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

Ladies and gentlemen, dear shareholders, Hello, everyone. It's a real pleasure for me. And for the Michelin teams, to be with you again for our Annual General Meeting. I would like to greet all those who are following us from distance, thanks to the live webcast on our website. The Annual General Meeting is always an important moment, not only for making decisions, but also for providing information and exchanging ideas about what brings us together, i.e., your group Michelin. You may have been surprised to see some of the objects on this stage. We wanted to highlight the richness of Michelin's know-how and the vast potential of its applications, but I'll come back to this in a moment. Now without further ado, I declare open our Annual General Meeting 2024. With me are Yves Chapot, General Manager and Group Chief Financial Officer; Benoit Balmary, Corporate General Counsel. Mrs. Itto El Hariri; Mr. Jean-Christophe Georghiou and Frédéric Gourd representing, respectively; the statutory auditors, PricewaterhouseCoopers and Deloitte & Associates, are also present on the first row in the dark, but I can still see them, the members of the company's Supervisory Board. With the exception of Mr. Le Hénaff, Mr. de La Chevardière, and Mr. Scheider who are following this event live from distance. Mr. Vincent Montagne, Chairman of SAGES, the non-managing general partner. We shall now proceed to the constitution of the bureau, chairing the meeting, I appoint as scrutineers the 2 shareholders who each hold and represent the greatest number of votes in this room and who have agreed to act in this capacity. They are Mr. [ Pierre Mishnan ], Chairman of [indiscernible] and Mr. Eduardo Royo Mariscal, who's the Chairman of the Supervisory Board of Manufacturer Michelin's Employee Savings BIB [indiscernible]. The Board thus constituted appoints Benoit Balmary, present with us today as Secretary of the meeting. The attendance sheet shows that the quorum requirements have been met. And you will be notified on the final tally before the resolutions are put to the vote. The meeting may, therefore, validly deliberate on the matters on the agenda set out in the notice of meeting sent to you. This ordinary and extraordinary general meeting is convened on first notice. And I'd now like to turn to a summary of the Group's business in 2022 -- 2023 and the outlook for 2024. And for this, I give the floor to Mr. Yves Chapot.

Ladies and gentlemen, dear shareholders, Michelin's all sustainable approach, which constitutes our business model permeates the group's strategy. It is based on the development and fulfillment of people, economic and financial performance, and respect for the planet and its inhabitants. The Michelin in Motion 2030 strategic plan part of the group's all sustainable approach since 2021 lays the foundations for growth in 3 areas: tires, connected solutions and high-tech materials. This sustainable growth is possible, thanks to the team's expertise and materials, our mastery of industrial processes, the strength of our Michelin brand and our close relationship with our customers. About people now. For more than 130 years, Michelin has placed people at the heart of its strategy and remains firmly convinced that the group's performance is linked to the fulfillment and commitment of its employees which improved again in 2023, reaching a level of 83.5%, this score confirms the feasibility of achieving an engagement rate of at least 85% by 2030. It is based on the in-depth work carried out by our managers, with their teams to improve both commitment and management quality. Workplace safety is Michelin's #1 commitment vis-a-vis its employees. And on September 29, 2023, the group published its new health and safety statements. The year 2023, we'll have seen a further improvement in the number of accidents per 200,000 hours worked, and we aim to be below 1 in 2024. In the field of diversity and inclusion, the group aims to become a benchmark company. Our approach to diversity is the subject of policy and structured actions in 5 areas: diversity, identity, multinational management, disability and equal opportunities. In this respect, the results are summarized by the IMDI indicator with a rate of 72 out of 100 in 2023, and we are continuing to make progress. In terms of the value we create for our customers, beyond the quality of our product, we aim to provide them with the best value over the long term with ever greater safety while minimizing their environmental impact thanks to the professionalism of our teams and the advantage provided by our services. With regard to environmental issues now, we are aware of the impact of our activities and products on global warming and capitalize on the know-how of our research and development teams to make constant progress. We are firmly committed to reducing our net CO2 emissions having them by 2030 and achieving 0 net emissions by 2050. Several levers are being activated, including improving the energy efficiency of our industrial sites, we invest nearly EUR 100 million a year to electrify our processes and promote the use of renewable energies, thermal insulation and air renewal in our buildings. At a time when the urgency of climate change calls for a decisive collective action to reverse the trend, our ambition is also to improve the energy efficiency of tires during use with the aim of improving by a further 10% by 2030 compared with a 2020 benchmark when we were already the market leader. Thanks to the expertise of our teams and the design, development and production of innovative materials, we are active in a number of areas. First of all, reducing the rolling resistance of our tires, the production of tires that meet the demanding requirements of electric vehicles and the provision of services and solutions that optimize the use and management of vehicle fleets. Concerning now the environmental footprint of our industrial activities, Michelin is deploying 5 priority programs, first of all, reducing water consumption, eliminate the consumption of solvents used in tire manufacturing, reducing the amount of waste generated and reduced energy consumption and, of course, lower CO2 emissions. The Carbone site in France, close to Clermont and the Shanghai site in China are models of efficiency and already have 0 net CO2 emissions, and we're pleased to present a film illustrating the group's collective efforts in this area. And finally, the group has set itself the challenge of achieving its ambition of an all-sustainable tire by 2050, incorporating 100% renewable and recycled materials. The incorporation of these materials in tire manufacturing is based on a number of principles designed to ensure an environmentally friendly approach and promote sustainability. Michelin also relies on research programs in the field of recycling, such as BlackCycle, the result of the European consortium coordinated by Michelin to develop a value chain around the recycling of end-of-life tires or the BioButterfly project with the construction of the first biosourced butadiene production demonstrator at our Bassens site near Bordeaux, and production has started recently. As you can see, Michelin is moving forward to deliver its planet ambitions for 2030 and the actions identified should enable us to align ourselves with the climate warming scenario limited to 1.5 degrees defined as part of the 2015 Paris Agreement. The good economic performance in 2023 illustrates the group's strategy of leveraging its differentiating solutions designed to meet increasingly demanding customer needs. Michelin maintained its sales supported, in particular, by a 10% increase in sales in nontire activities. These play a key role in the group's sustainable growth and cover a variety of fields such as connected mobility activities and polymer composite based solutions, including conveyors. The integration of the Flex Composite Group acquired in 2023 is part of this area. And in tires, Michelin continues to enrich its offering in the most value-creating segments and to promote sales growth in the most promising segments such as 18-inch tires for passenger cars. We've delivered a record operating income from our sectors in 2023 despite unfavorable markets and currencies with a substantial mix effect resulting from our targeting of markets and segments and our improved value proposition. This result was also driven by an improvement in operating performance offsetting cost inflation factors. And lastly, Michelin has significantly improved its free cash flow generation and return on capital employed, which is now above our target of 10.5%. And we also note a lower level of debt. Year after year, your group demonstrates the strength of its financial structure and its ability to create value while preserving its independence. In terms of shareholder policy now, the profits generated enabled Michelin finance its innovation policy, attract talent, contribute to reducing its environmental impact and remunerate its various stakeholders. Michelin targets a fair and attractive remuneration for its shareholders with progressive growth over time. We, therefore, propose a dividend of EUR 1.35 per share for 2023, representing a payout ratio of 49% of consolidated net income group share and an increase of 8% compared with 2022. Over the past 10 years, total shareholder return, which takes into account the change in Michelin share price and the reinvested dividend has exceeded 120%. Given the high level of cash generation and the strength of its financial structure, the group has also decided to launch a share buyback program that could represent up to EUR 1 billion over the period 2024 to 2026 of which EUR 500 million will take place this year. In short, you can see that your group has the means to implement its strategy, its development strategy while guaranteeing a fair distribution of value at a satisfactory return for shareholders. I'd like to take a moment to look at the value created by Michelin. This value is growing thanks to our Everything-Sustainable business model in the 3 dimensions mentioned at the start of this presentation. In 2023, the economic added value created by the group amounted to EUR 13.1 billion, broken down as follows: 58% of this added value was allocated to employees in the form of salaries, variable -- the benefits and fringe benefits, 22% was allocated to the group's development in the form of investments or acquisitions and around 8% of this value was paid in the form of taxes to the countries in which the company operates. And finally, our shareholders receive 7% of this added value in the form of the dividend, the dividend you are asked to approve today. As you can see on the right hand side of the chart, the EUR 917 million increase in added value in 2023 compared with 2022 has mainly been allocated to investments in the group's growth, notably with the acquisition of FCG, i.e., EUR 633 million with a share accruing to shareholders via the dividend increasing by EUR 65 million and the share accruing to employees increasing by EUR 337 billion. In June 2024, the group will publish its first tax transparency report to make its tax data accessible and to demonstrate its role as a socially responsible tax payer. In this respect, the company's first responsibility is to ensure that it complies fully with all international, regional and local tax legal obligations and the guiding principles that underpin them. And this is going to be done in line with the group's values. The report will present the group's tax strategy and also its global tax for fiscal year 2023. Michelin's tax contribution for 2023 with customs duties amounts to EUR 1.36 billion. So this is nearly 38% of the sector's operating income. To conclude this presentation, I'd like to share with you our outlook for 2024. In terms of tire markets, there should be overall stability, which is expected for each of our 3 segments: Passenger Car, Light Truck and Specialty business. Against this market backdrop, the group expects the sales volumes to fall between 2% and 0% compared with 2023 and aims to generate operating income through its business segments of the EUR 3.5 billion at constant exchange rates with a reported free cash flow before acquisitions of over EUR 1.5 billion of first quarter sales results, which were published a few weeks ago, have confirmed this outlook. Looking ahead now to 2030, the group has drawn up an ambitious road map and all of our resources will remain mobilized to pursue our progress in the 3 inseparable areas of people, economic and financial performance and the planet. Dear shareholders, thank you very much for your attention. But also thank you very much for your confidence. And now I'm going to show you a film, which shows and illustrates the group's collective efforts to reduce environmental footprint of our industrial sites. [Presentation]

