Lagardere SA (MMB) Earnings Call Transcript & Summary

Good morning, shareholders. And welcome to this rather special AGM of Lagardère SCA. And we'd also like to welcome all the other persons who are joining us for this webcast who may not necessarily be shareholders. Around the table from left to right, [ Pauline Noel ], who is the Director of the company's Secretary Department. Good morning, [ Pauline ]. Patrick Valroff, who is the Chairperson of the Supervisory Board; Gerard Adsuar, whom you all know well, who is the financial and the CFO of the group. And on the phone, Pierre, who is in good health, I can reassure you. Pierre Leroy, who is the Joint Managing Partner of Lagardère. Good morning. Now a further few words before we open the AGM more officially. First of all, we'd like to wish you good health to you, your families, to your nearest and dearest. And during this meeting, we're going to be talking about industry market share growth results, but everybody knows without necessarily being a professional economist, that the key thing for all of us is health. So please look after your health. Stay healthy, especially in the weeks ahead when we lift the lockdown [ privy ]. And I also would like to have the first few words for all the men and women who have worked tirelessly in the group since the beginning of the year, and in particular, during the lockdown period in very difficult conditions and difficult social material and emotional conditions as well. And I would like to reemphasize, I would like to restate what I've already said in writing, do not hesitate in the future, rest assured that the group stands by you. We'll continue to do so. And this year, as you have seen, we have decided to maintain the date that we had planned for the annual meeting, first of all, because the regulations allow us to do so. Secondly, because we have all our employees who are working. Life goes on. It has to go on. And therefore, it is quite normal that this general meeting be also maintained because life must continue, maybe not in the same way. We'll talk about that. And the last reason, I would say, is that all shareholders have had the time and media access -- access to the media to have all the required information, and they've been able to convey their personal views. Now we're going to open the annual General meeting, and I would like to give the floor to Pierre Leroy. Over to you, Pierre.

Thank you very much, Arnaud. Ladies and gentlemen, good morning. So we're opening this general meeting, which will both be a general and extraordinary meeting given the nature of the resolutions. As Arnaud has said, this is -- AGM is being held in closed session, meaning that neither shareholders or other people can be present physically or through -- they can attend by audiovisual means consistent with the provisions of Article 4 of decree number 2020-321 of the 25th of March regarding the adjustments to rules governing annual general meetings with the administrative measures restricting movements and gatherings through the relevant decrees in response to the pandemic. This AGM is being broadcast live in French and English on the website of the company. Consistent with usual practice, I will give you some general information. First of all, the members of the Bureau, the AGM is chaired by Mr. Arnaud Lagardère. As the Managing Partner, the 2 tellers and Mr. Patrick Valroff, Chairperson of the Supervisory Board; and Gerard Adsuar, CFO of the group, who are both shareholders of the company, the Chairperson and the tellers have appointed a secretary of the -- this meeting, [ Pauline Noel ], who is the Director under the company's Secretary department. Shareholders have been able to vote under 3 voting modalities, namely by distance or remote voting, by giving a proxy to the chairperson of the AGM or a proxy to a third party. The shareholders have been able to vote by postal ballot through the Internet, through the secure platform vote access, and exceptionally this year in order to deal with delay in post by e-mail, consistent with the decree I just referred to. 2,712 shareholders took part remotely with 102 million shares namely 79.10% of the number of voting shares, which is a very high turnout, significantly higher than previous years. For the extraordinary part of the AGM, it's more or less the same. 2,703 shareholders took part, bringing together 102 million shares with the same percentage, 79.10% of voting shares. This mean that we can officially hold our meeting since the quorum required 20% in an ordinary meeting and 25% in an extraordinary meeting. In terms of the running of the meeting, Mr. Lagardère will, first of all, make a presentation, his traditional usual presentation on the situation of the group, its strategy. Mr. Gerard Adsuar, who is the CFO, will present and provide comments on the past fiscal year and the financial situation of the group. And you will also read this summary prepared by the statutory auditors of the company, Mazars and Ernst & Young of the report that has been drawn up for this general meeting. Mr. Patrick Valroff will present the report of the Supervisory Board, which he has been chairing since the fourth of December 2019. Then we will read out the written questions. I will be doing that. Questions that have been submitted before this meeting. And the answers given by the managing partner. We will then announce the results of the votes on the 34 draft resolutions that have been submitted for a vote. With the 19 resolutions submitted by the managing partners, we also have 15 resolutions that have been tabled by Amber Capital U.K., LLP and Amber Capital Italia, SGA SpA, acting on behalf of the Irish and Luxembourg funds as follows Amber Active Investors Limited, Amber Global Opportunities Limited, Amber European Long Opportunities Fund, [ Privilege ], Amber Event Europe and both [ Strategic Opportunities Fund ] And Alpha UCITS SICAV, Amber Equity Fund. These resolutions concern the revocation of 7 members of your Supervisory Board and the appointment in their stead of 8 new members. Several documents have been submitted -- have been provided for the shareholders on the company website in order to enable you to better follow the proceedings. The first is entitled, Convening Documentation and has also been submitted to each shareholder by postal or electronic mail. It includes the reports that you should have as well as the text of the resolutions that are being tabled with the reason for these resolutions. This document given the Amber resolutions has been supplemented with a supplement, which shareholders have also received further to the change in the proposed allocation of the company result. This supplement to the convocation document includes the text of the draft resolution modified by the senior managing partner and the 15 draft resolutions tabled by Amber Capital. The reason for these resolutions, and the opinion on these resolutions by the Supervisory Board and the managing partner on the aforementioned draft resolutions. The other document is the universal registration document, which is replacing the usual reference document. It has pretty much the same content. And it is a supplement to the management report included in the convening documentation. It provides a very full picture of the group, and all its businesses. You will find their activities, financial statements, legal running, financial running, organization, corporate management. And it includes all the components of the financial report that each listed company must produce. Finally, the document called Landmarks is a document -- a summary document which is more visual, which provides a presentation -- a summary presentation of what the group is today. We hope that the content and the quality of these documents will be fully satisfactory to the very vigilant shareholders that you all are. I wish to thank -- I'd like to take the opportunity to thank all the members of staff of our group who took part in drawing up these documents in very complex working conditions due to the pandemic, and we'd really like to thank them very warmly. I will now ask Madame [ Pauline Noel ] as the AGM secretary to give you the list of the documents that have been submitted and to provide a summary of the agenda which is in the convening documentation. And after that, Mr. Lagardère will take the floor. Thank you very much.

Thank you, Pierre. Good morning, ladies and gentlemen. First of all, I confirm that all the documents that are to be submitted to the -- to the shareholders that have to be put online have been provided consistent with legal provisions. They are -- we have several documents submitted to the bureau and up-to-date copy of the statutes. The convening documentation in the ballot and another convening documentation on the 10th of April, a copy of the convening letters submitted to these statutory auditors and a copy of the additional documentation. And of the 3 reports drawn up by the statutory audit is a copy of the universal registration document. Carole Duparc is bailiff appointed by the Tribunal de Commerce de Paris is present in the room. She has been appointed in order to record the proper running of the AGM, including establishing the quorum and also the announcement of the results of the vote, the AGM is convening to handle all the agenda, which is in Page 7. I'll give you a presentation of the agenda. So this is a mixed meeting. The ordinary meeting, the agenda includes 18 agenda items, numbers 1 to 17. And then 18, 19, approval of the consolidated financial statements allocation of the company's profit, reappointment of Mazars, statutory auditors for a 6-year term, ratification of the cooptation of Nicolas Sarkozy as a member of the Supervisory board, ratification of the coopting and reappointment of Guillaume Pepy as a member of the Supervisory Board for a 4-year term; reappointment of Martine Chene as a member of the Supervisory Board for a 4-year term; approval of the information concerning the remuneration of corporate officers; approval of the components of remuneration paid during or allocated in respect to 2019 to the executive corporate officers and to the Chairman of the Supervisory Board; approval of the remuneration policies of the executive corporate officers and of the members of the Supervisory Board; 18-month authorization of managing Paris trading company shares and past formalities. And agenda adopted for the extraordinary resolutions, amendments of articles 12 and 14a of the articles of association in order to incorporate the terms and conditions for appointing employee representative members of the Supervisory Board. So with this agenda, approved by the managing partners and the Supervisory Board, we have 15 draft resolutions tabled by Amber Capital, representing several funds with shareholders of the company. These resolutions are [ AAH ] and [ GAP ] concern the revocation of Mr. Gilles Petit; Madam Aline Sylla-Walbaum, and then Mr. Patrick Valroff as members of Lagardère SCA; and the appointments of Mr. Patrick Sayer; Madame Valérie Ohannessian, Brigitte Taittinger-Jouyet Laurence Bret Stern; and Mr. Enrico Letta, Madam Elena Pisonero as members of the Supervisory Board for a 4-year term. Thank you very much. And I will now give the floor to Arnaud.

