Kering SA (PPRUF) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders. I'm delighted to welcome you here in [indiscernible] on the occasion of this new General Meeting of the Kering Group. By my side, Véronique Weill, Lead Independent Director and Chair of the Remuneration Committee; Serge Weinberg, Independent Director and Chair of the Appointments and Governance Committee; and Eric Sandrin, Legal Director for the group and Corporate Secretary. First of all, I'd like to thank the members of our Board of Directors and Executive Committee who are present here in the room. I would like to welcome Luca de Meo who is just here, who should be joining the Board of Directors and also be appointed Chief Executive Officer who will be talking to you later on. Let us first set up the Bureau of this General Meeting. As Chairman of the Board, I shall chair this. The supervisors will be the 2 largest shareholders, Artémis represented by Mr. Alban Gréget and Amundi represented by Lionel Parisot who are here on my right. So with their agreement, I now suggest we appoint, Eric Sandrin as Secretary for this General Meeting. We have now constituted the Bureau and this General Meeting is now open. Now over to Eric Sandrin, who will tell you about the legal implications and the agenda.

Thank you, François-Henri. Ladies and gentlemen, dear shareholders, you are summoned for this combined general meeting. Summons that was published at the Bulletin des Annonces Légales Obligatoires on July 30 and August 22, 2025. I hereby confirm that the quorum required to hold this general meeting has been reached and that the general meeting has been regularly constituted and can deliberate both on ordinary and extraordinary matters. The final quorum, as per usual, will be communicated before the vote opens. All of the documents legally required have been made available to the shareholders and sent to those who have requested them, and I, myself, have a copy here on my desk. So the report by the Board of Directors concerning this general meeting is featured in the brochure, which -- and it is online on the corporate website since July 30. You can also read it on the voting tablets which were handed to you when you came in. So to leave more room for our debates as is usual, I shall spare you the -- an extensive readout of all of these documents. And before I present the agenda, I would like to track your attention to the fact that this event, this meeting is open to other persons and the shareholders, including journalists. So for this reason, this is considered a public meeting. The general meeting will also be streamed live on Kering's website and will be available in replay as is usual. It will also be subtitled simultaneously to be accessible to the deaf and hard of hearing. Finally, more housekeeping details. This room is not very large, and therefore, another room nearby has been equipped with the necessary equipment for people to other people to follow. Let me also specify that Mr. [ Thomson ] a baliff has made the various controls and verifications for the regularity of the vote counting system. Which now brings me to the agenda of this combined general meeting. No shareholder has asked for any other points to be added to the agenda. You will therefore have to vote on 6 ordinary, then extraordinary resolutions, which are submitted by the Board of Directors approval. The first 3 resolutions, ordinary resolutions are about the voting policies, the remuneration policies -- I beg your pardon, applicable to the new CEO to the Chairman of the Board, and to other directors. Resolutions 4 and 5 are extraordinary and are about the appointment of Mr. Luca de Meo to the Board of Directors in keeping with the agenda of the calendar of our general meeting and the statutory modification of the age limits as set by Articles 10 and 15 of the corporate bylaws. And the sixth resolution, therefore, on the powers, the formalities -- given for the formalities that need to be done after this general meeting. So how is this going to proceed? We shall start by listening to François-Henri Pinault, Chairman and CEO; then Serge Weinberg, Chair of the Appointments and Governance Committee will present the company's new governance. Mr. Luca de Meo, who is to become Kering's CEO, whose appointment is being subjected to you, will introduce himself to the shareholders. Then, Mrs. Véronique Weill, who is a Lead Director and Chair of the Remuneration Committee will tell you about the remuneration policies for corporate offices which are being subjected to votes today. And then, Mr. François-Henri Pinault will close this series of presentations before we then proceed to the Q&A session and then vote on the resolutions. Now back to our Chairman and CEO.