Thank you very much. Thank you very much to all of the teams who made this video, and it's always very touching to see all of the progress that we're making in all of these different sectors, and thanks very much to all of the teams who are committed to the subject every day. And thank you very much, Yves as well for this look back to what we did in 2023 and all of our achievements. And also the future road map for 2024. So your group is transforming itself to preserve the planet and its resources so this is a source of both confidence and pride. We're truly building a sustainable company. So dear shareholders, as you know, this Annual General Meeting is a special opportunity to present the full range of Michelin's activities. And today, we wanted to highlight the via Michelin offering, which is being reinvented and it's going to -- with the launch in April in fact. So the idea is to offer everybody the best travel experience. So I invite you to discover it now. [Presentation]

So well done to all of the teams who worked on this new travel experience, really is wonderful to see how this has progressed over these many months, but it's fantastic to see this new version. And you can see it now and you can experience it for yourselves by downloading it on the ViaMichelin application. So it's a slightly different. But basically, now you have all of the content and all of the great wealth of the offering offered by the Michelin guide and everything in this application is wonderful. So now I'm going to hand over to Mr. Frédéric Gourd, who represents the statutory auditors.

Ladies and gentlemen, dear shareholders, so on behalf of the Board of statutory auditors, I'm now going to present the reports that we've drawn up for you. So for the ordinary business of this Annual General Meeting, we have 3 reports. We have our reports on the consolidated financial statements, a report on the financial statements and our report on the regulated agreements. We've also issued 3 reports in respect of the extraordinary resolutions of this meeting on which you are going to be called upon to vote. These reports are included in the universal registration document, which is available on the company's website and has been available since the 8th of April 2024. So I'm not going to present these reports, starting with the reports accounts. So the reports on the consolidated and parent company financial statements were established on the 16th February and can be found on Pages 445 and 464 of the universal registration document. Firstly, we have confirmed in our reports that we've compliant with the rules of independents to which are bound under our professions Code of Ethics and also the European regulation, which is applicable to the statutory audit of public interest entities. Secondly, our audit, which was designed to obtain reasonable assurance about the fair presentation of the financial statements and financial information. Our approach takes into account the specific characteristics of the Michelin and Group with its strong international presence and also the integration of recently acquired perimeters but also an internal control system and information systems, which were adapted to all of these challenges. In the course of our work, we call upon teams from different countries who are under our responsibility and supervision and who carry out the audits of the group's various subsidiaries. Finally, we kept a group management and the Audit Committee regularly informed of the progress and the outcome of our work. Our reports on the consolidated financial statements and the annual statements contain an unqualified opinion. Our reports include a description of the key audit issues relating to the risk of material misstatement that we consider to be the most important for our audit of the financial statements year-ended December 31, 2023. For each of these key audits, we describe the reasons for selecting items, the nature of any risk identified under our audit response. For the year ended 2023, these key points relate to for the consolidated financial statements, valuation of goodwill and sensitive CGUs and the valuation of employment benefits under defined benefit plans for the annual financial statements, the valuation of equity investments. We also report that we have to carry out specific audits, and we have no observations to make on the conformity and the fair presentation with the financial statements of the information given in the Chairman's report on the group's financial position. Likewise, we confirm in our Supervisory Board report on the Corporate Governance that we have all of the disclosures required by law. Based on our work, we conclude that the presentation of the consolidated financial statements for inclusion in the annual financial report complies in all material respects with the required format. Now let's move on to the special report on regulated agreements which is on Page 468 of the universal registration document. In this report, we state that we have not been advised of any agreements authorized during the year ended -- or in prior years, which were pursued into the year ended December 31, 2023. As I was saying in my opening remarks, we've issued 3 reports on extraordinary resolutions on an initial report pursuant to the 17th, 18th, 19th, 20th and 21st resolutions on the proposed delegations to the managing partners or to one of them of various issues or shares and/or securities. This report appears on Page 525 of the universal registration document and contains no specific comments or observations. Also, we've issued a second report pursuant to the 24th resolution on the proposed delegation to the managing partners or to one of them of the authority to decide on a capital increase through the issue of ordinary shares with cancellation of preferential subscription rights reserved for members of a company savings plan. This report appears on Page 527 of the universal registration document, and contains no specific comments or observations. Lastly, in accordance with the 26th resolution, we've issued a report on the proposal to delegate to the management partners or to one of them for a period of 24 months, the power to reduce the capital by canceling shares purchased by the company up to a limit of 10% of the capital. This report appears on Page 528 of the universal registration document and contains no specific comments or observations. So that concludes our report. Ladies and gentlemen, on behalf of the Board of statutory auditors, I'd like to thank you very much for your kind attention.

Thank you very much, Mr. Frédéric Gourd. Thank you very much for your speech. And I'd like to take this opportunity now to thank Mr. Jean-Christophe Georghiou for his support and the support that he's given us over the years in his role as the company's statutory auditor. So for reasons of internal rotation within PricewaterhouseCoopers, he has now been replaced by Ms. Itto El Hariri, who's in the center here. Now I'd like to hand over to Mrs. Barbara Dalibard, who's Chairman of the Supervisory Board to present reports on the Board's activities and also the draft resolutions.

