Koninklijke Philips N.V. (PHIA) Earnings Call Transcript & Summary

[Interpreted] Good afternoon, ladies and gentlemen. Welcome. I'm pleased to open the Annual General Meeting of Shareholders of Royal Philips N.V. Our annual meeting is an important moment for all of us. We're delighted to see that so many of you have joined us again, and we greatly appreciate your commitment to our firm. Let me start -- already a rumble. I haven't even been going for 30 seconds yet. First, I'd like to introduce some people to you from your perspective, from left to right, Mr. Stoffels, Mr. Paul Stoffels, Deputy Chair and also Chair of the Remuneration Committee; Marnix van Ginneken, and next to me, our Chief ESG and Legal Officer; and to my other side, Roy Jakobs, our CEO; and next to him, Charlotte Hanneman, our CFO; and next to her, Liz Doherty, the Chair of the Audit Committee. Behind me are the other members of the Supervisory Board from your perspective, from left to right, Sanjay Poonen, Indra Nooyi, Peter Loscher, Herna Verhagen, Benoit Ribadeau-Dumas, Marc Harrison and Chua Sock Koong. David Pyott, Chair of the Quality & Regulatory Committee is unfortunately unable to be present at this meeting, but will attend remotely. In the room at the first row is Bob White, who will speak in a moment and will be introduced as a member of the Supervisory Board. I'll tell you more about that later on. We also have present Frank Blenderman on behalf of our external auditor, EY, [indiscernible] who will succeed him as external auditor on behalf of PwC, the civil loan notary [indiscernible] from De Brauw Blackstone Westbroek [indiscernible], Secretary to the Supervisory Board, very well. Before we start the other part of the meeting, I would like to make some remarks. The global tensions and other geopolitical developments are visible to everyone, including for a multinational such as Philips, with operations in over 70 countries, sometimes it is difficult to navigate in these changing circumstances, and I will mention a few challenges that we face. The company is presumably not immune to the impact of the world economy and geopolitics and, of course, related tariffs that are being imposed. We are closely monitoring these developments and consider various scenarios to assess the impact of higher costs and inflation. And Mr. Jakobs has already spoken about this earlier this week at the Q1 results. And of course, the macroeconomic situation is challenging. We strongly condemn the military aggression by Russia and Ukraine and deeply regret this war, the devastating impact it is having on the Ukrainian people. Since February 2022, we have significantly scaled back our operations in Russia, except for delivery and maintenance for essential medical systems and devices, especially for the local population. And the ongoing situation in the Middle East is also causing deep human suffering and is worsening economic and political instability. We also see sometimes conflicting views emerging about the importance of sustainable business practices due in part to the rise of populism in parts of the world. Philips remains committed to taking responsibility for our planet and society. Everyone is entitled to access to the quality health care that Philips represents. Our purpose remains as relevant as ever to improve people's health and well-being through meaningful innovation. We cannot operate in 70 countries globally without respecting different views. And I am hereby repeating what Francis said, building bridges is better than putting up walls. And the world is now eagerly awaiting the conclave in the sistine Chapel in Rome. Those who know about the Vatican say that it's very likely if we see white smoke at the -- after the votes at AGM Philips, there may well be white smoke coming from the Vatican, and we'll see that at the end of this meeting. The Cardinals will need to agree first just as you, shareholders, will need to agree about the white smoke that we can disclose here. Well, before I continue with the rest of the meeting, I'd like to review some general matters. As you're aware, as you've noticed, our official language is Dutch in this meeting, and you can listen to the English interpretation via the webcast and online. I'd like to change the procedure a bit from what we ordinarily do, where we would have a topic questions, votes and then another topic and votes and then questions. First, we'll cover all topics, all questions, and then we'll vote on all agenda items. And then each time, we'll disclose the results to you. We will be voting electronically. And later, when we start voting, I'll explain exactly how to do that. Now to give everybody the opportunity to speak at this meeting, I'd like to ask you, though it may sometimes be a challenge to ask 2 at most 3 questions each time you have the floor. And there may be an additional round in which you can ask 2 or 3 questions. For those of you who find this complicated, don't worry about counting to 3, I'll help you with that. Questions asked here in the room will, of course, be answered to the best of our knowledge. You will understand, however, that we may need assistance from others and in that case, we'll seek assistance. Thank you. After these general remarks and the general introduction about Philips and the world, I'm pleased to give the floor to Roy Jakobs, who will deliver his presentation in English. And later on, I will give you the opportunity to ask questions about his presentation, and you'll be able to hear the Dutch interpretation online. Roy, you have the floor.

Ladies and gentlemen, welcome to the 2025 Annual General Meeting of Royal Philips. Given the pace of change around the world today, I welcome this opportunity to share an update on our journey. While we continue to make good progress, we still have a way to go. We are committed to delivering our focused growth strategy and to improving people’s lives. I feel privileged to be leading Philips on this journey, together with the Philips Executive Committee and the Supervisory Board and Chair, Feike Sijbesma. I also feel the urgency to strengthen Philips while navigating an increasingly uncertain world. We are determined to continue delivering better care for more people. Healthcare is under pressure, and Philips is well positioned to help ease that burden and improve healthcare delivery. Around the world today, the gap between demand and supply of care is widening. There is a global crisis in healthcare. I see the immense pressure healthcare professionals are under and feel a deep sense of responsibility to help address the challenges. Patients expect better care and a better experience. In parallel, we see that people everywhere want to be empowered to take care of their own health and well-being. At Philips, we want to contribute to healthcare professionals feeling supported and energized, and to patients experiencing better care – while making it easier for people everywhere to lead healthier lives. We are committed to improving healthcare and driving impact with care for patients, people and the planet through deep technological insight and our meaningful innovations. We see this coming through in the demand for our technology. At the same time, we have been building our business to respond to external challenges, including tariffs – making fundamental progress, ensuring our supply chain is agile and that our business is adaptable. This drives the resilience we need to continue to develop our industry leading innovations in these times of unrivalled economic uncertainty. And this is recognized. As a leader in health technology, Philips was the leading applicant in medical technology at the European Patent Office in 2024, and Clarivate recognized Philips as the top-ranked medical technology company in the Top 100 Global Innovators 2025. Strong partnerships and advances in AI-enabled innovation are helping to drive real change. In the hospital, our next-generation BlueSeal helium-free MRI system uses AI to scan three times faster. In the home, the Philips Baby Monitor gives parents peace of mind by allowing them to keep a closer eye on their children, supported by an AI coach. We continue to push the boundaries, not only with AI agents that can work automatically, but also in robotics. Philips Research is already developing robotic arms that help automate image-guided therapy procedures. We see a day where AI agents are embedded within robotically enhanced medical equipment to support doctors and their teams to deliver better care for more people. Philips is passionate about creating that future. However, the current tariff discussions have the potential to impact affordability and limit the accessibility of care. We are engaging with governments all over the world to explain the importance of unrestricted flow of medical technology. After all, every dollar, euro or renminbi spent on tariffs is one not spent on patients and healthcare innovations. These developments make me even more determined to do what we can so people everywhere can access the care they need. Looking back, in 2024 we made solid progress. We believe we are on the right path, executing our strategy to improve people’s health and well-being through meaningful innovation, with patient safety and quality as our number one priority, we're expanding our innovation platforms in monitoring, imaging, interventional, informatics and consumer health. While we grew orders and sales, we were negatively impacted by significantly deteriorated demand in China, due to subdued consumer confidence and extended hospital procurement cycles. Given these factors, we had to adjust our growth expectations for the year. Driving profitable growth will be a priority in 2025. Despite global uncertainties and slower growth, we delivered strong profitability improvement and cash flow and further strengthened our balance sheet. We also made important progress on resolving the Philips Respironics recall, including the settlement of both the economic loss and the personal injury and medical monitoring claims in the US. And some of our largest investors further expanded their investment in Philips, showing confidence in our future. Our focus on patient safety is at the center of strengthening our fundamentals and fostering a culture that upholds quality. In our latest engagement survey, colleagues shared that they feel empowered to speak up and take action to support our commitment to patient safety and quality. While we acknowledge this progress, we remain diligent in continuing this work. We are concentrating on accelerating momentum, building on our industry-leading innovations, and continuing to improve execution. In our supply chain, we have made significant progress. Recent developments on tariffs underline the need for this agility and for further regionalization that we're on. In making sure we become a leaner, more agile and simpler organization we have also made important strides with our move to an end-to-end business-led business model where we can operate faster and leaner. We reduced approximately 10,000 roles from 2022 through the end of 2024, doing so with care and respect. We focused on enhancing our team with deep medtech expertise and new leadership. This included the strengthening of our experienced and diverse Executive Committee and the addition of proven leaders across wider Philips. We welcomed our new Chief Financial Officer and member of the Board of Management, Charlotte Hanneman, with her strong medtech background; as well as the other new Executive Committee members, Ling Liu, Chief Region Leader, Philips Greater China; Jie Xue, Chief Business Leader Precision Diagnosis; and Özlem Fidanci, Chief of International Region. Charlotte, Ling, Jie and Özlem bring a wealth of experience to the Executive Committee, which is now an even split between men and women. Further to this, we welcome proposals to appoint Bob White as a new member of the Supervisory Board, to re-appoint Indra Nooyi and Ms.Chua Sock Koong as members of the Supervisory Board; and to re-appoint Marnix van Ginneken as a member of the Philips Board of Management. I also want to take this opportunity to thank David Pyott, member of the Supervisory Board since 2015, and Chairman of the Quality & Regulatory Committee, who is completing his third and final term. David, thank you for your guidance and leadership. Let me now shift to another topic that is close to my heart– our incredibly talented team of Philips colleagues around the world, the ones that make Philips work every day, the team that reflects the patients, consumers and customers we serve. We continue the work to create an environment where all employees can thrive to drive business impact. Reflecting the success of these efforts, in 2024, engagement across the company increased further with 5 percentage points. We are reinvigorating our culture of impact with care and we believe we drive greater impact when we work together. Our new headquarters in Amsterdam reflects this. It’s a space that promotes collaboration, innovation and engagement and we will be moving into it next week. The progress we are making builds on our strong heritage in social and environmental responsibility. In 2024, we improved the lives of nearly 2 billion people and we contributed to more sustainable healthcare, while ensuring a more sustainable consumer experience. This included, among other things, partnering with hospitals to support them with their own sustainability plans and expanding access to care in and outside the hospital. We have an enhanced and fully integrated approach to doing business responsibly and sustainably, for Philips and for our customers. And that is seen which is seen. For example, Forbes recognized Philips as one of the world’s best employers. Our ESG commitments help drive our business results and our global impact, creating long-term value for our stakeholders. We remain committed to delivering our focused growth strategy, further building on our industry-leading innovations, improving our fundamentals, and simplifying how we work to make us more competitive and agile, while moving with speed. We are stronger and better prepared to deal with the current turmoil, remaining laser focused on what we can control so we can continue to serve patients, customers and consumers. We want to win and provide better care for more people in a fast-moving, competitive world, where care provision is under pressure. And by doing so, we aim to deliver profitable growth, expand our margins, and fulfill our cash and ESG commitments. I would like to thank all our stakeholders for their ongoing trust, support, collaboration, and confidence. I also want to share special thanks to our employees, who show their passion and commitment every day, and to their families who support them and us. A special thanks as well to the Supervisory Board for their trusted guidance, and specially to the Chair, Feike Sijbesma, for his strong collaboration and leadership. And thank you, our shareholders, for your trust. I am more determined than ever to ensure that Philips gets back to where it belongs –delivering value for all stakeholders through meaningful innovation. Reflecting the progress we have made, reducing risk and strengthening our balance sheet, along with the importance we attach to dividend stability, we propose to maintain the dividend at EUR 0.85 per share, to be in shares or cash at the option of the shareholder. To balance our commitment to dividend with prudent cash management, up to 50% of the total dividend will be available in cash. As I look ahead, I am realistic about the challenges and uncertainty we see in the world. But I am also optimistic about building on the momentum we have created –and deeply excited about delivering on our vision of better care for more people. Thank you.