Dear shareholders. Thank you for attending today here at Kering's head office for this general meeting. This is a crucial moment for our group, but also, as you can imagine, an important moment for myself. More than 20 years ago, I had the great honor of taking the helm of a company founded by my father in 1962, known as Pinault-Printemps-Redoute at the time, a powerful company, well established in retail, but which I already believed needed to be transformed. As soon as I arrived, I held a very deep belief that our future would come elsewhere in a sector where creation is the driver, where value is constructed in the long term, where mastery of know-how, the strength of the brands, the excellence of the products and the emotion of action count much more than quantity. That strong belief was in luxury as we understood. We worked together to deeply transform the company. It didn't happen overnight. It wasn't always easy, but it was determining. We made key choices. We spun off some activities. We refocused our strategy and patiently, we created a group with a new identity. In 2013, to mark the accomplishment of this transformation, we changed our name, Kering, which expresses our vision of luxury and motion, responsible luxury that pays attention to its impact. And then things were remarkable. The cumulative revenues of our houses tripled. We consolidated our portfolio around powerful, unique Maison with a strong development potential. We worked with various directors. We worked with our craftsman, our artisans, the teams to stimulate their creativity to renew their language and to strengthen their global reach. Within a group, particularly in our industry, you can never rest. Luxury is an economy that is based on desire. You therefore need to reinvent to astonish and elevate at all times. And that is what we have been doing over the past 2 years. We have refocused our efforts on the essential, desirability, scarcity, excellence. We have strengthened our fundamentals. We have worked on our structure. We have invested in our industry in training and education, in skills, in digital. And we have adapted our organization to better serve our houses and to better anticipate transformation in our market. So of course, we know that recent results do not fully reflect all of these efforts, but we're also well aware that the seed was sown yesterday will determine the success tomorrow. And it is at this crucial moment and in agreement with the Board of Directors that I decided to open a new chapter of our governance. As you know, I had been Chairman and CEO for many years, a position that I have always served passionately, and of course, I have required [indiscernible]. Today, I think the conditions for the separation of the 2 functions has come, the time has come. And I think we could entrust the position of CEO to a personality who can breathe in new momentum to all of our houses. This process is conducted rigorously and independently by our Appointments Committee. Serge Weinberg, who chairs it, will tell you about it more in a moment, and this process has led to the appointment of Mr. Luca de Meo as Kering's future CEO. Luca will have full responsibility for executive management of the group. He is a great strategist. He is a builder. He is a man with a deep understanding of brands. His career in the automotive sector has been hugely successfully. He has the ability to steer complex organization and impulse deep transformation. But Luca is also -- also has a passion for the product. He knows the importance of creation. He understands what the house is, what the style is or what a heritage is. And his sensitivity to culture of our brands is essential in steering a group such as ours. I am convinced that he will be in a position to build on what we have constructed to open up new pathways for our group. You will see that he has a huge sense of urgency and is remarkable at execution. He is quick and efficient. And that is why he will strengthen our brands, stimulate our brands and grow selectively while continuing our reorganization by generating value and improving our performance. The resolutions that we are subjecting to your vote today, of course, reflect this new step. I hope you will vote in favor with the care that you have always expressed. I will continue to take part as Chairman of the Board of Directors and as CEO of Artémis, I will continue to support the group's development. I am, therefore, fully confident in handing over the position of CEO to Luca. And finally, let me conclude on perhaps a more personal note. Over all of these years, you gave me your trust. You supported me. You were both vigilant and demanding. And it was, for me, a huge responsibility and a great honor. Leading Kering day after day, representing our houses, defending our idea of a demanding an ethical luxury was a unique human experience. I would like to thank you from the bottom of my heart for the support you have provided over the past 20 years. I am very excited by the new configuration of our governance. Many thanks to you all and many thanks to all the men and women who carry the torch of Kering everywhere in the world. Thank you. Now I yield the floor to Serge Weinberg, who will tell you how the Board and more specifically the Appointments and Governance Committee worked on the selection process for the new CEO, resulting in Luca de Meo being selected.

Thank you, François. Ladies and gentlemen, dear shareholders, it's for me a great honor to address you to present your company's new governance. On June 16, last, the Board of Directors decided in a collegial manner to separate the functions of Chairman of the Board of Directors and Chief Executive Officer, which had been jointly held by François-Henri since May 19, 2005. We decided to entrust Luca de Meo with the position of CEO as of September 15, 2025, next Monday, and François-Henri Pinault will continue to serve as Chair of the Group of Directors. These decisions are the result of a process initiated in 2023 in line with the group's operational evolutions, among which the reorganization of the management team, key appointments within head office and the houses serve to strengthen our operations and the group's capacity to execute. Once this new operational organization was in place, the Board of Directors intensified its reflections in terms of governance around 2 priorities. First, the separation of functions and organization of governance within this new configuration. The purpose was clear, establish a new robust exemplary and effective governance. And against that background, we chose to preserve the function of Lead Independent Director in line with the best standards in governance. Second priority to seek out the best-suited personality to replace François-Henri Pinault as Chief Executive Officer. This process led under the guidance of the Appointments Committee took place methodically rigorously with great discipline. We used 2 headhunting firms, one with an in-depth knowledge of the group and the other that provided a more global approach. This approach allowed us to cross reference 2 methodologies and to examine an extensive panel of profiles, both internally and externally. Our work started with the definition of selection criteria. We were looking for a weathered leader with a global international experience with in-depth knowledge of brands and how they work with the ability to look at the group and the industry with new eyes, to be agile in complex environments and to bring the teams together around a common ambition. The quality of the relationship with the Chairman of the Board was, of course, a key element. After an initial selection conducted by the headhunting firms, we examined around 40 profiles, both in-house and externally, all very high-quality profiles. Our in-depth analysis led to a shortlist of 5 potential candidates with whom we conducted a number of in-depth interviews. It's against that background that early in 2025, we met Mr. de Meo who immediately stood out. He's a leader who has driven and developed brands. He is passionate for innovation, and he knows the market well. Throughout his career, he has a proven track record, a remarkable ability to boost and transform businesses while generating value in the long term. Luca de Meo has worked prestigious brands such as Lamborghini and Ducati, and he is well versed in matters of luxury and its clientele. He is deeply focused on customer experience. He has a 360-degree vision and pays close attention to the value chain throughout. Beyond his professional skills, Luca de Meo has human qualities that were unanimously acknowledged by all who have worked by his side. Integrity, team spirit, ability to listen, ability to discuss and employee engagement, many assets that deeply resonate with our group's value. The choice seemed obvious. And we are fully confident, the board is fully confident that he will make a fantastic CEO. In line with this decision, we are today inviting you to approve his appointment to the Board of Directors, subject to your approval. It is the fourth resolution of this general meeting. The participation of the CEO in our work is, of course, an essential element of consistency and efficiency in defining and implementing the group strategy. Luca will provide his strategic vision, his experience in brand management. This hands-on approach guided by his experience in the customer experience, many assets that will be useful to us. Should you approve his appointment, the Board of Directors will have 14 members, 12 appointed by the shareholders; and 2, appointed by employee organization. Independent directors will be 58% with gender equality, 50% women, 50% men, and 6 nationalities will be represented. In addition to this resolution, we're also submitting to your approval in Resolution 5, two modifications of our bylaws to extend the age limit for the Chairman of the Board and CEO, currently set at 65 years old. This common limitation was adapted to unified governance, but now seems unappropriate now that the functions have been separated. We therefore suggest a difference best aligned with the specific aspects of that, 80 years for the Chairman of the Board, and 70 years for the CEO. This measure aims to ensure stability in governance against the background of a managerial succession and to give the new general management, a sufficient leeway to implement the new strategy it will define with the group. Ladies and gentlemen, dear shareholders. On September 15, next, a new major chapter of Kering's history will start to be written. The Board of Directors is enthusiastic, responsible and confident. And let me assure you, on behalf of all of our directors that we are fully committed and fully mobilized in supporting this new step in our history. Many thanks.