Ladies and gentlemen, dear shareholders, it's a great honor to address you at this Annual General Meeting, and to report on the work of your Supervisory Board. I will give this report on behalf of all the members who are present here today. The Board that I chair is part of an agile and robust governance structure, which is a guarantee of stability for your group. I'd like to emphasize the quality of the relationship with the other 2 pillars of this governance, which is the managing partners who run the company and define and implement its strategy. But at SAGES, which is the company's non-managing general partner and its Chairman, Vincent Montagne, who play a key role in the succession and remuneration of the managing partners. I'd like to thank them for their active and extremely valuable collaboration. Our ongoing contracts contribute to smooth governance and the interest of the group and its shareholders. The Board plays an essential role in Michelin's corporate governance. It ensures that your company is properly managed and reports to shareholders. It examines the group's strategy and makes recommendations concerning major investments. This year, this led us to carry out a detailed analysis of the entire Michelin Motion strategy and its progress as part of the strategic seminar. So we took a closer look at various aspects of the strategy and notably the industrial strategy and in particular, the road map to carbon neutrality and the strategies and opportunities in the electric vehicle market, but also a comprehensive overview of the people-related topics, including the employee training approach in order to face up to business transformation. The Board is called upon to make major decisions relating to corporate governance, the terms of reference of the managing partners and remuneration with SAGES. We also maintained a close dialogue with our main investors through the governance roadshows that I have the pleasure of leading and we present our governance principles and discuss the group's main social, societal and environmental challenges. In all of these areas, the Supervisory Board is committed to applying the highest standards of governance in line with recommendations of the AFEP-MEDEF Code I'm committed to implementing regular improvements in our operating methods. As the group is evolving and changing, it's only natural that the Board should adapt accordingly, so that it can assume its role in the best possible way. I invite you to consult the universal registration document for a more detailed description of our activity. As you can see on the screen, the composition of the Board is carefully balanced. The Board is made of 89% independent members with the exception of the employee representatives who have made a decisive contribution to our discussions, and I would like to thank them for that. It's 45% female membership and 33% foreign nationality should enable it to take better account of the international reality of Michelin's activities, which today covers 175 countries. We are especially vigilant when it comes to mapping the skills of Board members to ensure that the control we exercise over the company's management is appropriate. We are constantly on the lookout for emerging skills or those that may be lacking for the proper performance of our missions in order to prioritize them for future recruitment. We also continue to train, we go out into the field to get a real feel for the most critical transformations required to implement the group's strategy at the Ladoux Research Center. For example, we discussed the distinctive skills developed by the group in high-tech materials research. We also traveled to Central Europe, to gain a better appreciation of the value created by the shared services center for operational excellence at the service of the strategy and the Everything-Sustainable approach. We have attended training sessions with independent experts on key topics such as cybercrime, were the main regulations in terms of social and corporate responsibility commitment and reporting. The respective skills of the Board members are decisive in the composition of its 3 committees. I'd like to take a closer look at these activities. The Audit Committee. The Audit Committee is at the heart of the Board's supervisory role, reviewing the financial statements is the major part of the commitments work to design the committee interact directly with the group's finance department teams as well as with the statutory auditors. The committee examined the management of risk relating to information systems, cyber security is an important area of work for which the committee can call on external expertise. In addition to cyber risk dedicated work was carried out on financial and fraud risk management. And then CSRs risks were examined at a joint meeting with the CSR Committee. Finally, the valuation of the group's negative externalities in particular, the CO2 emissions was discussed in depth Jean-Pierre Duprieu will shortly present the work of the Compensation and Appointments Committee. He will talk to us about the compensation of corporate officers. The committee also reviewed the group's variable compensation policy and how to assess the group's policies and action plans in terms of talent management as well as diversity and inclusion issues. I would like to emphasize the importance and quality of the succession processes put in place for the group's senior executives. The same applies to Supervisory Board members, each renewal or search for a new profile is the subject of an in-depth study of the skills required for the Board to function properly, taking into account the changing challenges facing your company. This Board is thus acting in line with the commitments it has made to this same assembly. The CSR Committee now. Corporate social responsibility committee dealt with an ever-increasing number of subjects in growing importance -- of growing importance, thus revised the extra financial performance declaration, which you can find in the universal registration document in terms of the group's environmental responsibility, the committee analyzed the progress of the Climate Action Plan and in particular, the decarbonization plan in relation to emission targets for 2030 and 2050. It verifies the group's alignment with the biodiversity reporting standard, which will apply from 2024. It also looked into the question of wear particles and the scientific research efforts made by the group on this subject. In the area of social and corporate responsibility, the committee analyzed their group's living wage policy as well as the social protection base common to all group employees. It also examined the road map for steering the CSR performance of the group suppliers taking into account the current evaluation of suppliers and the action plans implemented. The CSR committee continued to keep abreast of regulatory developments and in particular, the European, CSRD, Directive -- the Corporate Sustainability Reporting Directive, which strengthens company's environmental, social and governance reporting obligations. After analyzing and joint work with the Audit Committee, it was decided to strengthen the system for certifying information published by the company on these subjects. And this is why when the resolutions are put to the vote, we will ask you to appoint statutory auditors to certify the company's sustainability disclosures. We will be proposing that you appoint PricewaterhouseCoopers Audit and Deloitte & Associates in this capacity in addition to their role as statutory auditors. The Audit Committee will be responsible for monitoring the performance of the statutory auditors. And this work demonstrates the importance of good coordination between the 3 committees, which deal with many common issues. We are continuing to improve the way they operate, driven not only by the CSRD directive, but also by your group's, Everything-Sustainable ambitions. The CSR committee is fully integrated in the group's broader CSR governance framework, coordination with the corporate sustainability and impact department is crucial. Its members report regularly to the work sessions of the CSR committee, which also draws on external expertise. The committee assesses the group's commitment to social, societal and environmental issues as demonstrated by its governance, which ranges from operational committees to the supervision provided by the group executive committee. I would like to take this opportunity to thank the group's management for the transparency with which we discuss these difficult issues, which are so important for the future. As you can see, in 2023, the group's committees carried out a great deal of work on subjects of major importance to the group's strategy and future. And I would like to salute the respective of the Chairman and Chairwomen as well as each of their members for the quality of their contributions. Details of their activities can be found in the universal registration document. Let's move on to the proposed resolutions, which I invite you to vote in favor of. With regard to financial resolutions, the Board approved the group's management during the year and appreciated the excellence of its results. I mentioned earlier the appointment of the statutory auditors responsible for certifying sustainability information. This is further proof of the seriousness of your group's approach in this area under the watchful eye of the Audit Committee and the CSR Committee. Jean-Pierre Duprieu will shortly present the resolutions relating to the remuneration policy for managing partners and Supervisory Board members. It will propose the reappointment of 1 Board member and the appointment of 2 new members. Jean-Pierre Duprieu and Anne-Sophie de La Bigne were not standing for reelection, and we'll, therefore, leave the Board at the close of this Annual General Meeting, some sad news. Both members of the Board since 2013, they have made a decisive contribution to our work, and I would like to thank them sincerely for their commitment to your company. Jean-Pierre Duprieu's in-depth industrial expertise, knowledge of international markets and rigor and pragmatism were decisive assets for our Board. As a Chairman of the Remuneration and Appointments Committee, he has, among other things, done a remarkable job of ensuring that your group anticipates and develops the skills it will need in the future. As a member of this committee and the CSR Committee, Anne-Sophie brought to bear her extensive knowledge of the regulatory issues that are transforming the context in which the industrial world operates as well as the associated environmental challenges. On behalf of the Board and the group, I would like to pay tribute to their availability into the energy that they have devoted to Michelin and to their values, which are so dear to your company. Anne-Sophie, Jean-Pierre, I have immensely enjoyed working with you, and I really enjoyed our fruitful exchanges once again, my warmest thanks on behalf of the Board. Dear shareholders, you will be asked to vote on the appointment of 2 new members to the Supervisory Board. I would like to pay tribute to the quality of the candidates proposed by the Remuneration and Appointments Committee, Jean-Pierre Duprieu will present them to you in a moment with your approval 2 highly qualified individuals will be joining the Board and making a major contribution to its work. I would like to thank them for their presence here today, and welcome them in advance to the Board after your vote obviously. But with conclusion, I would like to reiterate the Board's appreciation of the quality of the company's management under the leadership of its managing partners. In a difficult environment, the group continues to deliver on its strategy and meet its commitments. On behalf of the Board, I would like to express our gratitude to the group's employees for the performance. Thank you for your attention, and I now hand over to Jean-Pierre Duprieu.