Thank you, [ Pauline ]. As you know and as you have read and seen and we spoke about this in recent previous AGMs, the group in the past few years has been undergoing major but necessary transformation. And I have read and understood that there has been a form of nostalgia for the conglomerate that we were, combining high-tech and media activities. Conglomerates are becoming increasingly rare because companies are now focusing their financial and human resources on a reduced number of businesses in order to focus their efforts and to be as efficient as possible, and this makes good sense. The extraordinary company that Jean-Luc Lagardère has established -- the conglomerate that he established can no longer exist. And he was fully aware of this. And we are not betraying his vision and his memory in recent years by adopting the strategy whereby we are focusing on 2 giants, which are already giant leading -- leaders in their businesses, namely Publishing and Travel Retail. And this is the story that I would like to roll out by -- with some slides. It's a fairly exhaustive menu, but you're used to this. So here is the snapshot as of 31st of December 2019. So you have Publishing to your left and Travel Retail on the right with some figures, which, of course, Gerard Adsuar will be going into in far more detail. So you can see the relative weight of the businesses. The margins on Publishing and on Travel Retail are quite high, but this is inherent to each of these businesses, very strong brands. Admittedly, these are entities that do not necessarily have product synergies, but they are extremely complementary. What you have on the left is a very powerful driver, a resilient driver. And on the right, you have a growth driver. And as you can see, in 2019, 8% like-for-like growth, organic growth for Travel Retail and 1.5% growth for Publishing, which is good. Because, as you know, the -- and this industry is very stable in terms of growth. So this organic growth has to be sought out, and this is what Publishing does and delivers every year. Now you have some rankings here. I'm not going to go through all of them, but you can look at them at leisure. We are the third player in this business. The second is Penguin, very developed in Education in United States. And it's a business where we don't have a presence ourselves. So perhaps we are more comparable to Penguin Random House, which is controlled and almost wholly owned by Bertelsmann, the German group. And then we also have -- we've quoted -- we've given you the example of 4 businesses on the chart, but others are coming up. For example, games, video games -- board games, video games, and this is a very successful acquisition, and we are also the global leaders. We started off 10 years ago in, of course, other forms of Publishing, which are suffering. Now looking at the ranking, which is very interesting and is published each year by JFK. It gives you the sale of all the cultural products and across all categories, you see video games, DVDs, books, et cetera. And you can see that amongst the top 20, we have -- we are in 5 of the top 20. #1, of course, is Asterix. You know that one well. Then you have Musso. Thank you, Mr. Musso, and then you have some excellent novels by Valérie Perrin and Laetitia Colombani, and I really do strongly advise you to read them if you haven't yet done so. And this is a success story that goes beyond pure publishing. It's a global cultural success, continuing with travel retail. This is where we are in the world. We can't be everywhere. We are in many geographical areas, Africa, Latin America. These are economic choices. And there are also opportunities emerging and others that don't emerge. Now you have some figures. We have almost 25,000 employees. We're present in 39 countries. We have 4,850 stores. We are in 750 railway and metro stations around the world. So in short, we have a very diversified development of our business in all our businesses. We're the only player in Travel Retail to have a presence in all the businesses, namely Duty Free, what you call travel essentials items that you buy at the last minute, a charger, a pillow, et cetera, and everything related to food and foodservice. And this enables us to offset cycles to absorb cyclical impact and to grow more quickly. And we have done a great deal in 2019. You can see the acquisitions. I won't go into detail, but just to make things more clear. IDF is a great company that was developed by our friend, [ Aldo Vastapane ] in Belgium. We were very -- we're delighted and proud to be able to acquire this company. HBF is a company that has a greater presence in food in the United States. It has a synergy with the previous acquisition. It's in the same region, Atlanta, and we have also had some renewals. I won't dwell on them, but it's simply to show you the most telling examples. In 2019, some have had significant organic growth, and others have had external growth that we have, of course, not neglected. Now the big question mark, well, for us, it's not really a question, but there are many commentators involved here. People are saying, well, the world is changing. It's going to change. It will no longer be the same kind of world. People will travel far less or they won't travel at all. And of course, our views are very different. First of all, traveling is part of human nature, going to other places, meeting different people. And as you can see in recent years, we have suffered different crises. There was the first COVID crisis, which was SARS and then on air traffic, what you can see, even though there may have been a small decline or stagnation, it's always recovered. And this year, we're going to have a collapse in airline traffic because all countries have closed down, and they will gradually reopen. I'll see you next year, I'll see you in the subsequent years. And I'm sure you'll see these charts going up. Again, the trends going up. But what I can certainly say is that air traffic growth will continue to grow. And this is what we are betting on, and we will have to be ready to support and exploit that, of course. Now, carrying on with the group's strategy, which is an ambitious strategy. Now what you can see in 2003 to the left and 2019 on the right, what you can see that there was only 11%, you can see on the left-hand chart, which is Publishing. Travel Retail at the time was mainly press distribution and very little travel retail. So what we have done is we've rebuilt gradually over these years through organic growth and by acquisition and also by disposals, the revenue in order to have the group that you see that we have today. So this is a far-reaching transformation, which was absolutely vital. And now we're focusing on these 2 businesses. Now I will not go through point by point, this particular slide, which is very exhaustive. But what you can see is that since 2003 and to date, everything that has been accomplished. And of course, you can criticize things. Not everything was perfect, but overall, it has been a success in terms of segments and in terms of acquisitions. I repeat, it has been a success in terms of acquisitions and disposals. Now moving on to the next slide. And this is important. What I was saying is that we have 2 growth drivers, and resilience drivers. On the left, you can see that the result for [ Publishing ] was stable. And what I'm showing here is free cash flow, what is generated by Publishing each year. And what you can see is that this is very stable, which means that it is resilient. And in terms of assets, this is very important for us. We can depend on this. It's very stable, very strong. And on the right, the average growth of Travel Retail has been significant for many years. This is going to continue. And we have the same balance here. It's not something that we have made up. It has been present for many years. I've shown you to 2012, but you could go in previous years, and this will continue in the years ahead. Now looking at the allocation of capital, how did we implement this transformation with what resources had -- we used them. Well, as you can see, we have had disposals. Main -- a great deal was done gradually. And on the right, you can see the use that has been made of the resources. Now indeed, there has been -- there have been exceptional dividends, which