Thank you, Serge. Let me now without further ado, invite Luca de Meo to come up on stage.

Ladies and gentlemen, dear shareholders, I'm very happy to be here with you today at Kering's head office, and it is with great pride and a deep sense of responsibility that I am joining the group. I fully measure the privilege I'm being granted that of contributing to the development of houses, prestigious houses at a key time in the luxury industry. I would like to thank very warmly François-Henri Pinault and the Board of Directors for the trust they have put in me. Their choice may seem surprising to some, I am well aware, but I consider that it is an audacious and visionary bet, opening up the field of possibilities by calling upon experts from other sectors with a new vision. That new vision is what I am keen to contribute very humbly to the strategic orientations that are already underway with the group. As François-Henri, I come here with an experience that is deeply anchored in complex industrial and sales sectors, but also with an unbiased mind, resolutely geared towards transformation. For the past 30 years or so, I have worked for 4 major global groups, all of them listed at the service of 13 brands in 5 different countries in 5 languages. I steered the launch of more than 150 new automobile models. Throughout, I believe that I have developed a very powerful culture of innovation, be it a technological, product-oriented or organizational as well as taste for demanding in a highly competitive environment. I have always thought it was important to bring the teams together around a common project and a clear vision by entrusting each and every member with a part to play in the collective success. I have always been driven by worlds where the product, the brand and the dream are at the heart of value creation. I have a passion in the luxury sector for the ability, the unique ability to combine emotional power and excellence in [indiscernible]. Luxury is not just a product or a service. It is the expression of a vision. It embodies aesthetics. It tells the story, which is why I feel, again, in my place because the houses of the group bring together heritage and innovation, identity and transformation, but they can fuel the subtle balance between dream and demanding. We know that the industry is changing. The market is increasingly demanding, increasingly unpredictable. But I'm sure that with Kering's exceptional assets and the talents we have, we will put the group back in the place it deserves. The current situation described by François-Henri strengthens our determination to act without delay. This will require very clear and strong decisions. We will need to continue to deleverage, to cut costs and where we need to rationalize, to reorganize, to reposition some of our brands. All of this by pursuing the development of our offering and our activities. These decisions will not always be easy, but we shall take them with great lucidity. We shall be demanding. And with a sense of responsibility as business leaders and guarantors of precious heritage in the future that we will need to work together to build. We will focus our efforts initially on the most effective levers to improve the quality of our capital allocation to generate a tangible operating rebound. Of course, I will not today go into the details of our future strategic plan, which I shall be designing with the team and presenting in the spring of 2026. It would be far too early to draw conclusions about each of these subjects. However, what I can assure you is that we shall be swift, effective and decisive. We will consolidate the foundations of our houses and build a luxury group that is even more integrated, more agile and driven by a conquering spirit as in the finest of our history. This will probably involve efforts by all management, employees, partners and suppliers and a little bit of trust from you, dear shareholders. But I am convinced that these efforts will be in line with the results that they will bring. And even more importantly, we shall not wait for the finalization of the strategic plan to act. We are already deeply engaged in identifying and implementing the necessary decisions, most -- many of which will be taken before the end of this year. I am coming on board with determination, enthusiasm, but also with a clear awareness of my responsibilities towards our employees, our houses, our partners and towards you, dear shareholders. Many thanks for your trust, for your support. And again, many thanks to François-Henri Pinault and to the Board for offering me this opportunity to take part in this exciting and ambitious project.

