L'Air Liquide S.A. (AI) Earnings Call Transcript & Summary

Ladies and gentlemen, shareholders, I'm delighted as the Chairperson of the Board of Directors to welcome you here at the Palais Des Congrès. I'm very happy once again to have this unique opportunity to have a direct exchange with you, our shareholders. I would like to take this opportunity to warmly welcome those who are joining us for the first time, whether in the room or online because now there are almost 800,000 of you, individual shareholders who put their faith in us, and thank you so much. This general meeting is -- provides an opportunity to present the strategy of our group, but it also is an important moment for having exchanges since we want to take the time to answer your questions, and we will be doing that during the Q&A session during this general meeting. As you know, 2 years ago, we launched our new strategic plan ADVANCE. The results will be presented to you by Jérôme Pelletan, our Chief Financial Officer. And the results are in line with our vision and reflect our capacity to deliver strong, consistent results even when the circumstances become more demanding. This requirement means that the performance of our 67,800 employees is even more impressive. And on behalf of the Board of Directors, I would like to thank them and to warmly congratulate them for their individual and collective contribution and their unwavering commitment. Please give them a round of applause. Thank you and thank you on their behalf. And also, 2 years ago, the group opened a new chapter in its history by establishing the new governance structure to manage your group. And I'm delighted with the efficient totally fully operational functioning and cooperation between the Board of Directors and the senior management. And in this regard, the partial renewal of the Board enabled us to strengthen the working momentum. It's very positive of the Board with new independent directors with complementary skills. I would now like to welcome all the members of the Board who are with me, to my right on the podium. Xavier Huillard, who is the Lead Director. And to my right François Jackow, who is the CEO; and on my right, Madam Fatima Tighlaline; Mr. Philippe Dubrulle, who are the members of the Board representing the employees. Madam Christina Law; Mr. Alexis Perakis-Valat, Madam Kim Ann Mink. And to my left, Madam Annette Winkler. Mr. Bertrand Dumazy, Madam Catherine Guillouard, Madam Monica de Virgiliis and Mr. Michael Thaman. I hope that all our shareholders have now come into the room. Thank you for bearing with us. We only had one escalator available this year. And I've been told that there was -- there were many people waiting downstairs. So you are gathered here for the ordinary and Extraordinary General Meeting, which has been convened through the BALO of the 20th of March 2024 and also in the act to [indiscernible] announcements bulletin on the same date. All the owners of registered shares as well as the statutory auditors have been convened to the meeting. Over 400 of us for an entry pass. And I want to tell you that these discussions will be broadcast live on the website of the company. And I would like to welcome those who are listening to us online. I recall that this event is also open to other persons and the shareholders. Since we have journalists in the room, I would simply recall that it is prohibited -- it is prohibited to circulate footage without the authorization of the company. Now you have been given a voting tablet. The way -- explanation will be given for you to use it. Now we will go ahead with the establishment of the bureau. As Chairperson of the Board, I will be chairing the bureau, and I would like to point 2, the scrutineers, Mr. Michael Herskovich, representative BNP Paribas, Madam [indiscernible], representing Amundi. They are the 2 members of the general meeting who have the largest number of voting rights, and they're sitting with us in the front row. With the agreement of the scrutineers Madam [indiscernible], who is the Secretary of the Board, who is also sitting in the front row, will be acting as the secretary. So we now have the bureau. Looking at the attendance sheet, 1,118 shareholders who have 625,464 shares are either present or represented legally and the 81,817 shareholders who are the owners of 299,882,773 shares have voted through a postal vote or through the Internet. The total number of shareholders present or represented or have voted through a postal vote, thus stand to 82,935 shareholders out of a total of 300,508,237 shares of the 522,510,315 shares with voting rights, meaning 57.51% of the shares given that each share has 1 vote. So the general meeting now has over 1/4 of the shares represented. Therefore, the quorum has been attained and the general meeting can therefore begin. The agenda, which has been published is displayed on the screen, should appear on the screen or it's about to be displayed. So I'll continue. All of the documents required by -- under current legislation have been submitted to the Bureau of the General Meeting. Furthermore, the preliminary documents have been made available to the shareholders at the head office through the shareholders' department and on the website of the company in the normal way. No shareholder has exercised their right to add agenda items or draft resolutions to the agenda. The Social and Economic Council has received in a timely manner, the documents and information which has been submitted to the general meeting. The council has not exercised its right to add a draft resolutions. As we do each year, I propose that in order to save time for the discussion, we do not read out the report. We will be getting the main points presented to you. As part of the preparation for the general meeting, we conducted a survey to which over 4,300 shareholders responded. I would like to thank the shareholders. This was very useful for us in order to establish the themes that you would like to see discuss. And unsurprisingly, the outlook for 2024 and the hydrogen activities came top of the list. We will therefore start with the presentation of the financial and extra financial performance and of the results for 2023 with Jérôme Pelletan, who is the Chief Financial Officer of the group. I will then be talking to you about the strategic framework. And going back briefly on the global situation, its implications for your group. François Jackow will present the strategy, the environmental and societal advances as well as the outlook for 2024. Next, I will continue on governance, and then I will hand over to Xavier Huillard, who is the Chair of the Remuneration Committee. And finally, the statutory auditors will summarize their reports. Next, we will move on to the question-and-answer session, which we wanted -- we wanted it to be a bit longer this year in order to have more time for an exchange and discussion with the room. You will be able to take the floor live. And for those who so wish, you can until 4:00 send your questions by text message to the number, which is appearing on the walls on the side of the hall. And this method respects your anonymity, and we do not have access to your telephone details. And finally, we will close the general meeting with the vote on the resolution through a tablet, which was handed to you when you signed the attendance sheet. I'll now hand over to Jérôme Pelletan. Jérôme, over to you.

Ladies and gentlemen, dear shareholders, in 2023, your group posted very strong performance both in financial and extra financial terms. This performance is all the more remarkable and that it was achieved in a complex environment, continuing conflicts internationally, a slowdown in global economic growth and persistent inflation. Regarding our financial results, I would emphasize the 4 main following points: number one, strong comparable growth, like-for-like growth in sales; second, a further strong increase in our operating margin; thirdly, continued strengthening of our balance sheet; and finally, a record level in terms of investment decisions. In 2023, our sales stood at EUR 27.6 billion, up plus 3.7% on 2022 on a comparable basis. And on a published basis, they declined by 7.8% due to a negative foreign exchange impact and the decline in energy prices. I recall that variations in energy costs are passed on contractually to our clients in large industries. Therefore, this is a purely accounting effect with no impact on operating margin. Therefore, comparable sales, like-for-like sales are what counts. And as you can see, they were up in 2023. Let's move on to our activities. The Gas & Services activity, namely 95% of our sales was up over 4.2% on a comparable basis. All of our main geographies are up, in particular, the Americas and also Europe, with growth, respectively, of plus 5% and plus 4%. Now looking at business lines. Industrial Merchant and Healthcare were particularly dynamic. They more than offset the relative slowdown in electronics and the more contrasting activity in large industry this year. And now moving on to our other activities. The consolidated sales for Engineering & Construction was down 15.6%, but this figure excludes the activity connected to internal projects with large industry and electronics, which were up significantly. Thus, the order books for third-party clients and the group's requirements stood at a new record level of EUR 1.5 billion. And finally, the Global Markets & Technologies, that's 3% of the group's sales were slightly down. But there again, new orders for group projects and third-party clients were up, and they stand at almost EUR 930 million. Let's move on to my second point. At EUR 5 billion, recurring operating income was up strongly on a comparable basis at plus 11.4%. The group's operating margin as a percentage of sales was up once again at plus 80 basis points, excluding energy. So the increase in the margin is due to 3 factors. First of all, our dynamic management of prices in Industrial Merchant, where our offerings are providing added value enabled us to adjust our selling price. Next, record efficiencies. Efficiencies stood at almost EUR 466 million in 2023, which is an excellent result. This includes major savings on procurement, which, of course, are more difficult to achieve during our inflationary periods. And finally, the active management of our business portfolio with 2 disposals and 14 targeted acquisitions in 2023. Now let's move on to my third point. The strong increase in sales on a comparable basis as well as the further improvement in margin enables us to post an increase of plus 13.3% of the recurring net profit, excluding currency impact at EUR 3.3 billion. Now let's move on to the balance sheet and cash flow of Air Liquide, which have been strengthened once again. Self-financing was up plus 6.6%, excluding FX impact, meaning that we can thus continue to reduce our debt load while paying out dividends and investing for the future. Regarding the sharing of value. I emphasize that the amounts paid out to our employees, which include salaries, but also profit sharing incentives and other components are 3x higher than the dividends. Our net debt to equity capital ratio of group level stands at 37% versus 42% at the end of 2022. And finally, ROCE, return on capital expenditure, stood at 10.6%, consistent with the objective of our advanced strategic plan. In concluding, let's look at our investments. Thanks to our cash flow, the momentum has accelerated. Our investment decisions have reached a record level of EUR 4.3 billion. Furthermore, the portfolio of investment opportunities on a 12-month horizon stood at EUR 3.4 billion at the end of 2023. It now is based to the tune of 40% on projects regarding the energy transition. Regarding the improvement of the operating margin, we have almost achieved in 2 years, our initial goal set at 2025 in our advanced plan. At present, we are doubling that ambition, meaning that we are now targeting an increase of plus 320 basis points over 4 years. And our overall performance has been commended by the market, and we have gone over the threshold of EUR 100 billion of market capitalization on the 6th of March 2024. Now after our financial results, let's look at our extra financial performance, which include 2 extra financial dimensions. In 2023, the performance was very strong. First, in environmental terms, the group seeks to achieve carbon neutrality by 2050. And by 2035, we intend to -- our goal is to reduce by 33% our CO2 emissions in absolute value on Scopes 1 and 2. And in 2023, our CO2 emissions were down 4.7% on 2022, whereas our comparable sales were up plus 3.7%. So we now maintain our ambition, which is to begin a decline from 2025 of our emissions in absolute value. Regarding water management, we've defined our action plans for our priority sites. And regarding biodiversity, our commitments have now been recognized by Act4nature. Our road map also includes social and societal components. In Healthcare, the rollout of personalized support plans reached out to 55% of patients in 2023. We have also facilitated access to medical oxygen in the rural zones in Africa, meaning over 330,000 extra persons have been able to benefit from this compared to 2022. Now looking at our employees, the group makes the following commitments on safety. Safety is our absolute priority and a supreme requisite for all our actions. In 2023, the accident rate involving sick leave stood at 1, which is one of the best group's -- progress performances of the group in 20 years. Next, diversity. As you can see on the screen, this involves a continued increase in the number of women among our engineers and managers. The deployment, the rollout of basic health coverage is also being stepped up. I would recall that it includes health insurance as well as life insurance and maternity leave, paid maternity leave of 14 weeks everywhere around the world. And finally, 73% of our employees now have access to our program, citizen, which enables them to devote part of their working time to helping local communities. To summarize, Air Liquide has posted a very solid performance in 2023 against the backdrop of a complex changing environment. The group is extremely well positioned to continue its advanced plan both in financial and in extra-financial terms. And therefore, first quarter performance in 2024 confirms the solidity of our growth, the resilience of our business model, in particular with comparable sales up 2.1%. And thus, for 2024, we are fully confident in our capacity on the one hand to increase our operating margin and on the other hand, to achieve growth in our recurring net income at constant exchange rate. Ladies and gentlemen, thank you very much.