we felt were legitimate in terms of disposals, nonstrategic asset disposals, what we have done is pay out approximately 50%. The disposal of Canal+ and EADS to the shareholders because the shareholders are also making efforts and sacrifices for the company, and I thought it was perfectly logical and reasonable that they should have a return on investment or a yield that could keep the share price where we want it to be. Now moving on to the next slide, you can see that for some time now, apart from investment in other areas for the past several years, we focused on Publishing and Travel Retail with acquisitions that you can see on the left -- on the right-hand side of the chart, and -- which this has enabled us to build the group in its present form. And this whole trend has accelerated over the past year or 2. And this began some years ago, as you can see on this slide. Moving on, I was talking about dividends a bit earlier. You can see that we have a stable dividend, the orange-shaded area. This way we decided not to pay out a dividend. First of all, we thought that we would be able to pay it out and then we saw that the crisis was worsening and help from the state and banks would only be given to companies not paying out a dividend. So we aligned ourselves on that policy, bearing in mind that we might have to use furloughing, that we might need subsidies from the state from banks. And I think that Gerard will talk about this a little bit later. Now gearing our debt load has remained at around 2x. Of course, it's going to increase this year. We will know that but over all these years since 2012 and indeed before, we've always had a gearing that has always, on average, been between 2 to 2.5x, bearing in mind the cost of money. The fact that there's virtually no interest on money at present. We feel that this gearing is very reasonable, this -- that ratio. Now moving on, of course, what you have behind all this are men and women who manage all this. And of course, the organization has to adapt to this. And first of all, we have focused on corporate functions, corporate centers. And we're dealing with this in structural terms. In other words, there are functions that we are focusing on such as finance, legal affairs and others, which are perhaps less important in a somewhat different group with 2 key businesses. And we have to reduce cost across the board. We have been doing this, and we're going to continue to do this. You can see some figures here and you'll see this in the next slide. The objective is EUR 15 million. We have done this in the past. And as you can see, we are stepping up this movement, and we will continue to perform savings, not necessarily in terms of the headcount, but in the way that we manage our 2 main assets, which are Publishing and Travel Retail. So we are adapting to this new environment in the corporate center functions as well. Now I can't give you a presentation without talking about COVID and how we have been organized. The priority, of course, is the health of the men and women who are part of our team in everything that we have been able to do on home working, of course, provides some reasonable way of working for people, men and women who are at home in lockdown. And underpinning this is a lot of investments, a lot of organizational work that has been performed to enable this, and we're going to organize ourselves for the subsequent period with the gradual lifting of lockdown and how we organize cafeteria services, offices when you have open spaces. This has to be organized in a rather different manner. Use of stairs, lifts access for the disabled. So there's a description of all this, but I think that what we have decided to do, the fund that we have created, first of all, it's a EUR 5 million fund. It could go up to EUR 10 million, but I think it has helped many people a great deal, not only in France but overseas, and I'm sharing this with all of you. This is for everybody's benefit. We've had many letters encouraging us, people warmly congratulating us, saying that this is initiative, which -- that touches them very deeply. And I want to reassure people, everybody, I do not fear for the future because the group will stand by you. And we are demonstrating this here through what we're doing. Now carrying on, this is not something novel in the world we're living, the CSR, Corporate and Social Responsibility. But it also involves a number of other things. Gender equality, our fight against discrimination. We also need to be particularly sensitive to the environment. And from our point of view, this comes under 3 strategic pillars. Isabelle Juppe manages this for our group very efficiently, I must say. First of all, we want to put human kind at the very heart of our strategy, then we want to limit the environmental footprint of our products and services because what we have is core businesses Publishing and food -- in particular, Foodservices, under Travel Retail can be re-steered. And then, of course, we want to share our social and cultural diversity. So how are we exactly doing this? We're increasing the number of women in senior management positions. You can see the figures here. And we're also trying to increase the proportion of women everywhere. We've also tried to do very well at the corporate level, but we need to do very well at every level. Then there's also the Gender Equal Pay Index, where we've been doing quite well. And we have these high scores, not because we just woke up to the idea and decided to do something, but rather because we've been sensitive to this over a number of years. 97% of the paper we use comes from certified sources or is recycled. It's not because we're in the paper business that we aren't necessarily greater polluters than others. Today, we're very happy to have digital distribution of a number of our products because this is a sure way of contacting -- developing a link with our consumers because bear in mind that paper books pollute a lot less than do e-books. So this image people have that paper is linked to pollution is increasingly wrong, it's increasingly false. A number of companies, including ours, quite clearly, are extremely careful, have changed the way they work and, therefore, that is no longer the case. And I would like to conclude now with what I was mentioning earlier, the fact that we want to share our social and cultural diversity. It basically goes back to what I was saying about travel earlier. It's true that it's a natural human impulse to try to go and meet other people, learn new things, and we're doing everything we possibly can in this direction because we consider it something that is -- enriches us all. I spent quite some time in the U.S. years ago, I lived there. And I realized that various approaches were good, including forms of quotas and deliberate allocation of slots to people from certain communities. This is something that we do want, it's required by law, but it's also something that we do because we feel it's necessary. And now by -- whereby way of conclusion before giving the floor over to Gerard, who's going to be talking figures. We have refocused the group. We have really done everything we could to make the group ever-more efficient. We're going to improve profitability further. We're going to reduce costs ever-more wherever we can in all of our activities. But you are a real business, you're a real enterprise when you have real entrepreneurs, people who are willing to move ahead. And that's why I have a team that's really working with me. We can't imagine our future as a shrinking group. But as a growing group. So in the future, we're going to be investing more in organic growth and also investing more in external growth. You just saw that we're number #3, #4 in our various activities worldwide. We want to become even better. It may take a while, but we have to be cleverer (sic) [more clever] than others. We have to be determined, and we do have the will. "Where there's a will, there is a way." And we're going to find this way, all of us together, and I wish to address these words to all the people who work with us, who work for us. I want to tell them how much I respect them and how much I wish them to be resilient in the months to come that are going to be tough. And now the floor goes to Gerard for our full 2019 results.

