Imerys S.A. (NK) Earnings Call Transcript & Summary

[Interpreted] Good afternoon, ladies and gentlemen, dear shareholders. It's now 3:20, and I'd like to open our AGM. I'd like to start off by expressing our apologies. Some people in country some difficulties in making their way to the room. I think the IT server had a mishap and we were suffering the consequences of that. So, we had to do manual registration of participants and voters later on. And the fact is we couldn't allocate a voting box to one precise voter or shareholders. So, we'll have to do things like we did in the old days. And I chaired out the meeting instead of having real-time voting. We'll have to use paper ballots and ask you to vote on each of our resolutions manually -- and that will lead us to give you the outcome of the voting process in a rather delayed fashion so that the outcome of the poll will be available tomorrow on our website. If the IT is working now, well, somebody must be saying to the Chairman that the IT system is working now. Don't worry, don't worry, we'll get it organized. So, I have no worries about that. So having said that, I suggest we start our meeting. Now even if the server were to be working again, which have the issue to do with the registration of the voting parties, and we couldn't match the voting boxes with the people who would have been registered manually. So, this meeting is being broadcast on our website. It will be available also as a replay. And I can guarantee you that also, we have Mr. Dazza, our CEO, Alessandro Dazza. By my side, Sébastien Rouge, our CFO; and Emmanuelle Vaudoyer my left here, the Group General Counsel and members of our Board. Marie-Françoise Walbaum, who is the Lady Chair of the Appointments Committee and the Compensation Committee. And she does every year will join us in a few minutes to make a presentation to this meeting of the items on the agenda concerning corporate governance. Also present in the room, we have the members of our Board of Directors as well as Olivier Boson, who's a partner within Deloitte and partners; and Cedric Haaser, who is a partner within PricewaterhouseCoopers audit, representing the joint statutory auditors.

[Interpreted] Thank you, gentlemen, for joining us. So, the general meeting, which is meeting on the first call here today is actually an ordinary general meeting here today. And I would like to ask Emmanuelle Vaudoyer to kindly, if you don't mind, Emmanuelle talks about the accomplishment of all of the formalities relating to the invitation of the meeting and the holding of the current meeting.

[Interpreted] I confirm that in compliance with the law, the prior notice of meeting, which is the invitation to the general meeting, presenting in particular the agenda, the draft resolutions and the condition for our participation in voting at the general meeting. These were published in the BALO publication here in France on the 5th of April 2024. The registered shareholders were also convened by letter or by e-mail addressed to them on the 24th of April 2024 and the publication of the notice for the meeting was conducted on the Act Jordi. -- website on the same date. Also, the documents and information that should be made available to the shareholders by virtue of the provisions of the French Commercial Code were indeed made available on the website of the company and the shareholders also were able to take cognizance prior to this meeting within the legal deadlines of the documents provided for by law.

[Interpreted] Perfect. Thank you, Emmanuelle, as the Chairman -- thank you. So, we'll have to make the usual checks, of course. But it seems that if we look at the tenant sheet of the meeting, the quorum is achieved 169.22 shares present or represented here. And will confirm the final quorum before the end of the meeting, of course. So, we want to appoint scrutineers for the meeting. They will be the 2 shareholders present who have the largest number of votes. We have Mr. Frederik Vermeersch, I hope I got your name right, is the pronunciation -- who is the nominee of Belgian Securities RL, representing 92,6540 votes; and Mr. Paris Kiricoples, who is the nominee of Blue Crest Holding S.A representing 8,96,217 votes. They have kindly agreed to be the returning officer, the scrutineers of the meeting, and I would like to thank them for that. Manuel Bodal will be the secretary of our meeting. And as we usually do in order to leave enough time for the presentation of our business activities and the results of your group and make a presentation on our climatic transition plan. We will well, we suggest we wouldn't read out in full all of the different reports provided for by law. These documents are available in full in the universal registration document for 2023 that was filed with the AMF body on the 26th of March last. And there are copies of this URD document for 2023, also the invitation to the meeting brochure and the climatic transition plan available here to shareholders in the room. And we will, of course, have a Q&A session at the end of the meeting. I won't talk about the functioning of the electronic voting boxes because we won't be using them. So that will save some time. So, let's move into the heart of the matter. In fact, I put out that when we have a presentation on the major highlights with our CEO, Alessandro Dazza.