Thank you, Luca, for this clear commitment to Kering service. I'll call now on Véronique Weill, who is the Lead Director and Chair of the Compensation Committee to introduce the remuneration policies that are being put to the vote in this AGM.

Ladies and gentlemen, dear shareholders, it is my privilege to introduce the remuneration policy applicable to the new governance of this company for the period starting 15th September 2025 to 31 December of the same year. These policies are listed in Resolutions 1, 2, 3, which the Board of Directors is now putting to your approval. Resolution #1 is that the remuneration policy for the new CEO, Mr. Luca de Meo, for the year 2025. The Board of Directors worked at a specific mechanism, a transitional system adapted to the limited period during which in the year, he will be working in the context of external hiring. This was designed so as to be both attractive and likely to promote a successful managerial transition while being remaining responsible and abiding by the rules of governance listed in the AFEP-MEDEF Code. There's 3 components to the remuneration structure for the year 2025. First part is a fixed compensation of EUR 2.2 gross paid on a pro rata basis for the period, i.e., about EUR 650,000. The second part is a variable compensation whose target maximum amount is EUR 1.210 million gross. Now that will depend on reaching 2 qualitative and strategic objectives. Number one, of course, the successful taking over, the CEO will need to work out a complete diagnosis of the organization and the working of this company, identifying lines of improvement and implement appropriate change. Second part is about working out together with the Board of Directors, a new strategic plan, which will then be put to the shareholders in the first half of 2026. The third part of the compensation package for the year 2025 is a compensation for accepting the job. But the purpose there is to compensate the -- for the long-term benefits which Mr. Luca de Meo was entitled to in his previous position and which he, of course, had to forego to take -- to join Kering. So these items of special compensation were part of 7 distinct plans, 6 of which were based on quantitative performance objectives related to a quantitative results and number 7 were on qualitative performance. All in all, the share performances were worked out to be worth EUR 20 million. This is a significant amount, and we would like you to fully understand how we worked that -- we worked on that figure. First, we worked out the number of shares, performance shares that had to be foregone for the 6 quantitative plans rather than considering that all performance shares would have been granted, we applied the average acquisition rate that was observed over the past 3 years, i.e., about 71%. That method is both realistic and conservative. For the seventh plan, which is then based on qualitative objectives, there was no historical standard, no benchmark. And so therefore, we decided to go along with the target number of shares that were potentially granted. And then we multiplied that by the average share price of the [ rentable ] share between mid-February and mid-March 2025. That's when the exchanges with Mr. de Meo took place about his potential appointment and therefore, the items making up his compensation package. So this taking over compensation will be paid out as follows: 75% in cash, i.e. EUR 15 million growth before the year's end. And then 25% in carrying shares worth EUR 5 million, but that is under conditioning of the 3-year attendance, 3 years presence and provided, of course, that the CEO meets his objectives for the year 2025. And so these shares can be taken back over a 5-year period should there be any falls to the group. Two provisions then will then the company need termination of the terms. They will be renewed every year as part of the compensation package. So the first case is, of course, a noncompetition commitment for a period of 1 year. The second one is a severance pay, only if there's a forced departure and so not in case of resignation and that is provided that the performance objectives were met for the 2 first years, but prior to departure. The accumulated amount for these 2 compensations is capped at 2 years of compensation, both for the fixed and the variable part. And then provided that you approve its appointment at the Board of Directors, CEO will not be compensated for his position as Director. And the third resolution of this AGM clarifies this point in the compensation policy for all directors, all of whose other provisions remain unchanged. As I was saying by way of the introduction, this mechanism, which is now being put to your vote is for the year 2025, i.e., for the period between 15th September and 31 December 2025. The Board of Directors has already worked out the framework applicable as of January 1, 2026. But that will be for you to approve on the AGM in 2026. Now that -- these provisions will be part of the standard mechanism, both for the fixed and the variable parts that is where the performance shares are granted and these will concern both the financial and nonfinancial performance. These will be specific demanding objectives in line with the shareholders interest and defined consistently with the strategic -- the new strategic plan. And so for the year 2026, Mr. Luca de Meo's remuneration will be based on 3 items: fixed annual compensation, again, EUR 2.2 million. Variable compensation in cash anywhere between 0 and EUR 6.6 million depending on the CEO's performance. And then the long-term variable compensation paid in performance shares so as to ensure there is a clear alignment between the interest of the CEO himself and those of the group and its shareholders. All in all, the variable, both long and short term, altogether will account for 87.5% of the target compensation for the CEO. Now regarding the compensation policy for the chair of the Board -- the Chairman of the Board, and that's Resolution #2 for this AGM. The Board of Directors proposes to set the fixed annual compensation at EUR 700,000 gross on the pro rata and this would work out to EUR 207,000 for the year 2025. Now that compensation, which is not the same as that of standard director has only one component. Now François-Henri Pinault compensation in his capacity as CEO and Chair, the Director, remains applicable until 14th September. And then it's on a pro rata basis from 1st January to that date. The performance shares that were granted in his capacity of CEO are maintained because, of course, the introduction of the new governance was driven and steered by François-Henri Pinault himself. So therefore, it seems the natural thing and a consistent thing to do to keep the performance shares so as to support that decision that is driven by the group's interest. Now keeping these performance shares also in line with a policy of logic of continuity at a turning point for Kering in his capacity as Chair of the Board. François-Henri Pinault will play a decisive role to ensure a successful transition. And that decision is also based on observation of standard practice in a large French group, companies finding themselves in similar situations. It is quite clear that performance conditions, both financial and nonfinancial remain in force. The number of performance shares acquired by François-Henri Pinault will therefore depend on whether these objectives are met. This completes my presentation of the compensation policy being put to -- which is being suggested for the new governance of the company. Thank you, ladies and gentlemen, for your attention.

