and the same objective to defend the interest of Michelin, its stakeholders and of course, you, its shareholders. Michelin has a robust governance structure. The durability of which is a guarantee of performance and balance. And as I've already had the opportunity to say last year, it's based on 3 complementary and well-established pillars. First of all, the managing partners who are responsible for managing Michelin, your group, and you know that we have also Yves Chapot, non-Managing General Partner and also Chief Financial Officer; and also the SAGES which is non-managing general partner, chaired by Vincent Montagne, I would like to thank for his active cooperation and also who ensures the long-term stability of your company by playing a key role in the development of the succession plan for the managing partners in close cooperation with the Board and also according to a very proven process. And then finally of the Supervisory Board, which is the supervisory body that ensures the proper management of the company and reports to the shareholders. Now allow me to go into more detail about the Board's mission with my colleagues who's committed to Michelin. I would like to salute. We regularly review your group's Michelin Motion Strategy. We do so by ensuring that it is relevant in a changing context that poses many challenges as we saw with Yves. And we've devoted a long session to this as we do every year. And we have a specific midyear review. We review all of the activities, but also the mapping of the transformations underway. In detail, this leads us to look at the results and the financial statements of which we are kept closely informed. And we also examined the organization, the operations, the risk management and internal control policies and the corporate responsibility policy. All of these elements form a coherent hole on which the members of the Board work together to take the most accurate and complete look in compliance with the mission entrusted to us by the group shareholders. We provide advice and recommendations to the managers for any major investment for all external growth operations or asset disposals. The Board has called upon to give its opinion on each of these structuring events. We systematically examined strategic merger and acquisition projects for an amount of more than EUR 50 million and for which we issue a formal opinion. Every 6 months, we carry out an assessment of the acquisitions made with the managers, taking into account their integration, their suitability for the strategy and the results obtained as well as how they're managed. Last year, we had to examine robotics, for example, in order to accelerate the development of tire-related activities by making the most of mobility data. And also we issued a favorable opinion for the acquisition of the remaining 51% of the capital in Indonesia, a major project, as you know, which reaffirms your group's ambitions in terms of natural rubber and therefore, in sustainable materials. Our monitoring of these acquisitions over time has also led us to review the integration of Camso in Michelin and the results obtained. The role that you, the group shareholders, entrust to us also consists of providing all the elements for the proper management of the company. The appointment and the reappointment of the managing partners as well as the termination of performance criteria, which govern their variable remuneration are the subject of recommendations or agreements as the case may be by the Board in close cooperation with the SAGES. This is also the case for the appointment and the succession planning of executive committee members. In this respect, the Board's work aims to prepare the future of your group as well as possible with a view to anticipating future developments. In the same vein, we are particularly attentive to the diversity objectives within the management bodies of the group and to the proper implementation of the corresponding action plans in each of its missions, the Board constantly adapts to current events and the challenges faced by the group. For example, we had to organize additional meetings to examine the consequences of the conflict in Ukraine. Also, we had lengthy discussions on the group's industrial strategy and its road map towards carbon neutrality or on the training approach to support the transformation of the business lines. Of course, all of these tasks can only be carried out by a fully mobilized Board. The individual participation rate of the members of the 6 board meetings and the 10 committee meetings scheduled at the beginning of the year, reached 98%, which is remarkable. I would like to thank all of them for this. And it's essential for us to apply the best governance standards, more particularly the [ office ] code. So we systematically have to check the large majority of independent members, which is essential for the confidence and relevance of our opinions. In this respect, the executive session is an important event every year, which brings together the independent members, excluding the salaried members and myself to discuss all the subjects they consider to be relevant. And in this respect, I'd like to thank Thierry Le Hénaff, who's a member of the Supervisory Board for leading this session in 2022. Also, we integrate our new members through dedicated training. And we also organized specific online training for all of the members of the Board in different issues as soon as we believe this is necessary. This was the case last year on the complex subject of distribution, for example. And more generally, we go out into the field as much as possible to get the most complete picture of the group's activities. And in particular, the new developments around and beyond tires. Our visits in 2020 to Fenner and Camso allowed us to see firsthand very positive contribution to the group's results. The Board has already identified a number of issues to be addressed in detail in 2023, including environmental and cybersecurity issues, which will be presented by leading external experts. In this regard, we conducted last month, a detailed training session on current environmental, social and governance, ESG issues. So we want to go further on these governance standards. So as to really go into depth on certain themes. Over the last few years, the creation of the Corporate Social Responsibility Committee and also the application of different themes, remuneration and appointments have helped make these developments and enable us to ensure that we carry out our duties. So during the governance roadshow that I led last year, we had direct dialogue with investors where we presented the characteristics of Michelin's governance. So these discussions gave us a lot. And I'd really like to thank warmly all those people who took part in those discussions. So the Board acts in the best interest of the group and its shareholders and the dialogue with investors as a major lever that we mobilize as much as we can, and we're going to continue to do this in this format, which I believe was well appreciated in the same vein to improve the functioning of our Board and also making it more effective. And in view of the many changes carried out over the past 2 years within the Board, in 2022, we assessed with an external firm, the quality of our work, the robust of our processes and also said that we had to continue our strategic thinking more particularly on merger and acquisition issues and also the ramp-up of the CSR committee. Dear shareholders, you can count on a board with a balanced and diverse composition, which is a guarantee of its efficiency and its relevance. Each of its members brings a different point of view. Its experience and its background and uniqueness, which gives us different opinions. I would like, in particular, to pay tribute to the 2 members representing the employees and through them, the whole of Michelin social body. Their contribution to our discussions is absolutely decisive. And we have 45% women, 1/3 other members of our non-French nationality, which is a great opportunity to better understand the reality of our group, which, as you know, is present in 175 countries. The Board is also diverse in the scope of its competencies. These must reflect the company's activities and its developments. And we've taken care to detail the expertise of the Board members who among all of their skills and experience are considered to be the most relevant to enable the Board to fulfill its mission. The mapping of the main skills of the Board members presented in our annual report on corporate governance is an important element in the composition of the committees as we'll see below. Just as your group is evolving, pursuing an ambitious strategy, the skills of the Board members must evolve if the Board is to continue to play its role to the full. This is an essential