Thank you, Jérôme for the presentation of the financial and nonfinancial results. Ladies and gentlemen, dear shareholders, I now propose to briefly go back over the global context and to list the major implications for your group and lastly, emphasize our strengths to adapt to those successfully. The global environment that we're all faced with now and in which we've learned to live has once again become complex. The world is seeking to achieve a new balance. Certain societal progress is visible and unquestionable with other fundamental breakthroughs seen called into question. More than ever, nothing can ever be taken for granted, and the company must continue to fight to maintain its march towards progress. But I'm convinced that faced with crises and tensions, there exist positive forces of change that will create new opportunities that will advance society as well as your group, and I'll return to those in a few moments. So it's with this world made of paradoxes and changes that we must come to terms with today by taking several factors into account. First of all, global growth outlook remains uncertain even if the economy is in better shape than a year ago. And so the risk of a global recession seems to be receding in large part, thanks to a vigorous U.S. economy and possibly a slight uptick of growth in China, even in Europe. Secondly, political stability and national investment plans that will be the energy transition electronics and more generally and manufacturing industries that will be particularly scrutinize, 2024 is a super electoral year. 49% of the world's population will be voting with electoral results that might influence the economy and investments. Similarly, regional conflicts, of course, I'm thinking of Ukraine, Gaza and the situation in Taiwan could well exacerbate geopolitical tensions and heightened competition between the U.S. and China could continue to impact global economic growth with, of course, its effects on financial markets, multilateral trade investment decisions. Thirdly, particularly critical in Europe, issues of sovereignty that are becoming preponderant, be it energy independence, access to natural resources or technological progress. Addressing these challenges at the European level is vital and will remain competitive and ensure our future on the world stage. I'll end lastly with the ESG requirements. That's the environmental, societal and governance that hence forth largely color the strategic trajectory of companies, not just because the way in which we lead our activities is hence forth assessed on the basis of these criteria, but also and above all because they're the reflection of deep convictions and shared by citizens throughout the world. Your Board, henceforth takes into account very much upstream the externality in reviewing the corporate road map. And I'm sure François will return to that in due course. You have understood, dear shareholders. It's in these more unsettled waters that your group is navigating, and we are prepared for that whilst remaining positioned on sectors that are both traditional and innovative at the cutting edge of the economy. We're in a position to anticipate market changes whilst remaining true to our business model. Having said that, we're seeing today that the nature of our growth has profoundly changed. This change is twofold because it impacts both our geographies and our markets. Geographically, the most loyal amongst you will no doubt recall a time when our strategy was simply primarily a matter of rapidly replicating the group's know-how across an extended geographic base. In other words, it was a strategy of expansion and conquest, fully pertinent and relevant at a time when the priority was to capture growth where it was generated, for example, in China, Eastern Europe or in the Middle East. We replicated our model and grew in volume applied successfully for 20 years. This approach has grown the number of countries in which we're currently present over 70 and makes Air Liquide a global major in its field. Today is the management of risk geopolitical, notably, that's become a strategic issue. How to best attenuate the risk that we're taking through our decision to locate and invest throughout the world? The answer for us is to rely increasingly on a strategy of regional densification by strengthening our local network in an area of activity. We're optimizing our investments, improving the efficiency of our operation, leveraging our knowledge of the country, which reduces the potential impact of the failure of a major client or an ecosystem matter. It's, for example, what we put in place in the Industrial Merchant activity by acquiring Airgas in the United States. So we're continuing in China where our strategy densification by acquisition in the major heartlands is bearing fruit. Of course, doesn't signal the cessation of any plan to enter new countries or to expand within emerging economic powers offering growth prospects. But with heightened selectivity, the nature of our growth has changed geographically, but also in terms of markets. You probably noted this over time that we're servicing today the markets of mobility, cement 3D printing, potentially energy, quantum computing to measure -- to mention. But I'd just like to focus on a few key markets. Firstly, the energy transition. Climate and energy have become fully flagged critical sectors for which we're seeing growing demand for sustainable solutions, renewable energies and low-carbon technologies. And all these applications, as you know very well, our solutions are henceforth at the forefront with notably hydrogen and carbon capture. Next, second market, health care and food, where the increased need for wellness and new food habits, stimulating the demand for innovative health care products and services as well as sustainable food solutions. Here again, the group is very well positioned in China with agriculture and breeding. Thirdly, I'd mention that digital technologies associated services that today are growing exponentially. Take Electronics, for example, the acceleration of the digital transformation is driving the demand for products that are even more sophisticated, miniaturized and consuming less powers, it's in these areas that our molecules provide undeniable value added for our clients, both in the design and manufacturing. Lastly, I'll end with infrastructure, industrial policies where we become an important player, be it investment in essential infrastructure such as hydrogen stations or master plans for carbon pipes for tomorrow, even proactive initiatives to stimulate industry like IRA, the Inflation Reduction Act in the United States, so the hydrogen strategy in France and in Europe. These policies contribute to extending our markets while supporting the construction, transport and manufacturing that benefit our Industrial Merchant activity. For all these reasons, I'm convinced that this world that is rich in challenges also carries new opportunities, and your groups will be able to seize them with the determination, the inventiveness and boldness that we know it has ceased this opportunities will not be an option for everyone in particular. One condition seems more than ever vital. The ability to cooperate to co-construct solutions of the future in the face of challenges that few people will be able to address alone. So this ability to be at the crossroads a major project to establish connections between players such as an aggregator of know-how is really at the heart of our expertise. Air Liquide, as you know, for a long time, has embarked on this ability that we have to co-create solutions of the future with and for our clients, places in a unique position. Our partnerships with major economic players opening the way to new business models that are complementary and new solutions useful for our clients as well as for society. François will return to those later. These collaborations are set to multiply in many areas. Some have already emerged such as energy storage, geological storage of hydrogen. For example, in partnership with Geostock electronics with molecules at the present the future with major global electronics players or what we call the technologies of the extremes that go from space-based exploration to quantum computing in these areas. We know how to work in ecosystems and forge strategic partnerships to innovate and to address challenges together with our partners. The diversity of challenges, the ability to mobilize multiple skill sets and the need to act on a greater scale justifies this more collective approach. And to illustrate this with a concrete example, I'd like to say a word about hydrogen mobility because barely a month ago, we inaugurated the brand-new hydrogen station at de l'Alma bridge that will replace the first prototype historical station built back in 2015. This station will host a new fleet of vehicles of our partner, Toyota, the Mirai latest generation that will come into service during the Paris Olympic game system. It's a fine example of ecosystems that is built at the heart of Paris with over 500 hydrogen taxis. Paris will be the first city in the world to have such a fleet available. The movement to scale is possible when all players line up to develop forward-looking solutions. And they describe this the best. Over to them. [Presentation]

Ladies and gentlemen, shareholders, you can see we're not short of challenges nurtured by changing world that is unprecedented. There'll be a further opportunity for Air Liquide to enrich even to reinvent its growth model. More than ever, we've demonstrated our resilience and beyond the talent of our teams who are meeting ever more complex challenges that are vital for our societies. We can be proud of this and continue to write this chapter together with you, our shareholders. I said you're now some 800,000 individual shareholders to demonstrate your trust and confidence in us and collectively hold 34% of Air Liquide share capital. More than ever, we can say that it is your group, a very fine financial performance delivered in 2023 allows the Board to propose this year a dividend of EUR 3.2 per share in respect to FY 2023. That's an increase of 8.5% over last year. This dividend will be detached on the 20th of May 2024 and put up for payment on 22nd May 2024. And then there'll be a new allocation of free shares, 1 free share for 10 holders. You'd see with an increase of 10% the number of free shares in respect of shares that enjoy the loyalty premium. That will occur on the 12th of June 2024. I'd like to sincerely thank you for your support and your loyalty that compel us, be assured of the full commitment of the teams of the group to continue on the road to success. And I will now hand over to our Chief Financial Officer -- CEO, who will return to the implementation of our strategic plan ADVANCE. François Jackow. Given him a warm welcome, please.

