Nexans S.A. (NEX) Earnings Call Transcript & Summary

[Foreign Language] Ladies and gentlemen, dear shareholders, good afternoon to you all. I'm very pleased to welcome you, and thank you very much for being here in Paris today for the shareholders' meeting. In this session, we will comment on the performance and the highlights of the 2022 financial year, a thematic presentation on fire safety, followed by a presentation on E3, the operating model of Nexans, followed by a description of the group's climate strategy also on the agenda. On the agenda is the composition of the Board of Directors with the proposal to renew the mandate of Bpifrance Participations, the lead shareholder. Karine Lenglart, a Senior Investment Director, will be the permanent representative of Bpifrance Participations, if this resolution is approved, have solid experience in mergers and acquisitions within companies in various sectors and internationally will be of great value to Nexans. We will also submit your approval the renewal of the mandate of Oscar Hasbun Martinez, Managing Director of Compania Sud Americana, and Chairman of the Strategic and Sustainable Development Committee. The group has benefited for several years from his managerial and financial experience in international companies. His sharp and agile analytical sense is a valuable asset for the group. You will be also asked to vote on the renewal of the mandate of Hubert Porte, Managing Director of Ecus Capital, who brings to Nexans his multiple skills in the field of services, finance, organizational transformation and M&A, in addition to his in-depth knowledge of the group's businesses. Finally, the renewal of my own mandate as an independent director is also submitted to your vote. I would be delighted to continue to put my expertise and strategy in international organizations at the service of the company. In addition, we are submitting to your vote a remuneration program entirely designed, in line with the group's strategic objectives up to 2024. 2022 is a record year with results never before achieved, proof of the relevance of Nexans' vision and ambition. In line with the dividend policy implemented in 2021 and beyond the stock market performance, we propose a distribution of a dividend of EUR 2.10 per share. We will have the opportunity to come back to this during the meeting. At the entrance to this room, you will find an exhibition illustrating our offer in the field of fire safety. We'll come back to that. Highlights in the field of sustainable development; the Nexans Foundation, which celebrated its 10th anniversary this year; and our philanthropy actions, in line with the values and commitments of your group. I would like to thank the representatives of the Cure Institute, which Nexans has supported for several years for their presence this year. I hope you enjoyed this exhibition. I hereby declare open the Annual General Meeting of Shareholders of Nexans, meeting in an ordinary and extraordinary session. In order to facilitate the voting of resolutions and to allow a quick display of the results, we use the electronic voting system, which is fast and secure. You have received an electronic voting tablet at the entrance, which contains, among other things, the notice. I invite you to use it and to return it at the end of the meeting. I remind you that the universal registration documents can be downloaded from our website. You can consult it on request from the hostesses. For environmental reasons, and as you know, we no longer printed systematically. Finally, I would like to inform you that this meeting is public. It is filmed and recorded for live and recorded broadcast on the website -- on the Internet. Unless you object, your image may be saved and broadcast on the Nexans website. I'm joined today by Anne Lebel, Independent Lead Director; Christopher Guerin, Managing Director; Jean-Christophe Juillard, Deputy Managing Director and CFO; and Nino Cusimano, General Counsel and Sec General. I also welcome the members of the Board of Directors and to thank them for their presence. Also in the room are the other members of the Executive Committee, some of whom will be joining us on stage later for presentations. I would like to greet the auditors, Mrs. Juliette Decoux-Guillemot, representing Mazars and Edouard Demarcq representing PwC. In my capacity as Chairman of the Board of Directors, I will now constitute the bureau of the shareholders' meeting. In accordance with the law, the 2 members of the meeting present who have the greatest number of votes and who accept these functions are the scrutineers. According to the information on the attendance sheet, the 2 shareholders present and representing the largest votes are Investments Limited and Bpifrance Participations. We ask these 2 shareholders at the beginning of the meeting, if they would accept to act as scrutineers, and they accepted it. I, therefore, propose to choose our scrutineers. On the one hand, Investments Limited, a member of the General Meeting, who has agreed to fulfill this function represented by [indiscernible]; and on the other hand, Bpifrance Participations, member of the general meeting, agreed to fulfill this function represented by Luis Pereira. I also propose that Mr. Nino Cusimano, Secretary General and General Counsel, will be chosen as secretary. The bureau is, therefore, validly constituted. So the quorum. I'll remind you that this assembly is meeting on first notice. And the legally required quorum has been reached, 81.9%, representing 1,731 shareholders. So the quorum has been reached. The quorum is 20% of the shares entitled to vote for decisions of the ordinary general meeting, Resolutions 1 to 17 and Resolution 29 for today, and a quorum of 25% of the shares entitled to vote for decisions of the Extraordinary General Meeting, i.e., Resolutions 18 to 28. Consequently, the bureau notes that the combined general meeting, having more than the required quorum, can validly elaborate on the items on the agenda, which are the responsibility of the OGM and the EGM. So this session will be conducted as follows. First, we will proceed to the completion of the legal formalities. After a short introduction video, Christopher Guerin will review the highlights and the main achievement of the year 2022. Jean-Christophe Juillard, who will continue the presentation with a comment on the 2022 financial results and the turnover for the first quarter of '23. This will be followed by thematic presentations on fire safety by Jerome Fournier, the Corporate Vice President, Innovation, Service and Growth. Then the E32 unique operational model specific to Nexans, Christopher Guerin and Maria Lorente Corporate Vice President will comment on that, and she is also in charge of CSR. And then the climate strategy and initiatives taken by Nexans is an additional item on our agenda without a vote of the shareholders. It will be presented by Marc Grynberg, the Climate Director. Finally, we will offer you an update on governance, candidates for the Board of Directors and remuneration with Anne Lebel, Independent Lead the Director, Chair of the Nation and Corporate Governance Committee and the Remuneration Committee. Afterwards, we will hear the reports of the statutory auditors. We will then take questions from the floor and from the shareholders who are watching this session live on the Internet, thanks to the chat system set up on the broadcast side. Finally, you will vote on the proposed resolutions. It is noted that the company has not received any request for the inclusion of additional resolutions or items on the agenda. We have not received any written questions from shareholders either. I'll give the floor to the Secretary of the General Meeting for formalities.