point to be taken into account when recruiting future members and in the remuneration and nomination committee. In addition to the plenary meetings, the Board conducts work in 3 committees: the Audit Committee, the Remuneration and Nomination Committee, but also the Corporate Social Responsibility Committee. Each of the Committee Chairman as well as all of their members are independent with the exception, obviously, of the 2 members who represent the employees and who will contribute to the work of the Remuneration and Nomination Committee and the Corporate Social Responsibility Committee. The Audit Committee and the Chairmanship of Patrick de La Chevardière examined all of the group's accounts for the year 2022. It also reviewed the risk management and internal control systems, particular attention was paid to cybersecurity and the group's policy in this area. The Audit Committee also worked on the subject of the reform of international corporate taxation which has direct consequences on the group's policy, particularly when it comes to transfer prices. The Audit Committee has been able to rely on the members who have strong financial skills in different areas, but also who have recognized skills in different fields such as digital technologies and security. In addition, the Audit Committee can be loan the skills of the other members of the Board, and in particular, the members of the CSR Committee with whom it held a joint meeting for the first time in 2022. This is necessary on many common topics such as the CSR risk metric or the valuation of the group's negative externalities, for example. The Remuneration and Nomination Committee has been working on preparing the future of your group, through its work on the succession plan of the managing partners conducted in close cooperation with SAGES, the non-managing general partner as well as the succession plan for senior executives and the Supervisory Board members. You know that the committee was particularly attentive to our policy from talent management and how to promote diversity and inclusion, Jean-Pierre Duprieu, its Chairman will present the committee's work in detail later on, more particularly the work done in terms of remuneration. Finally, I'd like to come back in greater depth to the work of the Corporate Social Responsibility Committee. The subjects that deals with are becoming increasingly important as we know. And we've seen this from the wealth and frequency of the new points that this committee has to deal with under the chairwomanship of Monique Leroux. The committee relies on a wide range of skills, and you can find the details of these skills as all other members of the Board in the universal registration document. And particularly, the sales committee reviewed the extra financial performance statement and made recommendations for changes to key CSR performance criteria. It continued to do its monitoring work as the committee chair woman says on regulatory developments, particularly at European level and continue to analyze the steps taken by Michelin to classify its economic activities what we call the taxonomy in relation to the importance of their contribution to the European Union's environmental objectives. Even more than for the other subjects we deal with, the CSR committee is fully integrated into Michelin's management and governance structure. It was presented with the principles for the steering of the CSR dimension whose governance is organized around 4 themes: environment, human rights, health, safety and ethics finally. So the feedback from the stakeholder committee provides us with a valuable external perspective on this. In the area of group's environmental responsibility, the committee analyzed the action plan for the climate, the biodiversity strategy and the end-of-life strategy for tire products. I think it's important to discuss this issue, the group's climate strategy with you. and more particularly, the transition plan Michelin announced its ambition as we heard already to achieve zero net emissions by 2050 with the short-term priority of reducing emissions from all production sites and or transport operations and the supply chain with suppliers all of this has to be done as much as possible. We've analyzed the targets for 2030 to 2050, with regard to the means implemented to achieve these targets. With regard to emissions related to product manufacturing corresponding to direct emissions and those linked to energy consumption, what we call Scope 1, Scope 2. The Board appreciated the group's ambitions marked by halving the emissions by 2030 compared to the 2010 base before reaching complete neutrality in 2050. This trajectory validated by the international science-based targets initiative consortium, is compatible with a global warming scenario of below 2 degrees Celsius. So this obviously means that each business in the world, and each of us has to make as much effect as possible. The committees were also focused on action plans for Scope 3. This means indirect emissions through the value chain for all of our logistics operations. The group is working on transporting less, transporting better, transporting differently with innovations that are likely to reduce the associated emissions by 15% by 2030 compared to the 2018 level. Upstream with the value chain, the group is attentive to reducing its emissions linked to the purchase of raw materials by ensuring the gradual integration of all of its suppliers into an externally controlled and validated emission scheme. So this will be the case for 70% of them by 2024, that is 40% increase compared to 2022. The CSR Committee and the Board as a whole were able to appreciate the full integration of the strategy and to the group's overall strategy. This is due to the high priority given to these issues by the group's management and more particularly the managing partners who I would like to thank on behalf of all of the Board members. In terms of social and societal responsibility, the committee analyzed the integration road map for the acquired companies. In particular, we ensured the Michelin living wage principles were applied throughout the new group scope. So you can see that the committee had a lot of work cut out for in 2022 with major subjects for the group strategy. And obviously, we were reported back to all of the Board members. I'd like to thank the chairmen and women of these committees for the quality of their contributions. So now let me turn to the resolutions, which will be submitted to your vote. The first of these will be the ordinary financial resolutions. In particular, I'd like to invite you to approve the annual accounts for the year 2022. The Board has once again been able to appreciate the excellence in the solidity. Jean-Pierre Duprieu will go into details on the resolutions relating to the remuneration of corporate officers. I should stress that these proposals are the result of in-depth benchmarking conducted by the Remuneration and Nomination Committee. And I've naturally excluded myself in these discussions that concern me directly, and the managers have done the same. Finally, you'll be asked to vote on the reappointment of 2 members of the Supervisory Board. The Board is fortunate to be able to count on the confidence and experience of Aruna Jayanthi since 2015. Her keen sense of business and her insight into the use of new technologies and in particular, cybersecurity are extremely valuable in the context where the challenge is facing your group in this area are multiplying. And from my part, I've felt an intense sense of pride and responsibility since I joined the Supervisory Board of your group, with a great deal of happiness since 2008, and this has been further strengthened since I took over as Chairman in 2021, succeeding Michel Rollier. So I'd like to thank you once again for the prescious support during the transition period. Obviously, I'll leave it to Jean-Pierre Duprieu to explain the council's proposal -- or the Board's proposal, in which obviously, I did not participate. To conclude, I'd like to send a message of gratitude on behalf of the Board to all of the group's employees. We've noted day after day the remarkable results obtained, and this is -- thanks to the mobilization of each and every one of you in a very turbulent context. And also, I'd particularly like to thank the management team whose intelligent leadership and commitment to Michelin's success were appreciated by the Board. And also, I'd like to thank all of you, our shareholders, for this wonderful loyalty and the engagement that you have, the adaptability and the capabilities demonstrated by your group's team give full confidence in its ability to face difficulties and achieve its objectives. Thank you very much for your attention. And now I'm going to hand over to my colleague and friend, Jean-Pierre Duprieu.