Ladies and gentlemen, dear shareholders, I am delighted to be with you for the last time at this Annual General Meeting to present their work of the Compensation and Appointments Committee. I'll come back to the compensation paid in 2023 to the managing partners and Supervisory Board members. I will present our remuneration policy for 2024 as well as the appointments we are proposing for your company's Supervisory Board. You can see on the screen, the remuneration paid for 2023 to managing our partners and the Chairman of the Supervisory Board. They result from the application of the remuneration policies adopted by the same general meeting last year. Details of these remunerations are given in the universal registration document available on michelin.com. Barbara Dalibard, has reminded you of the work carried out by the Compensation and Appointments Committee on these subjects so I won't go into it again. In accordance with the guidelines set by the AFEP in 2021, we are presenting to you at this Annual General Meeting. The ratio is measuring the differences between the remuneration of executive and corporate offices compared with the median and average remuneration in this organization. The upward trend observed over 2023 for the Chairman of the Supervisory Board reflects the 2023 remuneration policy adopted at last year's Annual General Meeting. This policy brought the remuneration of the Chairperson of the Board, into line with market practice with a view to ensuring the continuity and attractiveness of the position. During this transitional year, this change also means that the remuneration received in respect of the previous year and paid in 2023 would be taken into account cumulatively in the same financial year. The table on the screen shows the attendance fees allocated for 2023 and those actually paid in 2023 for Supervisory Board members. Directors fees for 2023 are based on the remuneration policy adopted at last year's Annual General Meeting. They break down into a base amount identical for each member and additional amounts based on participation in committees. The actual payment of 60% of all these amounts is conditional on the members' attendance at Board and committee meetings. I now come to the compensation policies for 2024, which we are submitting for your vote. For the managing partners, the committees and proposals take into account their respective functions as well as their status as a general and non-general managing partners. They are in line with the 2023 policy, [ whose ] the structure and criteria have not been modified for 2024. As in the previous years, we recommend that the variable annual remuneration of Managing Directors be based on financial, social and environmental criteria that are fully aligned with your group's strategy, multiyear variable compensation will take the form of performance shares as has been available to eligible employees of group companies since 2020. The remuneration structure for Supervisory Board members that we're proposing for 2024 remains unchanged from 2023 in terms of amounts, distribution rules and attendance conditions. I would now like to present the appointments we are proposing for your Supervisory Board on which you will be asked to vote in a moment. The terms of office of 3 Board members Anne-Sophie de La Bigne, Patrick de La Chevardière and myself will expire at the close of this Annual General Meeting. We will shortly be proposing the renewal of Patrick de La Chevardière term of office. He has been an independent member of the Board and Chairman of the Audit Committee since 2020. The Board has examined his candidacy for the first renewal of his term of office. Patrick de La Chevardière brings to our work, all his skills and experience in terms of financial expertise, international corporate management and knowledge of the industrial world. His involvement in assiduity over the past 3 years have led the Compensation and Appointments Committee to recommend its reappointment. Anne-Sophie de La Bigne and I have decided not to stand for reelection, having contributed to the work of the Board and its various committees since 2013. With this in mind, the Committee I chair has been careful to target precisely the skills required to enable the Board to carry out its mission in the best possible way, but also to enrich the skills already present. To this end, we drew up a detailed expertise matrix, which you can find in the universal registration document. And we called on a leading consultancy firm to identify that -- people best suited to the profiles identified. Today, we are submitting for your approval, the appointment of 2 new members who fully meet these criteria. Catherine Soubie has a wealth of expertise in the fields of finance, international corporate management, distribution and business consulting. Her financial expertise as well as her knowledge of social resources and governance issues as Managing Director of Arfilia, would bring a great deal of value to the Board's work, especially within the audit committee. Dear Catherine, I'd like to give you the floor to introduce yourself in a few words.

Thank you very much, Jean-Pierre. Ladies and gentlemen, dear shareholders, it gives me great pleasure to be given the possibility of submitting my candidacy. As Jean-Pierre pointed out, I have an expertise in the field of finance. I studied in the field of finance. I worked for a business bank. I have great wealth of expertise in the field of mergers and acquisitions in France. I've also worked for that Morgan Stanley's Bank in the U.S. and then Barclays and where I spent a couple of years, I was in charge of the business bank for France and Benelux. So I spent over 28 years in this field, was able to learn a lot. I was also able to be part of many operations in different parts of the world. And I decided to take a step back for the first time 15 years ago, in order to become more familiar with what I call real life. So the business world. So I joined [ Casino ]. And more recently, I joined a company called Arfilia as Managing Director. So we are specialized in consultancy in the field of human resources and communication, as Jean-Pierre pointed out, I'm also a member of the Board of Directors of 3 companies, Covivio, Sofina in Belgium, and Clariane that I'm going to leave in a couple of weeks. So why am I so excited at the thought of joining Michelin. It's a marvelous group, a leading company with -- it's a very strong brand. Everyone knows Michelin, but beyond that, the group has very strong values we've been able to see a few minutes ago. It has a very strong history, but it's also a company turned towards the future because we know that innovation is really part of the group's DNA. Now I've been part of training course to discover the different activities of the group, and we even were taught how to manufacture a tire. And I am deeply impressed by the quality, the engagement of all those people I met, now I understand the success of the group over the last few years. And if you trust me, I hope that I will be able to bring my expertise to the group to rise to future challenges and my in depth of knowledge of the world of finance. And I hope that's within the Supervisory Board, I will be able to contribute to sustaining the group's success in the future.

So thank you very much, Catherine. We're also proposing the appointment of Mr. Pascal Vinet, who would bring in-depth knowledge of the industrial world, which he has developed over 38 years' experience with the Air Liquide group, his expertise in research, particularly in the field of materials, naturally brings them closer to your group's strategic challenges. His experience as a manager in an international group and his knowledge of the American and Asian markets have also prompted us to propose his appointment as a member of the Supervisory Board. So dear Pascal, please introduce yourselves directly. Thank you.