Thank you so very much, Véronique. I'd like to take this opportunity to express our deepest thanks to you and as well to Serge Weinberg and to all the directors, the rigorous process that led to Luca de Meo's appointment bears witness to the robustness of our governance structure. But I would like to express my belief and trust in Luca de Meo's abilities and no matter what we'll will be able to hold the helm and keep the course. I'd like to thank you for your attention. We are ready to take your questions. But prior to this, I'd like to call on Eric Sandrin to tell us just how this is supposed to work out.

Yes. Well, thank you, François-Henri. This, therefore, is the Q&A session. For your information, let me point out that we received 3 questions in writing from a shareholder prior to this AGM, for this general meeting. They were about the timetable for the introduction of the future CEO's strategic plan, Gucci's governance and Kering's project in beauty and cosmetics. The answers of the Board of Directors were published on the company's website in the portion dedicated to the AGM. Before we start off, let me point out that only shareholders are entitled to put questions. And so if you have a question, please indicate not just your name, but also the number of shares that you hold. Right. Now you can put your questions and do ask for a microphone from one of the hostesses in the room. I see a hand rising here. Yes, please go ahead, sir. We're looking for microphones are we. Sorry, we were -- we got a bit carried away here. The microphone is making its way to you. And here it is.

I have about 100 shares, and there is a potential capital loss. After the meeting in May, the share price of Kering has stumbled down all the way down to the lower ebbs from EUR 175 to EUR 120 per share. And right in the heat of the summer, the group announced the appointment of the Commendatore, Luca de Meo, who is to become CEO of Kering having walked out of -- having his left his position as Renault CEO, of course, the share price climbed term EUR 125 to EUR 175 to EUR 240, the idea was that Luca de Meo would be able to bring about the spirit of Renault renaulution and at Kering, there would be a Kering Renaulution. So please Luca de Meo make sure that the Kering share be as attractive as ever, make us proud to be part of the big family company in the luxury industry, we are playing with the major players alongside LVMH and Hermes.

Well, it's not really a question, is it? But many thanks for your kind wishes. We are, of course, determined to play along the big players in this industry. I'll take a question on the right-hand side.

My name is Alex Tuddy, I only own 10 shares. I experienced a capital loss of 10%, but I do believe in the CAC [indiscernible]. And we have an issue with the return on investment for shareholders. We would like to know what is being done to set the interest of the individual shareholders because that is, of course, the key to the group's success.

Well, thank you for this question, sir. The total return -- total shareholder return, there's no real difference between an individual shareholder and the rest of the company. Of course, over the past 2 years, we've experienced significant challenges. We are doing everything we can to bounce back. And of course, you saw that the markets have regained confidence in the company after the announced change in governance. This will be reflected in for sure, of course, an improvement in the share price and Luca is here to find a new pathway to growth. Question number two, maybe I'll go from the right to the left.

Thank you. I'm with an organization association representing individual shareholders. Under the positive impulse of the Serge Weinberg, you decided to dissociate to separate out the 2 functions of Chairman of the Board and Chief Executive Officer. You are nodding on Mr. Weinberg, but clearly at some point or another, the CEO and Chairman of the Board in challenging situations will come under pressure from Anglo-Saxon investors who will insist on the 2 positions being separated. Why did you wait so long before you decided to separate out the functions? And now you -- well, there was a Lead Director's position that was created precisely with a view to meetings the expectations of Anglo-Saxon investors. That's point number one. Number two, artificial intelligence is spreading all over the place. Has it made its way into the Board of Directors? And if so, what you propose to do? Will you create the geostrategic committee, especially in the present state of affairs where you will find a return to a military order all over the place. And finally, at the present time table doesn't really serve your interest, does it? Giorgio Armani just died, didn't he? Even though he himself made a number of provisions for his succession and in particular, for his move to #2, maybe you could have found a #2 for yourself. And of course, you could have found and somebody working with another iconic brand, and that would avoid putting Mr. de Meo in an uncomfortable position moving from a manufacturing industry to the very select world of craftsmanship.