[Interpreted] Thank you, Roy. In the discussion at agenda item 3, at the different items in 3, I will also give you the opportunity to ask questions about this agenda item 2, the presentation by Mr. Jakobs. So that takes us to agenda Item 3, the annual report for 2024. And that heading comprises various topics, Agenda items 3A through 3F and first, I'll comment on the proposed dividend. As Mr. Jakobs said, the dividend proposed is EUR 0.85 per ordinary share to be paid in shares or cash at the shareholders' discretion and charged to our profit reserve. Of the total available dividend, a maximum of half will be paid in cash. For additional information, please see the explanatory notes to the agenda. The proposed dividend is in accordance with the company's current dividend policy. For several years now, an advisory vote has also been held on the remuneration report, which is included in the annual report and features here as agenda Item 3D. And you'll have the opportunity to ask questions about the different agenda items. I'll now give the floor to Mr. Stoffels, Deputy Chairman of the Supervisory Board and Chair of the Remuneration Committee, so that he can explain the remuneration policy, and he will also speak in English, Paul.

And good afternoon. It is my pleasure as Chair of the Remuneration Committee to discuss the 2024 remuneration report for the Board of Management and the Supervisory Board. Before elaborating on the main activities of the Remuneration Committee and the Supervisory Board during 2024, I would first like to reiterate the main elements of the 2024 remuneration policy approved during last year's AGM, which were applicable for this year. The annual incentive target is 100% of base compensation for the CEO and 80% for the other Board of Management members. There is an opportunity to earn double this amount for an at or above maximum performance level. On the downside, there is no payout for performance below threshold levels. The long-term incentive grant value is 200% of the base compensation for the CEO and 150% for the other Board of Management members. The vesting of the annual grant is based on the realized performance measured over a 3-year period and can range from 0 to 2x the initial grant. Our compensation package support a pay performance focus to our variable incentives, leading to 75% of the total compensation package of the CEO being at risk. Now coming back to the activities during 2024 and the compensation decisions made by the Supervisory Board in respect of the Board of Management over 2024. In terms of the regular annual compensation cycle, the following decisions were made. First, the base compensation levels. During the regular remuneration review, which took place early 2024, an increase of 4.2% was applied to the annual base compensation level of the CEO and an increase of 3.7% and 3.5% for the CFO and CLO, respectively, to bring the remuneration levels closer to the medium of the quantum peer group. Second, the 2024 annual incentive. In respect of the financial metrics, performance was at target for the adjusted EBITDA metric, below target for the free cash flow metric and below threshold for the comparable sales growth metric. The nonfinancial performance realization was above target for all members of the Board of Management, recognizing the improved operational performance driven by a strong focus on execution in order to enhance patient safety and quality, improve customer experience and drive a focused strategy to win in the market. Third, for the awards granted under the long-term incentive plan in 2022, the company performance resulted in a realization strongly above target for the sustainability objectives. For the relative TSR and the adjusted EPS metric in our long-term incentive plan, however, there was a below threshold realization based on the performance since the start of the performance period in 2022, and therefore, no payout for these elements. As briefly referred to in the beginning of my speech. Next to these recurring topics for the regular annual cycle, we successfully introduced new remuneration policies for the Board of Management and the Supervisory Board. These policies had retroactive effect for the full year 2024, hence, the 2024 remuneration report represents the first year of the application of the new policies. The year 2024 was also the year that we welcomed Charlotte Hanneman as our new CFO, succeeding Abhijit Bhattacharya, the remuneration elements of which have been described in detail in the remuneration report. This concludes my discussion of the 2024 remuneration report. give the back floor to you, Mr. Chairman.

[Interpreted] Thank you, Paul. Thank you very much, and thanks for all your work as Chairman for [indiscernible]. The financial statements for 2024 were audited by EY, our external auditor. And first, I'll say everything I need to Item 3. On behalf of EY, Frank Blenderman is present, and he's responsible for the audit. Mr. Blenderman will deliver a brief explanation of the audit performed by EY and the statements made by EY included in the annual report. Any questions may be asked to him. Now I'm pleased to give the floor to Mr. Blenderman. Frank, you have the floor.

Thank you, Mr. Chairman. Ladies and gentlemen, I'm pleased to take this opportunity to explain our work concerning the 2024 annual report of Royal Philips N.V. I'm Frank Blenderman, and I'm the EY partner in charge of the audit of Philips. In this presentation, I will elaborate on the following aspects of the work performed. Next slide, please. The audit approach and focus, the results, the key audit matters, ESG and CSRD, communication and interaction. Audit approach and focus. We have audited the company and consolidated financial statements of Royal Philips N.V. We have examined whether the annual report complies with the legal requirements, whether the content is consistent with the financial statements and whether the annual report is consistent with the knowledge we acquired of the company. We determine the audit approach at a consolidated level, focusing on the most important developments and risks. Based on this, we determine which business units and which countries need to be audited. In the process, we also make use of the international EY network. The central team also visited foreign business units from the Netherlands. On site, we discuss important developments, risks and audit findings and have also reviewed files. In our audit, we have assembled an experienced and expert team with relevant sector knowledge. In addition, experts have been consulted on a number of topics, such as valuations of intangible fixed assets such as goodwill, financial instruments, taxes, IT, fraud risks and legal expertise. The materiality we applied in auditing the consolidated financial statements is EUR 90 million. We discuss all errors above EUR 4.5 million with the Board of Management, the Supervisory Board and the Audit Committee. We based our determination on revenue as an important KPI. Based on the materiality and the risks we assessed, we then performed our work. Now the results. As you will see, as in previous years, we have issued several statements. Next slide, please. An unqualified -- one further, please, an unqualified audit opinion on the financial statements and for the U.S. regulator, an unqualified audit opinion on this Form 20-F report an unqualified opinion on internal control an unqualified assurance report on the sustainability statement and EU taxonomy information, limited assurance and on certain selected KPIs, a reasonable assurance. There are no material audit differences that have been recorded. I can also tell you that there were no difference of opinion with the Board of Management regarding the estimates and that we generally consider the estimates made by Philips to be balanced. In compiling the financial statements, the Board of Management assessed the going concern assumption for the 12 months following the date of the financial statements. We reviewed this analysis and did not identify any material uncertainties. Next, fraud and noncompliance with laws and regulations. EY puts fraud and noncompliance high on the agenda as does Philips. We determine the material impact of the fraud risk matters on the annual report and coordinated this with the Board of Management and the Supervisory Board Audit Committee and included it in our audit plan. The Supervisory Board Audit Committee is regularly informed by the management about fraud and noncompliance risks. We review these reports in detail. One fraud risk factor, for example, is revenue recognition in which we assess whether revenue is recognized in the correct period. We engaged forensic auditors as experts. Now key audit matters. Next slide, please. I think even one further. No, one more. These are the key audit matters. This lists the key audit matters. These key audit matters are largely the same as the ones last year. There are matters that received the most attention in our audit. I will elaborate on 2 of them. Valuation and disclosures of liabilities as a consequence of lawsuits, Philips and group entities are involved in lawsuits, including proceedings with regulators and investigations by local authorities, especially in the United States. Valuation and disclosure of contingent legal liabilities are complex and uncertain due to the difficulty of predicting the outcome, including potential related cash outflows that may be material. Philips uses external legal advisers from which we have obtained confirmations as part of our work. Valuation and explanation of deferred tax assets in the United States. The valuation of this deferred tax asset is complex and requires estimates and assumptions by management. Valuation depends in part on estimated future taxable profits for the U.S. tax unit. Valuation is a key audit matter because this valuation model is complex and management's assumptions regarding expected future taxable profits figure prominently. We have checked whether these assumptions are reasonable. In summary, we assess whether based -- whether estimates and assumptions are reasonable based on the audit evidence obtained. We confirm that the management's estimates based on the information available to us are consistent and acceptable. Next, ESG and CSRD. For 2024, Philips has voluntarily drafted its sustainability report in keeping with CSRD. Philips has reported at length about sustainability information. I say voluntarily because the CSRD implementation law has not yet been incorporated into Dutch law. We have performed work on Philips 2024 sustainability report with the following results. With limited assurance, we have not found that the sustainability statement has been prepared in all material respects in accordance with ESRS and is consistent with the double materiality analysis. With limited assurance, we have not identified any deviations from the aforementioned taxonomy regulation with regard to the EU taxonomy information. We have audited various selected sustainability indicators and have issued a reasonable assurance. These include, for example, the environmental P&L, lives improved and the carbon footprint now about implementation. During the year under review, Philips has devoted considerable attention to careful implementation of CSRD, subject figures is high on the agenda of both the Board of Management and the Supervisory Board. As part of the implementation, Philips has further refined its ESG governance structure, operational processes, systems and controls. In 2024, Philips updated its double materiality analysis. The disclosures on nonfinancial information in the 2024 annual report has been further elaborated in keeping with the results of the double materiality analysis in accordance with the prescribed ESRS structure of impact risk or opportunities, the relevant strategy, policy targets, action plans and metrics have been reported for each material sustainability topic. In our assurance report, we included an emphasis of matter paragraph. An emphasis of matter paragraph does not affect our conclusion or opinion in our emphasis of matter paragraph. We refer to the disclosures in the annual report that -- to which we would like to draw your particular attention. These are topics are as follows: the double materiality assessment process. Our procedures were designed to determine that all mandatory DMA process steps were followed in accordance with ESRS. We focus specifically on alignment of material impacts, risks and opportunities with ESRS standards, disclosure requirements and data points. The balanced presentation of the reported material impact risks and opportunities. The emphasis of matter paragraph emphasizes that the results of the DMA may vary over time as a result of future new insights and also that the results of the DMA may be assessed differently by each stakeholder. Second, the most significant estimates and assumptions regarding the metrics lives improved, environmental P&L and Scope 3 emissions. Our assurance procedures were focused on evaluating the suitability and consistent application of the criteria used determining whether the estimates and assumptions were and the external sources used were reasonable, assessing the related disclosures in the annual report. The emphasis of matter paragraph emphasizes that criteria may change over time due to new insights into reporting methods. In drafting the financial statements, the Board of Management has assessed whether the effects of climate-related risks and obligations have been properly accounted for and disclosed. Management has determined that climate risks have no material impact on the valuation of assets and liabilities. We have reviewed this analysis and agree with this conclusion. Next, communication and interaction. We regularly consult with financial management, the Board of Management, Supervisory Board and the Audit Committee. The relationship with the company is transparent, professionally discerning and independent. We have established that management, the Audit Committee and the Supervisory Board take our findings seriously and that they follow up on them adequately. Topics that we reported on in 2024. In addition to the key audit matters include the internal control environment, assurance of the continuity of automated data processing, our view on significant estimates and judgments, our independence and tax matters. Finally, some concluding remarks. 2024 is the last year that we will be operating as auditor for Philips. We have completed the transition to the new auditor, PwC. Thank you very much for listening and for the trust you have placed in us over the years. Mr. Chairman, I'm pleased to give you back the floor.