Thank you, Benoit. Ladies and gentlemen, shareholders, hello, everybody. Well, as you can imagine after this intensive year, full of challenges and questioning, I'm very happy to be here with you who are our loyal supporters to share with you the special moment and that's the general meeting. Looking at the quality of our results and our advantage in 2023. At the outset, I would like to tell you my full faith in our capacity to achieve the 2025 goals of the ADVANCE plan. But before presenting the outlook for our group and my convictions regarding the purpose of what we're doing, what are the highlights of the past year? Halfway through the ADVANCE plan, I am very proud with our teams to be able to say that we are remaining on course, starting with our performance, which is the first pillar of our strategy. Jérôme has set this out in detail. The group achieved financial and extra financial performance that was very robust in 2023. And this was -- this has demonstrated once again the strength of our business model. In this regard, the record that we have broken or achieved in terms of market capitalization a few weeks ago is a recognition on 2 counts: recognition for the past, that is the strength of our results and recognition for the future, which is your faith in our outlook. And all this, of course, reflects the remarkable mobilization of all of our teams. And with you, I would like to commend their commitment. Thank you. Thanks to our teams and notwithstanding a complex external environment, we are remaining on course. And to illustrate this, here are a few specific examples. For example, the agreement reached with TotalEnergies to provide renewable low-carbon hydrogen to the Gonfreville refinery in Normandy. The hydrogen will come from our electrolyzer, 200-megawatt electrolyzer, which is the biggest ever built using PEM technology. It will include equipment manufactured by the gigafactory that was cocreated Siemens Energy, thus developing a European sovereign industrial business. In Germany, another 20-megawatt electrolyzer commissioned in 2023 will accelerate the decarbonization of the Ruhr industrial basin. In Rotterdam, we have begun to build a CO2 capture unit installed at one of our hydrogen plants. This will be the first European unit to be integrated in the CO2 capture and storage unit. In the United States, finally, Air Liquide has been selected by the Department of Energy to be the strategic partner for 6 regional hydrogen hubs. No other company has been so successful. All of these projects illustrate as Benoit was saying, our ability to create value by inventing solutions with our clients. In electronics also, we are accompanying the biggest global manufacturers in response to the stunning growth of digital technology arising from AI and to secure the supply of semiconductors. This industry has become a global sovereignty challenge in the United States. The group recently signed a contract with GlobalFoundries, which one of our long-standing partners in Taiwan, in Japan, in China, in South Korea. We have invested in the construction of new manufacturing centers for Advanced Materials and ultrapure gas for electronics. So as you can see, many of these projects that were completed in 2023, have a shared ambition, which is decarbonization, which is the second pillar of our strategic plan. 1 year ago, in this very hall, I was presenting our various actions to reduce our CO2 emissions. Now as Jérôme has stated, for the first time, in 2023, we achieved an inflection in our emissions, which were down 5%, whereas we continue to grow. In other words, in 2023, we were able to decouple growth and CO2 emissions. This decoupling is a turning point for the transition of all industries. It has been achieved through our continued efforts to supply renewable electric power to our factories. Apart from our own factories, our portfolio of solutions also enables us to accompany our clients in order to achieve carbon neutrality. From oxy-combustion to hydrogen, carbon capture, it's the diversity of the solutions, which make us a recognized leader in climate solutions. Specifically in France alone, on the 50 sites producing the largest amount of CO2, no less than 15 sites where we are involved for in reducing their emissions. And I would emphasize that this know-how enables us not only to accompany our long-standing plants, but also to go into new markets on thinking, for example, for our cement factory such as Holcim or glass manufacturers such as Verallia, with whom we have signed major contracts this year to help them decarbonize their activities. Acting as a leader also means putting technology at the service of progress, which is our third pillar. And there again, 2023 was marked by major advances where our innovative capacity made the difference by signing 60 on-site contracts for our industrial merchant clients and electronic clients. We have set a new record. This means solutions providing a permanent gas supply while enabling a reduction in CO2 emissions from the transportation of our products. In Healthcare, also, we have launched a new innovative offer, which frees up the hospitals, releases them from the need to manage the supply of medical oxygen. This enables health care staff to be fully focused on the care for -- on caring for their patients. This unlimited capacity to innovate, to invent with new solutions to the DNA of the group. Our clients are telling us every day how important this is in the context of rising costs and the need to be competitive. And I will end this overview of 2023 with our fourth pillar, which is acting for all, which provides the framework for our ESG environment, social and governance strategy. This ESG strategy ensures that we run our operations responsibly vis-a-vis our stakeholders. Acting for all, first and foremost, means taking care of our employees and partners. It means ensuring that they have a safe working environment, which is inclusive and a level of social protection, which is equal around the world. Jérôme emphasize this. Our advantage in this respect are concrete and backed up by figures. We also support communities, those communities in which we operate via citizen of work or the Access Oxygen program for example. And finally, the Air Liquide Foundation, which has just celebrated its 15th anniversary, has supported 34 new projects this year. Acting for all means finally acting for you, our shareholders by creating value, meeting your expectations. And here, I would like to say how grateful we are to you because you supported us in 2023 through the awarding of many prizes, including the Golden trophy for services to a CAC 40 shareholders and the prize for responsible investment. As you can see, through the progress achieved in 2023, I'm fully confident in our ability to achieve the objective of our ADVANCE plan in 2025. And in fact, we can go beyond that because as we mentioned previously, we have already virtually achieved our ambition to improve our margin halfway through the ADVANCE plan. Therefore, we've decided to accelerate our ambitions by doubling the initial ambition by 2025. This brings me to our outlook for 2024. In an uncertain global environment, our clients are telling us that they expect 2024 to remain on the same trend as the year end of 2023 with a possible sequential recovery over the next few months. So we'll see whether this is borne out in the future. So whatever may happen, rest assured that with a strategy that enables us to manage uncertainty, explore emerging opportunities, your group is fully operational and ready to rise to these challenges. This confidence comes in particular from our short- and long-term growth outlook. On the one hand, our Industrial Merchant and Healthcare businesses are the 2 key drivers for sustainable the growth, and they provide added value solutions for our clients and for our patients. Furthermore, and there's a good piece of news, this potential growth has been strengthened through 2 acceleration drivers. The energy transition, which is driven by many projects in large industries and electronics, which are driven by the requirements, the demand for chips and memories that are constantly growing. And this is further reflected in our investment portfolio. We have seen an increase in opportunities in both areas. Our growth ambition in the long term is also put at the service of our corporate responsibility. And that's why we have set at the heart of our ADVANCE strategic plan, ESG as strategy and goals. These objectives are clear. They are measurable and they are ambitious. In environmental terms, the key objective is to reduce by 1/3 our CO2 emissions by 2035. After an initial inflection in 2023, 2024 will mark a new step in order to confirm this momentum. In social and societal terms, we are continuing our efforts in 2024 to roll out a civic minded responsible vision. And I would like to add, it's even truer against a global backdrop where the transformation of the world calls for structural -- sometimes structural adjustments to our operations. These adjustments are necessary in order to enable our teams to write to the challenges that are facing them. It's our role as an employer to accompany them in this transformation by providing them with the framework, the know-how and the resources that are required to go ahead with this necessary transition. And finally, in terms of governance, we are applying the highest standards in a stringent transparent manner. The regulatory framework is going to increase next year with the rollout of the European CSRD directive. And although this will lead to further reporting requirements, I'm convinced that this will be a good thing for us or ultimately. In an increasingly uncertain world, transparency is a guarantee of trust. And this trust, your trust is the very foundation of our long-term success. And in concluding, I'd like to share with you my conviction that our financial performance is never an end in itself. Financial performance is what provides us with freedom to act autonomy and the latitude to act with impact. And basically, what that means, it gives us the means to do things well. And this is what enables us to contribute to progress to lend meaning to our actions for the benefit of our teams, our clients, our patients, of yourselves, our shareholders as well as society as a whole. And it's in this spirit that we are partnering Paris 2024 for the Olympic and Paralympic Games, which is a perfect illustration of contribution to productive -- collective progress. Now let's be honest. It's not -- our group is not accustomed to sponsoring high-profile events. So why are we making an exception this time around? Well, quite simply because this partnership, we felt was fully aligned with our convictions and useful and enabling us to make a contribution that will go beyond the Paris 2024 event. By putting our expertise, our know-how in hydrogen, the service of the environmental ambition of the games. We're proving that they can be concrete solutions for decarbonized mobility. This demonstration will be a wonderful driver to step up sustainable decarbonization in transport by creating infrastructure for lasting use going beyond Paris 2024. For example, the number of hydrogen stations in the Paris region will double further to the games. This partnership also enables us and this is sometimes not quite as visible to lend life to specifically implement the values of diversity and inclusion, which we hold dear. And indeed, throughout the world, 6 power athletes and athletes have been chosen by the group, and we will be supporting them for their qualification in the 2024 Olympic Games in Paris. To illustrate this partnership, here is a short film. [Presentation]

Well, as you can imagine, we are particularly proud to be accompanying these athletes on this adventure. And of course, we wish them every success. And in concluding, rest assured shareholders that our teams whom I wish to thank once again will be fully mobilized during the teams. Indeed, as they are mobilized every day all around the world in order to serve our clients and invent the future. Thank you.