Thank you very much. We're going to start with Slide #4 with the highlights. 2019 has been a very good fiscal year for the group, both for Travel Retail and for Publishing because both managed to really make the most of what growth opportunities were available at their markets. Our revenue is EUR 7.2 billion, and our group recurring EBIT, EUR 378 million. I'll be discussing things in terms of scope later because it is an issue for 2019. Our free cash flow is -- totals EUR 294 million which, restated to take into account our real estate dealings last year, is significantly better than it was. And our net to consolidated result has been negatively impacted by disposal of asset. Our net debt is EUR 1.461 billion. And as Arnaud was saying, we have decided an agreement with the Supervisory Board to not pay out any dividend this year. Okay. Now let's look into scope issues. Fiscal 2019 was a very special year because we were refocusing strategically. This slide wants to make that aspect of our work clearer (sic) [more clear] in terms of operating result. What you have on this slide are figures for 2019. To the left, you have the recurring EBIT with our 2018 reporting scope. Then in the middle, you have 2019 as reported. And to the right, the right-hand column is these figures tailored to our target scope. In other words, on a like-to-like basis, we have grown in terms of revenue, 4.4%. And quite significantly also in terms of recurring EBIT, which validates our strategy. So now, next page, which will show you how our actual end of year accounts compared to the guidance we had published during the year. This gives you an idea of fiscal 2019 recurring EBIT. Our guidance had been to clock in growth between 4% and 6%. And at the end of the year, we clocked in at 5.6% plus we had a scope and FX impact to take on board, where we made this AGM acquisition in the U.S. And so our actual recurring EBIT was plus EUR 361 million. For our nonretained scope growth, we expected to clock in between EUR 64 million and EUR 74 million. And we actually did more than -- better than that at EUR 81 million. Okay. Now let's go to our division-by-division results. Lagardère Publishing had a very good year. Revenue was EUR 2.384 billion, which significantly due to growth in France, Spain and Partworks also in a number of countries, Germany, Japan and France as well. For Education, we were a bit below because we've done so well before. So we have end of year recurring EBIT at EUR 220 million and an operating margin at 9.2%. Now if you want to look at the cash flow statement for Lagardère Publishing. Free cash flow is up considerably from EUR 101 million for fiscal '18 and to EUR 186 million for fiscal '19. Our performance there has to be assessed in terms of free cash flow before changes in working capital because our needs in terms of working capital can be fairly volatile on a year-to-year basis. Although if you take a longer view, these changed -- our needs in that field, are fairly stable. So you see the free cash flow before changes in working capital went from EUR 115 million in fiscal '18 to EUR 151 million in fiscal '19. Now let's move to Travel Retail, a very good year, too. Revenue plus 16% [ unconsolidated ] basis and 6% on a consolidated basis with strong growth everywhere, EMEA, France, Asia Pacific and, U.S. and Canada. Our revenue buy activity did very well as well. We were up considerably. And our margin, as you see, was increased to 3.6%. Our cash flow statement is good as well. As we did a few slides ago, we're showing you here free cash flow variations before changes in working capital. There, we were up by 19% to EUR 87 million. This slide gives you a clear idea of free cash flow variations before changes in working capital for our two core businesses. With the same comments I made earlier, you see how much cash generation capability we have at Lagardère Publishing, with a strong conversion rate -- cash conversion rate. And to the right, in red, you see the very strong contribution made by Lagardère Travel Retail, due in large part to external acquisitions and a cash conversion rate that's improved over the last couple of years. You know that that's one of our goals via our strategic refocusing. Okay. Having looked into our 2 main activities, now let's look at the group's financial results. First of all, changes in revenue. In organic terms, we have generated EUR 280 million more, plus we benefited from dollar appreciation, and we didn't have much of a scope impact because, despite the divestment of our media activities, we made some acquisitions under Travel Retail. And now I'd like to move on to data concerning our recurring EBIT and our EBIT. Our recurring EBIT is EUR 378 million, 2 branches. Under that, you basically find restructuring costs that were down this year compared to last year. Gains and disposals, EUR 134 million. That's basically the disposal of TV channels. Impairment losses, EUR 34 million; and amortization, EUR 91 million. That mainly corresponds to acquisitions made by Lagardère Travel Retail, and that's a scope impact. So as a result of all this, our EBIT proper is EUR 411 million. But now a few words on restructuring. In the past, restructuring costs, basically focused on press and media activities, where margins were under pressure. Having divested these activities, we now have less pressure. To this year, EUR 15 million worth of costs are linked to the retailoring of the corporate level linked to refocusing. This will help us save EUR 15 million by 2022. In 2019, exceptional costs for Travel Retail had to do with integration costs that are due to lead to synergies; and for Publishing, with rationalization and logistics improvements. So in other words, all of this will improve our operating capacity in the future for both our core businesses. Next slide. Here, you have interest expense and lease liabilities computed under IFRS 16. Most of that is under EBIT. There's a slight increase because we integrated HBF and International Duty Free, those 2 companies that were acquired by Travel Retail. Our finance costs on a net basis are slightly better, EUR 53 million as opposed to EUR 57 million last year. Income tax expense better than last year, EUR 55 million as opposed to EUR 124 million, where we were paying exceptional taxes on the sale of the Europa building Our net income or loss from discontinued operations is at EUR 207 million. That corresponds to the divestment of Lagardère SpaE. We had to depreciate for EUR 234 million. So our net -- where we -- where you have the last result to the right, where the group share of our profit is EUR 50 million. Then as we do every year, we compute a group recurring EBIT to adjusted profit on a group share basis to account for loss of value. And for this year, our adjusted profit at the group level is EUR 200 million, stable from as compared to fiscal '18. And I'm now going to comment on our performance vis a vis our target scope. What I wanted to show here is to show you how we're doing with respect to our target scope to isolate all of the nonrecurring items away from what is going to be our core business in the future. In so doing, you can see that the free cash flow generated by our target scope, before changes in working capital, for fiscal 2019, clocks in at EUR 250 million, up from EUR 208 million for fiscal 2018. Okay. Now balance sheet -- consolidated balance sheet. Assets and liabilities. You see here, we had intangible assets where you know we carried out some divestment. Then right-of-use assets there were up because of our new acquisitions. Our total equity has gone down a bit because of our distribution of shares last year. And finally, our financing policy. After having carried out a significant acquisition program last year, we're now doing well with the gearing ratio that is stable at 2.1 -- 2.4x EBITDA on the basis of a pro forma disposal of Lagardère Sports. At the end of March this year, we had liquidity of over EUR 2 billion, EUR 1.250 billion authorized credit lines, not drawn out, at EUR 913 million worth in cash. And we feel that this liquidity should do the trick for fiscal 2020 despite a pessimistic scenario in terms both of activity and in terms of financing or refinancing. In other words, we remain convinced that we have a resilient model with these 2 core businesses, and that our liquidity position, combined with the special measures taken to survive the COVID-19 crisis, will do the trick and help us be on a sound footing to make the most of markets when they resume. Yes -- no. We're first going to have the reports of our statutory auditors. You're going to have -- yes, I'm going to read the main conclusions prepared for this general assembly. We're going to be telling you about what the main elements in the reports submitted by Ernst & Young and Mazars are, that have been prepared for this AGM. We have intervened all the main entities of the group in France and abroad. The audits that we have made take into account the specifies of the group in terms of activities, organization and internal control. These surveys have given rise to detailed reports presented to your management and the audit committee and the main conclusions were submitted to the Supervisory Board. Our reports have been put at the disposal of shareholders under the circumstances provided for by the relevant legislation. The list of reports is shown on the screen now, and the full text of each and every one has been submitted in the convening document that has been handed out. In the framework of our audit of the annual lockouts of Lagardère SCA, the parent company, the main point we made concerns the assessment of the assets and liabilities, and we have certified these annual accounts with no reservation whatsoever. And now the consolidated accounts of the Lagardère Group. Our report on the consolidated accounts of the Lagardère Group highlights 4 main points. The first concerns the accounting consequences of the strategic refocusing of the group considering the significance of management decision-making on these issues. The second concerns the evaluation of the goodwill assessments and the intangible capital with an indeterminate lifespan involved in light of the significance of management decisions in this respect. The third part has to do with the restatement of revenue for Lagardère Publishing because of the significant -- of the estimated returns and the significance of the hypotheses that are made. And the fourth point has to do with the first application of IFRS 16 on the leases, the impact of which is described in our notes. By way of conclusion, we have established a certification report that includes no reservations on the Lagardère Group. And that specifically targets the impact of the first application of IFRS 16 leases. And our report on special contracts, [Foreign Language] recalls the 2 contracts concerned and approved by the AGM. The one that covers assistance with Lagardère Capital and Management and the supplementary pension system for Lagardère Capital Management and the Executive group. No new special contract was concluded during the fiscal year in question.