[Interpreted] Thank you for that brief but very complete comment. Thank you also for the many years of good cooperation with EY and with you personally, Frank, very well. That brings us to the discussion on the various agenda items under heading # 3. Similarly to the previous years, we have informed you about the state of play. Now I have a script of 64 pages and my compliments, we've already come to Page 19 after 45 minutes. So we are on track. Let me start with the discussion and the questions about 3A and 3C, both are about dividends, the dividend policy and comment on the dividend payout over the past year. Who would like to speak first? Mr. [indiscernible]

[Interpreted] Thank you, Mr. Chairman. I think we can also discuss the introductions of the annual report and the financial statements?

[Interpreted] No, this is about dividend.

[Interpreted] Very well. Let me start with dividend. I have 2, 3 questions. The financial position. In Q1 of this year, Philips reported a negative free cash flow of about EUR 9 billion, mainly as the one-off payout in the [ APM case ] in the U.S. and there was also increased pressure on the cash flows. But now you say that the cash flows for the entire year was going to be slightly positive, which is a reduction compared to the EUR 300 million plus EUR 400 million to EUR 600 million in the earlier outlook. So the lower outlook for cash flow leads to questions about capital allocations, indeed, payout. We have a repurchase program, maybe not. But also what about debt reduction and investment ingrowth? You are once again proposing a option dividend, but only half of the dividend is paying out is in cash. Is it to be expected that you can soon pay out fully in cash? Is management comfortable with the current balance and the current financing structure?

[Interpreted] I'm not sure whether Roy or Charlotte would like to address this. But over the past years, every time we have paid out dividends in shares, not in cash. Some shareholders were very happy with this, and it's at the request of some shareholders that we are doing this, but all this would prefer cash. And in this year, given the fact that -- we have gone through the first issues of litigation, the first cases of the sleep apnea devices, we have decided to have a payout in cash, but we wanted to be prudent and therefore, we will pay out no more than 50% in cash. It will depend now on the preferences of shareholders. We can't predict that either. In the end of the day, it is our intention to increase this ratio. And if our free cash flow will follow the same growth pattern in the years to come, but that remains to be seen. Charlotte?

[Interpreted] thank you, Mr. Chairman. Indeed, over the past years, we've focused on that production, and Mr. [indiscernible] something you see reflected in our results. We have seen a significant reduction of the leverage ratios. We obviously knew that the patient injury settlement was coming, so we took stock of this in our considerations for dividend. Nevertheless, we feel comfortable with the decision of order proposal with the 50% ratio that Mr. Sijbesma just pointed out.

[Interpreted] Can I have 1 follow-up question here. How do you see this logistically? Is it first come first serve? Will everybody run to your offices today to get the payout in cash? How will that work?

[Interpreted] Not like that. it's going to be pro rata. So that means that we'll look at the preferences of shareholders, and then we will pay out pro rata up to a maximum of 50% in cash.

[Interpreted] okay. So what will it take to bring you to the point where you can pay out a full dividend in cash. That's obviously something we hope to see in order to prevent dilution. Is that something is happening at the end of this year? Or is it going to take longer?

[Interpreted] Looking at our balanced capital allocation policy. And as you said, growth is our #1 priority, then we have dividend and then we have organic growth and then share buybacks. We currently focus on growth. And we know what world we have with tariffs and therefore, with uncertainty. It's a bit early to speculate on our dividend policy over the years to come.

[Interpreted] any other questions? [indiscernible] not here. I have been doing AGMs for 20 years, 14 years with ESM and now Philips and an AGM, without Mr. [indiscernible] is not quite the same. There's a question from the room inaudible. You're not going to tell me that BAM is more important than Philips. Any other questions about the dividend policy? If not, then I turn to the questions about agenda item 3b and also agenda Item 2, the presentation by the CEO, Mr. [indiscernible] had some questions about this. So there for the annual report and the annual financial statements and the presentation by the CEO.

[Interpreted] I don't speak on my own behalf, but on behalf of the Royal and the Chairman reminded me that I should use is the Royal Association of Shareholders of VEB. Thank you for the comments. And the particular attention to the effect of the tariff wars on the profitability. You shared your concerns about the geopolitical reality. And this, I think, is an example for listed companies. In general, our CEOs are very silent and Chairman are also very excited about this, and we believe it's high time that from the Netherlands and the EU leadership in companies collectively standing up against the major mistakes that are being made in the U.S. Certainly, when, as Mr. Jakobs just said, this has a negative impact on health care worldwide and may cost lives. And it costs growth, it cost dividend. The capital markets immediately respond, but you see that the financial future of many people is at stake with a very concrete risk that the outlook of Philips for this year has been adjusted downward with 100 basis points of EBITDA margins as well a net cost item of EUR 250 million to EUR 300 million less health care, less profit. In reply to the tariffs, you are going to speed up regionalization of production, hoping to have exemptions. But honestly, this will not free you of change to prices because also the mitigation of effect will be felt in the next year. So we welcome your transparency about your pressure on the margins, but we have a few questions about the geopolitical risks, the structural impact and questions about the resilience of your operating model because the tariff war is certainly occupying the minds of our investors. Let me start with tariffs. And I hope that then on behalf of 200 million people investing in the Netherlands, you also allow me questions about China, [indiscernible] devices and streamlining the organization. I have some questions to the auditor that will be brief. Let me now restrain myself to the geopolitical issues. As a start, what strategic scenarios you have mapped for the case, the trade tensions between China and the U.S. will further escalate, which we cannot rule out. You, for instance, say you want to manufacture more in the U.S. But what are your conditions the U.S. are all of a sudden showing themselves to be unreliable partners and are not shying away from illegal and corruption similar projections from central power. How far are you going to follow this when will be enough be enough? Is it our impression correct that most of the EUR 350 million to EUR 300 million damages from tariffs is related to the stream of goods between China and the U.S. between those 2 powers or are also other trade routes affected by the expected results. And then what product categories will be most hard hit and will the manufacturing of those products to be moved? And what time frame do you see. What will the impact be also of the higher wage costs and the fragmentation of manufacturing, if you bring manufacturing to the U.S.? How will that affect the long-term earning capacity how will the fact the competition position compared to GE Healthcare or Siemens Healthineers that are already manufacturing more locally in the U.S. How does it affect this? Then what kind of exemptions you have applied for concretely under the Nairobi protocol and the duty drawback arrangement? And how successful have you been so far, to the extent you can share that with us? Does Philips expect that the geopolitical storm will come down or we will have a smoothing fire under the world economy because the U.S. tariffs are exclusively intended to protect domestic economy and also to slow down our economies, including Philips. Do you think it's a real risk that U.S. authorities will take additional [ protectistic ] measures, for instance, subsidies, local demands or fiscal benefits for local U.S. players, making it structurally more difficult for foreign manufacturers. Those were my 3 questions.

[Interpreted] I also counted 3, 1, 2, 2.5, 2, 3 quarters. Well, I fully agree with you 3 questions. Roy?