Thank you, Francois. And I'll now turn to the key points of the corporate governance report issued by your Board. I suggest we begin with a short video on the composition of the Board of Directors and the Committees and the work undertaken throughout 2023. [Presentation]

So at the end of today's meeting, the terms of office of 2 directors will be expiring the terms of s Kim Ann Mink and Monica de Virgiliis. You're asking Resolutions 5 and 6 to renew these 2 terms of office for a 4-year term. Kim Ann Mink will thus continue rather on Board to benefit from her scientific know-how of her experience in the fields of research innovation and chemistry as well as her managerial skills. Monica de Virgiliis will continue to provide to the Board her skills in the field of technology, semiconductors and energy, her managerial skills and her commitment in the field of energy transition. Kim Ann Mink and Monica de Virgiliis are both independent directors. Furthermore, for information, Fatima Tighlaline was renewed by the European Works Council as Director representing the employees for a 4-year term. Following this meeting, subject to the approval of Resolutions 5 and 6, your Board will remain unchanged with 14 members, 6 women and 5 of foreign nationality. This composition reflects a diversity of [ pro formas ] and experience, expertise and cultures sought by the Board. Composition of the committees will also remain unchanged after this meeting, subject to the approval of resolutions proposed regarding the renewal in terms of office. I will now hand over to Xavier Huillard, who chairs the Remunerations Committee, who will outline the resolution pertaining to the remuneration of corporate officers.

Ladies and gentlemen, shareholders, good afternoon. Your meeting is invited to rule on 6 Resolution concerning the remuneration of corporate office as 8 Resolution concerns, remuneration paid in 2023 or allocated in respect to 2023 to your Chief Executive in accordance with the resolution, the policy you approved this remuneration come an annual fixed portion of EUR 1.1 million, a variable component of EUR 1,471,067, reflecting the quality of the performance, both for financial criteria as well as qualitative criteria. The financial criteria, the variable component 2023 achieved to the tune of 94.7% of the fixed part. Regarding the qualitative goals the Board considered the very good performance of your Chief Executive, both in terms of corporate social responsibility as well as that of organization and human resources. Francois Jackow has instilled strong momentum for the continuance of environmental goals and specifically decarbonization. He also invested heavily in putting in place a new management team and talent management and in promoting a policy of diversity and inclusion. Lastly, I would underscore the remarkable individual performance of Francois, who, in an uncertain context steered the group with energy and agility. Remuneration lastly is comprised an allocation of performance shares for an IFRS valuation of EUR 1,649,284. Resolution 9 concerns remuneration paid in 2023 or awarded in 2023 to the Chairman of the Board. In accordance with the policy that you approve this remuneration comprises an annual fixed remuneration of EUR 800,000, it being stated that your Chairman doesn't benefit from any variable remuneration or any long-term or exceptional remuneration. The 10th Resolution, you're asked to vote on a overall vote on the remuneration of all the executives, leaders and nonexecutive directors as part of the information supplied, that's the annualized remuneration of your executive compared to the average and medium remuneration of company employees as well as the average remuneration of group employees in France. The ratio for your executive office are shown on screen. The rest of the information is available on Pages 187 or 188 of the Universal Registration Document. Remuneration of nonexecutive directors set out in accordance with the policy 2023 and forms part of the package that you approved in 2020 is to be found on Pages 189 to 191 of the Universal Registration Document. You're also invited to vote on the remuneration policy under Resolutions 11 and 13, its detailed pages 201 to 211 of the same Universal Registration Document. In terms of general principles and structure remuneration policy the Chief Executives in continuity of that approved by your AGM in 2023 with a change proposal regarding remuneration, which will be presented to you in a few moments. The financial criteria, the variable component remains based on EPS and revenue growth. Individual criteria continued to form part of CSR goals of organization and human resources. Performance conditions applicable to performance shares remain linked to the ROCE, the TSR and an environmental criteria aligned the goal to reduce CO2 emissions in absolute terms in accordance with the goals of the climate set by the group. These criteria reflect the strategy as a group combining both financial and nonfinancial performance. The remuneration policy of Francois is put to you under Resolution 11. The Board wish to revise the positioning and the remuneration of your CEO at midterm. After an in-depth review, it appeared that the CEO's remuneration was positioned well below the benchmark average of his peers remuneration. It therefore appeared necessary to propose a revaluation of the order of 10% of the overall remuneration of the Chief Executive. The target remuneration of Francois Jackow would then remain stable until the end of his current term of office. This remuneration policy provides for annual fixed remuneration of EUR 1,210,000, a target variable component equal to 120% of fixed component -- 150% of the fixed component, annual LTI allocation of the order of EUR 1,850,000. Francois will not receive any remuneration in his capacity to Director, but will continue to benefit from the supplementary retirement scheme put in place. He'd also continue to benefit on the team terms of those approved by the AGM in May '23 of a termination of duties indemnity and return for non-compete commitment. You're invited under the 12th Resolution to approve the remuneration policy of Benoit Potier, your Chairman. This policy is identical to that approved by the shareholders' meeting in 2023. In this respect, he will receive fixed remuneration of EUR 800,000 already said, without any variable remuneration, either long term or exceptional or as a director will be awarded to him. The remuneration policy for directors is the subject to 13th Resolution. It's also in continuity with that, which we approved last year, the variable remuneration is preponderant and based on the attendance of directors at each meeting. Supplementary remuneration is paid to the lead director and to the committee chairs. This policy thus promotes actual attendance and participation of directors at Board and committee meetings. You're also asked on the Resolution 14 to vote on the increase of the total annual pay package of your directors. This increase notably takes into account the new composition of the Board and the evolving regulatory context that requires an increased number of Board meetings. And even more meetings of its committee. Remuneration allocated for each Board or committee meeting will remain unchanged. And least in the amount of the calculation, this amount will thus increase from EUR 1.3 million currently unchanged since 2020 to EUR 1.5 million. Thank you for your attention.

Thank you, Xavier. And I propose that we move to the reports of the statutory auditors.

Ladies and gentlemen, shareholders, good afternoon. On behalf of the group of statutory auditors, KPMG, PwC, have the honor of reporting to you on the assignment entrusted to our reports relating to FY '23 to be found in the notice of meeting of this AGM or in the universal registration document 2023. We issued 7 reports in respect to the annual financial statements, consolidated financial statements, related party agreements, the consolidated statement of nonfinancial performance and operation on the share capital by proposing keeping with standard practice at this meeting to present the key points of these reports. So firstly, your report on the annual financial statements of your company to be found in the Pages 307 to 309, the universal registration document. The annual financial statements had drawn up in accordance with French accounting principles. Under our due diligence, we consider the evaluation of equity interest as the key audit matter authority. We certified without reservation or observation, the financial statements of Air Liquide. Our second report concerns the consolidated financial statements who you agreed to be found on Pages 291 to 294 of the Universal Registration Document. The consolidated financials are drawn up in accordance with IFRS as adopted by the European Union. I worked on the consolidated financial statements providing reasonable assurance that the financials free of any material misstatement. Our overall audit approach adapted to various activities and businesses of the group as well as its organization. It was shared together with conclusions of work with the group finance department during the course of regular exchanges. We also reported on our work to senior management, the Audit Committee as well as to the Board of Directors. Our report comprises 3 key audit matters. The first 2 concerns large industry activities: qualification of contracts and arrangements for booking revenue, the duration of amortization of production assets and assessing their recoverable value. Third key point concerns the goodwill test. Following what we certified unreservedly without observation the consolidated financial statements of your group. Our third report concerns related party agreements to be found on Page 433 of the Universal Registration Document. We've not been advised of any new agreement during the course of FY 2023. The agreement relating to the life insurance policy for Mr. Benoit Potier agreement previously approved by this AGM in prior years continued during the course of last year. Our fourth report covers the consolidated nonfinancial performance statement to be found on Pages 485 to 487, the Universal Registration Document. Following our word, the report comprised no predicted comment. Our last 3 reports are to be founded at Pages 434 to 436 of the Universal Registration Document. They concern resolutions 17, 19 and 20, authorizing operations that might have an incidence on your company's share capital. These reports contain no specific comments or observation. We'll draw up an additional report when these agreements are used by your Board. Mr. Chairman, ladies and gentlemen, thank you for your attention.