It's an honor for me as the new chairperson to take the floor to submit the annual report of the Supervisory Board. My presentation will, first of all, cover the membership of the Board, then on its activity and its running and on the opinion of the Supervisory Board on the resolutions that have been put to the vote. Regarding the membership of the Supervisory Board, may I please see the next slide. The Supervisory Board has a restricted number of members, 12 members versus 15 members until 2018. We've reduced the numbers in order to adjust to the new scope of the group. All the members of the Supervisory Board are duty-bound to represent all of the shareholders, and they are independent. It is constantly renewed, consistent with the requirements of the Afep-Medef code, 1/4 of the terms are renewed approximately each year. The terms have all been put to the shareholders' vote, with a view to renewing them over the past 3 general meetings. New members, this is a transparent methodological selection, which is governed by the Supervisory Board with the help of a specialized company working on the basis of the very specific requirements of the Board. The next slide. Your Supervisory Board has been constantly -- continuously renewed. We have welcomed 4 new members over the past 2 years. In February this year, Mr. Pepy and Mr. Sarkozy were co-opted, providing unquestionable value for the management of the Group given the nature of their experience and their unique know-how. And by the end of the year, we will have 2 additional members representing the employees of Lagardère SCA. I must say that these changes enable us to ensure proper balance between new insight and experience with the provision of additional expertise. Your Board will continue to be renewed in the years ahead since several terms will expire between 2021 and 2024 in order to be consistent with the needs of the Group, its development and the challenges it faces. Next slide. Given the recruitments that have been made, your counts -- or your Board, your Board has a very valuable experience and expertise in operational terms, in managerial terms, in financial, strategic and legal terms as illustrated by the table you see. It has in-depth knowledge of the Group, of the Group's businesses, of its environment -- competitive environment and the challenges. This was not done overnight. This is something that has been done, work that has been conducted over several years. Next slide. Now coming back, and this is my second point, to the work of the Supervisory Board itself. Your Board met 4 times in 2019, with attendance of 98%. We were informed at each of our meetings, in order to be able to fulfill our supervisory duties of the overall situation of the Group, its outlook, and we also examined the consolidated financial statements, quarterly statements. We provided an update on Europe 1 Europa, and the situation of International Duty Free as part of Lagardère Retail and the restructuring plan of the group's corporate functions, which have been presented to you. As every year, we prepared the Annual General Meeting of shareholders, and we conducted all the required diligence. We reviewed the membership of the committees. The Supervisory Board appointed a new Chairman of the Supervisory Board and Audit Committee, namely myself, last December. A dedicated working group also at the end of the year, reviewed the succession plans for the Group. And like every year, the Supervisory Board held a seminar, during which the strategy was set out in detail and was discussed with the managing partners in attendance. We also held a meeting without the managing partners in order to be able to provide feedback to senior management. We have decided, at the meeting we held in February of this year, to hold 2 of these executive sessions, and one of them in presence of the statutory auditors. And this provides an informal addition to the meetings that are held between members of the Board and Arnaud Lagardère in a restricted format to be able to have a very open exchange with him on the group strategies and plans. As there's also a self-assessment of the membership and operation of the Board, and every 3 years, an external assessment, which is conducted by an independent auditing firm. This was held in the fourth quarter of 2019, and we reviewed the conclusions, which were very positive at the meeting, which we held in February, and therefore, we have adopted an action plan in order to implement the recommendations arising from the assessment. Next slide. Your Supervisory Board has 3 specialized committees, which work in the various fields, namely the Audit Committee, the Appointments, Remuneration and CSR Committee. Well, we've just renamed it to Appointments, Remuneration and Corporate and Social Responsibility Committee in order to better encompass and reflect the mission, which is increasingly important regarding CSR. And finally, we have the Strategy Committee. The Board decided to establish this committee in February, further to the avenue set out by the assessment that was conducted at the end of 2019. This committee is chaired by Gilles Petit, also a member with Mr. Sarkozy and Mr. Petit (sic) [Pepy]. The goal is to interact regularly with senior management on strategic development, on markets, on the competitive environment and also to assess the challenges, which the Group is facing, and to assess investment and disinvestment opportunities in February. Next slide, please. We also decided to change the structure of these -- the membership of these committees. As you can see on this slide, the Audit Committee, which I chair, now includes David (sic) [Aline] Sylla-Walbaum, Nicolas Sarkozy (sic) [Guillaume Pepy]. And the Appointments Committee, the CSR Committee, chaired by Gilles Petit, now has Jamal Benomar and Aline Sylla-Walbaum. And the Audit Committee, its duty is to examine the financial statements and risk control. It met on 5 occasions in 2019, with 100% attendance, and it reviewed the annual and half yearly consolidated financial statements. It conducted the value test on tangible and intangible assets, the main risks for the group, off-balance sheet commitments, procedures, establishing terms of the security of IT systems. The internal audit activity and the convention that links Lagardère Capital Management with the group. And in this regard, I asked an independent expert, Leduc to conduct a contractual audit on the implementation of this agreement on the basis of the -- in addition to the annual review by the statutory auditors. And this report confirms that fears that have been set out by some shareholders are unfounded. And this report was published on the Group's website. The Audit Committee was also submitted with a map of the risks and the results of the self-assessment campaign for internal evaluation. The audit committee also examined dividend coverage, the Group's tax policy, the compliance situation vis à vis data protection. And finally, it reviewed the renewal of the term of the statutory auditor. The committee recommended that it be a matter, this term be renewed for a last term on a competitive basis, consistent with best practice in the market, given their in-depth knowledge of the group, which has been very valuable as part of the refocusing strategic effort. Now moving on to the Appointment and Remuneration CSR Committee. It met -- it held 5 meetings in 2019, with an attendance rate of 100%. In terms of appointments and governance, it reviewed the membership and the independence of the members of the Board. It prepared the reappointment of members whose terms of office were due to expire. It examined the comments of the main advisers. It examined candidates for the Board and prepared the -- this appointment committee reviewed the nondiscrimination -- the antidiscrimination and diversity policy within the Group's managing bodies and worked on the replacement of the audit. In terms of remuneration, it assessed the remuneration policy regarding senior managers, and regarding CSR policy, the committee examined the CSR road map of the Group and gave an update on the ESG ratings of Lagardère SCA. Before moving on to the presentation of the resolutions and the votes, I would like to conclude on the membership of the Board and how it fulfills its duties. Your Supervisory Board has a very significant mix of skills. This combination reflects a selection process, which is both demanding and transparent. And it enables our Supervisory Board through the involvement, commitment of its members to discharge its duties and exercise its prerogatives independently from the managing partners and in the best interest of all of the shareholders. Next slide, please. Moving on to the draft resolutions, which are being submitted by the senior managements and those regarding the Supervisory Board. Nicolas Sarkozy, and Gilles Petit has been coopted unanimously at the Board that met on the 27 of February. Regarding Mr. Sarkozy, I would like to emphasize his solid financial expertise, which he acquired as the Minister of the Budget and the Minister of Economic in Economics, Finance and Industry. His international contacts, his qualities of influence and strategic vision, all these are unquestionable assets for the Supervisory Board. As for Gilles Petit, his experience at the head of a group undergoing in-depth transformation and modernization, his direct knowledge of the Travel Retail segment and digital activities are particularly useful for our Board, and therefore, we recommend that you endorse their coopting for both of them for a term of 4 years. Regarding Madam Chêne, she has strong know-how in human resources. She has in-depth knowledge of Lagardère News' business because when she was an employee of the group, she has sat on the employee representative committee, the Works Council. She is a very independent person, and she has no hesitation in constructively challenging the senior managers. The Supervisory Board has asked her, in fact, to keep a special watch on CSR policy, particularly regarding social issues, and she will be doing this in conjunction with the Sustainable Development Department under the orders -- under the Remuneration CSR Committee. We recommend that you endorse the renewal of her term for a four-year period. Next slide. We are also proposing to go ahead with the modification of the statutes in order to enable, under the law, the appointment of 2 employee representatives members on the Supervisory Board of Lagardère SCA. This is one women, one man designated on a gender equal basis by the group's employees committee for 4-year terms. The maximum number of supervisory board members will be maintained at 12, including the 2 employee representative members. We are also recommending adopting the other resolutions that have been put to the vote by the senior -- by the managing partners. Number one, approval of the financial statements, which we are recommending without qualification. We're also recommending endorsement of the cancellation of the dividend in 2020 for fiscal year 2019. We recommend adopting reappointment of Mazars as the joint statutory auditor for the next 6 years. Approval of the remuneration of corporate officers payable or granted for 2019. Each of the members of the managing partners and this approval of remuneration policies of the managing partners and of the Supervisory Board, this is set out in the corporate governance report, which has been drawn up by the Supervisory Board. Approval of the remuneration policies for the managing partners under the Supervisory Board, consistent with the new legal provisions, which are also described in the corporate governance report. And number five, renewal for 18 months of the authorization for the managing partners to trade in the company's chair, similarly to what was adopted at the AGM of 2019. Next slide, please. Fifteen resolutions have been submitted by the active investor fund, Amber Capital. And the goal is to replace virtually the entire Supervisory Board, except for Misters Petit and Sarkozy. This proposal, to be frank, seems irresponsible in the present situation and counter to the interest of the Group and of its stakeholders. The COVID-19 pandemic is an unprecedented crisis, requiring a stable and experienced Supervisory Board, which is fully committed to managing this exceptional situation. Without giving any comment on the value of the persons involved, what we see is that we have candidates with no particular in-depth knowledge or experience of Lagardère SCA, its businesses and challenges. And there has not been a transparent selection process, and we can legitimately question the actual independence of some of the Amber Capital candidates who have publicly and relentlessly relayed Amber Capital's criticisms of the management and governance of Lagardère SCA. We are also concerned that this proposal, if it were to be adopted, could lead to institutional deadlock, which we feel is unreasonable given the crisis -- the unprecedented crisis, where an understanding of the Group's challenges and the smooth functioning of the governance bodies are absolutely vital and critical. For all of these reasons, the Supervisory Board unanimously delivered a negative opinion on these 15 proposed resolutions, which have been tabled. We therefore call on you to reject them. That brings me to the end of the presentation.