[Interpreted] thank you, Mr. [indiscernible]. I think we share your concerns about tariffs. I've already said a few things about this. And let me start with this. The first concern are patients and we continue making sure that innovations reach hospitals and that we can serve our patients and we serve our consumers. So that is our first focal point in Philips. And this covers 2 aspects. First of all, we're in an active dialogue within the Netherlands and within the EU, within China and within the U.S. about the exceptions that we are applying for concerning medical technology in the interest of patients. We are actively working on this. We do encounter resonance. It's not clear yet how this will pan out. So we have assumed in the current scenario for this year that will not be successful and that after the 90 day holiday on the tariffs, the rates or the tariffs on the whiteboard will actually apply and that the high rates of 145% between China and the U.S. will remain in force. So that's our assumption that explains the EUR 250 million to EUR 300 million net impact on our profit. That's quite something. And this is after many mitigation measures already have been taken. It seems, however, to be a realistic scenario. We are working based on several scenarios. Things can improve, things can deteriorate. But we have stated the following: we base ourselves on what we know right now that was with the annual results, we said that we will take on board what we know now, but there are so many developments that it's difficult to know everything. We can't speculate. Secondly, we have done the following, something you referred to. We have the Nairobi exemption that already applies to certain medical items. I won't have a discussion of the concrete matters, but we are using it, and we are getting exemptions. We are using this arrangement, this scheme, and this particularly helped us in the respiratory care products that were subject to this before because that was a result of COVID. And that shows a good link between what we see happening for the long term. We've seen a change in the view of the world on logistic prospects since COVID. I always say that there was a world before COVID and the world after COVID. Before COVID, we had worldwide streams of flows of goods and efficiency COVID has confronted countries and parties with the insight that you need to look at logistic flows that are closer to home. So we started regionalizing from then, trying to see how we can cover China by China, Asia by Asia and Europe by Europe, U.S. by U.S. However, most technology looking at our products is made up of lots of components. It's nearly impossible to source everything from one country or one region. It's nearly undoable. So there are going to be flows of goods. But since 2020, in China, 90% of what we manufacture there has been localized. And that was clear because in 2020, the Chinese authority said, if you want to keep selling to the Chinese market, you have to localize by 90%. We did that. We focused on that. And we meet that standard at this moment, so we can participate there. We foresee similar process in the U.S., maybe not 90%, but they want to see more local manufacturing. So we have already gone through this, and we'll have to keep focusing on this in the future. So that's the 10-year outlook in terms of logistic flows. We can build greater resilience into the flows that have been developed over the past 2 years. Why can we respond pretty rapidly? And you see that Siemens and others have also proposed impact larger than we have done because we already anticipated some of the scenarios that are unfolding right now. So we keep building on the more agile flows that we have created -- but also, we are focusing on regionalization or localization in some countries, but you can't do that in every country. You can't make a factory for every product in every single country. There are limits, there are borders. If you cross borders, there are going to be tariffs. We assume they will be there. Now you have to reduce them by cost cutting. We have taken such measures, and you have to try and see whether selective pricing can actually carry this forward. But we are cautious with this because hospitals are under pressure, patients need to be served. And we know that also on the level of consumers, there is a limit to price increases. So the major chunk of cost cutting is made up of cost-cutting measures. And this affects our profit based on the tariffs that we know today.

[Interpreted] One brief matter or question of clarification. You -- first of all, my compliments for your prudence and for using what we know today instead of developing positive scenarios like it's not going to be that bad. That's not realistic. So I think it's very fair that you have shared this information with us in Q1. But I have the following question. Okay, you're taking measures concerning China and the U.S., particularly about local production. Are there any other regions in the world that are also affected by the EUR 250 million to EUR 300 million? Or is it really about those 2 countries?

[Interpreted] Most of the impact is about China and the U.S. But let's be fair, the 10% that has been imposed on all countries in the world is a cost increase of 10% that we will have to absorb and then something else that we have taken on board. After the 90-day grace period, there's going to be a return to the announced rates. For Europe, maybe 20%. That will have a significant impact. We know that this is the debate between the Netherlands and the EU. The Netherlands need to be competitive. The Netherlands need to maintain an environment where we can compete. It doesn't help to have 20% on top of energy and wage costs. It's going to be on top of all that. So this will affect Europe. It will also affect Asia. For instance, Indonesia. Indonesia is going to be affected by a rate of 45% or 46%. So it's a bulk amount already, 125% or 145% of tariffs between the U.S. and China. If you look at the underlying flow of goods, we have significantly reduced it. So we have reduced the dependency between the U.S. and China because we knew about tensions. We don't expect those tensions to go away. We do expect some modifications of the tariffs, but we are not anticipating or speculating on this.

[Interpreted] And then a last point. I referred to possible protection measures. Tariffs is one thing, but you can also have tax measures, for instance, that benefit local manufacturers compared to Dutch or other players. Do you expect this to happen? Do you see this happening?

[Interpreted] We are not necessarily afraid of protectionist measures for individual companies, but for measures in general, yes. There may be measures stimulating manufacturing for U.S. customers in the U.S. That's clear, and we are already anticipating this, and that's what we did in China before. Some countries are very angry with the U.S. doing this, but China already did this. So you shouldn't be surprised by countermeasures it's the self-interest of a country. We might want to think about this in the EU, maybe we are too open sometimes in the EU. So this is the self-interest of a country saying that it must be possible to manufacture in your own environment. But you need to balance this with the time required to achieve this. This is why the tariffs are so problematic. They are entering to force tomorrow, and you can't deplace or move flows within a day from Europe to China, China to the U.S. So this is the kind of problems you have when you introduce tariffs overnight. That's the pain.

[Interpreted] I'm very happy to hear the words -- beautiful words of Mr. Sijbesma, Mr. Jakobs and also Mr. [indiscernible], who is going into politics at last and starts making this world a better place. Philips has the network and the expertise to contribute worldwide to the huge investments in the field of sustainability, innovation and the environment. You have another company in the Netherlands that wishes to invest billions in the. It's a good contact of Mr. Sijbesma. And Philips can use this to attract a lot of new money. Also, we have Draghi who wants to invest EUR 800 billion in Europe. We should have done that a long time ago. And Philips also has 10,000 patents on its shelf. I think it time to commercialize them, to use them certainly in the field of defense because there's no limits to defense budgets. You can send lots of medical equipment and MRI scanners to medical clients. You can do a lot. Then the pension funds, they have EUR 16 billion in funds. Only a very small amount is invested in Netherlands. That can be done differently. We have a lot of savings in Europe, make Europe great again. And Philips can be the leader here because Mr. Sijbesma plays a prominent role in the World Economic Forum. He also plays a prominent role in the World Bank. And that is moving forward. We can complain about this difficult world. But if you're a stand-alone company, you can do what you want, and Philips is well positioned to do what it wants. Then we see something else. We invest lots of money in people that are sick, but [indiscernible] is investing money in getting people to move. So maybe it's good to make him an ambassador. Meaning that people will remain healthy longer. It's almost free of charge. And then such investments will be used much better. And then a final remark about Mr. Sijbesma. He was involved in the 2015 Paris Agreement. Since then, the size of 30x the Netherlands has been deforestated worldwide, the surface of 2x France. And it would seem to be good to the following. Philips is very sustainable. ING is sustainable, all companies sustain, still, we see forests in this world being wiped out. We should stress this more and do more about this. These are my questions. What are you going to do about sustainability, defense, innovation? And all the things that can be done in Europe to bring matters forward?

[Interpreted] Thank you for your encouraging remarks. I'm not sure all of them were questions. .

[Interpreted] Oh, yes, yes, all the questions.

[Interpreted] Then I'm going to call Mr. Jakobs to the rescue. Yes, Philips really cares about sustainability. We want to responsibly care for the society and this planet using the expertise and the skills that we have. So not using the stuff. We are not experts in, but in the field where we are experts that what we do as Philips. I also am engaged in this in other capacities. But don't discuss them here, but in another context. But you're absolutely right. Both Europe and discussions in the World Bank or the economic forum or another context are places where we look into this, trying to make a difference for this planet. You're also right when you say that the Paris agreement didn't get us where we want to be. We made clear agreements in 2015 between 200 countries and 9 years later, we cannot conclude that we are fully on track. A lot remains to be done. Roy, anything you can add about Philips?

[Interpreted] I think that we have a role to play there. We have a responsibility there. And we take this responsibility now sustainability starts at home. So we are working and have been working for a long time on limiting the impact, science-based targets, zero emission targets, then scope 1, 2 and 3 something we're really working on. But in addition, we don't only care about our environment. It is about ourselves. This is about our products. When you work in health care, you know you help people, but that you also have a 7% in print on the worldwide carbon emissions. So we are working on Ecodesign, making sure that the product we develop or design are as environmentally friendly as possible and also making sure that we help customers to become more sustainable. We develop joint plans with them on making operations more sustainable. And then an interesting fact, you were mentioning deforestation and the importance of deforestation. We are actively working on this. Just now in India, we decided to expand our campus and it meant cutting 600 trees and replacing 300 place. But then we replanted 16,000 trees in cooperation with local communities in Kenya. There are many forests that we planted to reduce our environmental footprint. So we are taking measures on different fronts, then defense. We are actively supporting defense institutions with health care items because if you talk about resilience, we work with the Dutch government, for instance, for image situations for monitoring on the front line. We have mobile units. We are actively working in Ukraine. We have supported actively other theaters of war. So we, as an organization, try to support health care in the field. And here, certainly, innovation can contribute. We can make health care more sustainable. Then about the patents, we certainly commercialize them. And Mr. [indiscernible] is very successful in this. We make sure that the technology that we have developed will find a way into applications, and it gives us income for new innovations. And then in conclusion, obviously, we're also involved in programs in the Netherlands, in Europe, in other countries, in the U.S., in which we develop innovations together with governments and for which we receive government support. Obviously, this is under pressure in the current situation, in particular, but all 4 elements you mentioned are fields where we are working, and thank you for your suggestions.

[Interpreted] In addition, I had a question about [indiscernible]. You could have a dialogue with him because he works with defense. And Mr. Sijbesma knows Mrs. [indiscernible], I assume. So what's the take of Philips on Mr. Jakob, Mrs. Sijbesma on this. It would seem very nice. It's something to get Netherlands moving without large cost and without increasing the cost for medical treatment. We are in favor of moving our mobility and I move. So we'll try and see how we can contact them?

[Interpreted] Yes, we know him very well. And there's a number of initiatives, for instance, the daily mile, something that's free of cost, something you can do at schools in other places. We know him very well, where we can work together. We will work together. And you're absolutely right. Not all forms of prevention have to be expensive.

Thank you for your excellent answers to my questions. It is exceptional. Most companies really put this under the carpet. But you have given a fantastic answer to my questions. We'll take that on board.

[Interpreted] [indiscernible] PGGM. I'm speaking on behalf of the pension fund for care and well-being and some of the medium participants. My first question also relates to the question that Mr. Edward asked about accelerating the regionalization, localization strategy. How will this impact manufacturing and employment in Europe, especially in the Netherlands. My second question concerns maintaining your diversity, equity and inclusion policy given the recent course of events in the United States concerning [indiscernible] can provide the Board of Management mentioned whether Philips can continue complying with its dedication to diversity and inclusion in the United States? And can Philips affirm its commitment to these values?