Thank you. We have completed the presentations, and we will now move on to question-and-answer session.

Each shareholder can remain anonymous and those shareholders who take the vote will not appear on the photos on the Internet. Those who do not wish their name to be quoted should not introduce themselves when they take the floor. Before we open the discussion, here is how we will operate. You can ask your questions directly by asking for the floor. Bear in mind that we also gathered your questions by text messages on phone. Under the legal current legislation, there are answers of the Board of Directors to written questions submitted before the AGM published at the website of the company in order to enable more debate with the shareholders in the room, I propose not to. Over 40 questions are mainly concerned sustainable development, climate, and in particular, decarbonization, in particular, water, biodiversity, risk, share buybacks, government as well as hydrogen. The questions to the Board are thus available on our website under the General Meeting section. So let's go ahead with all questions in the room while the questions by text message are analyzed. So I'll take the first question from the floor in the room. So question O in front of me, a bit further up.

I'm a registered shareholder. A question on hydrogen. Hydrogen means you have to burn a lot of energy, be it clean or not. And among all the means that we have it's far from being cost efficient. It's much more expensive than other forms of energy and the CEO of Total refers to this as being an illusion. So what profitability do you think can be produced by this room of energy or whether you've achieved it or when do you expect to achieve it? And I also have a question regarding China. How do you protect yourself the industrial setup in China?

Francois, first question for you.

Thank you, sir. Regarding hydrogen and hydrogen production. The major part of hydrogen sent around the world and produced in part through natural gas. The is done through CO2. Now the advances we're setting up to decarbonize the content of hydrogen by being able to capture carbon using this gray hydrogen, which becomes blue hydrogen as it's often referred to, either by using electric power to produce electrolyzer through water or if the electricity has a low carbon to have hydrogen with low carbon contacts. So these technologies are emerging technologies, but they're already being used at industrial level in our group, as Air Liquide is one of the global pioneers for the implementation of industrial solutions regarding low-carbon hydrogen. You all have seen that in the final cost of low carbon hydrogen, the share of the energy is very high because for energy produced through electrolysis of water, the cost of electric power accounts for approximately 70% of the final cost of the hydrogen molecule. Therefore, we're working not only in order to be able to source renewable energy, electricity, but also low-carbon electric power, for example, coming from nuclear power. So those who can use this low carbon energy, our clients who can enhance the premium quality of low-carbon hydrogen. And this is to produce low hydrogen contact fuel for land use or for air use. So one of the main challenges here is the availability and cost of energy for this.

So when will it be profitable? Well, we have to work on the whole supply chain, both investments and the cost of energy, as Francois just said. So we are quite confident that all the projects that we are involved in will achieve normal profitability once we're over the transition period, which is just in addition to Francois' answer. The second question on China. What you're saying is true, but it's nothing new. For several decades, we've had a presence in China and the experience that we've had in China has been extremely positive, which goes for many other industrial companies. And we were aware as early as 1994, when we set up the engineering operations that China potentially was a difficult geography regarding protecting intellectual property rights. So we took every measure to protect our know-how and technology. And we were criticized, in fact, for that by our Chinese partners. So can we ensure 100% that in the future, no industrial secret from Air Liquide will be captured by -- taken by China? It's difficult to say. But we have organized ourselves and we continue to organize ourselves in order to protect our fundamental know-how to keep it in Europe. And I think this is important to develop applications, new technology from China for China, which is also a good way of having more potential available to us because the Chinese are quite competent, in fact, in some technological areas and also to serve with low risk -- level of risk in the industrial and this is nothing new. This was the case as early as 1994 when we set up engineering in China. And we'd already had a presence in gas there. Next question?

Chairman, good afternoon. This one's for API, the association for individual shareholders. First of all, warm congratulations for the 800,000 individual shareholders. I hope that you will be treating us to champagne next year when we achieve the 1 million mark, 1 million individual shareholders. Now, here are my 3 questions, if I may. First of all, on artificial intelligence. Number two, on partnership with Total and the 3 on embezzlement through user patient of anonymity. Now there -- we will not just have a generative AI. AI will be every way in what you do, 8 industrial groups including Air Liquide, signed in July 2019, a manifesto to prepare for the use of AI, artificial intelligence, in their activities. What's happened 5 years down the road? Have you appointed a Chief AI Officer? And my second question on partnership with Total is that you have signed several partnerships with Total Energy in South Africa in particular. What synergies will there be for Air Liquide? Total Energy and Air Liquide have also announced that they've set up a joint venture held in equal shares to develop hydrogen station for heavy goods vehicles on European motorways. Where does that stand? And they've also signed a long-term contract against the -- as part of the reconversion as a biorefinery of the Grandpuits refinery and to recycle renewable, low carbon energy. So the increasing number of partnerships with TotalEnergies. Does this mean that we will end up with a dedicated subsidiary? And finally, on embezzlement through the use of patient of your identity. Looking at the Air Liquide website, airliquide.com, I noticed that you have a warning, a disclaimer against these fraudulent attempts to use identity. So thank you for warnings about this. But I would like or we would like to know a little bit more about that. And you pointed out that the new hydrogen powered Mirai is extraordinary because you cannot hear the noise of the engine here. But I can tell you since I've used it, there's a lot of noise. In fact, which is to the many pigeons -- well, there are many pot holes that we have in Paris.

Thank you, sir, for your questions. One million shareholders, of course, we would love to have that. But I think the API is also an association to promote individual share ownership. So I can tell you, in turn, help us. And that way, we'll achieve that threshold. So I'll let Francois answer the question on artificial intelligence and I'll go back on Total.

Thank you, sir, for your question. It's a key issue. We accumulate, we receive about 3.5 billion data from our industrial operations. So data is really at the heart of value creation of Air Liquide. It's been the case for many years now. We're pretty advanced, if not a pioneer in the use of those data. There are 2 sources of value creation, things we can do with data, optimize our operations for better safety, better maintenance, better productivity and offer new services to our clients. And so of course, we've developed the use of AI. We're also testing today generative AI. And in fact, we have 300 use cases in the pilot phase that we're developing and testing on real data, real live industrial cases. A few illustrations, for example, the use of generative AI to emerge and invent new materials for gas separation in our membranes, for example, also the use of generative AI to facilitate the maintenance of our plants by delving into our databases to help our engineers to find the right information immediately at their fingertips to repair an engine or a particular partner. Health care, the opportunity to supply our teams that interact over the phone with our patients, the quality of information and expertise, far superior than that might be available to them. We're very proactive essentially pilot today because there's real potential, but we want to remain prudent as to the utilization. These technologies are not as yet fully mature. We want to proceed step-by-step. We set up an association for the use of trusted AI because there are many issues around the processing and use of data. We want all this to be correctly secured. Huge potential, but let's realize it's a way of either conducting our operations or supplying services. We want to keep the human factor at the heart of the company.

Thank you, Francois. I'll take the question about Total because it goes really beyond the bounds of what you cited. You need to see it in an overarching framework. Total is a long-standing client of Air Liquide, so we have relations with Total that perfectly conventional B2B relations. So the first 3 contracts I personally signed with clients in the major industry were with Total, so it goes back a few years. Very good client relationship, supplied a client. The 3 examples you cited are 3 different examples and clearly illustrate the concept of partnership. I mentioned South Africa is a contract for the procurement of renewable power. To decarbonize Air Liquide, we need to buy more earn more clean power, low carbon or fully renewables. A big contract we signed with Sasol in South Africa, a contract in which the condition for us to accept the terms would be to convert the client who was supplying from coal-based power to renewable. Big success by Francois who is negotiating with Sasol back then to commit the client to go down that we need to find 900 megawatts, 900 megawatts, almost a tranche of nuclear power, renewable power in South Africa. We put out RFPs, signed the first tranche of 200 megawatts. We signed with Total that supply of Air Liquide, a renewable power to all. It's a case where Air Liquide is in the business of the supply and renewable path. Second example is Total, this partnership for service stations. We're really at the front here. We distribute essentially gases to professionals by delivering to them. The mobility business goes because the general public, you can go to service stations. We don't plan to enter the service station business. That's why we were pleased to find a partner who's in that business to accompany us and to have a joint effort to guarantee the total change from production to the end user. And that really makes sense in terms of partnership with infra -- and the Grandpuits refinery really is the evolution of current contracts with clients as part of decarbonization. We're seeking to supply products to clients to decarbonize. This refinery in the Paris region was fed with an oil pipeline that was discontinued. And so Total decided to convert it into a biorefinery. And as you know, too, remind me to run a refinery as a biorefinery. You need hydrogen. So we're very pleased, of course. And at that point, we can have a partnership. We've integrated the various product flows between our future plant and the Total refinery to optimize the production of this biorefinery. So it's the third example of joint innovation between a client and Air Liquide. So you see 3 examples, 3 different situations. It doesn't foreshadow what we might do with Total or others in the future. Question on fraud. I'll let Francois answer the question about the Mirai. I'm sure he'll be happy to tell you about that. Scams, fraud, you're right to mention that. Let me take this opportunity to ask all our shareholders, those all of you in attendance to remain extremely watchful, vigilant. We've noticed since the end of 2022, just over a number of fraud attempts via just about everything. Website, social media, phone calls from people who are trying to sell Air Liquide shares at a discount by holding out opportunities and possibilities of tremendous development of hydrogen and they're using our logo that have pretty flashy terms, pretty slick sales pitch. It's obviously a scam. That's why we put the banner on the website so as to warn our shareholders. If you go on the banner, and you look for more on the line. If you -- more information, you'll see what we described the process. And of course, we urge everyone to be extremely vigilant. Of course, we filed a suit. We informed the regulator and reached out to shareholders to make them aware of that abuse. And we set out a dedicated e-mail to warn them. Don't hesitate to spread the word. If you got the slightest doubt, just call Air Liquide. You know us. You know what to do. Give us a call and we'll tell you immediately, whether it's us or it isn't us.