Now without making any poor mistakes in the handover. I will give the floor to Pierre Leroy for the written questions, and then for votes.

No, you're quite right, Arnaud. You did not pay -- you're not mistaken, written questions. This may seem a little bit long, but I have to read out the questions that have been posed. The questions (sic) [answers] may be a little less long than the question. The first question was Mr. [ Christoph Kalman Levy ]. It's a question which is not a proper question, but it has been submitted in strict compliance with the rules, and it's been written with quite a good sense of humor, which is different from what we usually get. It concerns Mr. Lagardère in -- personal. And perhaps Mr. Lagardère will personally deliver the answer to the question, and I'll read it out. Since 2012, I have gone to each of our noble AGMs and I have criticized you for the confusion between personal professional interests and I have asked you to remove your status. With all, I think this has been a real conversation of shareholder democracy. I'm very sorry that you never listen to Mr. [ Glick ], and you were very condescending towards him. And I am deploring that the press present was anesthetized by your language. And to date, you, your courtiers, we the small shareholders, are all dealing with what is a very uncomfortable situation, and you have created confusion, you have created great uncertainty for the future, and this has been worsened by the pandemic. And in order to try to save your fortress, you have decided to ask for assistance from a few knights, like Mr. Pepy, who left the SNCF; like His Lordship Sarkozy, who committed to ensure that the Qataris who are tax-exempt, should pay tax; like the squire [indiscernible], who was so unfairly sentenced for a misuse of social goods; like the Crédit Agricole, who also to remember [ Jake ] or like King Bolloré, who is the Duke of Editis and will have to wait before he takes over the kingdom of [ Asia Live ], which is a great disquiet for the [ Asia ] teams, given the situation that the publishing industry is going through in view of the competitive situation. And also looking at the situation of our company, which is too closely linked to your own and to the latest tribulations, which were not known when this letter was written, could you not simply become the Honorary Chairman and leave the executive chairmanship to a man or woman who would be better able to restore the image of the Lagardère Group to breathe fresh energy, confidence and pride with the 29,000 employees of the group to reassure shareholders, small shareholders as well as our customers who are getting very tired of this never-ending spectacle? It would also be high time to reshuffle in-depth our Supervisory Board, which certainly has some experienced people, but it really is not active. It would also be time to endow some of your branch directors. So if you were to abdicate in this way, appointing an heir to the throne, this would not be a dishonor, but it would be an active redemption, which would be priced everywhere in France ranging as far as the Anglo-Saxon shareholders who are militating against an internal breakfast. Conversely, with a few mercenaries, you are remaining in your feudal realm. Your Lord Chairman, we would all be so happy to see the Lagardère Group move from the Middle Ages to The Renaissance. Thank you in advance for your courteous reply your distinguishing humble, Mr. [ Guillaume Levy ].

Now. In literary terms, this is a very literary approach. And at least our friend is consistent with his deep, cultured approach. Well, to answer -- of course, I'm going to answer our friend [ Guillaume Levy ]. Well, this, kind sir, your -- the goodwill that you endow me with each year, frankly becomes a bit of an embarrassment. If there's too much love, it kills love. And I wouldn't want to break this burgeoning friendship between us by -- and I will simply say that I would simply dwell on dishonor. But for me the ultimate honor is to have an executive duty. And of course -- and I would sort of return fully respectfully all the honors you have conferred on me, and I'm sure we'll be talking about this next year. Thank you.

Next question. The question from Mr. [ Level Nivos ]. I would like, first of all, to know whether you will be paying out a dividend? And how -- what would be the amount of the dividend? I would also like to know how you are feeling the impact of the pandemic across the group. I'd like to know whether you have a vision for your sector? How you're positioning yourself? And my last question regarding jobs. I'd like to know whether you are considering redundancy plans or not. And another question by -- from Mr. [ Francis Lescarée ]. Given the crisis, the stock market crisis, the Senate health crisis, the decisions that we're taking will have significant impact on our employees. Of course, the decision to drastically reduce or to suspend the dividend is a healthy decision, given that our main business is in the media, which have come to a complete halt in some geographical regions, establishing a rapid evolution of our retail activity based on transport hubs in a lasting context of restricting freedom of movement. And also, what we're seeing is an increase in education inequality in some parts of France. We have great responsibility in this, frankly. Our governance seems threatened. What would be your main direction in these key sectors? And as investors a return on the results of the company would be a reward for our loyalty. Past dividends were probably too high, reducing our reinvestment -- capital reinvestment under 2/3. And we're seeing how vulnerable we are, as a result of this. What will be the payout policy when it responds? I'm wishing you every success and to successfully go through this very difficult period.

So clearly, we want to thank Messrs. [ Nivos ] and [ Lescarée ] for their loyalty and the interest they show for the group. The questions they have raised have been the focus of reviews and discussions within the governance bodies. And we, therefore, have a common shared answer. The pandemic is an unprecedented crisis for the world at large and for all economic sectors. Some sectors are more affected than others. This is the case of rail and air transport that have a great impact to Lagardère Travel Retail. Our other activities are nevertheless also impacted by the lockdown measures in a variety of countries, in particular, Lagardère Publishing. From the very onset of the epidemic, our first concern was to protect as best we could our employees and our clients. We have taken a number of strong measures in this respect, and we will continue to adapt our response as flexibly as we can. We are, however, convinced that our group's model is robust and will help us prove our resilience when the economy rebounds. As regards to Lagardère Publishing, activity was affected principally as of mid-March 2020 when our physical points of sale in Europe and North America closed down. But thanks to our various divisions and our geographical diversification, we managed to resist in terms of revenue. We agree with Mr. [ Lescarée ] to say that we need to focus again on digital formats. On this point we are in a good position and have also another asset, audio books. This shareholder also raises the issue of education and equality of access to education. This is a very important topic for us. We're #1 in France, #2 in Spain, #3 in the U.K. in terms of educational publishing. As regards equality of access to education, this obviously depends firstly and foremostly on public policies of the governments in the countries where we are active. But we are totally committed to further our activities in these fields. As regards to Travel Retail, we do not share Mr. [ Lescarée's ] analysis. We feel that our specialized distribution model in airports and train stations remains relevant. We have gone through similar crises in the past with 9/11, SARS, the financial crisis. Every single time, we watched air traffic and rail traffic significantly rebound. Today, obviously, we have to be very careful, as we said in our letter to shareholders and our press release of April 30 last. But we're nevertheless confident that we will -- at some point, start growing again. As regards Mr. [ Nivos' ] question, we are not contemplating, for the time being, any redundancy plan. Our priority remains as health safety and the economic safety of our employees, and that's why we set up a special solidarity fund for COVID that was mentioned earlier. As regards our dividend policy, it's part of our general capital allocation policy that covers both investment and the paying out of dividend, and it has to remain proportionate to the group's resources. Our policy in this field aims to find the proper balance between investment that are the growth of the group for tomorrow and our dividends, which are there to create value for our shareholders. In the past, we had found an appropriate balance with a generous and stable dividend payout policy at EUR 1.30 per share. This has remained compatible with the significant investment that allowed us to develop Lagardère Publishing and Lagardère Travel Retail, which are now world champions on their respective markets. But investments and dividends must remain proportionate to the group's resources because we need to have a solid consolidated balance sheet. We have, for the time being, now had no communication on our prospects for future dividend payouts because the context does not allow us to do so.