[Interpreted] Thank you for your questions, localizations and the consequences for the EU and the Netherlands. 2 parts of the answer. On the one hand, if we manufacture more in the United States, this will have consequences for other areas where we manufacture the same products. As I say, our footprint is global. So that means that we will transfer the parts manufactured in other countries to the United States, and that may impact what we're manufacturing in Europe. Well, the good news is that perhaps under pressure from the United States and what's happening there, Europe seems to be waking up and we see more economic activity in Europe and the fact that we need a supply chain for Europe in Europe and innovations in Europe should help us continue meeting that need. As I said, it doesn't depend on localization. It depends on your competitive position. So we're trying to see how we can implement that in the EU and how in the Netherlands, we can establish the conditions to remain industrial active. We're very passionate about that and have a huge factory in Drachten and another one in West, and we have lots of suppliers and we have a lot of incentive to remain competitive in our operations here. But I always said there are limits to everything. And if we can no longer justify this with respect to our results and the economic reality, then we'll examine how we can become more competitive, but that won't be our first course of action. We want to remain strong here in the Netherlands, and we're doing everything possible to achieve that. Second. The -our DEI values remain unchanged. And we have -- our company has maintained that compass for the past 134 years, and we are of the opinion that it strongly reflects the various groups of people and customers that -- and we need to represent those groups internally as well, and that benefits our operating results. We believe in that, and we'll continue along that track. What it does mean, if you consider the new reality in the United States, but I don't see that as being any different from other parts of our operations. You always need to operate in accordance with the law. And if you're required in the Netherlands to set a quota for diversity, for example, with respect to women employees. And in the U.S., your punishable by law. If you include such a quota in your operations, you'll need to reconcile those, which means that you'll need to have that quota in the Netherlands, but cannot have that quota in the United States and that's simply good practice adhere to local regulations. But nonetheless, as Mr. Jakobs is saying. You still represent your values in all cases. And in Philips, these values relate to respecting all types of people regardless of their background or proclivity.

[Interpreted] Another question about DEI separate from quota. I read this in your 2023 annual report. Philips wrote that in the United States, there is a focus on promoting representativenes of black people of Latin American origins and women in leadership positions. And although there won't be a quota there, will you continue to focus on that?

[Interpreted] Well, we still believe that everybody should be properly represented and that everybody needs to be heard, including those groups. We have ERG specific groups that are still active there, and they will remain active, and they're drafted for everybody. So we'll continue along the track we were pursuing. You can see how proportionate we are about diversity within our company. So we continue to aim to do this respectfully in a way that represents the world. But also with respect for legislation, and they are compatible.

[indiscernible] Johnson, VBDO. I prepared my questions in English. So I'll be asking them in English. I read your report with full attention. Congratulations with another year of great results and achievements. We'd like to ask you questions on 3 different topics, starting with ESG, planning and biodiversity. Philips established an ESG plan for 2020 to 2025, which is set to conclude this year. And in the annual report, Philips discloses the progress made on the targets. We congratulate you on the steps taken and the targets achieved thus far. The questions, could you reflect further on the outcomes and progress made on the 2020 to 2025 ESG plan. How does it look back on the steps made? And what is the ambition for Philips ESG plan in the coming years? And the second question VBDO commenced Philips for recognizing the importance of healthy ecosystems and biodiversity and what the company strives to reduce its impact through the natural capital program, which concrete actions as Philips taken last year as part of the biodiversity and ecosystem services program. And could you confirm whether biodiversity will be included as an area of focus in its future ESG plan, especially in relation to its value chain?

[Interpreted] Regarding our progress in the targets that we introduced in 2020, you'll be able read about that in detail in the 2024 annual report, but I believe overall that we achieved good progression, continually achieved progress year after year. If you look at life improvement, I mentioned in my presentation, we're approximately [ $2 billion ]. And that's certainly a significant figure and an important guideline for us to continue pursuing. We've worked hard on circular economy and have various programs supporting circular economy. And -- the same holds true for our climate change ambitions and we'll move that forward. And we're convinced that this is an important part of how we do business. And as I've said, we also think it's important to do this together with our customers and those we serve, both as consumers and our business customers, especially in health care as for biodiversity that will remain part of that. It's less material for us than it may be for some other companies. But we will continue -- we will retain this topic on the agenda with specific implementation measures as you're accustomed to, once we have a program, we crystallized that program and, of course, report on that as well. I believe that's appreciated, and we're working on new measures and new ambitions. We want to formulate them in more detail, and we'll get back to you as soon as we've done that, to continue making our way of doing business more sustainable and progressing in that respect all over the world.

[Interpreted] Thank you, Mr. Chairman. I have 2 other topics that I'd like to ask questions, but I'll wait the next opportunity to ask those.

[Interpreted] Now back to the financial statements and the financial report. Mr. [indiscernible], I believe you have more questions. Yes. We're very kind to each other's shareholders. So after me, the next person will be able to ask questions. We missed Mr. [indiscernible] here, but -- in some ways, we don't. Let me put it that way. So your words are, I miss it. Yes, I said that, too, an economist, Excellent. Yes and no. Both answers can't.

[Interpreted] Uncertainties about China and Philips revenue in China worldwide, the largest consumer market is down significantly, including in Q1 of this year, especially in Personal Health and Diagnosis & Treatment, a combination of economic adversity, lower consumer spending and the Chinese anticorruption campaign, which makes the care industry rather cautious. We have some questions. Philips should be expected to discard its reputation to surprise investors with bad news, but to camouflage the bad news by, especially in the second half of the year, expressing positive growth expectations. And this was proven in recent years with hindsight, not to be a very convincing strategy a reality because the trust had been tarnished. And of course, we'd all like to abandon that. We do -- and I recognize that you do as well, but does that risk exist because a considerable loss or a setback was taken in Q1. And later this year, things will probably improve. We'd like to be convinced, but also in 2024. So recently, a similar expectation later proved to be overly optimistic. And my question is whether you're estimate regarding the second half of the year may be supported by stronger foundations and as the new management and the new composition better in control of the growth expectations. And my next question is our additional measures necessary in China to protect your markets, such as in pricing, marketing or new products. Can you say anything about that? And in addition to negative impact based on the tariffs, should we expect additional margin loss now about the tender in China. In the past 2 years, China reached a settlement with the SEC, the U.S. regulator because of alleged irregularities concerning tenders in China in the period from 2014 to 2019. Can you put the concerns of our investors at ease that the disappointing results in China are not the result of the clients problems we'd specifically be relating to Philips and the enormous negative growth and unemployment, et cetera, more broadly speaking as well as the question is, how sure is Philips that the compliance structure and control in China has been tightened to such an extent that what happened in the past will not recur and you've said that. You've largely replaced the Chinese leadership team. Can you provide a more elaborate rendition? And is the Chinese leadership team now up to standard? Those were my questions about China.

[Interpreted] Thank you. Some remarks relate to what happened last year with China's economy and the consequences for us well. That economy remains difficult to predict, especially in China. We're learning that the hard way, especially because consumer confidence plummeted in the second half of the year and significantly impacted our consumer sales. Now if I look at our estimate for this year and how we wrapped up Q4 for 2 quarters, we pursued our own plans. So our estimate of the Chinese economy corresponds with what we thought. I go to China each quarter, and I talk with high government officials customers and, of course, with my own team to keep track of things best I can. And the course of the year so far aligns with our expectations. And we've also noticed a macroeconomic circumstances in which we operate are not entirely predictable and may have an impact. So we cannot exclude a possible change. But what we see at this point and what we're in control of indicates that the year in China is progressing as expected, and this is supported largely through our positioning in China. And we've devised a Chinese strategy that we're implementing in which we focus very clearly on several categories that we sell in China, especially D&T and Personal Health categories. We manufacture those locally. So we're competitive on the market. And we're very close to that market, thanks to the new management team. Ling is here, he's the new leader of China, and I'm very proud that Ling is a leader that we trained in Philips over 26 years, and is from Philips, has worked in Europe and North America and was brought back to China to take things over and has a very strong compliance culture that she'll bring to bear when she replaces Andy, who worked hard and achieved good results over the course of 9 years in China, but it was time to change leadership and Ling is excellently positioned for that. Perhaps I can ask Marnix to elaborate on compliance because his team does a lot of great work in China together with the Chinese team to strengthen compliance and to drive it.

[Interpreted] Thank you. You mentioned our settlement with the SEC 2 years ago. And yes, that was because of alleged measures believed to have been taken in China. And for several years, we've had a global compliance program and for certain ratios, we add specific measures as we did with China, specifically depending on the situation that emerged there. We report entirely transparently and meet all the requirements imposed by the SEC and we discuss the composition of our program with them and describe our progress in that respect. And to date, we're very happy about that. But each time you have to see what's happening, whether something is happening, you have to take measures and restore those in your control mechanism and your compliance program. So we keep trying to do that and to improve. And as Roy noted, the tone at the top 5 exemplifying the leadership in China is very important, and we devote considerable attention to that as well.

[Interpreted] So then I have one very brief question. The specific question that I asked. Can you confirm that the growth that had disappeared in China basically no longer relates to the historic SEC regulation concerning Philips?

[Interpreted] Absolutely.

I'm [indiscernible] Johnson from the VBDO. Working conditions and the fundamental role of a living wage in fostering systemic change to alleviate poverty. VBDO continues to urge companies to commit to ensuring payment of a living wage across the value chains. VBDO is glad to see that Philips included living wages in its ESG commitment and has set a KPI on providing its employees living wage. Now the question is, is Philips also planning to set a similar target and/or KPI for providing living wages to workers in the supply chain in the future. And if so, within what time frame?

[Interpreted] Thank you for the questions. Living wage is indeed an important aspect of our policy. We start with ourselves and have introduced that policy can confirm that it applies to all our employees as you say, it's not limited to what we do ourselves, but we're also actively working on this close with our suppliers. So we've included that in our sustained supply declaration. Everybody who works -- our supply has to sign such a declaration and work on it, and we quantify it. And what we saw is when we did that for the first time last year, it was 723,000 employees of our suppliers were subject to the most recent report, it's increased to 936,000 people. So we're specifically working to expand this each year in consultation in conjunction with our suppliers, and we perform on-site audits to check this is not simply in writing. We are in dialogue and monitor it to make sure that it happens.