Thank you very much, Jean-Pierre. Ladies and gentlemen, shareholders, I'm absolutely delighted to be here today and to stand before you to introduce myself very quickly. So I'm Pascal Vinet. I'm Assistant Managing Director of the Air Liquide group, a group that I've worked for more than 38 years now, as Jean-Pierre said, so after being trained in technical and scientific background, I've got an engineering degree and also have got PhD in physics, and this is what I did most of my research work in the U.S. and NASA another on material behavior characteristics. So I've moved a lot in 38 years with Liquide. I've done a lot of operational and functional activities. Also a lot of expatriate experiences have had -- expatriate experience in the U.S., where I spent 6 years between 2016 and 2021, where I was managing a big acquisition made by the Air Liquide Group in 2016. So all of these different activities over the years, operational activities. Also I've managed a lot of industrial subsidiaries. I also managed the activities of the Air Liquide Group in health, and this was across the globe. I've managed more functional activities, as Jean-Pierre mentioned, my research activity. I was Research Director for the Air Liquide Group. And I also managed strategy for Air Liquide and now in addition to my very operational and management activities with Air Liquide. I'm in charge of security and safety and industrial systems for the group. So that's a quick overview of my background. I'm very happy to join the Michelin Supervisory Board. If you trust me with your vote. As Catherine has just said, Michelin for me is a company -- a group with a long history with values with technologies. And I really like everything it does. It's got some extraordinary products as well. So I really hope that you're going to trust me with your vote and I would be delighted to bring my skills and experience to the Supervisory Board and the management of your company. Thank you very much.

So thank you very much, Pascal, dear shareholders. So I've come to the end of my presentation now. I'd also like to thank the members of the Board with whom I really enjoyed working. Also, in particular, I'd like to thank my fellow members of the Remuneration and Appointments Committee. And I've presented the work of this committee for the last time with the satisfaction of recommending the appointment of the people who are best placed to carry out the Supervisory Board's essential mission to serve your group. Thank you very much for your attention.

So thank you very much, Barbara. Thank you very much, Jean-Pierre, also my warmest thanks to Pascal and to Catherine for your presentations. Well, I'd just like to extend my thanks to Jean-Pierre and Anne-Sophie. I've known them now for more than a decade, 11 years actually. And I'd just like to talk about everything you've contributed to us, but also everything you've contributed to me personally. It's always a very moving moment when people like this who we've progressed with over several years and moved forward with over several years when they head off to new destinies. So I wish you all the best. And also really from the bottom of my heart, I wish you a great future. So now I hope if the shareholders vote and follow the choice of the Remuneration and Appointments Committee, I hope that we can welcome Catherine and Pascal among us. So good luck to you. And we'll see later on what happens. Now I'd also like to share the key elements of your group strategy in a few minutes. But before I do this, I would like to show you a film. And this is a film which expresses what makes Michelin so unique. [Presentation]

It's always particularly moving to see this when you work at Michelin. Ladies and gentlemen, dear shareholders, I'm particularly moved and I'm particularly happy whenever I see this type of film, which really does express what has driven us since the beginning and what we do every day at Michelin. This shows our belief in human progress, but also our determination to contribute to this progress through our innovation. Let me have a little drink. So this is really what sets Michelin apart. But first and foremost, I'd like to thank you, so I'd like to thank you once again for attending our Annual General Meeting. So this is where we share the progress that we've made, but also the key elements of our corporate strategy. And this is where we make key decisions for our group. Yves, he talked about this earlier on, and he told you that our group -- your group in 2023 achieved a very solid performance both in terms of its economic performance and also personal development for our headcount, but also in terms of protecting the planet and its resources in this very remarkable year. I'd just like to highlight our ability to make progress in all 3 dimensions at the same time. It's through these very concrete examples that we come to grips with the reality of what we do. We saw this in the film early on, for example, when we deploy a new electric press technology to cure our tires, we use 7x less energy than the steam presses. And we emit 4,000 tonnes less CO2 every year. And therefore, we're significantly improving the working environment of our staff because the temperature in the curing rooms has decreased dramatically. And when we put our data intelligence to work for our fleet managers, we improve driver safety. We also optimize the performance of the entire fleet, and we reduce its environmental footprint. Every day, within your Michelin Group, our teams work to manage and to combine progress for people, progress for the planet, but also progress for economic performance. This is a source of pride, but also a source of confidence in our ability to continue to meet the challenges that we face in the future. Now 3 years ago, I had the privilege to present our Michelin in Motion strategy. And this is the strategy that we're going to pursuing until 2030. So this set the course that enabled us to navigate an increasingly complex volatile and uncertain environment. And there are many other adjectives that come to mind to describe that environment. This strategy will continue to guide us through to 2030. So we can already see how far we've come. Our growth now is real and tangible. Our growth is the source of profitability. And this profitability underpins our long-term development despite highly unsettled business environment. Over the past 3 years, we have further strengthened our innovative power, and this is what enables us to offer ever more efficient and environmentally friendly products and services. At the same time, we are transforming ourselves profoundly. We measure the concrete effects every day in the experience that we offer to our customers and also in the design of our products. We also measure the wealth created by our acquisitions. All of this is possible because our company is, first and foremost, a committed human community. This community progresses if everyone -- and only if everyone feels protected, if everybody feels recognized able to act and to take initiatives. The decent wage, which was implemented at a global level in January 2024 and the Michelin One Care program enable every employee to benefit from the same essential labor and social rights. This community is at its best when we build a more diverse and a more inclusive company in all of its dimensions, in all the dimensions of diversity and inclusion. Now looking back over the last 3 years, we can now say that our Michelin in Motion strategy has made us ever more resilient. By deploying our core know-how in new markets, we are extending our playing field, and we're becoming less and less dependent on the economic climate. The growth of our non-tire business this year once again shows this, we have double-digit growth. As we continue to implement our strategy, we've aimed to further accentuate the value that we create for our people but also for the planet and economic performance. So this is not incompatible. So what we do on a daily basis, this is demonstrating that these 3 things are a whole and are not incompatible. Your Michelin Group has some tremendous assets with high-quality, highly committed teams and cutting-edge technology. We have a strong brand. We have exceptional products and exceptional services for all of our customers. We create a real difference and this difference needs to be recognized. This is what we call our value approach. And the value approach enables us to improve team workers' conditions, our workstation ergonomics and training opportunities and creates development prospects for all. It consolidates our technological edge. It has a positive impact on the environment by aiming to use fewer resources and also to decarbonize all of our human activities. This value approach means prioritizing the markets and the geographies in which we operate. Michelin can do a lot, but we need to focus our resources and we need to focus our efforts on where we can make a real difference. And Michelin has so much to offer. The film that we've just seen is a good reminder of 2 essential features of Michelin's DNA. First of all, our passion for innovation, which is at the service of human progress and our fundamental mastery of materials. Over time, we've developed unrivaled expertise in polymer composites, I'm going to come back to that in a few minutes to explain what these barbaric words represent. We excel in the art of designing and combining materials, so as to create products with an exceptional performance. The tire is without a doubt the most emblematic composite. It's a very complex product to tire. It's one of the most complex composites units that has over 200 materials, which are processed and assembled by unique processes. So if we put these 200 materials together that we put into a tire, if we were to lay them out on a table, they wouldn't necessarily naturally form a tire. But when you use a tire, these 200 materials work together. And when it's a Michelin tire, obviously, it's -- lives a lot longer than others. So we ask this round and black object, which is nonetheless a technological tools. We're always asking more from these tires and we're asking these tires to be round and flat to be exposed to high temperatures and high risk resistant to have a great endurance and so many other characteristics. So we spend our time reconciling things, which might seem completely unreconcilable. And Michelin, now I'm sorry for the name, this new Michelin tire Air X Sky Light tire. This is a great example. So we have difficulty naming our tires, I must say. And we produce better tires than names. And basically, we're asking this tire to allow ever more takeoffs and landings for planes. And we're asking it to go from minus 50 degrees to plus 120 degrees in a fraction of a second when planes land. Also, we're asking these tires to be a lot lighter, so as to save up to 250 kilograms on the landing gear of an Air Bus A350. So less weight of the tire. This means less weight on board the plane and also less materials to produce this tire. And this is a clear benefit for the environment. So these product characteristics are in high demand for many of the very demanding applications such as the building industry, energy and health care. When you arrived here at the Xenith you may have discovered the Michelin shades structure. This shading system reflects our expertise and the assembly of materials for inflatable structures. It can provide up to 260 square meters of cool space in hot weather. This is very useful in the summer, for example, in areas where no other technical solutions are possible, especially on some squares where trees cannot grow because of what is present underground. It's also our textiles that form the floats and the floor of the boat, you see on stage. They make it a highly portable tool that can be deployed within a few minutes, allowing rescue operations that happen to save lives, for example. Our composites can be as visible as they are imperceptible. When a machine is running, you can be sure that inside there is a composite material. Our products coming to their own in complex systems, ensuring optimum operation. As I explained, the tire alone on the table, it's not really that useful, but then if you fit it higher onto a wheel and onto a vehicle, all of a sudden, it really radically changes your vehicle. The tire, such an elaborate composite is so critical that over time, we've developed an intimate knowledge of its uses. This understanding, combined with our data intelligence, helps our fleet customers to meet their operational, environmental and human challenges. The tire that you might have used to come here would not be able to operate in India, in China or in the U.S. And when we talk about experiences that transform our daily lives, how can we not think of the MICHELIN Guide? Since 1900, it has been guiding travelers towards new discoveries and remarkable new experiences. With its all our travel-related activities continue to be digitized to offer our customers new ever more relevant and innovative experiences. Thanks to our know-how, we can continue to innovate in the service of human progress. Together, we are building a world-leading manufacturer of the composites and experiences that transform our daily lives. By continuing to write the Michelin story, we are projecting our exceptional heritage into the future. We do so with confidence because we know that some things simply never change. Michelin will always be Michelin because we will continue to take care of people. Strengthened by our values and our [indiscernible], we are committed to offering everyone a better way forward. Michelin will always be Michelin because we will always be pioneers. We are constantly exploring new territories, and we will continue to do so, because we want to make a decisive contribution to the great challenges facing humanity. And Michelin will always be Michelin because we will continue to place innovation at the very heart of our actions. We do this by ensuring that technology remains at the service of people and improves living conditions for as many people as possible. Ladies and gentlemen, dear shareholders, as you've seen, Michelin will always be Michelin. We are continuing along the path laid out by our founders more than a century ago. And you can count on the commitment of all the teams in your group and here and in the rest of the world and on my own as we develop this mission. Thank you very much for your trust and attention. I now give the floor to Benoit Balmary, who will remind you of the resolutions submitted for your votes.