Okay. And now the main part of our written questions segment. Madame Neuville's question. Madame Neuville chairs the ADAM, the Association for the Defense of Minority shareholders. . These questions come under various sections. The first concerns the arrival of new shareholders within Lagardère SCA. A few days before an AGM that was going to determine future of the company, we have learned that 2 industrial groups, including Vivendi, have declared to AMF that they had acquired more than the 10% threshold of capital and intend to go on buying shares. We want to know whether members of the management team have intervened directly or indirectly with these 2 industrialists to incite -- to push them to enter into Lagardère's capital. If so, what was the goal? What contacts have taken place, what projects, what agreements have, if necessary, been agreed to? What attitude do you have in particular to one of these new shareholders who's your direct competitor in the field of publishing and, to a lesser extent, in the media business and who doesn't hide his ambition to develop these activities? Has the management team or the Board been offered something in exchange?

Management, first of all, wants to stress the fact that it considers this arrival of new major shareholders as a sign of trust in the company. The company has read the press release published by Vivendi indicating this acquisition as a long-term investment, where Vivendi also says that it has no intention to acquire the control of Lagardère or exercise any influence on the group's strategic decisions. . In particular, Vivendi has not claimed to have a representative at the Supervisory Board. All of this should normally reassure ADAM. These are shareholders on a par with others, and no special agreement has been reached with the company or any of its associates. More generally, management of Lagardère SCA intends to continue its strategic refocusing on Lagardère Publishing and Lagardère Travel Retail in order to accelerate value creation for its shareholders. And clearly, we do not intend to change our way forward. The second topic addressed by Madam Neuville is the same as one she addressed in previous AGMs, namely the personal financial position of the managing partners. So first question, questions relative to the net wealth of the managing partners and their ability to pay out the debt of the company as provided for by French legislation. In exchange for very significant powers, French legislation says that managing partners are indefinitely and solidly in charge of the company's debt -- liable for the company's debt. But this guarantee is totally abstract if the debt of the managing partners are not commensurate to the value of their assets. .

So let's move on to the following question. On the value of the managing partners' wealth, there are -- why are there no published accounts since 2010 of LC&M, one of the personal holding companies belonging to Mr. Arnaud Lagardère. In an article published on January 15, 2020, following an interview exclusively granted by Mr. Lagardère. [ Le Parisien ] states that detailed accounts of LC&M, published as 2010, shows debt that has been divided by 3 between 2008 and 2019 and now totals EUR 164 million. Doesn't Mr. Leroy acknowledge that shareholders should have a right to know what the total debt of Mr. Lagardère through this holding company LC&M actually is? As regards the EUR 470 million mentioned as the total debt of LC&M in 2008, shouldn't you state that this is only a debt vis-à-vis banking establishments? Aren't there other forms of debt that should be added to this total? Furthermore, are there further more credit -- loans that have been made to LC&M? And have the -- for these forms of debt been booked? Can one assert as does the magazine [ Capital ], that the debt of Lagardère SCA vis-à-vis LC&M totaled EUR 209 million at the end of 2018? All in all, what is today, the total amount of Mr. Lagardère debt, all categories taken together totally? What is the value of the guarantees given to banks and other creditors? And what is Mr. Lagardère's ability to act as the lender of -- ultimate debtor for the company? Then there is the whole matter of the inquiry opened by H3C on the LC&M auditor. [ Ramonatxo ] says that the general rapporteur of H3C decided in December last year to investigate the auditor that covers LC&M on 3 accounts: the non-publication of accounts, the remuneration issues and the qualification of EUR 115 million loan made to Lagardère SCA. Do you think that LC&M with no income, such as the dividend, the 1% on revenue due to the managing partners is still in a position to continue operations?

Okay. So here comes the answer. As we indicated already last year, the AGM of Lagardère is neither the place nor the time to raise issues concerning the private life of its managers or the accounts of these persons, even if they were certified on an annual basis by an auditor. This is all the more inappropriate as Madam Neuville is basically commenting on media articles that have been elicited by Madam Neuville herself as well as by Amber Capital. And that Mr. Lagardère and myself are -- personally corrected a number of inaccuracies. More surprising, still, we are being asked to comment on an inquiry that should have been initiated -- that has apparently been initiated by an independent authority vis-à-vis an auditor that happens to be the auditor of one of its shareholders. We are not -- Lagardère SCA is not party to this investigation and therefore has no knowledge about this whatsoever. Furthermore, there is no reason to have any form of general treatment on the same footing of the managing partners in their personal wealth management capacity and what they do for Lagardère SCA. The société en commandite par actions, this private company limited by shares is a special status that comes with special liabilities. But in a way, it does allow and to some extent, encourages cautious management. The managing partners, in any event, are exactly in the same position as the shareholders of a limited company would be because they do come into -- they do have an executive role in management. But they are only responsible to the extent of the money that they have paid in. Now questions regarding profits and dividends, which will allow me to cover in more detailed fashion issues that have already been addressed.

Okay. Questions relative to the consequences of the debt of the Managing Director. In order to cover their financial costs, Mr. Lagardère's holding companies basically rely on the dividends paid out in light of their 7.5% holding in the company and the percentage that is paid out to him, 1% on profit. . Question one, on past distributions of dividends, does this conflict of interest not explain why Mr. Lagardère in the past under pressure from his bankers has privileged the distribution of dividends over shareholder strategic value, i.e., investments? Question two, the elimination of dividend payout in 2020 is true as BFM Business said on April 20 that the plan to get Arnaud Lagardère out of the war against Amber led to the elimination of a dividend payout this year, after having negotiated with his bank, an extension of the maturity dues on his loan. Third question, the amendment of the articles of association of the company. This has to do with Mr. Lagardère's relationship with Crédit Agricole, in particular.

Okay. Answer, as regards the dividends paid out to shareholders over the last few years, I want to recall that the proposal formulated by management corresponds year after year to a choice combining in a very balanced fashion, significant investments for growth and significantly attractive return for shareholders. Our capital allocation policy has always been balanced and proportionate to our ability to generate free cash flow to fund the group's activities. Please refer back to our letter to shareholders dated April 21 last for further details. We also want to say that dividend payouts are not something that is decided exclusively by the managing partners. This is submitted to the Supervisory Board. And the -- over the last 15 years, the rates of approval have been very high, to the -- on average at 98.6%. As regards the annual dividend proposed for fiscal 2019, the company announced on March 25 last, that because of the pandemic, it was going to reduce its payout in order to retain the means necessary for other strong measures that might reduce the financial impact of the economic crisis. But in light of the crisis worsening, we finally decided not under pressure from Amber Capital to forgo any payout for fiscal 2019. EUR 5 million were instantly taken off our total free cash flow to set up a special solidarity fund to which were added the full amount of the drop in remuneration of members of the Executive Committee, 20% less than their previous recommendation that was decided by themselves, as well as the additional amounts that were contributed on a voluntary basis. This last question didn't really surprise us because it corresponds to a number of things we've been reading in the media in support of a campaign that we won't even be mentioning here, and covered as well in Madam Neuville's letter to AMF made public via Mediapart. That said, I think it's nevertheless, surprising that a shareholder as aware of governance issues as Madame Neuville might have concern that our company, bound by rules that demand accurate -- disclosure of accurate truthful and specific information, should have refused to give out information on such a significant plan. But I can nevertheless reassure Madame Neuville on the fact that as has always been the case in the past and in accordance with the applicable French regulations, all shareholders would be informed were we to decide on any strategic transaction of a significant value.

No. And I thought I was done, but I have one last question. For Madame Neuville, that concerns the Sports branch. In a press release published April 22 last, Lagardère stated that in the framework of a strategic refocusing on core activities, it had finalized the divestment of Lagardère Sport to H.I.G Capital. But this raises a number of issues. First of all, H.I.G Capital will -- is H.I.G Capital, the buyer, going to stand in Lagardère's stead in the various disputes with the Confédération Africaine de Football? And is the sales contract a contract that includes a liability guarantee?

The company sold to H.I.G. Capital remains a party to the dispute with Confédération Africaine de Football to the exclusion of other -- all companies within the Lagardère Group. Furthermore, the provision for settlements under Note 28-2 of our consolidated accounts, does that include any share linked to this dispute. The agreement with H.I.G. Capital colors the usual guarantees with this type of transaction and covers a number of limited issues, antitrust compliance, excluding the CAF dispute.