Ladies and gentlemen, dear shareholders, I'm pleased to meet you again in this Annual General Meeting in order to present the work of the Remuneration and Nomination Committee. I'd like to thank my fellow members of this committee, each of whom brings his own or her own expertise and experience. As Barbara Dalibard already pointed out, the Remuneration and Nomination Committee carries out in-depth work on such crucial issues as the remuneration and nomination policies for senior executives and the policy on diversity, inclusion and talent management. So before you this morning, I'll come back to 3 subjects, in particular, that have mobilized the committee that I chair. I will also first inform you of the remuneration paid in 2022 to the managing partners and the members of the Supervisory Board. And then I will outline the proposed principles for the remuneration policy of the managing partners and the Supervisory Board members in 2023. And finally, I will submit you the proposed appointments for the expiring terms of the Board members with regard to the remuneration paid to the managers for financial year 2022, on this slide, you have a summary of all the remuneration elements. As a reminder, the remuneration of the managers is subject to a decision by the general partners and deliberation by the Supervisory Board. The variable part allocated each year to the managers comprises an annual variable part and a multi-year variable part, which are both subject to performance conditions. In line with the group's all sustainable strategy, the objectives set to reflect both the company's financial performance, the development of people, with employee safety, the rate of feminization of management and the group's action in favor of the preservation of the planet and its resources, obviously, CO2 emissions being a large part of this. This meets the objective of encouraging managers to take long-term action in line with the interest of your group. The multiyear variable component is reflected in the allocation of performance shares. All the details of these remunerations are naturally included in the report on Michelin's corporate governance, which is included in the universal registration document 2022 published on the 7th of April. Barbara Dalibard received in 2022 EUR 120,000 for her duties as Chair of the Supervisory Board. This is the remuneration set in 2019 for the previous Chairman of the Board and has not changed since Barbara Dalibard was appointed as Chairwoman in May 2021. On this table, you have the total remuneration received by the managing partners and the Chair of the Supervisory Board in 2022. The annual variable part of the managers remuneration is therefore related to the previous year. That is to say 2021. This is also the case for the long-term incentive figures, which are calculated on the basis of previous results. The Remuneration and Nomination Committee also examined the equity ratios applying the rules defined in the guidelines on remuneration multiples published by asset in 2021. Now this is the same methodology that I presented to you last year taking into account both the evolution of the remuneration and its relation to the median and average remuneration within the organization. However, for the Chairman of the Executive Board, the application of this methodology resulted in a double accounting of long-term remuneration for 2022. On the one hand, that the performance share rights granted in 2022 but for shares not delivered before 2026. And on the other hand, the payment in 2022 of a long-term remuneration granted in 2019 before the implementation of the performance share plans. Now this factor, together with the revaluation of the fixed remuneration in 2022, to bring it into line with the market practices. And a one-off basis for the entire term of office explains the very relative relevance of the ratios and progressions observed, therefore, this year. Nevertheless, it seems important to the committee that I chair to present the most complete information on this subject in order to ensure the consistency and comparability of financial years over time. The remuneration of the Board members for 2022 is determined on the basis of the overall package voted at the 2022 general assembly. It has been allocated in the following manner 50,000 for each member. The Board plus additional amounts for responsibilities, including chairing -- participating in 1 of the 3 committees. The payment of 60% of all these amounts is conditional on the members' attendance at the Board and committee meetings. This table shows the amounts allocated for fiscal year 2022 and those paid in the same year for the previous year. I now turn to the committee's work on the 2023 remuneration policy for corporate officers. For the managing partners, the committee's proposals, they take into account their respective functions and the statutes of the managing general partner and non-general managing partner. They are in line with the 2022 policy. We, therefore, propose to maintain the fixed remuneration of Florent Menegaux and Yves Chapot at their current levels. Following the adjustments made in the previous year, these amounts will remain unchanged until 2026, so the end of their current terms of reference. In order to ensure the greatest possible convergence with the company's performance, the variable annual remuneration of the managers will once again be based on financial, societal and environmental criteria, reflecting the strategy of your group and capped at 150% of that fixed remuneration. In a further effort to increase transparency, you will note that for the first time this year, the managers' remuneration policy included in Michelin's corporate governance report presents the detailed calculation of the objectives set. So at thresholds, the targets and ceilings for all the quantitative criteria determining this annual variable remuneration. Long-term variable compensation will again be based on the granting of performance shares as it is the case for the group's employees. As in the previous year, this allocation will be subjected to performance criteria with a double capping and associated with an obligation to retain 40% of the shares effectively received during the term of office. On this slide, you will see the proposed remuneration package for the Managing Directors for fiscal year 2023. These elements seem to us to ensure that the planned remuneration is consistent with the company's performance and with market practices. The expiry of Barbara Dalibard from the office as a member of the Supervisory Board at the end of this general meeting prompted the Remuneration and Nomination Committee to carry out an in-depth work on the major role played by the Chairman of the Board and the remuneration associated with this responsibility. We've analyzed the appropriate datedness of a change in this remuneration in the light of market practices. As part of the monitoring of the succession plan for this chairmanship, we've endeavored to preserve the continuity and attractiveness of this position for which future candidates must have demonstrated the most appropriate skills and expertise. To this end, the committee conducted in 2020, a comparison of the remuneration associated with the chairmanship of the Supervisory Board of your Group with that of equivalent positions within comparable groups. More specifically, we based ourselves on a perimeter of 28 CAC 40 groups with dissociated governance, which presented an average annual remuneration of EUR 600,000 for the Chairman of the Board. And then we chose to exclude companies whose main activity is in the financial sector and companies where a former executive is Chairman of the Board. The scope is thus finally limited to 8 companies. The average annual remuneration of the Chairman of the Board for the latter, perimeter stood at EUR 450,000. The Board, therefore, proposed on the recommendation of the remuneration and nomination committee to upgrade the annual fixed remuneration of the Chairman of the Board to EUR 400,000 on the occasion of the renewal of the term of office. And I would like to point out that Barbara Dalibard naturally excluded herself from the discussions on this point, which was brought to the attention of the Board and the general partners at the initiative of the committee that I chair. As regards to the members of the Supervisory Board, the committee suggest adopting the distribution rules within the framework of an annual package of EUR 950,000 voted out the 2022 assembly. As in 2022, the remuneration of the Board members will be divided into a basic amount for each member and additional amounts according to individual situation and responsibilities, in particular, within the committees. 60% these amounts will continue to be directly linked to attendance at Board and committee meetings. Dear shareholders, I now come to the appointments we are proposing at this meeting, which you will be asked to vote on in a moment. The Supervisory Board has asked the remuneration and nomination committee to review the term of office of the Board members and to continue to implement the succession in the plan for Board members in preparation for future term of office. This task, the committee relies on the mapping of skills considered most relevant to enable the Board to fulfill its missions. It draws our profile to complement the expertise already present on the board examines the applications and calls on a leading external firm -- a recruitment firm for this purpose. Throughout the process, it also ensures that the diversity and inclusion policy is applied. Two Supervisory Board members mandates expire this year. Those are Barbara Dalibard and Aruna Jayanthi. The Remuneration and Nomination Committee proposes after a thorough examination, the renewal of these achieved mandates. Barbara Dalibard has been a member of your group Supervisory Board since 2008 and Chairman since May 2021. The committee underscored her competence and experience acquired in a career that has seen her whole management positions in the automotive and the mobility sectors as well as the new technologies, all of which are of decisive important to Michelin today. All the members of the Board also emphasize their essential role in the proper functioning of the group's governance, its interactions with their managers, with a non-managing general partner, SAGES and in the direct dialogue, it conducts with investors. Barbara Dalibard only served as the Chairman of the Board for a their expertise in social, HR and governance issues is especially appreciated. Her expertise in IT, digital and cybersecurity issues, consolidated by 38 years of experience in IT service companies is invaluable, especially in role as a member of the audit committee, where these subjects are increasingly important. On the recommendation of the committee, the Supervisory Board, therefore, also decided to recommend the reappointment of Aruna Jayanthi for a period of 4 years. I thank you for your attention.