Thank you, Mr. Chairman. Ladies and gentlemen, dear shareholders, we would like to inform you that the documentation relating to the draft resolutions on the agenda of our combined ordinary and extraordinary channel meeting has been published within the legal deadlines. In particular, the Supervisory Board's annual report on corporate governance, which includes detailed information on the Board's activity and on the remuneration of the corporate officers that was posted on our website on April 8 within the universal registration document for the 2023 financial year, which also contains the report issued by the statutory auditors. The full text of the 27 draft resolutions as they currently proposed was published in the Bulletin des Annonces Légales, the BALO on April 8. The notice of meeting, including the full text of the draft resolutions and the corresponding reports by the Chairman of the Management Board and the Supervisory Board was sent to each shareholder on April 19. Consequently, in order to ensure that the Annual General Meeting run smoothly and in particular, to devote sufficient time to your questions, these are draft resolutions will not be presented at the meeting. In accordance with regulations, we collected your paper votes up to midnight on Tuesday, May 14, and electronic votes up to 3:00 p.m. yesterday, Thursday, May 16. As you know, preserving our planet and its resources is a major challenge for your group. With this in mind, you will be able to receive an e-invitation as of the next Annual General Meeting, in order to limit the overall use of paper. I invite you to contact the dedicated teams who will be waiting for you in the lobby to answer your questions and enable you to benefit from this service. Thank you very much for your attention.

Thank you very much, Benoit. The general discussion is now open. I would like to inform you that in accordance with the possibility offered by late answers to written questions prior to the Annual General Meeting have been published on the company's website. And I'd like to start the session with questions from the floor, and then we'll take the questions. You've sent us remotely by the dedicated e-mail address. I would first like to give the floor to the members of Michelin shareholders committee. I think they're ready.

Vianney Leroy. I'm a shareholder and an employee of Michelin. And today, I also represent all the individual shareholders via the shareholders committee. Thank you very much for giving me the possibility of asking this first question. Can the Michelin Group via its reputation play a role in reducing consumption, what we call the sobriety of usages.

Lorraine Frega, is in charge of digital services within the group, and she is also in charge of supervising the group's strategy, among other functions. Lorraine?

Thank you very much for this question. This is something that we feel very passionate about. So I would answer yes. This concept of sobriety is really at the very heart of our corporate culture. We need to boost our product performance, the products and services with less material, reduced emissions. This is what we've been doing for a long time. And this culture, this culture of sobriety is something that we are pushing forward for all our products throughout their life cycle is something that affect all our activities, but it goes beyond our activities because we really want to encourage this culture of sobriety, especially in national and international rules and regulations. And we also reach out to our customers because when customers understand the impact of their choice when they select a tire, for example. They can then take the right decision. When we talk about regulations, Michelin has played an active role in promoting a European regulation encouraging all of us to use our tires as long as possible. But of course, these tires have to remain safe. This regulation will see that in 2024, it will lead to a lesser waste and less emissions because of a lower fuel consumption. And then retreading is another example. Michelin is really a pioneer in the field of retreading. And retreading will really lengthen the life span of our tires, truck will be able to cover twice the number of miles with the same tire, thanks to retreading. And we also talked about this earlier. At the very heart of our action lies this notion of sobriety especially when we talk about connected services for professional fleets. So we're going to help the fleet, optimize the way that they manage their tires. We're also going to help them lower their fuel consumption by training drivers on a daily basis to adopt the best driving behavior. And we also support fleets when they want to transition towards electric vehicles. And generally speaking, I know that Yves was talking about BlackCycle. The Michelin Group is collaborating with a certain number of the start-ups, NGOs and research institutions in order for us to move forward together to protect resources to protect biodiversity and also to reduce CO2 emissions. Let me give you one example. We play an active role in order to develop a recycling sector, focusing on end-of-life tires to turn these tires into a new form of raw material. We're also in favor of a European regulation that will really promote the notion of sustainable rubber. Yves Chapot mentioned this in his presentation, this strategy, our strategy complies with these international principles in order to protect the environment, for example, the Paris Accord in 1990 and 2015. And we are definitely very much involved in reducing consumption.

Thank you very much, Lorraine.

Second question, Catherine Michon, I'm a member of the Shareholders' Committee. I have a question on AI, artificial intelligence. Is Michelin going to integrate this in R&D in order to optimize resources and be more efficient?

We already have a lot of artificial -- well, at least, real intelligence, human intelligence within the R&D department, but I'm going to give the floor to Eric, who is in charge of research and development and a member of the Group Executive Committee.