Thank you. The noiseless Mirai car in Paris. Well, the Mirai generates no noise. I'm a daily user. For the potholes, I think, it goes beyond the remit of this AGM. But yes, we will forward. We'll pass that on.

Next question at the back of the hall.

So afternoon, Chairman, CEO, ladies and gentlemen, directors, and good afternoon to all shareholders present. Forgive me if my question has already been answered in the written question. So if you answered at the beginning of the meeting, I was not in attendance. A question I asked every year, just deliver my -- I'm here with my father who is a shareholder, my son who is a shareholder, his mom is a shareholder, I'm also a shareholder. You'll understand what I'm getting at. The amount of -- splitting the share into 2 few years back you said that when it would reach EUR 100, we think about it. Last year, previous years, you said, well, it's not yet on the agenda, but we'll give it some thought. Now that the share is nearing EUR 100, will that be on the agenda?

Well, thank you. Well done to your father, mother and son who are shareholders. That's an excellent piece of news. I did say when we'd reach EUR 100, we give it -- start thinking about it. So can't go back on that. We're considering it. So a share split transaction is a lot of work for the company, comes at a high cost. That's why I tell you every time, so I'm pretty consistent with what I've said previously. We had a lot of work at the shareholders department. This one, we have 1 free share distribution of free shares is a whole plan within Air Liquide with all the shareholder teams mobilize. It's not the year where we can do a share split. But I'd say that more broadly, when we look at the price of the shares, you have shares that are worth far more than -- yes, the companies continue to attract new shareholders. And amongst the new shareholders, we've got a lot of young people. So of course, these are young people who already have a certain amount of money. They've decided to invest some of their savings in the stock market. It's not an absolute barrier, investments by young people, but it can seem rather high to some. And there are financial instruments that are developing that we discussed in the communications committee with shareholders and thus quite legally make it possible to buy or gradually save amounts once we've reach the share price, give access to the share lease, considerations as such are there. We're not in rush in spite of this EUR 100 level to divide the share price. It's something we continue to consider it, keep it under review, which needs to be part of the overall effort of the shareholder. The shareholder service was swamped with requests this year, due to the heightened account security. You all notice to log on the accounts, in certain cases, you had to update your password, they became obsolete. After a year, you had to reapply for them. Some of you decided to call in and ask for explanation or advice. And in April, we were totally swamped with incoming calls. We're going to take all that into consideration to better serve you, but we plan to look at the share split is not on the cards for this year. So I'm sorry to have to disappoint you. It's not yet for this year. Thank you, at least, for being in attendance and for asking that question.

So we'll take a letter L and then we'll move to the side of the room. Letter L, first.

Chairman, member of the Board, like many people here, I am a proud shareholder of Air Liquide. We're not only shareholders of Air Liquide, but a member of the investor coalition in climate action. This is broad coalition of institutional investors working on climate issues and with which you have been engaged for many years. And therefore, we want to testify to the quality of this actual dialogue, which proves the importance you place on your shareholders since 2018, which is when we made our first statement at the annual meeting, much has been done. So we want to congratulate you for all these major advances that you have achieved, be it in climate objectives in 2018, in carbon neutrality on the overall value chain in 2022.

Thank you.

We recognize that you are part of a complex ecosystem and it's important to have the credibility, the scope of our transition plan, let it be ensured with -- consistent with the trajectory of 1.5 rise in global temperatures. Hence my question, we would like to have more detail on the execution of your transition plan. Can you more specifically quantify your drivers for decarbonization, in particular on Scope 3.

Thank you. I'll ask Francois to take the question, if I may.

Hello, Madam. Thank you very much for your fulsome praise, which I take on behalf of our teams who are working so hard to provide quality information, transparent information and to be in line with the ambitions and goals of the Air Liquide Group. Now you've emphasized this, in our this industry, we are pioneers in terms of commitment to decarbonization and more broadly speaking to the ESG goals. And of course, you're asking us for more information. So I'll try to give you information. And first of all, recall that the 3 main drivers for reducing carbon emissions. On the one hand, successfully using less carbonized energy, lower carbon energy, which means buying a renewable energy after 1,500 gigawatts of energy were secured by the group. Second, capturing and stocking or reusing CO2 emissions from our own units. In 2023, we launched the construction, as I said earlier, of the first European unit for capturing and storing CO2 in Rotterdam, by way of an example. Then the third driver is working on our assets, our existing assets and our new assets in order to be able to produce a gas with a low carbon footprint. To illustrate this in 2023, we signed a contract to set up an oxygen unit for our client, who originally had a coal-based plant who shifted to renewable energy, renewable power to manufacture oxygen. So this is a way of decarbonizing energy production using existing units. And for new units, what we're doing in Normandy, for example, is that we're investing in the biggest electrolyzer units in the world to produce low-carbon renewable energy at this unit. So number one, sourcing low-carbon energy; number two, working on carbon capture and storage; and number three, working on our existing assets. Each of these components contribute each to 1/3 of our low-carbon introduction. Now you referred to Scope 3. Scope 3 for nonspecialists is looking at CO2 emissions which are not directly linked to Air Liquide's business, but which are upstream. For example, we buy -- we purchase power, we purchase goods and services or downstream the emissions that may arise from the use of our products by clients in terms of CO2 emissions. So Scope 3 is becoming increasingly important. We were the first group -- industrial gas group to have quantitative targets. And just 2 examples here of what we do upstream. For example, we're working with our supplier in order to achieve carbon neutrality in our procurement. That's the first area. And downstream, we work with our clients in order to help them achieve carbon neutrality. For example, we've set a goal, which is that our 50 largest clients from 2025 have a carbon reduction -- carbon-neutral goal for 75% of the clients and for 100% of our top clients by 2050. So we're continuing with learning as we go along. And as you've emphasized, I think we have a genuine goal, and we have specific advantages here. Thank you.

Thank you, Francois. So now we'll move on to questions we've received by text messages. We've had 110 questions sent by you by text message. These questions have been analyzed using artificial intelligence -- innovative artificial intelligence, which uses semantic analysis and enables us to have a shared vision of the most important themes for you. So let's discover the top 5 themes. You can see them displayed on the screen. The themes we're interested in Air Liquide's strategy, hydrogen, shareholder policy, performance, energy transition and climate. We've selected a few questions. One or 2, then, in fact, have already been covered so we won't take them, but I'll start off with the favorite theme, which is what Francois generously left to me in our breakdown -- allocation of tasks, so that's white hydrogen. That's paradoxical. When we talk about blue hydrogen, you ask questions about green hydrogen. And then we came to green hydrogen, and now you're asking us about white hydrogen. So I think we'll cover the whole rainbow as it where. And at the end, I think you would have fully understood what kind of hydrogen this is. So what is Air Liquide's position regarding natural hydrogen, what we call white hydrogen, its -- reduction of which began last year and have the investments plan. Now, for those who are not familiar with white hydrogen, it's natural hydrogen. Natural hydrogen is formed when the earth's surface, the hot magma meets seawater, magma rises, and with the presence of sand and silicium, you have a chemical reaction with the iron of magma and H2O with the water and sand. So this response breaks iron down, iron silicate, and therefore, produces hydrogen. So if any scientist is in the room, I hope denying the -- I'm right in saying. And this is called serpentinization. Now this is a phenomenon that we're aware of. But scientists themselves are not all in agreement on the natural formation of white hydrogen. What can be said for sure is that each time the magma rises and it has the -- and meets sand and seawater, potentially, you have a formation of hydrogen. So near to coastal areas, in some cases, onshore, along the coast, this hydrogen can be pure. That's actually quite rare. Or with a 10% or 15% content of hydrogen, which means you have to purify, which involves cost, and it can also be low pressure, which means we accumulate cost in order to produce it, and we don't know how deep it is. It can be 100 or 150 meters down below the earth's surface or 4 kilometers down. We don't know how long it takes to form this hydrogen. So those are the conditions in which this hydrogen can be formed naturally. This is not a new theme because all the way back to 1970, when the first findings were made, many scientists looked into. Companies such as Total and others are exploring in order to see whether this is a major reserve or not. For the time being, we think it's a hypothetical topic, but we are following. We're monitoring at Air Liquide, but we can't lead to an industrial process to produce it. So that's the current state of knowledge. But if perchance there were reserves that could be exploited at a reasonable cost, then Air Liquide, I hope, would be among the very first to enter. So that's what I can say about white hydrogen. Maybe we can take to François the question on green hydrogen.