Thank you very much, Jean-Pierre. Thank you very much, Barbara. Dear shareholders, our Annual General Meeting is always a privileged opportunity to share news about your group to explore the challenges we are facing and the solutions that we want to provide. This year, we would like to take a closer look at a central topic at Michelin, i.e., reducing the environmental footprint of our products and services in line with our vision of everything sustainable. This imperative is a strategic priority and a major lever for preserving our planet and its resources. I would like to invite Brigitte Chauvin, Director of the Sustainable Materials Program; Cyrille Roget, Director of Scientific Communications and Innovation; and Aurelien Paris to join us that you present Michelin's approach to these different questions.

Hello, everyone. Hello Brigitte and hello Cyrille. Now we've already talked this morning about the everything sustainable approach, of which the environment is 1 of the 3 pillars. Cyrille, what are the biggest challenges that facing the group in this area?

Well, for over 30 years, the Michelin Group has been committed to reducing its environmental impact by conducting its operations in an exemplary manner, but also by design designing evermore innovative products, services and solutions to contribute to the progress of sustainable mobility. The environmental challenges are multiplying today, especially for our tire business. The automotive market, as we all know, is undergoing profound changes. Vehicles must meet the demands of consumers for more comfortable, safer and more technological vehicles. regulatory changes such as emission standards and crash tests are becoming increasingly stringent. As a result, the vehicles are getting bigger and heavier. In addition, to these constraints, we have tires that have to be fitted to heavier vehicles. This means bigger brakes to be able to break efficiently and larger wheels as well. and larger tires that require more raw materials. And we know that it is important to adapt to the urgency of climate change. And this shows that all-season tires are gaining a lot of ground. And then electric vehicles that require for us to adapt in terms of noise, energy, efficiency and resistant to abrasion. In this new landscape, a major imperative is added and dominates all the others the reduction of the environmental impact of our products. Now in order to reduce the environmental footprint of tires, the industry is subjected to many injunctions from many stakeholders, including citizens, consumers, manufacturers, regulators, competitors or investors. And we must also combine this with our own ambitions for progress. These injunctions cover the need to limit fight against global warming the depletion of natural and fossil resources and also the protection of biodiversity. And in addition to this, we have levers such as, for example, increasing recyclability, the quantities of recycled or bio-sourced materials increasing the lifespan of products or their repairability, increasing their energy efficiency, reducing particle emissions and recovering products at the end of their life cycle. Now that all these levers are known.

I imagine it's easy.

Well, no, unfortunately not. That would be too easy. Progress on the one front can actually lead to a setback on another. This is what we call the impact transfer. Let me give you an example, the rate of renewable or recycled materially. Today, we could actually make it higher with 100% renewable or recycled materials. And yet, it's energy efficiency performance or life span would be significantly reduced. So this wouldn't be a progress in terms of our footprint and will be the same thing with a thread that would have much more recycled materials but with low performance recycling technologies. So this means that we have to boost our performance in this respect. The challenge is to manage the complexity of these multifaceted issues and identify the most important levers to effectively and significantly reduce the environmental footprint of our products while maintaining a balance between our 3P pillars, profit, people and planet.

Now I appreciate how can we reconcile all these imperatives? And how does the group take into account its environmental footprints in its say choices and decisions.

Now wanting to reduce our environmental footprint means working on all aspects at once. Not on just a few taken separately. No, on all of them, and at the same time, in the global approach, a holistic approach, precisely to avoid the type of impact transfers that as Cyrille has just mentioned. And I would like to mention that this is something we have to avoid because it involves improving something on 1 side, but with the less performance on the other side. This means taking into account all possible environmental impacts, such as impact on water, air, soil pollution, extraction of fossil fuels and so on, but also all the phases of the life cycle of our products and services from the raw materials required to the end of their life, including all the stages of manufactured, logistics and use. So basically from the cradle to the grave. The tool that will enable us to reach this is what we call the life cycle assessments. And we are systematically using it to a wide spread our environmental impact assessments to all our products and services. As you can see, from this example of the passenger car tire, the usage phase has the greatest impact on the environment ahead of the use of raw materials.

Now this impact measurement that takes into account both carbon emissions and resources, for example...

Yes. No less than 16 environmental impacts are assessed in total in the life cycle assessment, including the impact on global warming, for example, greenhouse gas emissions and also on the use of natural resources.

Is this analysis carried out at company level or product by product?

Well, it's done by product. In fact, we should even say by product plus service. The proposal of the product only makes sense to meet a need, for example, to fulfill a function expected by the user. The analysis must therefore take this function into account. Let me give you an example. If the function of the tire is to be able to drive a passenger car for 60,000 kilometers in Europe before it needs to be changed, and you offer a tire with a wear life of 60,000 kilometers then to carry out the life cycle analysis, and you would have to consider for tires. But if you offer a tire with a wear life of only 30,000 kilometers, then 8 tires and not 4 should be taken into account for this analysis. Now you'll understand that this can significantly change the assessment of the environmental impact it generates. Well, in fact, the genesis of the product is key. 80% of all environmental impacts are determined as early as the design stage. This is why we widespread the practice of this life cycle analysis and an eco-design approach that we also apply to all our new products and services.

Now as the use phase is an important part of the life cycle analysis, what are the avenues to reduce this impact.

Well, there are 3 levers to reduce the environmental footprint. First of all, rolling resistance. Rolling resistance is the utmost importance as it directly affects CO2 emissions of all the thermal and electric vehicles. And Michelin is not a newcomer in this field. We invented low rolling resistance tires more than 30 years ago. Since then, our relentless efforts to increase the energy efficiency of our products have enabled us to cut the rolling resistance of our tires by more than half. And this is very important because more than 30% of the impact of the tire is produced because of rolling resistance. Let me remind you that 1 in 5 or 4 tanks is consumed by the tires because of rolling resistance. And on an electric vehicle is it plays a role twice. So once when driving and also with regenerative breaking the tires absorb part of the energies that should go back into the battery and therefore, it plays a role in terms of autonomy. Therefore, the energy that is needed to make a journey.

Now after energy efficiency, what is the most important lever?

Well, second one, longevity. And this is another advantage of Michelin tires. And often one of the first reasons for our customers to choose a Michelin tire. And this is something that is recognized by the industry as you can see on this slide with the ADAC results published in 2023, the German automobile club. And the most important characteristic of a durable product is that it should last. And this longevity conditions, the number of times that you have to replace your tire, therefore, extract the materials, secure the tires, transport them and so on. So longevity is also associated at Michelin with very high-level performance throughout the life of the products so that our customers can use their tires in complete safety until they wear out. And this longevity accounts for 20% of the tires environmental footprint.

The more energy-efficient tires that last longer , is there another way to limit the environmental impact of their use?

Well, the third lever, because we did mention 3 levers, were particle. They account for almost 10% of the tires environmental footprint. The amount of particle emissions is a true performance of the tire and is measured in grams per 1,000 kilometers. This is a performance in which Michelin has been involved for many years in order to develop tires that emit as few particles as possible. The ADAC, the German automobile club published a study in March 2022, which clearly shows Michelin's leadership in this area compared with a premium competitors. Michelin, on average, emits 28% less particles than its premium competitors, which is huge. So many factures have a strong responsibility and the design of their tires because it can vary from 1 to more than 4 in the ratio between the best tires and the worst. For example, if we take into account this study published by the ADAC on 100 tires and the result of Michelin studies on more than 2,000 tires, we come up with the following observation. Here you can see the quantity of particles emitted by 4 tires on a car that covers 20,000 kilometers per year. The difference then goes from 1.6 kilos for Michelin tires per year for the 2 tires to 3.6 kilos for the average of the tires tested, but up to 8 kilos for the least efficient tires, which is the norms. And this is why, Michelin is very much in favor of a threshold regulation that would allow the worst-performing tires to be taken out of the market everywhere in the world. This is the case of the proposed Euro VI regulation in Europe, which involves setting a threshold on tire particle emissions in Europe, right.