Thank you very much for this question. At Michelin, the use of AI is something that we are already working on, and it's been a part of our activity for some years now. And of course, the research and development is that first area where we decided that to get a better understanding of the possibilities offered by artificial intelligence. So we use this today in the development of new products, because we have this capability to use a lot of data to influence our decisions to select the best component or the best material to meet specifications. And this is something that we are already doing. What is interesting is that artificial intelligence alone works better in some areas. And if we consider our research processes, we have strong synergies because we have a strong history. First of all, we have an approach that really focuses on a rigorous process when we characterize and select our products. This means that we have a lot of historical data with regards to how we manufacture our tires. And artificial intelligence really fits into this process. And this is the reason why this tool is extremely interesting. It's powerful. It's powerful because it's very quick. So we are able to identify the right solution much more quickly, but it also reduces the environmental footprint of our R&D process because we're able to take decisions much more quickly with less physical prototypes that -- we use virtual prototypes and less tests to reach the same result. Another aspect that is specific to Michelin and also explains why AI is a real added value is the fact that artificial intelligence alone is one thing, but it's even more powerful when it is coupled with the physical analysis, modeling capability in order to better understand how tires work. And we have a major advantage because we've been investing for decades in the modeling systems of our tires to better understand how they work. And if we combine the 2, we are able to fine-tune our analytical capabilities. Artificial intelligence is not here to replace the human intelligence, our analytical work, it's an additional tool in our toolbox in order to multiply our capabilities. And our analysts, our researchers can then focus on those areas of work that require a lot of creativity to push back the boundaries of what is possible and artificial intelligence is used in R&D, but it is also used in many other sectors. And we have a lot of applications, for example, in the supply chain or connected services or other areas where we use artificial intelligence.

So we can only see the front row and the rest of the room is in the dark, maybe we can switch on the lights. Please feel free to raise your hand, and you will be given a microphone. I can see there's a question here to my right. And if other people want to take the floor, feel free to raise your hand. Please show me your sign. So question 1, 10 and then 8 at the back of the room. I feel that no one is listening to me. No, you are listening to me. Okay, good.

Okay. Thank you very much. So question number one. Hello, everyone. I'm a shareholder, and I'm also a Michelin employee. And this is the first time that I attend the general meeting. I wanted to write down my question because I wanted to get it right. These diversity and inclusion initiatives, to what extent are they are part of Michelin's global strategy?

Thank you very much, David. I know him. He's really, really tall. He's almost a giant. I'm told, but he's taller than I am. So maybe Jean-Claude, you could answer this subject. Jean-Claude Pats is member of the executive comment of the group. And he's also in charge of headcount and people.

Thank you very much, David. Thank you very much for this question. Obviously, diversity and inclusion, this is an extremely important dimension of our strategy. Yves referred to this when he gave the report on the progress and the results that we obtained in 2023. Now why is this important? Well, because within the Michelin Group, we want any person irrespective of their characteristics, we don't want anybody to feel that they're faced with the glass ceiling or we don't want them to feel, well, this is just not possible for me. So in this framework, we've developed and defined an indicator that was presented, which is R&D indicator. I'm not going to go into detail because it's very complex. But basically, through all of these indicators, which make up this measurement system, we measure how we're progressing on all of these points every year. And this enables us to measure our progress. And this is absolutely crucial for social cohesion in our group, but also for engagement so that everybody is engaged towards the group. Obviously, nobody must feel left out. Nobody must feel because of this or because of that, I have less opportunities to develop my career within the groups. The answer is yes.

Thank you very much. So now question 10.

Paul Stefanick, I'm an individual shareholder. I'd like to ask a question about the future sports policy of the Michelin Group. And what are the future prospects for these different sports disciplines that you want to enter into?

Maybe I'll call on Scott Clark, who's in charge of our sports. So all of the people who are on the executive committee, they're going to be answering. So he's in charge of car tires and also competition activities.

Good morning, ladies and very much thank you. Thank you very much for this question. You know that competition is really part of the group's DNA. This is a way for us of showing our leadership techniques and also the performance of our products, but also boosting the group image. And for us, it's another opportunity to accelerate our know-how and sustainable development activity. So sometimes people ask what's the link between sustainability and competition. Well, we use competition today to quickly develop tires with a high rate of sustainable materials, and to test these tires in very difficult conditions. So for example, in MotoE, we have 50% sustainable material rate. And for Endurance, we have a sustainable material rate of 63%. So to answer your question, the most important part for us today is to find the competition organizers that we can work with, that we can really use to showcase our products and to tell a story around our tires and to talk about the advantages of our tires for competition performance for sustainability and things like this. It's not always the case. It's not always easy to find those organizers, not all organizers want to leave us margin to tell a story. There are some series where they prefer that the tires remain invisible. That's not our strategy. Our strategy is to use Motor Sports for competition to accelerate our innovation. And today, the Endurance series, such as the 24 Hours of Le Mans, [indiscernible] in the U.S. and the other competition races. These are the best ways of doing this in MotoGP and MotoE well. So MotoGP, with motor bikes that are really almost touching the ground when they turn the corners. So this is obviously, something that shows that the role of the tires is absolutely critical. And this is a good way of us to show our leadership in terms of sustainability. So thank you very much for that question. Thank you, Scott.

So I'd just like to add a few words on this because Michelin [indiscernible] sport a long time ago, and this is part of the group's philosophy. So people are at the heart of our strategy and a person has a physical body that we have to maintain and to give a free range to human genius. Basically, Michelin is the leading sponsor [indiscernible] and we were also the first sponsor of the Rugby team. And it so happens for reasons that I'm not going to go in today that there was a difficult situation there for the Rugby sponsorship operations. So basically, we bought this company recently to help the company reach new heights. So this is where Michelin is directly involved, but obviously, Michelin has no vocation to enter other sports. Now this being said, so I noted on Question 8, there was a question 8 somewhere. You've withdrawn your question. Then there was 12. Keep your boards up, please. So #12, please.

I'm a Michelin shareholder. I've owned -- been a Michelin shareholders for several decades now. And the Michelin [indiscernible]. You know that Michelin has factories and sites in countries where we have issues with patents. You know that long-term know-how of Michelin is liable to be copied by the local companies. We saw this with Dunham in China, for example, or Renault in Russia. Also with regard to the French shareholders when Michelin site has relocated abroad. It's the French shareholders who are under privilege compared to others because the French shareholders, like other French people have to pay taxes and the labor consequences of this unemployment, which is suffered from in France. And then finally, with regard to CO2, the activity in China leads to more than half of CO2 increases. And this has been the case since 1990 across the world. So the [indiscernible] produced in China emits 4x to 5x more CO2 on average. And it's more than if these tires were produced in France. And with regard to salaries and everything that's paid to the subcontractors also the taxes in China and also the energy, which has produced. So the profits from the Chinese activity don't necessarily compensate for this and don't contribute to our profitability. So can we decrease these 3 disadvantages? And how can we decrease this risk.

I'm going to hand over to Yves Chapot to answer that question.

Well, first and foremost, the group has a strategy, which is to produce as close as possible to its customers. And therefore, this means that we have to locate our production capacity as close as possible to our customers. So what do we do apart from the specialty products, which don't justify having a site on each continent. So what we try and do is have our plants as close as possible to our customers. So our Chinese plant since you gave this example, our Chinese plants are working almost exclusively for the Chinese market. And therefore, there's never been any relocation of production from Europe or France or the U.S. to China because the products that we sell and we produce in China are, well, I would say, 99% of them are sold in China. And then for the French shareholders of the group, like any other shareholder of the group, they do benefit from the group performance in their region. And I think the group has excellent performance in China, but also in other regions across the globe and also the subsidiaries are enabling us to increase the group dividends and this enables us to pay dividends to our shareholders. So just for everybody to bear these figures in mind, less than 10% of our sales in France and more than 15% of our employees are in France. So we have all of our research activities. We have all of our headquarters activities, which are located in France. And then behind all of this, Michelin's development across the globe is really done and also the Michelin shareholders do benefit from the rollout of Michelin sites and the work of Michelin across the globe. Now with regard to the protection of our know-how and patents now this is a subject that we have to pay close attention to. But this doesn't only concern China because Michelin has the best, by far, the best technology. So everybody is looking to what we do. And it's no surprise to know that we've had discussions with various states who seem very close to us, but who aren't hesitating to come and study our processes and our products. So we have very tight security and safety policy to protect our know-how and technology. And we're very, very careful about this.