[Interpreted] Thank you, Patrick. Good afternoon, everybody. Let's now look back at 2023 and detail out the results of the company, along with our CFO, with Sébastien Rouge. If you don't mind, I'd like to start off by focusing on certain highlights. In 2023, Imerys continued to prove its resilience and its agility, how resilient and agile it could be in a complex market environment. The sales volumes in 2023 were impacted by the low level of demand on the end markets, especially the residential construction market, the market of industry, especially in Europe and the paper market as well. And this low level of demand was aggravated by stock release destocking that went on throughout the year. So, in spite of a high comparative base last year, prices actually held their own, had own pretty well, and they even went up by 2.6% for the whole year. But the slowdown then in Q4, reflecting the end of certain energy surcharges that we had applied to our plants. And Sebastian, who is our CFO, will go into this topic in more detail in a short while. Thanks to our discipline in terms of pricing and especially thanks to the hard-hitting action we took on costs Imerys posted a current EBITDA for all of the financial year of 2023 at EUR 633 million, in line with our guidance. We should also note the high level of free operating cash flow generation, EUR 288 million before strategic CapEx, slightly up compared with the previous year 2022 and EUR 192 million after this CapEx -- this is largely the fruit of a couple of things. At taken on the working capital requirement, especially with a big reduction in inventories, but also helped along by the drop in inflation. And the Board of Directors will be proposing to shareholders a cash dividend of EUR 1.35 per share, in line with the historical average payout ratio. If we now look at the performance of the group over the last 2 years, Emrys confirms that its business model, our business model is indeed resilient, even when times are hard in difficult times like in 2023. In spite of low volumes, the EBITDA margin currently is remaining flat around 17%. This proves the agility of the group. You can see on the graph on the bottom right that we've adjusted our prices to take account of the trend in variable cost inflation also impacting our fixed costs and overheads. These price increases in 2022 and the adjustment in 2023 were indeed necessary to maintain our profitability, just like the cost-cutting measures set up, and we describe them actually in the next slide, the cost-cutting measures. The purpose of this slide is to give you an overview of the hard hitting, far-reaching actions taken to drive our cost down. And the idea is to explain how in spite of a low level of business activity, we achieved a current EBITDA margin that is flat at almost 17% in 2023. -- between 2022 and 2023, our costs went down by 9%, not just because of the drop in volumes, production volumes, but also thanks to the substantial actions we took to drive down our costs. These actions enabled us to achieve EUR 126 million worth of savings at 3.3% of total costs, and this more than offset the total inflation impact. These programs encompass all of the levers available to us in Iris by action that we took on procurement initiatives on procurement, operational efficiency in plants, adjustments of capacity, reductions of overheads and discretionary expenditure in general. As a consequence of this, our cost base for 2024 this year will be lower than what we had in 2023 because these actions have been deployed most of them anyway, in an enduring way. And you see them on this slide, the main end markets of Imres that saw contrasting orientations and more rather unfavorable ones, I would say, in 2023. First market is construction. Overall, we can say it was positive, but thanks to the momentum of the infrastructure sector, an increase of 7% compared to 2022 -- but Imerys hasn't got a big footprint in that market segment. It's less than 10% of our revenues in Construction for Imerys. So, exposure is mainly in the residential market, and that was very much impacted and still is impacted by the upswing of interest rates and the tightening of lending conditions in Europe and in North America. Consumer Goods, Beauty Care Goods, 18% of our exposure remained on a positive trend in the United States, thanks to the robust labor markets there, but down a bit in Europe because of high inflation. And regarding automotive and transportation in general, 13% of our exposure. But the year was pretty good. We've seen a robust business activity in nearly all of the geographies especially thanks to the catching up that was done regarding sales because of the chart charges in 2022 of semiconductors. Having said that, we shouldn't forget that sales overall remain at a lower ebb compared with recoveries, 14% negative compared to the situation before covered. In the other markets that we service, NRG, for example, low industrial activity in Europe and in North America impacted negatively by energy consumption there. electronics, the inflationary context impacted end markets and end demand. And then plant and equipment for industry, a big slowdown in Europe, a bit less than the U.S., thanks to all of the actions taken governmental flanking measures to support economies. And then for paper and steel, especially in Europe, we continue to slow down with a lot of capacity reductions, especially because of high cost of energy. A few words about lithium now the lithium projects. In 2023, it was an important year for us, but 2024 will be a pivotal year for these projects on lithium. For France, there's the Imerys project, aiming at producing 34,000 metric tons per year of lithium hydroxide. And we've come through some important milestones already. The drilling campaigns, for example, the success of drilling campaigns confirm the attractiveness of the deposit. The technology was tried and tested on a lab scale with several hundreds of kilos of lithium of battery grade already produced -- now the locations of the loading station in San Bone Durocher and the conversion plant in Molson, -- these locations were announced in January 2024. That means that all of the sites will be set up in the [ same department ] or same county here in France, which is Ali. So, what's on the cards for 2024. There will be -- there was already an important public debate started off. It started on the 13th of March last year in France. So that's a key milestone. And the Commission Nationale de Public will be publishing its report at the start of July. In parallel, the prefeasibility study is continuing and should be concluded by the end of the year. Subject to obtaining all the permitting necessary the construction of an industrial pilot plant will be launched. For the IRS British lithium project in the U.K., aiming at producing 21,000 metric tons per annum of lithium carbonate, substantial progress was made up to now. This project is running behind the French on the cost. So, the drilling has confirmed the grade of resource available in the concentration of lithium. So, we have already produced in a pilot lab on the spot, battery-grade lithium carbonate and the integration of this project within Imres is now underway. The next steps are as follows: pursuing our drilling campaign to increase the level of precision regarding the size and the content of the deposit. And in parallel, we'll be optimizing our processes within the context of the pre-feasibility study that's already underway. And a couple of words on innovation. Now -- the group has rolled out more than 50 new products in 2023 and the priorities in 3 areas: green mobility, sustainable construction and natural solutions for consumer goods. I won't go into the details of each new product, but I'd just like to underscore 2 points. our constant efforts to meet the needs of clients and markets in conjunction with the 3 key trends that we've mentioned. Also, each innovation project is now reviewed with a framework that we call the portfolio sustainability evaluation framework. And we have a check by an independent outside body. 78% of our innovative solutions in 2023 are indeed deemed to be sustainable solutions. And now I'll give the floor to Sebastien Roche, our CFO, who will detail out the figures for you.