So the use phase of the tire has a major impact on its environmental impact. I imagine that it's completely different for electric vehicle tires, since carbon emissions are still much lower, right.

Right. Well, no, I still have to -- here again, I have to answer, no, because the usage still represents more than 80% even when we're talking about electric vehicles because to date, energy is not a decarbonized enough and the tire contributes to absorbing part of the energy of the braking, regenerative braking. The electric vehicles also require larger tires because they're heavier and they use up more material. And because of their mass, they emit more particles per kilometer coverage.

I see that raw materials make up the second major impact of tires on the environment. What are the levers that we can actually activate?

We will always need as much material to make a tire. Now here, we're talking about the use of resources, i.e., the removal of the materials that we take from the planet. The first way to reduce this is obviously to use less material or to use it better so that it lasts longer. This is what we call the frugality lever. So you can activate this, for example, by reducing the massive tires or by increasing their life expectancy or by improving their rechargeability or their repairability, i.e., their ability to make several lives with the same original carcass by only changing the worn tread. The second solution is to use materials that are either renewables. For example, natural materials that the earth can regenerate within a human lifetime or recycled. So here, we're talking about recycled material. And basically, this is what we mean by sustainable materials.

So we are reducing our impact on raw materials, but does this result in a compromise and an increase on -- in the impact on the usage phase, for example, because of a deterioration in performance?

No, no, no. Out of the question to reduce our tires performance. By 2022, we will have manufactured growth approved to bus and car tires with 58% and 45% sustainable materials. This means increases of plus 50% and plus 100%, respectively, compared to current levels. And we've done this by maintaining the excellence of all their performance at the same level as the Michelin premium tires on the market today. Now we've tested these tires on the road and you have an example here of a bus tire here with 58%. And we are extremely proud to have been honored for these tires with the environmental achievement of the year award at the Tire Tech Expo in March 2023 given by the industry. You know that whenever we're talking about tire performance, obviously, it's going to have an impact on their usage phase and therefore, it's going to have an impact on their environmental footprint. And you'll have understood that. For us, this is totally out of the question. And this, even though the challenge is a huge because in order to reach 100% sustainable materials in the tires, we will have to be able to succeed in doing so by changing the 200 or so raw materials that are currently a fossil origin that make them up.

Is it realistic to imagine a tire made of 100% sustainable materials?

Well, you see in 2022, we already designed tires with 50% sustainable materials with the same premium performance levels as current digital tires on the market. So yes, we are very confident, and we will be able to make tires at much higher rates in the course of this decade, 60%, 70% and even more in the following, up to 100% by 2050. But then the most difficult thing will certainly be as it is very often the case when we're looking for this absolute goal to go and find the last few percent and above all to go and find for all our tires, but we are extremely confident.

And generally speaking, over the whole life cycle, are you also confident?

We can significantly reduce. And on a very large scale, the environmental footprint of our products and services on a large scale without degrading the essential performance, for which Michelin is known. Life cycle analysis guides us on our priorities. And these are already Michelin's areas of expertise and leadership, rolling resistance, longevity, particle emission, work on renewable and recycled materials. All of this is already well underway. And finally, we're working in parallel to continue to make our plants more sustainable. This is also the case for logistics. We're determined to transport -- less transport, better or transport differently. We are fully confident in our ability to achieve our goals, and I hope that you now share this confidence with us. Thank you very much for your attention.

Thank you very much, Cyrille Roget. Thank you, [indiscernible] and thank you [indiscernible]. So the competitive edge of Michelin. This is where it resides. And you've had a great example of 120,000 bps, which are referenced in terms of performance across the globe. So thank you for this very clear explanation. Now Michelin is reducing its environmental impact as well, thanks to its rigorous and comprehensive approach. And this is the only possibility to go beyond the announcements, but also to obtain tangible results. And as you know, one of our fundamental values is respect for facts and the facts are there, the facts speak for themselves. So your group also uses its capacity for innovation to help reduce its customers' environmental impact. So just by way of example, I'd like to show you one of these new activities, which is called Watèa by Michelin. [Presentation]