The question, how do you plan to secure your supplies, low carbon energy over the next 10 years and that will be in green power? As I mentioned, the purchase of energy in general, electricity and natural gas, key components are number one cost-based across our operations. So we develop real know-how in order to be capable of buying in various forms over various time horizons the electricity that we need to run our plants. And depending on the markets that are quite diverse across European countries, in Asia, I'd say, we have procurement strategies. They're very often based on midterm procurement for a large part of our needs, but supplemented with more spot purchases of energy. So this mix, the traditional electricity in our stride, we use it also for low carbon energy, knowing that there are a number of cases, new installations that are emerging and so potentially new ways of procuring this energy and securing at supply. We signed a number of multiyear agreements, sometimes 10, sometimes 15 years on the new PV plants and wind farms because to secure there's many markets, it's the rare asset to be able to access this electricity. Of course, we take into account risk management. And each of these purchases are backed up with long-term contracts of our clients. They're symmetrical to make sure that we have clients who are going to consume the power that we commit to buying. So this is an area that's crucially important in our strategy, constantly changing. And here again, we got real cutting-edge teams in this field who are devising new solutions to secure this low-carbon power supply. So Francois said, there are 2 financial questions on the debt. Maybe you could take that one. I'll come back to the listing market.

The question pertaining to the debt, the gearing has improved in 2023, but remains high at 36.8%. Do you have a target for that metric? So what are we talking about when it comes to gearing? We're talking about the level of debt that we're carrying, and this debt level has reduced in proportion to our equity. And as a result, they're very sound financial health. If we all group, our ability, to generate cash flow, and therefore, to reimburse our debt. And so that's very good news. You'll recall that when we acquired Airgas, this gearing ratio was well above 100%. Today, we see it steadily drop. It's good news for the group because as we showed and as we demonstrated in our advanced strategy, we have ahead of us major investments to meet the needs of our clients, in particular, for the energy transition and in the field of electronics. So we see that our CapEx level is set to increase in the out years. And so we're going to need this funding capability and to leverage debt in order to meet this market growth. For us, it's also a security. It gives us capacity to act in the event of a medium-sized acquisition that might present itself. In our strategic plan, it's not necessary to our growth, but we remain always extremely vigilant. There can be regional acquisitions. And to have this ability to take on more debt to seize those opportunities is of prime importance.

Thank you, Francois. So on the financial front, a question on the listing. Vice Chairman, to better stick to the geographic reality, the Chair, do you plan to leave the Paris stock market?

Yes. No, I want to say no.

Oh, so, no.

Just to give you a bit of context, some companies doing it, our #1 payer, Linde listed in Frankfurt and in New York, the New York Stock Exchange, has decided a while back to delist from Frankfurt to be listed 100% in the U.S., so applied for a few shares that are still listed for technical reasons in Frankfurt, almost all in the United -- left NYSE to list on the NASDAQ. So there's a strategy of our #1 competitor to seek out the market in the -- which is the most remunerative. It's not our strategy. Air Liquide's strategy is steady, long-term progress that proves successful. So I answer no.

Perhaps an additional word, and then, we'll take another question from the whole regarding what we're able to read in the press about the embryonic state of the renewable energy market and renewable hydrogen in Europe. The European Commission set Europe to be a 10 million tonnes of hydrogen produced in Europe and 10 million imported. This is a very ambitious goal, which, as of today, seems almost -- unattainable given the growing demand, the speed of the growth in demand. These are mammoth, colossal figures that [indiscernible], of course, recorded as being the vision of the European Commission in no way calls into question Air Liquide's strategy that remains focused on the same issues. To which, development -- gradual development where market segments are the most promising and with normal levels of profitability. That's how we'll grow the market. There's also an SMS question. Back to your question, the whole from question panel D that should be up towards the back, over there on the right.

Thank you. Good afternoon, Chairman, ladies and gentlemen, members of the Board. Three small groups of question. I'm getting some feedback here. I difficulty in -- you insisted on several occasions it was very comforting to hear that you look after your employees, partners, not to mention, we, the small shareholders. It's crucially important in a world showing a lack of humanity. Thank you for that. You also take great pains to thank your team to contribute to the independence of your electrolyzer, largest electrolyzer in Normandy, Saint-Jean-de-Folleville to be very important. My thanks for that to you. Then, you mentioned, Paris 2024. You say also that the goals -- the number of hydrogen service stations after the games unless I'm mistaken I didn't hear the number of hydrogen stations and the timeline. Second small set of questions. You said that you decarbonized your company in 15 of the 50 largest French sites. How are the others faring, if we could add some color on that? And what's your strategy to be able to support a bigger number? Thank you. Third and final point, I'd have liked to have had a short report on each of your committees with the explanation on the CSRD. I don't know what that is. But I really liked your ambition to increase your margin twofold by 2024. Time is tight. And so your commitments are even more compelling. Thank you.

Well, thank you, Madam. You're covering quite a broad spectrum. François is going to answer the question. I'll speak to CSRD and the committees.

Thank you, Madam, for your comments that are most welcome and music to the ears of our teams. On the hydrogen service stations in the Paris, there are 5 hydrogen service stations. There will be 9, possibly 10 by July. So there's a race underway. All the stations are not necessarily Air Liquide, operated by Air Liquide stations, but most often facilitated by Air Liquide with technology or supply of hydrogen via Air Liquide. So there again, sustainable improvement with about 10 stations in the Paris region. The network will be quite dense for professionals and for taxicabs in particular. Second question, on the industrial sites in France. The fact that we're already working today with 15 sites to supply low-carbon solutions. And of course, that is my -- the salesman in me speaking. I'd like to work with more. But there are also a number of other solutions that exist. And all the industrial facilities through the process system necessarily require Air Liquide solutions. There can be solutions involving, say, energy efficiency, isolating a number of processes or totally revamping the process or shut down of a unit that don't involve Air Liquide solutions. So I think that quite humbly, we really are positioned as being a benchmark player in France and internationally with a range of solutions going from hydrogen to carbon capture, but also oxy-combustion, for example, in cement manufacturing process, for glass makers or aluminum production. All those processes could benefit from Air Liquide solutions. I'm sure our teams view that as a challenge, as being a target for going even further. Benoit, perhaps, on CSRD?

There was a question on committees. Now, the committees that we have at the Board level audits it for the financial statements. Nominations is for the appointment and the nomination of directors, and governance on governance methods. Remuneration speaks for itself. We wished to establish it a few years ago an environment and social committee to look at all CSR. So all of these committees have been established. You have details in our Air Liquide documents, and you have regular reports on all the various themes. CSRD is a European directive, which is corporate sustainability reporting directive, which means a reporting directive on publications regarding sustainability. It's a new directive, which is applicable in France since January 2024 and requires that companies organize a much more transparent reporting for more -- consistent between companies on environmental, societal long-term issues with a double materiality requirement. It's a very important directive because it's going to generate a lot of work within companies. It will probably merchandise communication, but we're only at the beginning of this with a counter they are depending on the size of the European or non-European origin of the companies, we'll have a calendar between 2026 and 2029 for this reporting. So just have a look -- just look at it on the Internet, and you'll have all the details on what the directive will contain. Air Liquide, like everyone else is, of course, committed to those 2 analyses. And at Board level, we'll have to decide how we organize this. Will it be the environmental and society commitment that looks at the substance or the audit committee that looks at the process for producing the information in order to ensure that the process is clear or will the mission be fully entrusted to the Audit Committee? We're in the middle of our consideration of this, and we'll be able to make a decision by the middle of the year.

I think I covered it unless I forgot something. But the time marches on. I'll take one, possibly 2 questions, but you can't have 3 questions rolled into 1. You can take 1 question each if we take 2 questions each, question T. And I'll take another one, which is F. Question T, please. Question T is moving.

Hello. Good afternoon, to our Chairman. Hello, everybody. I've been working for 20 years in engineering at Air Liquide [indiscernible]. We've been told that the engineering center will move from this historic center with a drastic reduction in our workspace and addressing deterioration of our working conditions. My question is are you not afraid that this will hamper the ambitions for innovation and competitiveness for the Air Liquide Goup by discouraging employees and experts to be able to work in normal -- under normal work conditions and may potentially damage in the short or medium term to Air Liquide's results?

Thank you. Francois, I've got to let you handle this question.

Thank you, Benoit. It's a pleasure. Good afternoon, sir. The [indiscernible] Center is indeed an engineering center where some of us have worked. Benoit, you've worked there. I've worked there myself for a few years at the engineering center, so I know it well. This being said, we've come to the expiry of our lease on the site, which was becoming somewhat archaic in terms of working conditions, and I've seen that for myself. And I think some of you, your colleagues, would have seen this, in particular regarding soundproofing, user-friendliness workspace. So we felt it was appropriate to look at different options, either renovate the site or look at neighboring sites. So our choice was to opt for a much more modern site at [indiscernible], which is about 10 kilometers from [indiscernible]. It's in the same department. And it provides working conditions which I think are far more appropriate to develop new working methods that are far more collaborative where employees have an exchange work on projects, which takes into account the fact that some persons work from home, so the occupancy ratio is not the same as before. I recall that we have associate with all of our teams in the analysis, the adjustment to working conditions. The initial feedback from what I have seen is quite positive in terms of how we can best organize the premises. And more importantly, this move is part of an overall increase in the number of people working on engineering, which means bolstering our order book. So this move is geared towards the future. We have faith in engineering, and we need to be able to offer our employees the best possible working conditions. And to conclude, the feedback of all this is positive. Regarding the attractiveness and for the young generation, it's a more accessible site. It's closer to Paris, which enables us to draw new talents.