[Interpreted] Thank you, Alessandro. Good afternoon, everybody. I'd like to go back to some key financials for resin 2020 -- so starting off with the revenue. Sales achieved EUR 3.8 billion worth in 2023, a dropped 9% compared with the record-breaking previous year. The scope negative scope effect of EUR 31 million is connected with the recent divestments. The revenue figure also integrates a negative ForEx impact of EUR 83 million, mainly because of the depreciation of the U.S. dollar compared with the euro. Now the impact of prices remained slightly positive in 2023 for the full year after the exceptional inflation we saw in 2022. And we note the reversal of the upward price trend in Q4 of last year of 2023. Now if we have a look at the trend in the profitability of the group, the current EBITDA of 2023 was in line with our guidance announced in July last at EUR 633 million. That's a drop of 12% compared with 2022 financial year. This trend is the reflection of the drop in the volumes, EUR 240 million worth. Also, the contribution of prices was positive. That's EUR 106 million worth of positive price impact associated with a drop in CASK because of the cost-cutting actions we took and the reduction of the inflationary pressure that we under especially in Q4. It's also the reflection of the increase in the dividends paid by the joint ventures and the associates that we have. As a consequence, the current EBITDA margin leveled off at 15.7%, in line with the 16.8% of 2020 to the previous year. Let's now look at the other items in the IRS P&L. The current operating income stood at EUR 365 million. The net financial income negative by EUR 38 million, an improvement of EUR 12 million compared to 2022, mainly because of the deleveraging we've done in the group. The current taxes, EUR 81 million they corresponded to a current effective tax rate of 24.9%. The increased contribution of the net profit from joint ventures, not taxed at the level of Iris brings down this percentage of taxation, of course. The current net income of the continuing operations stood at EUR 242 million, down by 13% compared to 2022, a variation fairly close to the variation in the revenues. [Interpreted] [indiscernible] that was sold at the end of '23 until the net results stood at EUR 51 million. If we look now at the financial structure of the group in 2023, we are able to reinforce the balance sheet of Humes, thanks to the sale of the HTS activity and the significant generation of operating cash. And after the payment of an exceptional dividend of EUR 330 million paid in May 23. Mt. Marius has reduced its debt last year. At the end of '23, the ratio was diminished compared to 22 reaching 1.8x. In absolute terms, financial debt was reduced by EUR 548 million to reach EUR 1.1 billion, which made it possible to have net indebtedness standing at 35%, which is a record level for IMRs. I'll hand over now to Alessandro Dazza for information having to do with the first quarter '24. But before I hand over to Mr. Dazza, who's going to do is to give you the tax that we received today from the Social and Economic Committee the representatives of staff, which is complying with the law, they're invited to issue an opinion on the economic and financial situation. After having heard the report of the statutory of the statutory auditor and the accountant. So, the Economic and Social Committee, the CSE in French, gave the following opinion, which I'm going to read quickly to you. First of all, there are -- these are the main points. They went over the main figures that Mr. Vaudoyer and Mr. Rouge read decrease of sales, mainly due to a decrease in volumes of sales. We were not able to compensate by crisis increases, this decreases in volume. So, the result is down with the current operating activity, which is significantly down. But Imerys maintaining an operational performance, which is robust, in line with the forecast we issued in '23. The year 2023 was marked by a significant generation of cash, supported by a significant reduction in need for cash flow and a reduction in new inventory. So, this is taken into account the impact of the disposal of HTS, which occurred and finalized at the end of January 23. Thus, the ratio of net debt compared to EBITDA current and our own capital has improved considerably, offering the group good flexibility from a financial point of view because it's a very high level of available resources. The committee remind us as well that the AGS group share because of the other minus 135 other operational expenditures, as Mr. Rouge indicated. So, an exceptional result on goodwill and assets having to do with the paper market, EUR 175 million out of the EUR 235 million that I mentioned. So a dividend stands at 1.35 as proposed in cash and an overall amount of EUR 115 million or a rate of distribution of -- from a social point of view, not much change there other than the high temperature solutions, which is out of scope. Over the last 3 years, now reaching 13,678 staff. It is down in Europe outside of France and in Asia Pacific, between the end of December '22 and the end of December '23. So it's stable globally group-wide. So that's what Imerys a very high level of outside production outsourced production and internal employment is done, and that's a criticism. For these reasons, the elected members of the semi issue a favorable opinion with these following reserves -- if in '22 and '23 are atypical and the trajectory of the group. We are doubtful about the ability of organic group in the group, and we are wondering about the Connect and Shape effort in the commercial and social areas. That's the opinion of the social economic Committee. I hope that our General Director will be able to convince you and them and our social partners of the fact that we are less doubtful than they are and more convinced about the ability of the group to have organic growth. This has been the case in the past. And obviously, we obviously are subject to economic realities. -- as we were in '22 and '23. And we are subject to that directly the consequences of that. We hope that this will show the ability of the group to bounce back and to get back to organic growth of significant proportions. And I'll hand now over to Mr. Dazza, who's going to be confirming what I just said, I hope, about the figures for the first quarter of 2024.