Thank you very much to Pascal and all of the teams who have done such a remarkable job with Watèa by Michelin. This is revolutionizing the service for electric fleets. Thank you very much. Now I'm going to move on the stage. Ladies and gentlemen, dear shareholders. So the lights have gone down. I saw that there were so many of you here in this room. So thank you very much for this wonderful turnout to this Annual General Meeting and all of those who are listening online. So year-on-year, the Annual General Meeting of Shareholders is really a key event in the life of your group, but also the development of your group. It allows you as shareholders to better understand our strategy, but also to discuss our common future. And it brings us together here in Clermont-Ferrand, which is the birthplace on the headquarters of Michelin. It was the starting point of an adventure that has taken it to every continent, 175 countries worldwide today. I'd now like to say a few words about your group, about its future, but also about the subjects that mobilizes fully every day. Our Michelin Group, your Michelin Group is doing well. As Yves has already shown you very clearly, we've achieved some very solid results in 2022. Also, we've created value in a balanced way, value on each of our fundamental dimensions, people development, economic performance and the protection of our planet. This performance is appreciable given the context in which it was achieved. Michelin has always had to deal with crises and has done so successfully throughout its long history, but the intensity of the latest crisis and the serial nature over time are new factors. The conflict in Ukraine, supply difficulties, inflation, the change in the relationship to the workplace, the resurgence of COVID-19 and its management in China, in particular, have had a very heavy impact on our activities in 2022. These brutal and often unpredictable events have a profound effect on our environment. Faced with these difficulties, our teams have redoubled their agility and their commitment. And I'd really like to say thank you once again. I've already thanked them so many times. So we've succeeded in rethinking our supply chains in record time. We've also succeeded in offsetting the inflation and our transport raw material and energy costs, whose structural increase poses a particular threat in the industrial world. And this is particularly the case in Europe. Thanks to everybody's mobilization, our group, your group has emerged from this year with renewed confidence in our ability to overcome these obstacles. So I'd like to salute once again all of my staff and express my deepest gratitude to them. Our Michelin Motion Strategy 2030 is well underway. You've had different examples of this today. And we are growing in and around and beyond the tire with significant advances in each of these 3 areas by 2022. For example, let me take tires. We're continuing to innovate, as you've just seen, to build the future of mobility. In all segments, the excellence of our products and the strength of our brand are recognized by our increasingly demanding customers for whom we're always creating more value. One of our priorities is to support the movement towards vehicle electrification, which places tires at the heart of expectations and presents new opportunities for Michelin as a leader. Also in 2022, we unveiled these road approved tires, which are approved and composed of 45% and 58% as we saw, respectively, of sustainable materials. And this is just the start. On a like-for-like performance basis, I should stress that. We are more than ever convinced that innovation offers many solutions to the environmental and social challenges behind mobility. Now around tires, we rely on the intimate knowledge that we've developed of our customers and their usages, but also their needs. Today, technology increases the potential of these fields around tires tenfold. The innovative systems that we're able to deploy on vehicles as well as artificial intelligence for data processing. This enables us to offer our fleet managers the best possible solutions for improved performance, but also for greater fuel efficiency. Our global offers are already accelerating the transition of entire fleets to electric vehicles. We just had an example with Watèa by Michelin. The mobility data that we know how to use and manage is of crucial importance for new customers, but also for public and private infrastructure managers. And then finally, the third chapter beyond tires. Beyond tires, we're focusing our efforts and deploying our know-how inherited from our deep knowledge of materials, their transformation and their layout. We do so where our added value is the strongest at material level, for example, microscopic level, our breakthrough innovations in resins, biomaterials and reinforcements have numerous applications in many fields in which Michelin was not expected. So I'm thinking more particularly of the medical and the construction sectors. On the scale of the layout and combination of these materials microscopical to macroscopic level, we've just heard, the flexible composites at the heart of our business meet the critical needs of demanding industries considering tires like a composite flexible a very advanced material. On know-how, which is directly derived in the tire industry, this year enabled us to offer much more powerful and durable belts this year. They're already being adopted by a lot of distribution centers for the conveyor belts. And we're continuing to take part in the construction of new and emerging value chains with numerous potentialities. I'm thinking in particular of hydrogen. Hydrogen, we're very advanced on hydrogen with Symbio your company. Now in our Michelin Motion Strategy, this makes us a lot more robust and less dependent on only the tire market, which, as you know, has a lot of volatility right now, and it's a very disruptive market. So let me talk about the conditions of growth, more sustainable growth and stronger growth. So this is absolutely crucial in the context, which is marked by geopolitical, social and environmental uncertainty. But this is not enough. We must continue to transform our group. We have to make our group more efficient and more relevant in this ever-changing world. In an increasingly competitive and changing world, obviously, we know that if we don't innovate quicker, then there's a risk. So first, with this increasingly competitive environment, we're committed to creating ever more value. We are committed to valuing the quality of our people, our technology, but also our brands, which together create exceptional products and services for our customers. I've already said this. The value created as an accelerator in our strategy, more investment, more attractiveness and more opportunities. First with the profound renewal of the relationship at work, I -- Michelin transformation initiative aims to make each and every one of us a full participant in our own development and also the development of Michelin. Throughout our history, our group has been at the forefront of innovation, inspiring new ideas and new approaches that always place people at the heart of our process. We continue to innovate in this area to attract and to retain the talents of the future. So faced with the climate emergency that we've seen a few examples of already, we're focusing our efforts on decarbonizing our industry and all forms of mobility. We are accelerating our investments in the circular economy to reuse more and more materials and to extract fewer resources. We are taking action wherever we can and wherever we can have an impact. Starting with the use of products where each of our innovations in terms of longevity, rolling resistance and energy efficiency has had a 10-fold benefit, not only for our customers, but also for the planet. And we've just seen this in this film. In a world which is increasingly marked by geopolitical tension, our local to local approach, which consists of producing as close as possible to consumer markets is both resilience factor but also a way forward for more sustainable globalization. We strongly believe in this approach, which is an approach that respects local ecosystems and is responsible for the planet. So I was talking about transformation. We are transforming ourselves as well. So we have to transform ourselves to do better and faster by integrating new businesses. Our recent acquisitions of [indiscernible] over recent years to show wealth of synergies that we're able to create. Our ability to join forces with partners in joint ventures such as Solesis in the medical sector, or Symbio in the hydrogen sector, also bear witness of our dynamic management of our portfolio of activities to make the very best of our know-how. The world and Michelin are ever changing. Innovation, however, remains at the heart of all of our activities. The current period brings us back to watch inspired Michelin's pioneering spirit and its unshakable faith in human progress and in innovation. This is our DNA. The challenges that we collectively face are real ones, but the world can count on Michelin to turn these challenges into opportunities. I'm convinced that these challenges will all lead to the technological, social and environmental progress that we're not necessarily aware of yet. And I can assure you that visiting or research and development laboratories, visiting our plants as well. So with the executive committee a couple of days ago, we visited these labs and these plants, which are constantly reinventing themselves and meeting your group's teams, you have an example here in the room. Meeting these teams are really the best remedies for the prevailing pessimism. Few companies can claim the same ability as Michelin to master the design of products, but also the design of products, the materials that make them up and the processes that will enable their industrialization. And also the modeling of the impact of our products and services. This end-to-end capability is the key to the leadership of Michelin, the tire industry, but also Michelin positions and positions Michelin ideally to invent and provide innovative solutions to global challenges in the future. This is something we see every day. Our capacity for innovation creates value and accelerates our differentiation from the competition. So none of this would be possible without the commitment and creativity of Michelin's teams, who are really at the foundation of each of your group's successes. More than ever, we must be aware of this in order to take care of those people, who make Michelin what it is every day. Our group, your group is naturally exposed to the growing tensions in our societies. We've had a few examples already, and we see this every day. Unfortunately, the events that we are going through and the changes in the current world are increasing the anxiety that everybody feels in their personal and also professional lives, but I'm convinced that this profoundly updates -- and I'm convinced that this profoundly updates the role of our company and the role that we must play in the development of our people and also in social cohesion. Developing universal protection base, Michelin One Care, your group is taking a strong position that everyone within it should have access to. We should all have access to a minimum of rights and this should apply regardless of the country to which you belong. In addition to the national social protections regimes, depending on local situations, Michelin will ensure that each of its employees can have a child in good conditions and see their firmly protected in the event of an accident or have access to quality care at an affordable cost. Your group is committed to verifying and to guaranteeing that all employees receive sufficient and decent remuneration, so as to ensure decent living conditions for themselves but also their families and loved ones. Beyond that, we want to be a learning company. And this will be for the sake of everybody's development, but also our collective performance. Our responsibility is to allow each employer to be a fully-fledged actor of his own development according to his aspirations. The manufacturer of talent, which is based at our historic site in Clermont-Ferrand. This manufacturer embodies this ambition for lifelong learning. I think we have a problem in the room. I think we need emergency help for somebody in the room. Are you feeling okay? Okay. Thank you. Sorry. I'm sorry about that because obviously, we are sitting down and it's not great for blood circulation. So if you need to stand up, just to stretch your legs, please do so. We can't give a glass of water to everybody, but I'm with you. I know how hard it is sometimes. Anyway, our requirement for social cohesion goes beyond the strict framework of our company. It is our entire external ecosystem and the communities that make it up that links us and which must be strengthened. Michelin ensures this wherever we're present and our responsibility towards our regions and the communities, where we're present is also expressed when we have to make, unfortunately, some very painful decisions to close a site, for example or to restructure an activity. So what better way to be truly united than to project ourselves towards a more desirable future because, despite the difficult environment, I'm very optimistic at Michelin. We are all very optimistic. And I'm personally convinced that this is a vital need for any human collective, whether we're talking about a team, a company or even a country. In our shaken, fragmented and uncertain world, we all need to hope and we all need to believe in the better future. So we need to build this future together. I hope you feel better. Your group has always distinguished itself by its ability to make the seemingly impossible possible. And we do this on a daily basis, having a common dream and giving ourselves the means to achieve it, is what we continue to do at Michelin. Our corporate dream, this is the driving force behind our innovation. It also enables us to consider new options and encourage us to go beyond the boundaries of what seems possible. This dream -- our dream is a dream that we have built together with all of our employees. And we dream, what is this dream? Well, we dreamed that in 2050, Michelin will be recognized as a leader in innovation. A leader whose actions have been decisive in helping humanity across new frontiers. I think this is a dream that we can make come true together dear shareholders. I have full confidence in our group's ability, your group's ability to meet the many challenges ahead of us. And I think we'll be able to fulfill our collective dream in following the course set by our Michelin Motion Strategic Plan. Michelin will continue to grow. It will continue to grow in, around and beyond tires, and this will be for the benefit of all of its stakeholders. I thank you very much, ladies and gentlemen, for your trust but also for your kind attention. Thank you. So now it's a great pleasure for me to hand over to Benoit Balmary, who is on my left, who is going to present the main points of the 16 resolutions, which are submitted because don't forget, you're here to vote on these resolutions or not. So he's going to talk about the main points of the 16 resolutions, which are submitted for your vote. Thank you very much.