Philips has always been a front runner in providing reasonable assurance on its sustainability statement in previous annual reports. This year and also confirmed by the accountant earlier in the presentation, we observed that only select CSRD topics are within the sustainability statement that have been subject to a reasonable assurance instead of the limited assurance only. Now could you clarify the rationale behind this decision? And is Philips planning to obtain full reasonable assurance on its entire sustainability statement in the near future, if so, with what time frame? And could you reflect on the implementation of the CSRD framework sharing what are some of the key challenges that you encountered and what were some of the successes this past year?

[Interpreted] Marnix. Thank you for your question. I'll clarify because it almost sounds like we took a step back, but that's not the case. As you know, the CSRD listed the ambition to obtain a reasonable assurance from everybody that did not make it. Last year, we already had reasonable assurance in some topics, and we do this year as well. What matters is that what's new is based on limited assurance. And topics where we had reasonable insurance remain for this year too. So we certainly have not taken a step back in reasonable insurers. That said, we expect to continue along that line, and we are ambitious in this respect. But of course, we track legislation, and there are also some practical issues. I won't go into technical details, but the use of taxonomy is extremely difficult to obtain reasonable assurance on. So we have to see what course that it takes. I certainly don't believe we're lagging behind. I would almost say we're front runners. We're retaining our ambitions, and we're tracking very carefully what's happening, but we're certainly not lagging behind.

[Interpreted] What about the second question?

[Interpreted] The second question, what we saw is that we have been doing integrated reporting for quite a while. And we saw that in some field, the step-up with CSRD was extremely labor-intensive to align everything internally. For example, what's more recent is a lot of information about our own employees, that's something that everybody needs to get used to and many companies don't have the systems to track all these data and retrieve them. That was one topic where we invested an immense amount of time and effort.

[Interpreted] Well, if there are other questions, they can go first.

[Interpreted] May I ask a question about apnea?

[Interpreted] Yes.

[Interpreted] Philips indicates that they're on track implementing the consent degree imposed by the other U.S. regulator. You mentioned the SEC, but there's also the FDA, the Food and Drug Administration concerning the apnea case, including a warning Phillips is worried about potential more extended approval cycles as a consequence of future innovation because of the increased review burden from the FDA as the Board -- as the CEO. Can you indicate the time frame and the major milestones to comply with the consent decree? And do you expect to recover that lost market share in the U.S. from the competitors, which are now nearly have a monopoly. And are you ready to scale up independently to operate on the U.S. market in terms of commercial organization, sales teams and distribution channels? And if it's true that you expect to face more extended approval cycles, can you estimate what the time will be to market -- new marketing technologies in terms of apnea to recover your market share. Understandably, we're also curious about the current status of the criminal investigation by the U.S. Department of Justice. Can you say anything about that? How does Philips estimate additional penalties or future sanctions and how do you assess the risk of claims outside the U.S.A. because the FDA has not approved all test results of Phillips yet. So what's the latest on that?

[Interpreted] Thank you for your questions. Let me start with the consent decree. We made good progress in the first year of the consent decree. As we said, the consent decree takes at least 5 to 7 years. So last year, we launched that when we wrapped up in April. We've completed the first year, and we've taken all steps required, and they've been reviewed by the FDA as well. And we spoke about possible delays in approval of new innovations, possibly as a consequence of the redundancies within the FDA, and that's distinct from what's happening in the compliance section of FDA. So we see no change in that course yet. It depends mainland how we continue booking progression. And year after year, we meet all the requirements. That's a very detailed process that we've agreed with the FDA. I don't want to go into too much detail about this, but we devote a lot of time for that a third-party checks it. And then the FDA approved that. So that's a very meticulous and carefully monitored course. And we've done everything possible to get to it successfully and as well as we can while retaining the right quality because we can see that the market is expecting us to return. And in the other countries, where we were able to return outside the U.S., we were welcomed and innovations also find their way back to the patients, and we're continuing to innovate our sleep apnea product portfolio, including in the masks we offer there. And in the United States, of course, we have scaled back very cautiously to be in compliance with the current situation in terms of sales, but we still operate on that market, and we still have distributors that sell our masks to patients as well as respiratory devices so we can scale up very rapidly. And as soon as we see that we're headed in that direction, then we'll do that the right way because we have a large stake in accessing the market to recover our market share very quickly. And we have no reports about the Department of Justice, the DOJ, as I said, earlier this week, will remain in touch with the DOJ. And if there is any news, then we'll share it with you as for the claims that are taking place outside the U.S., perhaps Marnix can talk about those. As for the tests we've continued testing to date. Each test that we performed has indicated that we did not cause any injuries among patients. That's good news. And we cannot expect the FDA to base their decision on that. We submit all our test results and they look at them, but they're not required to share their opinion. So we continue publishing our test results, and we continue communicating them. And at present, we've made good progress there. Perhaps, Marnix can wrap that one up.

Certainly, you already mentioned the investigation by the DOJ as well as states of a federal and a state level. As Mr. Jakobs said, we're cooperating fully. That's ongoing. So we cannot tell you, when that will be concluded. We mentioned other jurisdictions as well as known we're, trying to be transparent in the annual report. We do have losses pending in other countries, both with authorities and with the courts, you asked about other authorities. We're in close contact with them, and they're obviously interested. I can tell you that an enforcement comparable to the consent decree is not something we envision, but we are working with all those authorities and parties and we're trying to settle them as best we can.

[Interpreted] If you don't mind, I'd like to ask a follow-up question. It's always nice. We have questions about the annual reports and presentations. But I do read things in the financial statements and the financial statements, we feel that the losses carried forward. The auditor spoke about that, that part of those losses carry forward will have to be written off by Philips. And given the huge interest of the U.S., which is about 40% of the group revenue. This raises questions as to why that write-off had to take place, especially because we just heard that you intend to increase manufacturing in the United States and a tax consultant would think that must be profitable. Otherwise, you wouldn't get into that. So why with the maximum compensation of those losses then be finite. That's one of my questions. And another question I have is we always look at good old property, plant and equipment, which are now only 25% of the initial purchase value. The book value is now EUR 140 million, the original purchase price was EUR 1.8 billion. And this may mean that Philips invested a little in the past year in terms of manufacturing capacity. How does Philips assess that. You mentioned that it's very easy for you to scale up again, but of course, the manufacturing base shouldn't be obsolete. So how do you feel about losses carrying forward? And production capacity written off in the context of your previous remark being able to switch gears quickly?

[Interpreted] Thank you, Mr. [ Indra ] for your question. I'll answer your question about deferred tax assets in the U.S. that we wrote off in 2024 in part, and that's caused by changes in the geographic distribution concerning, where we envisage income in the long run, especially in the United States, and that includes things such as no longer recognizing deferred tax assets on offsetable losses and other liabilities. And as you indicated, that includes our sleep and respiratory care provision that you just mentioned.

[Interpreted] Now for the property, plant and equipment questions, we did -- we made our supply chain more flexible, so that we work with more suppliers that manufacture together with us so that you don't have that CapEx on your balance sheet. Instead, you explore making these manufacturing process as efficient as possible so that they may work with other companies and that makes our footprint more efficient. So that's how you see the decline in our own CapEx is not because we're not performing any maintenance or renewal is because in our strategy, we work with third parties that do that.

[Interpreted] That explains matters. Now if you allow me to ask a few questions to the auditor, I'd be happy.

[Interpreted] Absolutely. But here in the first row, please.

[Interpreted] Something important to me is the fact that the shareholder value will increase. I look at some nice research in the future proof index. I read that, that Philips is way ahead of the others with 5 points and it's not important to be good. It's important to communicate. I think that 98% of the Netherlands are not aware of the fact is that Philips is the most future-proof company. This is an absolute sterling performance. It is important for pension funds many people, many companies would like to invest in you, I think, and I believe that commercially speaking, it's really important to communicate this. So what I'm seeing now is worth a lot of money. People are waiting for this. On the bottom of the list, we have Shell and Heineken alcohol, but Philips is way on top. So I would like you to spread the word.

[Interpreted] Thank you. The last to disagree with you, I would say, and thank you for a remark that has such great value. I think our Head of Communications is in the room as well. I'm not quite sure where over there. Well, this was a clear appeal to communicate more about this. And I think we've just got all that value on the silver plate. Any other questions about the annual financial statements about the presentation or questions to the auditor. Always happy when we have an auditor in the room because that's the safeguard. It's some additional eyes -- lots of additional eyes looking off your shoulder. And I didn't see any sweat on Charlotte's phase when he presented. So the relationships to be good, long-lived live meetings.

[Interpreted] We have a few questions to the auditor. We discussed compliance issues in China, which led to the SEC settlement earlier, very challenging operational and commercial circumstances in the region. So we expect the auditor to give additional attention to this in China. Can you, as an auditor comment on your work in China focusing particularly on assessing the internal compliance culture, the structure of compliance, the integrity of financial reporting. And can you, as an auditor confirm that now matters are in order in Philips, China with its internal environment. That's the first question. I have 3 in total.

[Interpreted] Yes, I can give you an affirmative answer. You're absolutely right. China is a special place. And this is why we attach a lot of importance to China. This is one of the countries where we conduct a site visit every year as we commented before. We have meetings with local management. We discussed all the fraud risk, the risk factors. We have a full file review and a good consultation with the local team. So I can confirm that we give attention to a country such as China.

[Interpreted] Okay. Thank you. Then I have a second question. We discussed the deferred tax assets, which is a key audit matter from the amounts are significant, EUR 1 billion. These are the offsetable or deferred losses in the U.S. We've had an explanation of the CFO. This is related the business units, and it's related in part to sleep and respiratory. You've looked into this? So looking at the reduced EBITDA forecast for this year, are you still comfortable with the assessment of the assets on the balance sheet. Now you and presentation refer to the complexity. Complexity is no reason not to comment any further. Would you expect the situation to change and leading to some write-downs on these offsetable losses ?

[Interpreted] I understand your question. But the funny thing is that auditors are very good at looking back, but not at looking ahead. But at the end of the year, we took a very critical look at this item. And as the CFO said, we took a very critical look on the forecast, forecast flows particularly concerning the U.S. And this is mainly about the fiscal profit that is expected. This has been assessed. Now there is a forecast that has been amended in the light of the expectations for the near future. And I certainly can subscribe to these.