[Interpreted] Thank you. Indeed, if you allow me to present the results from the first quarter '24, which was published the 30th of April last. They are very good results. It's well received by the market. Now the important event of note is that I'm convinced that we've reached we have the first signs of recovery in the actual demand. Sales has reached EUR 930 million, which is higher than the fourth quarter and the third quarter of last year, thanks to higher volumes. This is the first time after 6.5 years. Some end markets are still weak. Industrial markets in Europe and residential construction in the U.S. partially and in Europe. This explains but the worst is behind us. Now if we look at it quarter-by-quarter, sales are down 3% compared to the first quarter of last year, which was a basis of comparison, which is quite high. In the month of March was a record of the last year. The prices are slightly down, standing by -- down by 1.9%. And compared to a high-level last year. As you remind you, the first quarter, '23, that prices had increased by 11% compared to the previous year. The second important fact is adjusted EBITDA stood at EUR 18 million, up 9% compared to the first quarter of 2023. Very solid margin standing at 20%. This performance is really the fruit of our commercial actions and our savings and the good financial performance of the co-enterprise. Another effective note is, the group continued to implement a strategic road map. The things of importance, the creation of a new branch called solutions for the energy transition. So, I'm going to talk about that in a minute. And then we entered in exclusive negotiations with the American Group Flex, which potentially could sell off the assets serving the paper market. this transaction should be closed by the summer. Lastly, Numeris was active in acquisitions after a very tranquil 2023. We are continuing negotiating with Senvion, which is an affiliate of Kanon Carbon to buy their perlite and diatomite activity in France in 2 sites and in Italy's one site. So, these activities are represented in 2023, EUR 50 million in sales and 130 staff. This acquisition is targeted, which will generate synergies of significant proportions will enlarge our product portfolio, especially these are natural solutions for consumer goods, and this is a market that is strongly up. So, Imerys is continuing to be resilient and to be agile in an economic environment, which is getting better, but it's still a challenge. As percent to the market last 12th of April, we created a new branch of activity called solutions for the energy transition, so as to better reflect the -- how important the contribution to growth is group activities in minerals and critical minerals. This branch includes the graphite and carbon activities at Imerys and the part of our group is 50% in the co-Enterprise of CorteCorporation, a world leader in the production of silicon of high purity for solar photovoltaic and semiconductors and markets. Both of these represent key engines for growth in the future of Immerse and underline the major role that you manage plays in that energy transition -- as I said previously, the first signs of a recovery are strongly there in group activity. You can see the arrow is going up. Now in the last 2 quarters, this has been significant. This is due to changes in volumes. Comparing with last year, the prices are down, but -- and the considering effects are negative, and we have sold off an activity. So, the scope is necessarily negative. To conclude, we can look at the future with a certain amount of optimism. Now I'm going to change topics. I'm going to start talking about where we stand in sustainable development. Since 2018, our ambition in terms of sustainable development is around 3 major areas, which are fully aligned with the PAC model of the U.S. and the sustainable development goals of the United Nations. The first area is driving value from our teams to make sure that our employees stay in good health and are safe to protect human rights, to develop talent, to promote diversity and inclusion and commit with 2 local communities. Secondly, to build the future with our customers. to behave ethically to guarantee responsible purchases and promote products and sustainable processes. To take care of our planet. That means we're protecting the environment, promoting the efficacy of natural resources, respecting by diversity and acting against climate change. In 2022, the group defined priority themes with objectives in sustainable development over 3 years, which should be reached by the end of 2025. that are just a few examples. Now after many years of continuing improvements, our performance is continuing to progress. All of these objectives are detailed in Chapter 3 in the universal document of the group, I'm not going to go into all of the details. Here, you have a selection of indicators and performance here linked to 2023. They demonstrate that we are on the right path to reach our objectives in the middle term, especially and notably, thanks to the reduction of our greenhouse gas emissions in scope 1 and 2, 24% by 23, which are in line with our objective to reduce by 42% by 2030. I'll get back to that. This slide shows the integration of sustainable development in the heart of our strategy and that starts by solid governance, robust governance -- the Board plays an essential role in validating these sustainable ambitions of the group. In 2024, the Strategy Committee became the Strategy and Sustainable Development Committee. This committee meets -- has been supported by a reference administrator and ESG, who is independent since 2021. From an operational point of view, every day, our program called Sustain is supervised by a Sustainable Development Committee. This committee meets every quarter and is responsible for drawing out the ambitions of the group group-wide to approve key steps and to follow the implementation of the group objectives. We need to mention as well that the realization -- realizing these objectives of our program are integrated in the variable compensation agreements. -- the General Director of myself, the Executive Board as well as all of the senior managers. climate transition plan is robust and will make it possible for us to reach our ambitious objectives, which are in line with the Paris agreement, 1.5 degrees for limiting the rise in temperature. The detailed plan underlines our objective and are transparently, but also the progress of our performance and the actions that are concrete that we would need to apply every day and the solutions we're developing to help our customers to reduce their own emissions. We have a dedicated publication for this plan, and you'll find some copies in the room today of that plan. This is a key slide here. Here, you can see to reach our road map for decarbonation. We have to accelerate our efforts to reduce emissions, taking concrete measures to integrate the climate in all of our production processes as well as in our value chain. We've announced in 23 new objectives aligned with the 1.5 degrees trajectory. In other words, reducing CO2 emissions of scopes 1 and 2 by 42% in absolute value. So these are in tens of C2 Scope 3 of the 25% between now and 2030 with 2021 being the reference year taking into account. Now these objectives were approved by the initiative science-based targets, SBTI, in July of 2023 and approved by the end of last year. So, our road map for decreasing greenhouse gas emissions is based on 5 main levers for decarbonation, energy efficiency, change in fuels and biomass used, electrification, electricity, a low carbon emission and innovation in processes. For Scope 3 emissions, the levers include -- which are mainly upstream and downstream. So, it includes actions in collaboration with our suppliers and managing our product portfolios. -- in addition to replacing certain fossil fuel by biomass and actions targeting the improvement in energy efficacy. Here, a few examples of levers for de combination, which will contribute to reaching our objectives for reducing emissions of greenhouse gases. An example, in Andersonville in the U.S., we replaced the use of coal and rotating furnaces with peanut shells while the increase in our electrical consumption in low carbon, thanks to producing photovoltaic electricity on our sites. Lastly, studying new long-term projects such as carbon capture and storage derived from our production processes, which make it possible to reduce significantly our greenhouse gas emissions. Lastly, we will be using solid efforts and objectives to quantify our performance aligned to international standards. These fundamental elements contribute to define our position as leaders in terms of sustainable development, recognized by the ratings agencies where we are regularly recognized as being leaders in our sectors. Thank you for your attention. And now I'll hand back over to our Chair.