Ladies and gentlemen, dear shareholders, I remind you that all of the documentation was published in the legal deadlines. I'll give a summary of the resolution since their full text has already been published in the official journal. The text of the resolutions and the detailed reports of the Chairman and the management Board and the Supervisory Board were published on our website on the 11th of April and sent to each shareholder with the notice of the meeting. And aligned with regulations, we collected your paper votes until midnight on the 9th of May and electronic votes until yesterday at the 11th of May at 3:00 p.m. First of all, we're going to submit the ordinary resolutions for your approval and then the extraordinary resolutions. With regard to the -- sorry, the ordinary resolutions. The first resolution concerns the approval of the annual accounts for the financial year 2022, which show a profit of EUR 544,575,000 for the holding company [Foreign Language]. The third resolution concerns the approval of Michelin Group's consolidated accounts for 2022, which show a net result of EUR 2,008,883,000. In addition, as no regulated agreements were concluded during fiscal 2022, it is proposed in the fourth resolution to acknowledge that there were no such agreements to be approved. With the second resolution that we've submitted to the shareholders, the approval of the payment of dividend of EUR 1.25 per share, which represents a payout ratio of 44% of the net income. The dividend will be paid as of the 19th of May 2023. We've explained, in order to avoid a dilutive effect on the share, no payment in share is proposed. The fifth resolution concerns the renewal of the authorization given to the component for period of 18 months to trade in its own shares within the frame of a share buyback program for maximum not exceeding 10% of the company's share capital. The maximum purchase price per share is EUR 55 per share. This authorization is a continuation of that given by the general meeting of the 13th of May 2022 with the maximum units purchase price adapted to take account of the fourfold split in the nominal value share of Michelin shares from EUR 2 to EUR 0.50 decided on the 16th of May 2022, and effective on the 16th of June 2022. The description of this new buyback program is set out in Chapter 6 of the Universal Registration Document 2022. The proposed authorization could not be used during a public offer period. The implementation during 2022 of the existing buyback authorization is also detailed in Chapter 6 of the 2022 universal registration document. The Chairman of the Remuneration and Nomination Committee, Mr. Jean-Pierre Duprieu, has just presented to you the elements of the remuneration policy for the Executive Directors established by the General Partners and the Supervisory Board of the company for 2023. The remuneration policy of the managing partners and the policy starts the sixth resolution and the Supervisory Board seventh resolution for financial year 2022 are submitted for your approval. The main features of this policy are detailed in the corporate governance report in Chapter 3 of the Universal Registration Document 2022. The Chairman of the Remuneration and Nomination Committee also presented earlier the elements of the remuneration due or awarded to all of the company's corporate offices. This year, the general partners and the Supervisory Board of the company are submitting for your approval to the ordinary general meeting and the eighth resolution, the information relating to the remuneration of all corporate offices paid during 2022 or allocated in respect of that year. In the 9th, 10th and 11th resolution, the individual remuneration elements paid during 2022 or allocated in respect of this financial year to the company's executive office by virtue of the office held during this financial year. These resolutions concern respectively, Mr. Florent Menegaux, General Manager, Chairman of the Management Board; Mr. Yves Chapot, General Manager; and Mrs. Barbara Dalibard, Chairwoman of the Supervisory Board. These remuneration elements have been established in accordance with the remuneration policy presented in 2022 for the financial year and the corporate governance report and the universal registration document 2021. As the Chairman of the Remuneration and Nomination Committee has reminded you, the terms of officers Barbara Dalibard and Aruna Jayanthi expire at the end of this ordinary general meeting. The process for the review and selection of the candidates and the presentation of the candidates is detailed in the Supervisory Board's report on the draft resolutions included in the 2023 General Meeting notice and also in the Chapter 7 of the 2022 universal registration document. In accordance with the company's Articles of Association, only the Supervisory Board, 89% of whose members are independent, excluding employee members, can recommend to the general meeting, the members who will represent their shareholders on the Board. As is an essential guarantee of the separation of powers, none of the general partners intervene in these choices or can take part in the vote on appointments at the general meeting. These -- the shares they hold being excluded from the quorum for each resolution. At the end of this process, the Supervisory Board decided unanimously with interest members abstaining to ask the Chairman of the Management Board to propose to the general meeting in the 12th resolution, the reappointment of Mrs. Barbara Dalibard and in the 13th resolution, the reappointment of Dr. Aruna Jayanthi. These appointments are proposed for a term of 4 years, i.e., until the end of the general meeting called to approve the accounts for the year ending 31st December 2026. After the ordinary resolutions, I will now summarize the other extraordinary resolutions. Now the purpose of the 14th resolution is to allow the allocation of free shares to beneficiaries, employees and executive directors of the company and employees of French or foreign companies of the group. Following on from the authorization approved in 2020, this year's resolution aims to, first of all, adjust the performance criteria to take into account the Michelin Motion Strategy and to allocate up to 250 shares without performance conditions, with only a condition of presence to a larger number of operators, employees, technicians and middle managers in order to continue to develop their involvement in the company's results. This resolution replaces or would replace the 25th resolution approved by 97.02% of the votes at the combined general meeting in 2020, the characteristics and interim results of the performance targets or the corresponding plans that are set out in Chapter 6 of the 2022 Universal Registration document. The purpose of the 15th resolution is to reduce the share capital of the company by canceling shares acquired under an authorized share buyback program for a period of 24 months. This delegation replaces the resolution authorized by the general meeting of 13th of May 2022, 28th resolution. The implementation of the buyback authorization in force during the financial year 2022 resulted in the cancellation and corresponding capital reduction of 4,326,536 shares. Then the 16th resolution pertaining to the powers to carry out the formalities associated with this combined general meeting does not call for any particular comment. Thank you very much for your attention.

So congratulations to Benoit. You actually managed to make this the description of resolutions glamorous. Congratulations. Now I'm now going to open up the general discussion. In accordance with the possibility offered by law, the answers to the written questions before the general meeting have been published on the company's website. So I propose that we begin this session with questions from the floor, and then we will answer the questions that you have sent us remotely on the dedicated e-mail address. I will first give the floor to the members of the Michelin Shareholders Committee.

Hello, everyone, [indiscernible] member of the Michelin Shareholders Committee. I have a question, concerning the people dimension. Now you talked about Michelin's objective for 2030, which involves reaching 85% of employees who feel engaged and you gave us some examples, but could you expand on this? And maybe provide us with the concrete examples of initiatives or programs.