Anyway, thank you for your comments on that. Well, thank you, sir. Well, if I may address the issues on governance as was pointed out, are thinking on changes in governance are not new. We started thinking about this as early as 2023. And back then already, we're thinking of separating out the 2 positions. This did not come as a result of pressure from Anglo-Saxon investors. This seemed to be the natural way for things to move in this company. As to the presence of an Independent Lead Director, that stands to reason in a company that is, in fact, to a large extent, family held. There is a family shareholder, you have a Chair of the Board, but it is only fair to have an independent lead director that was a recommendation of the asset MedevCo. We're not being opportunistic here. And this is a pretty standard case of what you do when you have a company that is controlled by a family where a family is a majority shareholder as to the geostrategic committee, well, geostrategic consideration is not the work of a specific committee. This is the work of the Board as a whole. There's no reason why there should be a specialized committee that should address geostrategic issues because they are pervading all issues we need to address. And so therefore, it is for the Board of Directors to take on board what international developments might occur political or other events, the movements and offshoring or reshoring of manufacturing. I mean we are a single group. So we don't have issues of transfer prices, but it is the case that markets open and close. There are tariffs, and of course, this sort of thing is to be analyzed, and this will, of course, make a difference to our operational performance. And so it is -- we cannot trust a single committee to address issues which concern the group as a whole and therefore, the Board as a whole. As to Giorgio Armani, maybe you can add something.

Well, you saw that there are many different nationalities on board literally. And that certainly has made for, of course, more fruitful debates precisely driven by geopolitical considerations as well, which is no coincidence. Regarding Giorgio Armani, I mean I do not share your view that I put Luca in a difficult position when he had to move from the automotive industry to luxury craftsmanship. As he said to himself, he has skills as a manager. He's a strategist. He is well aware and sensitive to brands, his profile as Serge pointed out met many of the expectations that we listed out when it came to appointing a new person to run the company as CEO. So he already feels at home in the world of -- in this universe of luxury. As we said, as Serge said, this is a long process that started before COVID days. I believe that I spent enough time, 20 years at the helm of this company going beyond this 20-year period, didn't seem the right thing. You may remember, Serge was already with us at the time. When I was asked to take over the company back in 2005, I was fortunate enough to have a lead shareholder, my own father who gave me a free rein to run the company as I saw fit as soon as I took over. And in that capacity, Luca, in turn, will be able to do the same. As the CEO I've reached the age where my father -- my father has reached when he handed over to me. And so that decision had been made in his term of office. I started my own thinking quite a while back, we changed the group's organization to help the -- to run the individual houses. And this transition started in 2023, it continued in 2024 and 2025. And the combination, of course, the appointment of Luca de Meo as the Chief Executive Officer. If we can take now the next question I can -- maybe question number 8.

I'm Mr. John Dale, individual shareholder. And I have a small question. There's no WiFi in the audience. That's not very convenient. And apparently, there's a question, a written answer to a question, but I can't read it. And so for a good customer experience, it would be good to have WiFi, so we could read that answer on the website. I can see that this -- as a new employee, Corporate Officer, there is a fine sort of a welcome bonus as it were. It'd be nice to have an attendance fee for us shareholder. I have a question about the age of the Chair of the Board of Directors. You can -- the age limit has moved from 65 to 80 years old. Now is it really in the interest of shareholders as a whole to change that age limit. I mean it's really for Artemis, isn't it? I mean Artemis has more than 40% of the shares and 50% or 59% of the voting rights. Is that shareholder being directly concerned -- entitled to vote on that resolution? And regarding the compensation of our new CEO this compensation for taking over -- I mean, his sort of welcome bonus as it were. I find this an embarrassing because he is being, he is trading conditional bonuses, the options, the Renault stock options. But this is being turned into something in cash, 100% by Kering at least by 75% and 25% will remain optional. As of the 75%, we believe that the completion rate was 71% rather than 100%, but still that's the amount that will be given in cash. And if you work out the share -- the Renault share price, it was EUR 41 per share back then, now it's 30% down. So if we were looking -- if we're basing ourselves on today's share price of Renault, instead of EUR 20 million, it would be only EUR 13 million. I would want to make sure that Kering negotiated this properly. And then finally, will you be in a position to tell us about the cost -- the full cost of that recruitment because you also had to pay a fee for the headhunting firms didn't you? And then was that item of the package that is this onboarding fee, will the headhunting companies be getting a permission on that as well because, of course, as a headhunter usually I get a commission based on the salary, but will the headhunting company also get a cut, that is a commission on that, on the sort of welcome package?