[Interpreted] Thank you, Alexandre. And congratulations to you and your teams to work that's been done, which certainly is a reduction in the results, but this has been accomplished in a very difficult economic environment, as you've seen with the decrease in volume that was significantly impacting a difficulty composite, but a lot of work has been done, and you will see the effects of that over time because obviously, this is a structural job. Where about dividends now that's the historically thing that we do in the general assembly legitimate. Now what's being proposed by the Board at this point is a payment of a dividend of EUR 1.35, which translates the renewed confidence on the part of the Board in the strategy of the group. Here, you have displayed this slide, which gives you the history. And you can see clearly that in 2022, we talked about it last year about the dividend, the ordinary dividend as we added to that an extraordinary dividend having to do with sending back to shareholders a part of the product of the sell-off of SDS the disposal assessment which has been done. And you also see 47% as a payout of the percentage of the net current distributed result. So, we were placed historically. The net current result was down by 13%, and the dividend by 10%. In -- so a distribution rate is slightly higher now, which except for 2020, which was marked by COVID, it was a historically low amount, which is already observed. It was roughly 50% below, but that makes it possible to provide a good participation to shareholders with the progress of the group, and I hope this will make it possible for our shares to be contributive to our value. So, that's what I wanted to say. I'm going to ask Emmanuelle if he could sort of kindly summarize the resolutions that we are going to be asked to vote upon. And we'll obviously have the opportunity to discuss various matters to enable us to best respond to these.

[Interpreted] Thank you, Chairman. The ordinary general meeting has to approve the agenda that we have before us here on the screen with our 17 resolutions. As you can see, no request has been made to add an item to the agenda draft resolution apart from these ones has been proposed. So, we will of course, be voting upon the resolution phase or on. And the resolution submitted to you for your prop today are reproduced in full in Page of 376, 379 of our universal registration documents for 2023 and also available, of course, in the brochure of invitation to this meeting, both available too, of course, on the website of the company. Now the first and second resolutions as usual, concern the approval by the meeting of the management of the company and the annual accounts of the company as well as the consolidated council of the group, of course, for the past financial year. As you've heard, expanded upon by Alessandro and Sebastian, the third resolution then concerns the allocation of profit and setting the dividend with respect to the year ended December 31, 2023, EUR 1.35 as you heard. Fourth resolution, you're asked to give your opinion about the statutory or the special report governed by Article 25 to 40 of the French Commercial Code. Now the Board of Directors at session on the 21st of February 2024, in particular, reviewed once again, all of the related party agreements. And the Board noted that there was no related bad agreement that was entered into during fiscal 2023 and that no regulated related party agreement entered into during the previous financial year and already approved the general meeting was pursued in 2023. Next, you have in summary, the resolutions concerning corporate governance, especially the compensation of the corporate officers. Now before making this presentation, we would like to recall that all of the items concerning the determination of the content of the compensation policies of the corporate officers as we call them Ex Ante votes, and the information concerning all compensation paid with respect to or granted during fiscal 2023. This is what we call the Ex Post votes. These feature and pages, 194 to 212 of Chapter 4 corporate governance and Pages 37 to 373 of Chapter 8, the ordinary general meeting on the 14th of May 2024 in our universal registration document for 2023. So I think we can pursue now if that's all right. I think Mary Francois Bala will join us for the next section. Yes. Chairman, we're going to talk about the resolutions concerning corporate governance, of course. And as we said in our introduction, Marfan Laban, who is the latest Chair of the Compensation and Appointments Committee, she will detail out the resolutions on these topics.