[Interpreted] Last question. This is about key audit matters. We see shifts every year. Last year, we had a few others than we have this year. And 2 key orders matters have been removed the considerations or the -- for the sleep apnea new equipment and then goodwill for sleep and respiratory, what were your considerations for not maintaining these matters as key audit matters? What is your professional critical assessment? And has it changed structurally compared to previous years concerning these 2 items?

[Interpreted] As for sleep respiratory care, well, the provision was built up initially and then reduced. And at the end of the year, the situation was such that no major risk was left for any material error, and this is why this key audit matter has simply lapsed.

[Interpreted] And that would apply to both key audit matters?

[Interpreted] Yes, that is correct.

[Interpreted] Any other questions to the auditor. If not, -- any other questions about the annual financial statements or the annual report. Then I will update you on my Page #19 as we speak, but I'm at the bottom of the page now. And I will now proceed with questions on the remuneration policy questions to Mr. Stoffels. Any questions about the remuneration policy for the last year. Mr. Evas.

[Interpreted] Well, it takes -- it was planned for the whole afternoon so we shouldn't get home too early. I have another question. And that's my last one, actually. Well, I have a few left. So first of all, the arrangement for the previous CFO, Bhattacharya with a short-term maximum bonus and also maintaining a part of the long-term incentive products. This leads to some questions certainly in the light of the problems with the sleep apnea equipment, but also in the light of the difficulties we have faced shareholders. Could Philips comment on the rationale for -- giving this redundants page in this way. And this also leads to questions about long-term and short-term incentives we see in the report. We see that at 2024. This, of course for the nonfinancial performance indicators were much better than the results for the financial targets. That is remarkable, certainly in the light of the alterations to the policy with an increase of the nonfinancials and short-term 20% to 30% and 10% to 20% in the long term. So what's the view of Mr. Stoffels and Renumeration Committee on this? Isn't that a little bit contrasting in a year, where the results were under pressure. Wasn't -- was this the intention of your remuneration policy for short-term and long-term remuneration. And then last question, in the assessment of the short-term incentives of the previous CFO, it is stated explicitly that [indiscernible] was insufficient. This is a point that has been taken aboard. Can Philip's comment on the nature of this problem. To this extent, this forecast, apologies has contributed to operational or financial mishap to the extent we could see this performance indicator is a crucial KPI for a CFO and therefore, also for the CFO concerned, but it's not mentioned as a bonus criterion for the new CFO, Madam Hanneman. Can you comment on the reason why this element was not included in the remuneration system for the CFO. Isn't it an important lesson from the past that it should be maintained because this is basically at the heart of the conflict between the shareholders and management. We want to be informed in time properly. We need assumptions for future results. And in the future, unfortunately, that wasn't always the case. That was the question.

[Interpreted] Mr. Stoffels?

[Interpreted] Yes, your first question concerned Abhijit Bhattacharya, this was aligned with his service contract and also in line with what has been published on the website. There was a 6-month notice period. He worked until September. He received a payment of [ EUR 847,000 ]. And then there was a payment in relation to the performance of the year, but also pro rata for 9 months. That is [ EUR 351,000 ] and then the LTIs and that remained vesting, as you said. And this is also in accordance with the remuneration policy that was adopted in 2024. Mr. Bhattacharya has been in his position for more than 30 years, and he was a CFO for 9 years, and he made a significant contribution to the future of Philips. So hence, our decision that this severance could be conducted in line with the remuneration policy. Then your second question. In terms of the nonfinancial metrics. The nonfinancial metrics were introduced to allow us a structured way of assessing the non-financials, safety consumer experience and also the winning the market strategy have become one of the main reasons why the company is going to operate in the future. And this is why we have allocated a higher percentage to intensifying this policy, combining this with an important ratio of the financial metrics. So I think we have achieved a good balance for shaping the company's policies for the future. And could you please repeat your last question.

[Interpreted] My last question, the criteria for the remuneration or the short-term incentive for the previous CFO was also accuracy of sales forecasts. And the results are deemed to be insufficient that what we see in the -- in the report, but we don't see this accuracy of forecast as a metric for the new CFO. Although this is crucial, you need to be able to report, but also you need to be able to look forward. And this is key remuneration element or metric for a CFO that you think?

[Interpreted] I think it is important indeed and it's a criterion, but it's not part of the bonus scheme and now we can discuss this. But certainly, this is a matter of attention for [indiscernible] nodding. It is really important to her and Paul and Remco were consulted on this. But we haven't included this in the bonus scheme.

[Interpreted] Okay. Let me give you 2 pieces of advice. In a future cycle, you should include it in the remuneration policy, I think it's perfectly possible. And this is not an argument to reduce the remuneration, but we think it's important as a yardstick for CFOs. And secondly, as concerns nonfinancial and financial metrics, and this is something we say everywhere, both need a safety evolve. When things are in heavy waters financially, it really hard to give high payout on nonfinancials. So we think it's important to look at nonfinancial criterion in promoting, in reappointing not necessarily in terms of remuneration, but if you put this in the policy, you have to implement it, but there needs to be a safe evolve, meaning that, if the future or the existence of the company is at stake, it's really odd to make us shareholders suffer where those who are at the helm are receiving additional remunerations for nonfinancial criteria. We believe that this could be a suggestion for a future remuneration policy.

[Interpreted] We take this on board. And last remark about this maybe that forecasts are an important issue for the CFO, but not only for the CFO, it's also a matter for the people, who need to provide the input about financial forecast, but we are certainly taking your recommendations to heart. Okay. Then I can finally turn my page. There was one more question. Oh, my apologies. I cannot turn my page.

[Interpreted] Well bonuses are my favorite topic. And Mr. Sijbesma, you asked me to bring this forward once again. I'm very happy to do so. We heard something about a number of trees being planted. And a landmark or a yardstick for me is IKEA. They have planted a forest the size of Germany. Well, Philips is far from getting there, but you might think about an incentive in kind -- so members of the Board of Management or the Supervisory Board can have a bonus in kind -- for instance, 100,000 trees that will be named the Roy Jakobs forest or the Feike Sijbesma forest. And if you look at the future proof index, you see that's leading the way. It's almost free of charge, 100,000 trees, it's EUR 1 million, but it shows that you are shifting towards IKEA. A point for consideration and maybe a discussion.

[Interpreted] We will take this on board as well, Jakobs Forest and the Sijbesma tress. Okay, let's see what we can do with this. Get ready.

[Interpreted] Mr. Sijbesma, we will have to change the policy to do this.

[Interpreted] Yes, Mr. Stoffels very correctly points out that, such a matter would need AGM approval. Well, we will have your support, I'm sure of that.

[Interpreted] I still turn the page, and that brings me to 3E and that is discharge of the members of the Board of Management. Any remarks about discharge for the members of the Board of Management in 3F, that is discharge for the members of the Supervisory Board. Any remarks, moving fast. Agenda item 4. This concerns the composition of the Board of Management and the reappointment of Mr. Van Ginneken. Mr. Van Ginneken has been a member of the Board of Management since 2017, his reappointment is recommended in view of his leadership, his in-depth knowledge of Philips and his extensive expertise in international corporate governance as well as the important role he plays in the Board of Management and the Executive Committee. He has played a crucial role in the management of Philips legal intellectual property and standards government and public affairs and also in designing and implementing the Philips ESG objectives. The proposed term of appointment for Mr. Van Ginneken is 4 years as is customary, and this means that his term of appointment would expire at the end of the AGM in 2029. The contract agreed with Mr. Van Ginneken has been published on our website. And I would like to refer you to the further explanation in the notes to this agenda item. Anyone would like to take the floor on the reappointment of Mr. Van Ginneken? No one. Then we will vote on this later. Then we turn to the composition of the Supervisory Board. Starting with the reappointment of Madam Chua, that is agenda Item 5a. Madam Chua has been a member of the Supervisory Board, since 2021. Her reappointment is recommended because of her contribution to the Supervisory Board over the past 4 years. The way in which you fulfilled her role as a member of the Audit Committee and her track record in information technology, digital transformations and government and public relations, particularly in Asia. Madam Chua is nominated for a term of 4 years. I would like to refer to the further explanation in the notes to this agenda item. Who would like to take the floor about the proposed reappointment of Madam Chua? I then turn to agenda Item 5b, the reappointment of Madam Nooyi. Indra Nooyi has been a member of the Supervisory Board, since 2021 and is nominated for reappointment given our contribution to that Supervisory Board in the course of the past 4 years, given the way she fulfills her role as a member of the Corporate Governance and Nomination and Selection Committee and also given her expertise in corporate finance, strategy and planning and sustainability issues and also general management. Also, given her experience as CEO of PepsiCo, the proposed term of appointment for Madam Nooyi is 4 years. And I refer once again to the further explanation given in the notes to this agenda item. Who would like to take the floor about the reappointment of Madam Nooyi? No one. Then we will vote on this in a moment. I now turn to agenda Item 5c, the appointment of Mr. Bob White. Bob White is nominated for appointment because of his extensive expertise and experience in the health technology sector in the U.S., Europe and the Asia Pacific and also given his proven track records in driving growth and promoting innovation. Until 2024, Mr. White was the Executive Vice President at Medtronic, following a successful career at GE Healthcare, IBM and other leading health technology companies. Mr. White's proposed term of appointment is 4 years. I would like to refer to the further explanation in the notes to this agenda item once again. I am happy now to give the floor to Mr. White. You have the opportunity to say a few words and to address the audience, Bob.

Thank you, Mr. Chairman. I, too, look forward to the white smoke emerging from this meeting. It is a pleasure to be here today. My entire career has been at the intersection of health care and technology. And it would be a privilege to serve on the Philips Supervisory Board and a perspective and experience to Roy and the team, thank you.