Yes. Well, apologies for the WiFi. While it turned out, this is not a -- this is a private building and access to the WiFi requires identifiers and passwords. And unfortunately, this is a legal obligation. We have to impose these conditions, that is, password and identifier, which is the reason you were not able to access the WiFi. Well, if you want to have the WiFi, you need to go to the guest network involving an identifier, a password, but there are legal provisions on that, and we simply cannot circumvent that.

Well, you would need to go to reception to obtain a log-in and password as any other visitor to the head office would get. Comments by the shareholder off mic. You can go to reception and obtain these codes. We cannot provide a fully open access, as Eric explained, for reasons of confidentiality. Comment by the shareholder offline -- off mic.

Maybe I could talk about the compensation package offered to the headhunting firms. It is obviously based on part of the annual remuneration fee, are not based on any compensation that Mr. de Meo could be entitled to compensate for the losses resulting from his transfer. So worry not, the headhunting firms has not been excessively compensated.

As for the age change, the Chairman of the Board of Directors is not necessarily myself or Artemis. The -- it is quite -- it is standard practice in CAC 40 companies to have a higher age limit set at 80. And that is why we have chosen to up the age limits. Véronique?

Well, as for the calculation of the compensation, the welcome package, I think the important thing and then maybe something that we need to specify. The plans were quantitative. So we looked at the past history over the past 3 years, and they were reached at 70%. So we kept the 70% for the 6 quantitative plans. For the qualitative plans, of course, we have no hindsight. We, therefore, considered that this affected the plan as a whole. That is how we came up with EUR 20 billion. And then when you're talking to someone who applies for the job there are discussions, these discussions took place between February and March, and that is why we took the average share price over that period.

Thank you, Véronique. Question number five.

[indiscernible], Just a few words about the separation of functions. We are not an Anglo-Saxon fund, but we are favorable. We are in favor of this separation, particularly against the background of major difficulties that our group has been facing for some time now. Is the separation also -- does it announce a kind of refocusing or reconfiguration of the various entities of the group. What is in the pipeline for the group's future organization? I know that you will be presenting this in 2026, but it seems like a long time to wait. In the circumstances where we're being asked to approve Mr. de Meo's arrival. Do you -- could you give us any vision of what the group's organization might become? As for the welcome package, we have very clear reservations to put things mildly. And we would very much have preferred the proportions to be reversed, but there will be a 25% cash payment and the 75% say, a success fee for pursuant to Mr. de Meo's arrival or onboarding. How do you, at any point, consider that you might reverse the proportion and also have a payback loss as you have done for the EUR 5 million paid out in shares?

The first part of your question about the group's organization, as Luca was saying, there will be a strategic road map presentation in the spring of 2026. We have started working on it. We will not wait until the spring of 2026 to take major decisions, some of them will be taken. And Luca, for instance, is trying to obtain the best possible elbow room and leeway in the organization of the group. So we shall not wait until the spring of 2026. Do give him a little bit of time. We will only arrive next Monday. As for the welcome package, of course, it sounds like a lot of money, but it's an investment in the group's future and investing in the group's future. With the potential value creation that comes with it is healthy investments. Of course, we had discussions as part of our negotiations with Luca de Meo, this is the result of our discussions, this agreement. But I do consider that it's a wonderful investment for the group. Number seven.

Hello [indiscernible] shareholder. The press talked about -- the press talked about Artemis' and Kering's desire to sell off the minority stake in Puma, in the sportswear brand to deleverage, the press talked about this. Could you tell us whether Puma is being sold, that would be encouraged and appreciated by the market.

This is a Kering general meeting, not an Artemis general meeting. Let me remind you that Artemis' participation in stake in Puma was the result of the distribution of Puma shares in 2018, if I'm not mistaken, which is how Artemis ended up with 28% of the share capital. It's a stake that is nonstrategic for Artemis. It is interesting, we are keeping all options open as to the future of the presence of Puma in the Artemis portfolio. Question number two.

Hello Mr. Chair. I'm a shareholder. I have a comment and 2 questions. My comment is about those closer to home for the press so that they don't crick their neck. Wouldn't it be interesting to have a stage that is much higher so that we could get a clearer look at you rather than needing to crick our neck. I'm told that some people aren't as tall as I am, and it would be easier for everyone if the podium could be, say, a couple of centimeters higher. So I saw the equity, the equity reduced EUR 322 million. You bought EUR 2.2 billion in real estate assets, but you're going to be selling for EUR 1.3 billion, I suppose, you are selling to deleverage because the long-term debt has rose sharply in 2024, and I suppose it will be the same for 2025. Are there any other real estate assets we're going to need to sell to improve the balance sheet and the debt? Second question, you were seeing that in 2024, there was a ForEx effect, dollar-euro, I suppose, that hit the results for 2025. But the ForEx effect is going to worsen, isn't it? Because the dollar has dropped 12% more. What impact is that going to have on your revenues, which you're probably going to drop in equal proportions? Thank you, Mr. Chair.