[Interpreted] Thank you. So, in the context of resolution 5 to 7 by virtue of the legal provisions concerning the Exant vote, you're called upon to give your opinion on the policies for compensation of corporate officers of the company for 2024 as decided on by the Board of Directors on the 21st of February 2024 as per the recommendations of the Compensation Committee. On a prior basis, we'd like to just be on the screen here. The principles that govern the termination of these policies, especially the fact of respecting our corporate interest and the fact of being in line with the business strategy and the enduring nature of the company. The main modifications made to the compensation policies compared to 2023 are stated on the screen. And these were developed within the universal registration document in more detail. As in the past, we present in summary, the components making up these compensation policies of the Imerys corporate offices for 2024. Concerning the Chairman of your Board, Patrick Kron, his compensation includes exclusively an annual gross fixed compensation, which remains unchanged, standing at EUR 400,000. Concerning the 2024 compensation policy for the CEO, the changes proposed concerning the modification of certain criteria included in his annual variable compensation. So, the 2024 compensation policy of the CEO would include the following main components: annual fixed compensation standing at EUR 950,000, unchanged in 2023. Annual variable compensation, which will be a function of the achievement of quantifiable criteria connected with the financial and ESG performance of the group and also the achievement of personal criteria as we have described them here on the screen. Concerning the quantifiable criteria connected with the financial performance of the group, these include the EBITDA and the free operating cash flow. These criteria weighted 65% -- the count to 65% in the weighting of variable compensation and the levels of achievement expected are in line with the budget objectives for 2024. Concerning the quantifiable criteria connected with the ESG performance of the group. These are detailed out on the next slide and they include, in particular, a new criterion that's connection with water management. These ESG criteria are fully aligned to the ESG road map that we call sustainability here in the group, and the objectives are set consistently with respect to that. The weighting of these criteria is 15% worth of the variable compensation. Additionally, the personal criteria aim, among other things, at the pursuit of the strategic alignment of the group towards end markets which will post stronger growth and the implementation of the lithium project, a project road map. The way of these criteria is 20% of the variable compensation. Finally, it's also stipulated that this annual variable compensation is capped at 155% of the annual fixed compensation of the CEO. The compensation of the CEO includes, in particular, an end of contract allowance in the event of a constrained departure, a maximum amount of 2 years of compensation. And indemnity noncompete indemnity and the amount equal to one year of fixed compensation and the average of the last 2 years of variable compensation and 85,000 performance shares in line with the grant conducted in 2023. The 2024 performance share plan will let last year, be fully subjected to performance conditions based on the economic and business performance of the group and its ESG performance. These conditions would be set in line with the relevant budget targets and would be in compliance, of course, with the group's sustained agility as we call it, ESG road map. The ESG criteria applicable to the Chief Executive Officer of variable annual compensation and long-term compensation and performance shares can be seen here in the screen under is 2024 compensation policy. That is for 2024, of course. And in the seventh resolution, the 2024 remuneration policy for members of the Board is amended to allow the Board to waive the 50% deduction of the remuneration provided for in the event of participation in the Board or committee meeting by telephone or video conference on exceptional circumstances prevent the meeting from being held in person. The proposed 2024 remuneration policy remains, however, unchanged. -- does the annual remuneration of Board members will be determined according to the scale displayed on the screen and will still be within the limit of EUR 1.2 million per year. This limit has remained unchanged since 2018. In the eighth resolution, you are asked to vote on the remuneration or compensation report, which is intended to provide you with a clear and detailed overview for each corporate officer of all remuneration and benefits of any kind and any other items relating to the ropes for the year just ended. In accordance then with the ninth and 10th resolution, you're asked to approve the compensation paid or granted in 2023 to each of the executive directors. That is the chair [Audio Gap]. This amount will be paid subject to approval, of course, of this resolution by this general meeting. Your CEO's 2023 compensation also includes a grant of 85,000 performance shares, all subject to performance conditions as well as benefits in kind representing a book value of EUR 109,516. The following resolution is concerned then the composition of the Board of Directors. First of all, you're reminded that I personally have expressed the wish not to seek reappointment as director with effect from the present meeting. In the 11 to the 13th resolution, you're asked therefore, to renew the terms of office as Directors of Patrick Kronand Paris Kyriacopoulos, which expire the close of this general meeting and to appoint Laurent Raets, as Director. -- all for a 3-year term. Mr. Logan Fab is CEO of OPmobility, which was formerly Plastic Omnium, and professional information has been made available to shareholders in accordance with legal requirements and his biography is displayed on the screen right now Mr. Lan Saga has all the qualifications necessary to make a great contribution to the Board, and we look forward to welcoming him if you lost in favor. Due to a long-planned business trip, Laurent Favre is unable to attend today, unfortunately. And I'll give the floor to Patrick, you would perhaps tell a couple of words about Laurent Favre.

[Interpreted] Well, as Chairman, I am so happy to see the candidacy of Laurent Favre, who will bring to the Board precise an interesting worthwhile knowledge of the strategic issues facing the group and his in-depth knowledge of a certain number of industrial sectors that are important for us. And as [indiscernible] has said, Laurent Favre is the CEO of formerly Plastic Omnium, OP mobility. We've known the most plastic Omnium for so long. We tend to sometimes still call them Plastic Omnium. And the CEO of that group, and he's in the U.S. at the moment, it was very difficult for him to not on risk commitments over there today. So, we would not be with us, unfortunately, but he is really looking forward to hopefully joining our Board. he will be attending our Board meetings between now and the end of the year. If you vote in this member of the board. And it was such a pity you couldn't be with us here today to present himself to introduce himself to you in person. And I can guarantee you that we had a very interesting process with the appointments committee. It was a very interesting process of research that we engaged in with lots of fine candidates available, but he was a little bit better than the others. That's why we chose to ask you to vote on his favor here today. So, we would be very happy if you were to grant him your support in joining the Board and the Strategy Committee belonging to the Board, too, where he'll be particularly useful, we think. And also, I'd like to say on my own behalf and also on behalf of all of the Board, I'd like to thank Ms. Marie-Françoise Walbaum. For the 11 years, you put in, I think if I'm not wrong, Ms. Walbaum, you've put in a lot of valuable work over the last 11 years, and you've helped us in the different battles we had to wait to grow and develop the company. And thank you for feeding in to the workings of the Board and the Board committees, of course, especially the Compensation Committee and the Appointments Committee that you actually chaired my Francois and both of them for several years. So, thank you again. And Marie-Françoise Walbaum, I'm giving you the floor Marie. Well, we have voting for, but we're thanking her.