Thank you very much for your question. I'm going to give the floor to someone who's an expert in this field because you have the group's Executive Committee and Jean-Claude Pats is going to answer your question.

Thank you very much for this question. Hello, everyone. You're right. I confirm that this is our objective, 85%. Just to set the scene, this is something that was mentioned by Yves Chapot earlier on. This engagement rate increased by 3% last year. So we are on the right track. And just for your information, today, the Michelin Group is divided into 9 regions. And we have 4 regions today with an engagement level more than 85%. Now how can we assess this engagement rate? So we ask 4 questions. The first question has to do with the pride of belonging to Michelin? The second question is would you be ready to recommend joining the Michelin Group. And here again, we have answers above 85%. And there's a third question that has to do with our working environment. And here again, the answers are very positive for 85% of them. So for 3 out of the 4 questions, we're above 85%. But there's 1 question where there is a slight gap. The question is as follows: if you received an equivalent proposal in terms of salary and in terms of job description between what you do at Michelin and what you would do elsewhere, is 74% stated that they would stay with Michelin. And that's where we can further improve our performance. Now we're working on different fronts. Let me give you 3 examples. First of all, managerial quality in order to people to feel that they belong to the group, we don't want them to want to work elsewhere. And this means that in terms of management, the quality of management has to be as high as possible with a lot of initiatives in this field. The second front we're focusing on, especially after what we call the manufacturer of talent, we want to make available to our employees tools that will enable them to develop their skills, in terms of job skills but also their personal fulfillment. And then what we call the employee experience, their experience on a daily basis. And here again, we can always do better, and it is by focusing on these 3 fronts that we will be able to exceed this ambition of 85%.

Thank you very much. Second question Madam [indiscernible], member of the Michelin Shareholders Committee.

This is my question. Thank you very much. Michelin is going to link up with Scandinavian, Enviro Systems. And the French investor [ Antin ] in order to create the first tire recycling entity. Can you tell us a little bit more about this?

Yes. I'm going to give the floor to Maude Portigliatti.

Thank you very much for this question. We're extremely proud of linking up with these 2 entities, and we're going to create the first tire recycling group on a global scale. This joint venture will focus on a patented and unique technology designed by [indiscernible]. So we're going to transform these tires into carbon black and into oil, thanks to pyrolysis technology. By 2030, the recycling capability should reach 1 million tonnes in terms of tires, which is considerable. And the first plant will be located in Sweden, and it will be fully operational by 2025. Now we can contribute to this joint venture with our resources, our expertise, and we signed a multi-annual agreement in order to supply them with our raw material or our material. And we're extremely proud of this joint venture. This really testifies to our desire to engage in the circular economy and to take a part in highly innovative petitions. Thank you very much.

Third question asked by [ Mr. Anthony Katane ] also a member of our Michelin Shareholders Committee.

Good morning, everyone. My question is as follows. You work with RLU in Indonesia, and you acquired a controlled stake in the company. And what is your assessment of this partnership?

I'm going to ask Manuel Montana to answer this question. Until recently -- because he joined the Executive Committee recently, but until then, he was in charge of the E to A regions, so Southeast Asia, excluding China.

Hello, everyone. Thank you very much for this question. In 2015, Michelin linked up with a local partner Barito Pacific for the development of sustainable via trees in this region. And we found some land that was actually devastated by the deforestation. And I can tell you that today, Michelin can be extremely proud of the work carried out over the last 8 years with a lot of breakthroughs from a social standpoint with the creation of 10,000 direct and indirect jobs, but also from an environmental point of view, with thousands of hectares that we've been able to save. Thanks that you the work carried out by our teams in Indonesia. But we are still fully aware of the challenges that we have to rise to in the years to come. Because the value chain, if we consider natural rubber Indonesia, this chain is extremely complex and fragmented. And by becoming a single owner of this entity, Michelin is reaffirming its trust in this project. And also it's confidence with regard to our long-term ambitions, i.e., the production of natural rubber, while improving the quality of life of local communities. Thank you very much.

Thank you. This is an extraordinary project. It's not perfect yet, but we're getting there. So we're now going to give you the floor. Thank you to those shareholders who wish to ask questions, please. We have hostesses with roving mics. So you will be giving a mic. And before asking your question, please state your name. So to the left here, we have a question. Please raise your hand so I can see who is asking for the floor. So microphone #5.

Good morning, [indiscernible] I am an employee and a shareholder, and I'm also a union representative. I have a question that has to do with your wishes that you the press. You stated that you wanted a better distribution of wealth and more social cohesion. Now in order to make this a reality, what are the levers that you're going to activate in the years to come at company level?

Thank you very much for your questions. I think that capitalism went a little bit too far in terms of remuneration of capital. And we had the tendency to forget that at the basis of any society, we have people. So if wealth is not distributed enough, it becomes a real problem, especially labor work. It has to give -- rise to appropriate remuneration. And this is one of the conditions for personal development. So concerning what I said. Of course, the capital has to be remunerated. You are shareholders, you actually took some risk by becoming shareholders so it is normal that you should get to something back. But when this remuneration is higher than the capacity for everyone to fulfill themselves in the framework of their job, that becomes a problem. And that's why Michelin came up with different mechanisms. First of all, what we call a decent salary. For any group, salaried employee with family, we decided to select a family of 2 adults and 2 children. And what we call decent salary enable this family to feed themselves, but also to save some money, to have access to culture, entertainment, everything that enables people not only to continue living in survival mode but to enjoy life. And this is why we've implemented this concept of a decent salary everywhere and we just make sure that it is applied everywhere. The second measure is the Michelin One Care approach. The idea is that during the COVID crisis, we became aware of the fact that there were some populations in certain countries that received absolutely no support from a social standpoint when faced with a challenge with a difficulty in their life, for example, health problems or someone dying in the family. And at Michelin immediately, we thought this is not something we can tolerate. And therefore, in addition to all the social measures in place available in countries or not for that matter, we need a system that could actually take this over so in order to make sure that people would be protected enough for themselves, for their family in order to be able to face the future. So we want to guarantee a minimum level of social protection should such an accident occur. So these are important measures, but we need to go one step further. Now your question leads me to another comment that I wanted to share with you. In many cases, we want to keep at all cost people in their job, whereas the economic conditions are no longer met. You know that the company is a living entity that has to adopt itself. So I think it's better to add -- help people, who lose a job to help them find another job in another environment rather than maintaining a person at all costs in a difficult precarious situations. This is what Michelin has done in the past and they will continue to do this in the future. It's a sign of good health to adapt ourselves to transform ourselves. In our cases, we're an industrial site, a commercial site reach the end of its life cycle and we have to consider the recycling this entity. And of course, this means providing support to individuals who have invested a lot of time and energy and the development of this industrial or commercial side. But at the same time, we shouldn't keep person at all cost. And here again, we have to take into account this notion of a decent salary, but we will have the possibility of examining this in greater detail. And I think that Michelin is a pretty good example in this field. Microphone 6. So we have several mics, so please feel free to raise your hand. Mr. [indiscernible]

Can you hear me?