Thank you, Francois. And I'll take the last question, which is the very tough question. Efe, Please ask your question.

Good afternoon, Chair. Good afternoon. Thank you for giving me the floor. I would like to have some explanation regarding the allocation of free shares that you're considering for shareholders entitled for 1 for 10. Some groups decide on an increase in the dividend payout for some at Air Liquide. Others decide to buy back their shares. Others pay out extraordinary dividends. And here, the strategy is to have a regular allocation of free shares. So what's the strategic benefit for the group? And what's the benefit for the shareholder? Because what comes free of charge can always seem a bit complicated. Because free shares for managers, for employees, shareholders, is it really free -- is this really free of charge? And secondly, as part of what is a normal ROCE, given the shift in interest rates, what is the normal return on capital for senior officer? What is your ballpark figure? Thank you, sir.

Only one question, as we said. We'll take one question. Explanation for free shares. What I can confirm, it's totally free of charge. We use the same shareholder equity, and we divide it into more shares. So when we -- nothing has happened when we -- nothing has actually happened when we pay -- give a free share. So that means that the share price goes down automatically by 10%, but over time, the share price grew fairly quickly depending on the years, fairly quickly, goes back to its prior share price. So it's a form of lending momentum to the share price. So if you have an additional 10%, if the dividend is unchanged next year, then you have 10% more dividend. So it's a way ultimately of promising that the following year, but then will mechanically rise due to the free share allocation by 10%. So it's a commitment by senior management to shareholders. It's worth saying that we have sufficient faith in the company, in the markets to be able to give you a free share. And subject to rule, the dividend does not go down. In fact, over a number of years, it hasn't gone down, it has increased. And that means your portfolio has increased and your dividend has increased. So that's the practice at Air Liquide. In this respect, it's true that it's very different from those who buy back their shares or those who increase their dividends. But it's a way of ensuring loyalty, which has been proven over some years. So don't sell your shares, take the free shares, wait a bit, and you'll see that everything will work out fine. ROCE, which is return on capital employed, so that's equity and debt, and the 2 are fundamental to the balance sheet. Our typical ROCE is around 12%. And you saw on the chart earlier, before acquisition of Airgas, with some investments, we were above10%. The ROCE went down to 7% due to the acquisition of Airgas. We're committed to go back over a 5-year period above 10%. We met that commitment, and we now have 10.6% return on capital employed. So the ROCE in our industry is a very important ratio. We look at it very, very closely because we invest in huge amounts. And in order to create value, the investment has to be profitable. And that's why we use ROCE as a criterion for the out of action shares by management. Right. So I think I've answered your question and to all the -- on all the themes. Thank you all for your many questions. And I now suggest that we end the question and answers, and then, we move on to the vote of resolutions.

Now, as you've seen, our registering system is digital again this year. When you signed attendance sheet, a tablet was given to you, this will enable us to immediately record your vote. So we're going to display a video that presents the functioning of the tablets and how you should go about voting. In order to vote on the resolutions at the general meeting, a tablet was given to you on entry. It is for strictly personal use and it's only to be used for this general meeting. When the announcement for vote on the resolution is made, the window on the tablet automatically appears even if it's being put on standby. In order to vote, it's very simple. Press on the button that corresponds to your choice, so for, abstain or against. So press the appropriate button and then press okay to validate your choice before vote closes. Once your vote has been validated, you can no longer change it. Thank you for handing back the tablet when you leave the room. Thank you. So your tablet is automatically activated. Attendants are there if you have the slightest question. Before you -- we vote on the resolutions, I'd like to tell you the quorum that stands at 57.91% according to the latest information supplied. We have core rate. We can now vote on the resolutions on the items on the agenda, given that the resolutions that can be found in the documents sent private. I suggest we dispense with the full reading of the resolutions, and I will merely summarize them, and they will be displayed on screen. Resolution 1, approval of the company's financial statements for FY ended December 31, 2023. Please vote. [Voting]

Don't forget to confirm your vote with okay once you've voted. Vote is closed. For, 99.92%, resolution adopted. Resolution 2, approval of the consolidated financial statements for FY ended December 31, 2023. Please vote. [Voting]

Vote is closed. Adopted, 99.92% in favor. Resolution 3, appropriation of 2023 earnings setting of the dividend. Vote is open. [Voting]

No more voting. For, 99.84%, resolution adopted. Fourth resolution, authorization granted to the Board for a period of 18 months to allow the company to trade in its own shares. The vote is open. [Voting]

Vote is closed. In favor, 98.90%, resolution adopted. Resolution 5, renewable term of office of Ms. Kim Ann Mink, who's a director of the company. Please vote now. [Voting]

Voting closed. For, 98.07%, resolution adopted. Resolution 7, statutory auditors' special reports on agreements covered by the articles -- sorry, Resolution 6, renewal of the term of office of Ms. Monica de Virgiliis as director of the company. Vote is open. [Voting]

No more voting. In favor, 92.08%, resolution adopted. Seventh resolution, statutory auditors' special report and agreements covered by Articles L. 225-38 of the French Commercial Code. Please vote. [Voting]

Vote closed. For, 99.84%, resolution adopted. Eighth resolution, approval of the compensation paid during or awarded in respect of fiscal year ended December 31, 2023, to Mr. François Jackow, Chief Executive Officer. Please vote. [Voting]

The vote is closed. For, 96.71%, resolution is adopted. Ninth resolution, approval of the components of remuneration paid during or awarded in respect of FY ended December 31, 2023, to Mr. Benoit Potier, Chairman of the Board of Directors. Vote is open. [Voting]

Vote closed. For, 97.62%, resolution adopted. Tenth resolution, approval information relating to the remuneration of corporate office stated in article L. . 22-10-9-I of the French Commercial Code. Please vote now. [Voting]

No more voting. In favor, 97.55%, resolution adopted. 11th resolution, approval of the remuneration policy applicable to the Chief Executive Officer. Vote is open. [Voting]

Vote is closed. In favor, 94.41%, resolution adopted. 12th resolution, approval of the remuneration policy applicable to the Chairman of the Board of Directors. Vote is open. [Voting]

Vote is closed. In favor, 98.38%, resolution adopted. 13th resolution, approval of remuneration policy applicable to directors. Vote is open. [Voting]

Vote is closed. In favor, 99.46%, resolution adopted. 14th resolution, setting of the total annual amount of directors' remuneration. Vote is open. [Voting]

Vote is closed. In favor, 99.22%, resolution adopted. 15th resolution, appointment of the company PricewaterhouseCoopers Audit as statutory auditor in charge of certifying the sustainability information. Vote is open. [Voting]

Vote is closed. For, 99.57%, resolution adopted. 16th resolution, appointment of the company KPMG S.A. as a statutory auditor in charge of certifying the sustainability information. Please vote. [Voting]

Vote is closed. For, 99.64%, resolution adopted. And now moving on to extraordinary resolutions. Resolution 17, appointment of the -- to reduce capital by cancellation of treasury stock. Vote is open. [Voting]

Vote closed. For, 99.13%, resolution adopted. Delegation -- 19th resolution -- 18th resolution, delegation of authority granted to the Board of Directors for a capital increase through the incorporation of additional paid-in capital, reserves, profits or any other amounts, for a maximum amount of EUR 320 million. Vote is open. [Voting]

Vote is closed. For, 99.53%, resolution adopted. 19th resolution. Delegation of authority granted to the Board of Directors for a period of 26 months to perform share capital increases with cancellation of preferential subscription rights, reserved for members of a company or a group savings plan. Vote is open. [Voting]

Vote is closed. For, 99.24%, resolution adopted. 20th resolution, delegation of authority granted to the Board of Directors for a period of 18 months to perform share capital increases or cancellation of preferential subscription rights, reserved for a category of beneficiaries. Vote is open. [Voting]

The vote is closed. For, 99.09%, resolution adopted. Resolution 21, amendment of article 11, composition of the Board of Directors, the statutes regarding the modification of the age limit applicable to the percentage of directors. The vote is open. [Voting]

Vote is closed. For, 97.07%, resolution adopted. 22nd resolution, amendment of Article 12, which is the organization and management of the Board of Directors of the articles of association concerning the modification of the age limit for the Chairman of the Board of Directors. Vote is open. [Voting]

Vote is closed. For, 97.98%, resolution adopted. And finally, resolution 23, which is an ordinary resolution, which is powers for formalities. Vote is open. [Voting]

The vote is closed. For, 99.98%, vote is -- the resolution is adopted. The vote is completed. Ladies and gentlemen, shareholders, thank you for your trust. No further items on the agenda. The meeting is adjourned at 17:35. Thank you. Thank you for taking the time to be in the room or on the Internet. Look after yourselves and your loved ones. Thank you so much. See you soon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]