[Interpreted] Thank you, Patrick. Thank you to everybody as well. So subject to the approval of these resolutions, the new composition of the company's Board would be as shown on the screen here right now. It shows whether or not each member is independent, as assessed by the Board of Directors on the recommendation of the Appointments Committee and their membership of the Board's specialized committees. So, you can see that on the screen here at the moment. Thank you. And I'll give the floor back to Emmanuelle.

[Interpreted] Thank you, Marie-Françoise, the 14th and 15th resolutions concern the appointment of Deloitte Associate and PricewaterhouseCoopers Audit as statutory auditors with responsibility for certain sustainability information with effect from the 2024 financial year. Their terms of Otis will expire at the close of the Annual General Meeting to be called in 2020 to approve the financial statements for the year ending December 31, 2027. The 16th resolution concerns as usual, the renewal for a further 18 months of the authorization for the company to buy back its own shares. The objectives of this new share buyback program are set out on the screen. The maximum number of shares that may be acquired under this program has been set at 10% of the total number of shares outstanding at January -- in January 2024 or 5% if the shares are acquired by the custody with a view to their retention and subsequent remittance in payment or exchange in connection with the merger, demerger or contribution and the maximum purchase price of these shares has been set at EUR 85 -- EUR 85 per share. This resolution also stipulates that the Board of Directors may not make use of this authorization in the event of a public offer for the company's shares. And the purpose of the 17th and last resolution is as usual to confer the next report to carry out the legal formality subsequent to this meeting.

[Interpreted] Thank you very much, Emmanuelle. I would now like to move on to the statutory auditor's report. I'd like to invite Cedric Hauser, Signing Partner of PricewaterhouseCoopers order who is speaking on behalf of the joint statutory auditors to present to you all of their ports, both general and special ones issued in respect of the 2023 financial year.

[Interpreted]Thank you, Mr. Chairman. Thank you authorize me to turn you back to you for a couple of minutes. I do apologize. Digi's and gentlemen, dear shareholders. On behalf of the joint auditors PwC and Deloitte. I'd like to report on our assignments fulfilled in financial year 2023. The report on the company and consolidated accounts and our report on the wage part agreements feature in the universal registration document and also in the invitation notice to this meeting. The page numbers are on the screen here. So, I suggest, as we usually do at this meeting to sum up the salient items in these reports. Firstly, I'd like to recall that PBC and Deloitte and their network to the verification of the Council for all of these substantially sized entities in the group concerning our port on the accounts. We recall that the objective of our assignment is to obtain reasonable assurance on the truthfulness and accuracy of the accounts. And that make sure that there's no material misstatement in these accounts. So, we have implemented a noted procedure that looks at the risk incurred, the economic context that the group is working and its subsidiaries and also the changes in the consolidation scope. The audit approach is adapted to take account of the different lines of business of the group and its organization. We also tried to verify that the ordinary and particular transactions are the focus of procedures we implement as a function of the standard practice in the audit industry here in France. And we shared with the financial department of the group on many occasions. We had debates and talked with them, and we have spoken, of course, to the Audit Committee and the Board on multiple occasions as well, in line with the provision's laydown in European regulations. Our reports flag out the key audit matters concerning the risk of material statements and the responses we found in those respects. Also, we use the IFRS reference base adopted by the European Union, Page 335 to 339 of the URD. There were 3 key audit matters we'd like to flag up. Firstly, the measurement of the recoverable amount of goodwill. Secondly, the valuation of provisions for the industrial sites that need to be dismantled and the remediation of the mining sites and also the assessment of the financial impacts relating to the talc litigation. Following our work, we provided a nonqualified certification of the consolidated accounts of the group. Regarding the annual accounts of IRSA using the French gap, you will find on Page 340 to 343 of the universal registration document, the details regarding that. You will find all of the details there following the work we did. We also certified in a nonqualified manner, the annual accounts of your company, the statutory accounts. We also verified the management report and the other documents intended for as we looked at the truthfulness anocracy of the information provided in the management support, and we can certify that in the report from the Board on corporate governance. We see all of the requisite information required by the French Commercial Code. We also verified the compliance with the account of the information concerning the compensation and benefits paid and the commitments made in favor of corporate officers. -- concerning the related party agreements, we were not advised of any authorized related party agreement entered into in the past financial year or there was also no agreement authorized concluded and previously approved whose implementation continued in 2023. So, Deloitte and partners turned to an external independent outside body regarding the nonfinancial rating that needed to be done, you fund the basis on that on Pages 140 to 150 of the URD. No material misstatement was concerned -- was found concerning the statements made by the company or the truthfulness of the information provided in Page 140 to 250 of the URD. Thank you, sir.

[Interpreted] Thank you, Cedric, and the quality of your work and the college has accomplished. I'd like to thank the financial teams as well for the cooperation, which was able to propose the closing of the accounts and so that could run smoothly without any particular problem routinely -- thank you. So, we are going to move on to discussions and questions. So, a Q&A session. Any questions you might like to ask us. I would just like to say that we do not have written questions. But I think in the legal sense, we have a question which has to do with the buyback of shares -- company shares considering that this is done to the detriment of the long-term development. the share buyback program and operations that were made in this framework as described in the universal registration document of 23, there's no secret. It is they are published on our site and as they are available in this room, the objective of which was to ensure daily liquidity of the stock market prices, which is in the interest of all stockholders, shareholders and to provide appropriate hedging for the performance shares to the benefit of staff in the group and general corporate officers and general manager. So, the voids dilution that would be generated even if it would be moderate by attributing performance shares, which are conditioned upon performance criteria. The distribution of shares to the benefit. So this is not an aggressive policy of share buybacks. It's just to provide liquidity on the market and to avoid dilution linked to distribution of performance shares as authorized by the General Meeting and updated by the Board. That's what I wanted to say about that particular aspect that. Now, what I suggest is that we respond to the questions. Please let us know who you are, and we will be passing around a microphone so that you may use the microphone to ask your questions. Please wait to get the microphone.