[Interpreted] Thank you. Who would like to take the floor on the appointment of Mr. Bob White? No one. Then I would like to use this opportunity to say the following. Mr. White will join the Supervisory Board as of tomorrow. He will also join the Quality and Regulatory Committee that as intended will be presided by Mr. Stoffels and Madam Verhagen will then be the Chair of the Renumeration Committee replacing Mr. Stoffels. Still, I would like to use this opportunity here to thank David Pyott, as the Chair already said, for his excellent cooperation to Philips. And for his role as a Chairman of the Regulatory and Quality Committee. And under this agenda item, I would also like to give you the opportunity. I'm not sure whether Mr. Pyott is available online. Do we have Mr. Pyott on the screen bar. Yes, we do. There he is. Any questions about quality or other matters related questions you would like to raise with Mr. Pyott before we thank him for his contribution. David, the questions are overwhelming to you. But I would like to thank you very much, David, for your contribution to Philips in the recent years. David, thank you.

And I'm very happy that Bob White has joined the committee and a special thanks to Paul Stoffels for taking over the chairmanship and of course, a great pleasure working with the other colleagues on the Quality and Regulatory Committee, including the management team.

[Interpreted] Thank you very much, David. Thank you. Okay, very well. Then we are advancing at an enormous pace. We are now at Page 29. And we come to the joint discussion of agenda items 6, 7 and 8. Agenda item 6 is the authorization of the Board of Management to issue shares or grant rights to acquire shares and to restrict or exclude preemption rights. Agenda Item 7 is the authorization of the Board of Management to acquire shares in the company and agenda Item 8 is the cancellation of these shares. I would like now to move on to the joint substantive discussion of agenda Item 6, 7 and 8. And first of all, I would like to know whether there are any questions about these items. Then for the sake of completeness, knowing what we are going to vote on, I would say following 6A is the authorization for the Board to issue shares or grant rights to acquire shares and the share capital of the company and restricted preempt rights to a maximum as of the date of this meeting and also to restrict or to exclude preemption rights. And these authorizations are valid for a period of 18 months from the date of this AGM. Then agenda item 7, which serves to authorize the Board of Management with the approval of the Supervisory Board to repurchase shares in principle, up to a maximum of 10% of the issued share capital as at the date of this AGM. This number will be increased by 10% of the issued share capital for repurchase for capital reduction purposes. This authorization also applies for 18 months from the date of this AGM. And then agenda item 8, the cancellation of shares. No one wanted to take the floor about these issues. And before we proceed with the vote, I would like to see whether we have any other issues. This basically is any other business. After that, we -- I will not close the meeting, but I will proceed with the vote. So any other business, please.

[Interpreted] My name is Ryan. I'm a retail shareholder. I would like to complement you. I would like to express my compliments to the staff of Acura Hotel. 2 years ago, my mother left bag at the toilet. And we found out only when we got home, and we called and immediately they started looking for the bag, the bag was found within 30 minutes. And I came and picked it up in the evening. I then also found out that lots of people were still working very hard on clearing up the meeting. And once again, I think this is a very pleasant meeting. It was a great lunch. It deserves, I think, a complement and a round of applause.

[Interpreted] Thank you. It's heart warming, very happy to hear that bag, find its way home. This is not an appeal to leave any bags in the toilets at the hotel. But Acura and ourselves and the staff are doing everything possible to provide the orderly conduct of this meeting and also to make sure we remedy any mishap that might occur. Before we proceed with the vote. Any other questions? We've been going for 2 hours and a quarter.

[Interpreted] I wish too soon. I have a question at the very end. I have not heard from Mrs. Nooyi yet, but apparently, she was the CEO of Pepsi and launched a great many healthier products and environmentally friendly practices. That was very nice. And apparently, she's closely involved in Amazon and deals with artificial intelligence. I'm interested in what Mrs. Nooyi's added value is for Philips?

[Interpreted] I'll try to explain that one or Mrs. Nooyi can explain that herself if she'd like to. But what I'd like to say is that at the Supervisory Board and the Board of Management, we are absolutely delighted that Mrs. Nooyi has joined our Supervisory Board. She has incredibly broad expertise in management as CFO of PepsiCo -- as CEO of PepsiCo strategy, internationally operating a vast company. And if you're talking about people management, strategic course, international operations, then all I can say is that she is an incredible strength and asset to our Supervisory Board and the advantage is that not everybody has exclusively the med-tech perspective, but also comes from other industries as well as your background from Amazon and other industries, but she's able to add a lot. Would you like to add something?

No, I think that's a valid question, and everything Feike said was true, but I also sit on the Board of Memorial Sloan Kettering. So I have a very good perspective of a provider in the whole med tech space. So I bring that perspective to the Board. And at the end of the day, it's how do you create value. That's the core tenet of a Board member, and that's what I'm focused on.

[Interpreted] I assume that you were fully convinced?

[Interpreted] Yes, I am entirely convinced.

[Interpreted] Any other matters for any other business.

[Interpreted] Then before we proceed to the vote I'm going to conclude the substantive section, and we'll proceed to the vote, but a few observations in preparing this meeting, the civil law notary established that the legal and statutory requirements have been observed. The general meeting has therefore been lawfully convened and is authorized to take valid decisions on the items on the agenda. At the start of the meeting, the capital represented equal to EUR 146 million and titling us to 137 million votes, and this constitutes 79% of the capital entitled to vote present or represented at the meeting. Next, on to what you have all come to do, vote or white smoke. We will vote on each proposal separately and electronically. And the login code you received as personal and corresponds with a number of shares you represent at this meeting. You have received a brief instruction manual and personal data and a description of the voting procedure via your cell phone. People are present in this room who can help you vote as needed. Please take your cell phone and follow the instructions you received upon entering. If you encounter any difficulties, please raise your hand so that somebody can come and assist you. It's actually very easy. If you wish to vote in favor of a certain proposal, please press for. If you wish to vote against the proposal on the agenda, please press against. And if you wish to abstain from voting, please press abstain. I'm sure we'll make this work. For the record. Please note that later on, I will announce the percentages only of the votes cast. The exact results will be posted on the website within 2 weeks and will, of course, be included in the report. Very well. Are you ready? We will start voting. And if you have the agenda, we'll start with agenda Item 3B because there is no vote on items 1, 2 and 3a. We'll start with the vote on agenda Item 3B, the adoption of the 2024 financial statements. I now open the vote. Please cast your vote by pressing the button of your choice, so for , against or abstain. You have a few seconds to vote on agenda Item 3B. Is it on the screen? No, not yet, then I will close the vote. [Voting]

[Interpreted] Yes, the vote has taken place and 99.85% has voted in favor that it looks like it's clear that, that has been adopted and adopting the financial statements at 3b has been approved. Next, 3C, the dividend proposal. And I will open the vote on that as well. $0.85 per ordinary share in part in cash and in part in shares. The vote is open. You may vote for, against or abstain. Please cast your vote. [Voting]

[Interpreted] And I'm about to close the vote. May I do so. Yes. And that has been approved with 99.5% of the votes. So it appears that the dividend has been approved as in agenda Item 3C. Next, 3D, remuneration policy. And that's an advisory vote regarding the remuneration policy as explained by Mr. Stoffels, I now open the vote on agenda Item 3D, your advisory vote on the remuneration report. The remuneration policy that vote is open. You may vote for, against or abstain. [Voting]

[Interpreted] I am about to close the vote. And it has been approved with nearly 99% of the vote in favor. Agenda Item 3D, that's your advisory vote on the remuneration resolution that was 3D. Now 3E, the discharge of the members of the Board of Management in favor, against or abstain, for, against or abstain. The vote is now open. Please cast your vote. [Voting]

[Interpreted] I'm about to close the vote. The vote has closed. And the discharge has been approved with nearly 99%, 98.9%. This is the discharge of the members of the Board of Management. That takes us to a very important agenda item 3F, discharge of the members of the Supervisory Board. Please cast your vote for, against or abstain. [Voting]

[Interpreted] The vote is now closed. And agenda item 3f has been adopted as well with nearly 92% of the voting in favor of discharge of the members of the Supervisory Board. That was 3F. Now another very important one, for reappointment of Mr. Van Ginneken as a member of the Board of Management. Please, the vote is now open. Please cast your vote. [Voting]

[Interpreted] Please close the vote, and we'll see what happens, Marnix. Over 99% approval, Marnix. Next, that takes us to agenda Item 5A, which is the reappointment of Ms. Chua as member of the Supervisory Board. You may vote for, against, or abstain. The vote is open, please cast your vote. [Voting]

[Interpreted] The vote is closed. And the result is also 99%. My pleasure. Next, agenda Item 5B, the reappointment of Mrs. Nooyi as a member of the Supervisory Board. Please cast your vote. [Voting]

[Interpreted] The vote will close. Please close the vote, at 97% approved, happy. Agenda item 5C, Mr. Bob White's appointment as a member of the Supervisory Board. Please vote for, against or abstain. Please cast your vote. The vote is open. [Voting]

[Interpreted] The vote will close now. Bob, welcome. That takes us to the 6A, authorization for the Board of Management to issue shares or grant rights to acquire them, please vote for, against or abstain. Please cast your vote. [Voting]

[Interpreted] Closed. It's been adopted with over 99% of the votes cast in favor, 6A, the authorization to issue. shares. Thank you. That takes us to -- am I on track, 6B, authorization to restrict or exclude preemptive rights. Please cast your vote for, against or abstain. [Voting]

[Interpreted] The vote is closed, also adopted with just under 99%. That was item 6B. That takes us to agenda item 7, authorizing the Board of Management to repurchase shares in the company. Please vote for, against or abstain. Please cast your vote. [Voting]

[Interpreted] The vote is closed. And that agenda item has been adopted with 99% of the votes cast. Next -- that was agenda Item 7. Next is agenda Item 8. And that concerns the cancellation of shares. Please cast your vote. [Voting]

[Interpreted] And we're about to close the vote. And that proposal has been adopted as well. Agenda Item 8, with 99.5% of the votes cast in favor. Now in my script, I was following -- but I always follow the Company Secretary. It says that I will give another opportunity for a very short -- any other business. Would anybody like to say something at the very end or ask a question? Nobody? Then that takes me to the last page. In 2.5 hours, we made it together. That's Page 61, Agenda Item 10, closing this meeting. Thank you all very much for coming, for asking questions, for contributing and for your support. And I hope to see all of you at many other occasions during the course of the year and next year at the AGM again with this Board of Management and Supervisory Board with all kinds of reappointments. All the items on the agenda have been adopted. Thank you for your support. We're going to emit white smoke, and let's see whether we'll see white smoke from Rome, but we do have white smoke here. Thank you very much. Thank you for listening.