So that covers our written questions. And I think we can now look into the voting results. I have a short comment to make before giving you results resolution per resolution. First point, despite the unusual sanitary -- health situation that has led us to hold this AGM behind closed doors, we are complying with best practices recommended by AMF. The company implemented all the provisions on the law to enable shareholders to express their vote to convey their instructions through the secure platform open 20 days before the AGM by postal ballot and also by e-mail under the relevant decrees. The second indication is that given the request made by Amber Capital, the AMF asked the company to add the -- all the holdings, including the holdings of Amber Capital, which, consistent with relevant rules were under retention accounting and were not as of the date of record, which provides an additional amount of almost [ 14 ] million voting rights to be exercised in the AGM. The third indication, the Bureau of the AGM was informed that one of the companies managed by Amber, Amber Active Investors Limited, had not submitted the crossing of individual threshold of 5% of the share capital and voting rights. This could lead to a removal of over 7 million votes under the relevant provisions of the Code of Commerce. The Bureau, however, felt that the qualification of a failure to comply by Amber Active Investors was beyond its prerogative. And therefore, that no measures regarding deprival of rights was implemented by Amber Capital. The company, nevertheless, holds its right to go to a legal settlement of this matter, if necessary. And I wish to recall that according to the Code of Commerce, Mr. Lagardère will not take part in the votes for all the resolutions regarding the membership of the Supervisory Board. Although this is a fundamental right of the shareholder, as was recalled by the AMF, the Lagardère Capital Management and Lagardère SAS, which are controlled by Mr. Lagardère and the representatives -- the legal representatives of [ Archid ], Mr. Thierry Brentano -- Funck-Brentano and myself, who are not management partners have agreed to relinquish their right to vote on these resolutions. Hence neither Mr. Lagardère, nor Lagardère Capital Management and Lagardère SAS nor Messrs. Pierre Leroy and Thierry Funck-Brentano took part in the resolutions numbered from 5 to 8, A to H, and J to P. So the results, the results. I'm going to -- I'll go through resolution by resolution. The resolution is approved by 99.92%, which is for the financial statements as of 31st of December 2019. The second resolution, approval of the consolidated financial statements for 31st of December is approved to -- by 99.92%. The third resolution, which is the allocation of the company result approved by 99.89%. The fourth resolution, renewal of the term of statutory auditor of Mazars for the next 6 years approved by 89.77% in favor. Resolution #5, ratification of the co-opting of Mr. Nicolas Sarkozy as a member of the Supervisory Board. Votes in favor, 99.75%. The Sixth Resolution. Ratification of the co-opting of Mr. Guillaume Pepy as a member of the Supervisory Board, approved 99.8% in favor. Resolution #7. Renewal of the term of Mr. Gilles Petit as a member of the Supervisory Board for 4 years, approved by 99.78%. Eighth Resolution. Renewal of the term as member of the Supervisory Board of Madame Martine Chêne for 4 years, rejected: 48.74% in favor against 51.26%. Ninth Resolution. Approval of the information mentioned under article L-225 of the Code of Commerce regarding remuneration of corporate officers. Votes in favor, 73.6%. Resolution #10. Approval of the components of remuneration and benefits paid out -- or allocated to Mr. Arnaud Lagardère, management partner, approved by 72.48%. 11th Resolution. Approval the components of the remuneration and benefits paid out to Mr. Pierre Leroy, representing the managing partner, votes in favor, 72.48%. Resolution #12. Approval of elements of -- components of remuneration and benefits paid out to Mr. Thierry Funck-Brentano, a representative of the management partners, approved by 72.48%. 13th Resolution. Approval of the components of remuneration and benefits paid out to -- in 2019 to Mr. Xavier de Sarrau, Chairperson of the Management Board until 4th December, 2019, votes in favor, 80.95%. 15th Resolution. Approval of the components of remuneration and benefits paid out under -- to Mr. Patrick Valroff, Chairperson of the Supervisory Board from the 4th December, 2019, approved to -- by 92.2%, 15th Resolution. Approval of the remuneration policy of the members of the management partners, approved by 64.85%. 16th Resolution. Approval of the remuneration policy of the members of the Supervisory Board. Votes in favor, 98.4%. The 17th Resolution. Approval for the management partners for 18 months to trade in the shares of the company. Votes in favor, 99.46%. 18th Resolution. Amendment to Articles 12 and 14 based on the statutes of the company in order to include the modalities for appointing members of the Supervisory Board representing employees. Votes in favor, 99.53%. 19th Resolution. Powers for formalities, approved by 99.63%. Resolution A. Revocation of Mr. Jamal Benomar as a member of the Supervisory Board of Lagardère SCA, rejected: 37.24% in favor, 63.76% against. Resolution B. The revocation of Mr. Guillemot as a member of the Supervisory Board of Lagardère SCA, rejected: votes against, 68.27%. Resolution C. Revocation of Madame Soumia Malinbaum as a member of the Supervisory Board of Lagardère SCA, rejected: votes against, 57.33%. Resolution D. Revocation of Mr. Gilles Petit as member of the Supervisory Board of Lagardère SCA, is rejected: votes against, 69.47%. Resolution E. Revocation of Madame Aline Sylla-Walbaum as a member of the Supervisory Board of Lagardère, rejected by 57.2%. Resolution F. Revocation of Madame Susan Tolson as a member of the Supervisory Board of Lagardère. Votes against, 68.3%. Resolution rejected. Resolution G. Revocation of Mr. Patrick Valroff as a member of the Supervisory Board of Lagardère SCA. Resolution rejected. Votes against 57.03%. Resolution H. Appointment of Mr. Patrick Sayer as member of the Supervisory Board of Lagardère SCA, rejected. Votes against 57.18%. Resolution J. Appointment of Madame Valérie Ohannessian as a member of the Supervisory Board of Lagardère, is rejected. Votes against 67.06%. Resolution K. Appointment of Mr. Yann Duchesne as a member of the Supervisory Board of Lagardère, rejected, votes against 55.51%. Resolution K -- Resolution L. Appointment of Madame Brigitte Taittinger-Jouyet as a member of the Supervisory Board of Lagardère, rejected. Votes against 57.21%. Resolution M. Appointment of Madame Laurence Bret Stern as a member of the Supervisory Board of Lagardère, rejected. Votes against 61.47%. Resolution N. Appointment of Mr. Enrico Letta as a member of Supervisory Board of Lagardère, rejected. Votes against, 62.90%. Resolution O. Appointment of Madame Elena Pisonero as a member of the Supervisory Board of Lagardère, is rejected. Votes against 57.22%. And finally, Resolution P. Appointment of Mr. Stephan Haimo as a member of the Supervisory Board of Lagardère, is rejected. Votes against 68.28%. I have -- this finishes my presentation.

Thank you very much, Pierre. Thank you, Pierre. Well, by way of a conclusion, just a few words to close the cycle as it were. As you have noticed, there has been significant -- very significant media coverage by challenges. There were challenges before the AGM. And this has given rise as often happens to have fake news and [indiscernible] revealed some of these fake news. Despite all this, and I'd like to thank you for all this, shareholders. You all unquestionably voted in favor of the outlook strategy of the group, of its management team. You voted in support of the Supervisory Board, with the exception of Martine Chêne, who I wish to commend. And I think Patrick will endorse what I'm saying here. She has worked for many years, and she's been very dedicated to the trade union cause, and as Pierre -- for many years. And as you have said, Patrick, she was a tough person to deal with for management and also with the managing partners. So I really wish her every success and very good health. But despite that one particular case, this is an unequivocal vote in support of the managing partners of the group. Thank you very much for that. Pierre, Gerard, Patrick, [ Pauline ] will all -- are all joining me to wish you a very good day and in particular, be very cautious. And see you soon. Goodbye, everybody. And thanks once again. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]