[Interpreted] I'm an individual shareholder. First of all, congratulations, and thank you for your results. they're down, but you did what you could. Certainly, better than what others might have done. My question has to do with your investments in terms of the environment with a future perspective on strong constraints that we'll be encountering about the climate. I raised these questions to your colleagues. My question was there 2 has 2 aspects. What's the global envelope of investments that need to be done? How much is that going to cost us? And the subsidiary question is what measures are profitable. Some brand from Vince said it was -- we should have thought of it earlier because they're profitable. But the second 2/3 are profitable. And the third part, we're doing that because we have to. So how is it going to cost us? And can we have -- what's the breakdown between those 3/3, basic ballpark figures?

[Interpreted] All -- every company receives these kinds of questions. So, these are nonfinancial criteria and commitments linked to the energy transition, and it's an exercise that's imposed on all companies, especially industrial type companies as ours. And that's asked to the Board. So, the answer is simple. You'll find a discussion on what we're going to have in the transition plan, the climate transition plan is a page on that. So generally, Imerys today is investing every year between EUR 280 million and EUR 300 million regularly to manage mines and future aspects. Up until '23, we had invested between EUR 100 million additional to ramp up the capacity when you're building a new plant. -- graphics synthetic, what we call ecological transition critical elements. So we're closing 25 million now, but we normally have a good level of capacity to manage the next 3 to 5 years. EUR 300 million will stay as kind of the basis for the future Imerys. What we considered to be today to succeed in reducing our carbon production by 42%, which we committed to, we estimated between EUR 20 million and EUR 25 million will be required every year to reach that goal to set electrification to change out fossil fuel new technologies, that's the amount. So, it's roughly 10% additional in what we invested every year. It's not a catastrophe, -- absolutely not. And I think it's important. There's an important chart in this document that you can find in the room. Half of that amount are for projects to reduce greenhouse raisins, and they're profitable. In other words, for euro invested, I'm going to save more than EUR 1. So at least half so maybe it's going to take time to make that euro. Typically, we are restrictive in return on investment. We expect that we need it to be 3 to 5 years, we get it all back. But for these kinds of things, the return might be a bit longer. But half of those investments will be generating savings rather than costing money. And today, we have half is going to cost us more than a euro to save EUR 1. But there's hope because what's simple, clear and economical, we're going to be doing it now. The rest we're going to wait. We have 6 years to finish. Technologies will be improving. There will be more less expensive. And I think this curve will be a positive effect in the future. So, we're not facing a wall which as reducing CO2 is going to hurt the company. No, that's not the case. We could perhaps add you, if I may, there are constraints that Mr. Dazza just indicated, but there are markets which are generated through the energy transition. To cite a few, you have graphed in carbon in batteries. Lithium obviously, we're talking about courts, high-purity carts that are used in solar panels and semiconductors, the lightening up of vehicles so that we replace a certain number of metals by plastic, but so that the characteristics of plastic are adequately resistant to shock. We include minerals in there. So, you have to look at what the basic image is. And we have absolutely nothing to cry about other than our own convictions and citizens. As business people, we have no reason to try either. -- when you make investment decisions, obviously, we include that whole aspect of the ecology, the environment and the effect that it'll have on the transition plan. But there are many areas in many markets, we have a very sustained growth rate that we are part of, and we're contributing to that lockout. So, I had the nice questions.

[Interpreted] Now the last question is for the director. [indiscernible], shareholder individual. I have 2 questions concerning the Emily project. Who's going to be deciding from a government side about yes or no to the project? And the second question is, will RTE have a percentage in the project.

[Interpreted] RTE, that's the electrical network. The answer is no. The MLB project is owned 100% by Yumenis. We have several times mentioned that it was a very extensive project. We're going to be investing most likely more than EUR 1 billion in it. And for that reason, we consider that at the time when they're launching this investment, we might invite partners in. But for the moment, that's not the case. It's 100% Imerys. RTE might be the preferred partner.

[Interpreted] What authorizations?

[Interpreted] Well, today, ongoing, we have a public inquiry. It's typically French, right? The state creates a commission managed by a chair, who organizes public discussions over a period of 4 months. Upstream, you have to work in describing the project. You have to really put all the information about the project in that description and that's published. So, the public inquiry started on the 13th of March, and it concluded in the 7th of July. So this commission meets twice a week of appointments as well in sort of general meetings to describe the project or specific meetings. We're talking about different batches about the environment, about the final market, the products of other technology in various countries and regions in France. We did in Vin Paris and all of the countries [indiscernible] a small presentation, and then there's 2.5 hours of discussion with anybody can participate and ask questions, jump in and express their opinions. So, all of that will be collected and transcribed with comments and advice that will be published at the end of the process. That's the obligation of Imerys to start the project to consider that this is to improve the project. These are -- this is advise -- we don't necessarily have to follow the advice. But as is the case for all industrial projects, we have started to have building permits, operating permits and so forth with all of the government -- the appropriate government organizations. So that's what's ahead of us at this point. Emmanuelle for technical.