So now, number one.

Thank you very much, [ Florent Fias ]. I am a shareholder and employee. I have a question about the heavy trucks segment because we know this is a very difficult segment where there's a very tough competition. In Germany, we've seen that there are some factories closing down. And also, we've seen that it's difficult to get or generate margin at group level in that segment. So what's your long-term strategy for the trucks market?

So let me hand over to Benedicte Bonnechose, who is in charge of all of these truck and van and light truck activities.

Thank you very much for that question. To answer your question, I'd just like to start off by saying that the heavy goods and trucks activity. When you project the figures into the midterm and when we think about electrification, also it might be hydrogen. If you look at the sustainable and resources issues, Michelin is focusing on using all of these different technologies in our activity across the globe. So we're quite confident when we project ourselves into the future. And we're thinking about these future trends in the big areas where we operate, particularly in North America and in Europe, but this being said, as you've already stressed at the end of last year, we did make a few announcements so as to do with the overcapacity production situation that we had in Europe, which is obviously the results of big developments of imports of Chinese tires for more than 15 years into Europe and the Ukraine crisis and war in Ukraine and the heavy inflation, which has weighed heavily on our cost, this has become unbearable. This is why we've announced the closure of 3 sites in Germany to give more competitiveness back to our European plants. So I can tell you that we are quite confident for our truck activity across the globe. As Florent was saying earlier on, we've had to make some important economic choices of where we can express our differences. And this is mainly in North America, Europe and South America.

Thank you very much for that question. Thank you very much, Benedicte. So maybe to add to that, for years, we've striven to offset the loss of market share that we had in Europe. And this is due to the fact that Europe enabled truck tires from other countries to come to Europe with completely different rules. And so we lost market shares. But all of our main competitors lost the same market share rates. And so we lost a lot of market share. And for years, we tried to offset this by exporting tires. We exported tires from our European sites. We exported these truck tires to the rest of the world, and it so happens as Benedicte was explaining. It so happens that we've lost market share. But now, in fact, we are no longer in a position to export from Europe because our production costs are no longer competitive on the export market. So as Yves was explaining, we can produce locally for local markets, but exporting is not at all competitive. So this is why we've had to readjust our production capacity in Europe, but because we're no longer competitive, and we're no longer able to export this type of tire from Europe to the rest of the world. So now question number 3, please.

Yes, Christian Pascale. I'm an individual shareholder. I'm Following Motor Sports with great attention and Michelin sponsors and fits MotoGP with a great deal of success. But in Formula 1 racing aren't you start to see that for many years, in all of the world's racing trucks, there's a lot of advertising from your Italian and Chinese competitors. And have you carried out an impact study on the commercial impact of this because the 1.5 billion TV viewers who watch Formula 1 racing on television.

Okay. Thank you very much for that question. Scott, maybe you can answer that question. So you can start off by answering that question. I'm going to add to what you say.

So correct me if I'm wrong, if I say anything wrong. Well, it's true the Formula 1 is extremely popular. But as I was saying in my answer to the previous question, is the visibility of tire manufacturers in Formula 1? Is it positive or not? Because the organizers are asking for products which are degraded. A lot of people are talking about the tire performance and saying the tire performance is not great for Formula 1. So as I was saying, we're looking for opportunities where we can showcase the performance of our products and where we can tell a story, which is positive. And we're not looking to improve our visibility because we're already extremely visible across the globe with Michelin tires and the Michelin brand. So basically, we're looking for more opportunities to showcase our products, and we're going to continue to look for opportunities and competition to do this. Obviously, we'll always look at Formula 1 opportunities if they decide to change their strategy or their approach with regard to tires.

Just to add to what Scott has just said, bear in mind that the main reason why Michelin takes part in competition is because this will accelerate our innovation process. Now obviously, there are different benefits from media presence, but this is not what we're looking for in competition. What we're looking for most is to test things out, to test our performance out and to help us develop our technologies quicker. So if you have a tire that doesn't work, obviously, we don't -- when we do not have tires that don't work. So this is why we're not in Formula 1 because our tires work. Number 7, please.

Michel Nevro, I'm retired Michelin employee. I have been retired for 2 years now. So I have a question for the new Michelin wine guide for several years now, Michelin bought the Robert Parker wine guide. They bought it a few years ago, and the Robert Parker wine guide was a very reputed guide among winemakers. And this has had a great deal of influence on wine production. And obviously, we invented the word Parker-ization for wine testing, but when you look on Robert Parker's website, you can see that this belongs to Michelin but there's not much communication around Michelin on the Robert Parker website. If you read their annual repot -- they don't really talk -- our annual report. We don't talk about the Robert Parker guide in our annual report. So my question is, why did Michelin buy the Robert Parker guide? And what is your communication policy on this guide? And how can you reconcile the wine guide with road safety issues, for example? How do you reconcile the Robert Parker brand, which is a very strong brand with the Michelin brand. And one final question which is a very interested question. Are you recruiting inspectors for the wine guide because I'm looking for a job?

So Michel, you know what the procedure is. So send your CV and send a new application, if you want. So I'm going to hand over to Adeline Challon-Kemoun, who has 2 hats, in fact, she's supervising all of the so-called lifestyle activities. So this includes the Robert Parker guide. And also she is supervising all of our engagement and communication activities.

Yes. Thank you very much for this question. Well, the wine activity today is a very important activity as part of our so-called lifestyle activities, Florent talked about that a few minutes ago. Now the travel and leisure activity experience that we want to offer our customers concerns restaurants, hotels, but also the Gourmet and table experience. So the wine experiences fully part of the strategy. Now in -- among these activities, we have several brands in the hotel industry. We have Tablets. And in wine, we have Robert Parker. And basically, today, we are pursuing our investigations to see to what extent the MICHELIN Guide could, in fact, assume responsibility for the Robert Parker brand such as the Tablet brand that we have in the hotel industry. So this is something we're looking at, because we're thinking about providing more services to our customers who are looking for a full leisure experience around the Michelin brand. So communication, you're quite right. Today, it's Robert Parker, which assumes the activity in terms of communication and Michelin does a bit of communication as well. And all of the specialists in the wine growing industry in the distribution industry for wine, they know this brand today and they know that Michelin brand. So the question is as to its future development, how are we going to develop this in future? Is Michelin going to take more responsibility for this brand as for the Michelin Guide for restaurants. Now in terms of road safety, don't forget that we support all of these road safety initiatives. And sobriety not only for the environment but also sobriety in terms of not drinking and driving. So for the restaurant and wine industry and you know we do a lot of work in sobriety. So thank you very much.

Question #6 now, 6, 4, 10 and then 3. Bingo.

[ Noelle Montegno ]. I am a long-term shareholder. And I would like to talk about accidents that struck Goodyear. Is that something that could happen to other manufacturers as well and what kind of consequences could this have on Michelin?

I'm not going to comment, the situation of our competitor. But what I can tell you, however, is that at Michelin, we have quality procedures in place. They are extremely robust. And if we consider our development teams, we have processes that enable us to make sure that such accidents will not occur. So touch wood, because in the field of tires, you know that it's a product that is an extremely complex product, and we cannot fully master the evolution of all the components in time. But at Michelin, we really pay a particular attention to the quality of our development process. And we also monitor all the usages. And every time we have a doubt, we recall the tires immediately. This is what we did in the past. Our processes are robust. Whenever there is a doubt we recall the tires. That's what we do at Michelin. Question #4.