Let me answer briefly, of course, it's not really on the agenda. But will allow me to clarify things. The real estate investments we have made, as was stated for each acquisition were to be financed. We needed to secure key positions in the main capitals New York, Paris or Milan. We are not forced to do this. We said we're going to doing this, and that's what we are doing. Those are the movements that you can witness on the groups real estate asset. The agreement with Ardian, for instance, for the Paris properties. We're working on our New York property or our Milan property, there will be other deals. As we said at the time, and this is an ongoing process, and we will deliver on what we said we're going to. As for the foreign exchange effects, of course, they do have an impact on the group's activities, particularly U.S. dollar. I can't really tell you what the impact will be full year. We will talk about this during our next results announcements and for the group's AGM next April. Number five?

Greetings. Alexander Bonne', shareholder of 800 shares. I would like to congratulate Luca de Meo, for his appointment, congratulate him for what he has done at Renault in terms of products. You were known as a product man, Mr. de Meo, what sort of good ideas do you have that you would like to contribute by the end of the year? Do you have any ideas you would like to share with us?

Would Luca like to answer? He'll only start on the job on Monday. Of course, he did work quite a bit over the summer. He met a lot of employees and spoke to other external stakeholders to try and understand the sector. It's probably still early days to be more precise about what he intends to do. Number two, the gentleman here.

Yes, Mr. [indiscernible]. I have 7 shares. I used to have a lot more, but I switched to LVMH out to the designer problems that Kering ran into. I think that choosing Mr. Luca de Meo is very relevant. He's an Italian. He knows the luxury sector. He knows Ferrari, which is a splendid brands. There are a lot of luxury houses that are Italian, some of them were small and they've become huge, the Hermes, Versace, Armani, Prada. So is there going to be a tipping point with Mr. Luca de Meo towards an Italian style luxury? Or will we still be in French luxury?

You're well aware that Kering is already very Italian in terms of the houses. Some of our major houses, of course, are Gucci, Bottega Veneta, our Italian houses, Pomellato is Italian. So the group is already very well balanced between the French and Italian houses. The French houses being Saint Laurent, Balenciag, Boucheron in high jewelry. We also have a 30% stake in Valentino. And by 2028, we'll have an opportunity to take over that house completely. So the group is already -- very clearly, a group with Italian assets, major Italian assets. The 2 I have named or at least the size or even much larger than the Italian houses you mentioned. And we're continuing to grow them and the potential of these assets is huge. And I think Luca intends to express that potential in the coming months and years. Well, if there are no further questions. Let's now move on to the resolutions. Over to Eric Sandrin.

Thank you, François-Henri. So before we proceed with this essential step of this general meeting, the quorum is 80.2%. The legal quorum is therefore reached making all of this general meeting deliberations legally valid. As in previous year, you will be using voting tablets, which were handed over to you when you signed in. And let us first watch a short video about the use of these tablets to make voting easier. [Presentation]

Very well. Let us now proceed with the vote. As the resolutions have been fully described in the brochure that was sent to you prior to this AGM and which you can also read on your tablets. I shall spare you a full reading. I should just tell you about the title as will be shown on screen. First set of resolutions, the ordinary resolution is the first one. The approval of the remuneration policy for the Chief Executive Officer for the period of from September 15 to December 31, 2025. The vote is now open. [Voting]

Very well, let us now proceed with the vote. As the resolutions have been fully described in the brochure that was sent to you prior to this AGM, and which you can also read on your tablets. I shall spare you a full reading. I shall just tell you about the title as will be shown on screen. First set of resolutions, the ordinary resolutions. The first one, approval of the remuneration policy for the Chief Executive Officer for the period from September 15 to December 31, 2025. The vote is now open. [Voting]

It has now ended. The resolution is adopted. Resolution 2, approval of the remuneration policy for the Chairman of the Board of Directors for the period from September 15 to December 31, 2025. You may now vote. [Voting]

The vote has now ended and the resolution is adopted. Resolution 3, approval of the amendments of the remuneration policy for directors for 2025 for the period from September 15 to December 31. You may now vote. [Voting]

Voting has ended. The resolution is adopted. Let us now proceed with the 2 extraordinary resolutions. The fourth resolution, appointment of Luca de Meo's Director for a period other than the [indiscernible] 4-year period provided for by Article 10 of the company's Articles of Association. You may now vote. [Voting]

The voting has ended, and the resolution is carried. Resolution 5, again, extraordinary. Amendment of articles 12 and 15 of the company's articles of association in order to change the age limit to 70 and 80 for the Chairman of the Board of Directors and the Chief Executive Officer. You may now vote. [Voting]

The resolution is adopted. We shall now revert to the final resolution, which is an ordinary general meeting resolution, powers to carry out formalities. You may now vote. [Voting]

Voting is now close, the Resolution is adopted.

Many thanks, Eric. All of the resolutions subjected to your votes have been adopted. Many thanks. We have now reached the end of the agenda. This meeting is adjourned. See you next year for our Annual General Meeting. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]