Thank you, Mr. Chairman. I confirm that all documents required for this general meeting have been made available to the shareholders in accordance with the law. In particular, you will find the various reports of the Board of Directors in the Universal Registration Document 2022 and on the company's website.

I now hand over to the Managing Director, Christopher Guerin.

Thank you, Jean. Ladies and gentlemen, dear shareholders, good afternoon. We welcome you with pleasure this year for the General Meeting 2023, here remotely and physically. We have a lot of people connected remotely. We are very proud of our initiatives here. We want to work for the common good, especially to give access to electricity to the population deprived of that. And that's what we are doing through the Nexans Foundation. We've been doing that for over 10 years. So we'll show you a video clip summarizing the actions of the last decade. [Presentation]

We can give them a round of applause. A small contribution, but allowing us to provide electricity to over 2.2 million inhabitants in the world. We are going to increase the budget, up to 400 million each year. And we renewed our commitment to the NGOs mentioned in the video. They were all gathered at France physically and remotely to show our commitment to them for the next few years. So this is it for the foundation. I'm going to come back to the highlights of 2022. I do not know whether you remember, but in 2021, we said that we were starting a hyper cycle of the electrification of the world. Why hypercycle? Between '50, 1970, a huge turnaround took place. We needed to replace the full site energies, and we needed to resort to renewable energies. A lot of investments in a lot of countries are taking place. And a huge need to renew the grids, the electrical grids contrary to the telco network has not been renewed. There are over 50 years old in Europe, over 40 in America. A huge need to renew the grids. And electrification of usage on a daily basis will speed up the decarbonation of the world. So you see that through electric cars, electric heating. It's a step forward towards the decarbonation of the world. So yes, we -- only in the first years of the electrification. In 2021, we were among the rare companies to talk about it. And in the last 2 years, many events and many announcements confirm that we are heading towards this line. So this confirms our strategy. Our strategy is to have a pure -- to be a pure player of electrification, and this is true for 20 years. We'll need 20 years to renew -- to work at the renewal of the grids, and 20 years to move from the fossil energy to renewable energy, and 20 years before 100% of the car fleet is electrical, and that we keep on developing trains. The 2022 we'll see the full release of the potential of the new Nexans. That's what we said in 2022. We have not lied to you. So the highlights in 2022, that's what you see on this slide. I've been here for 25 years at Nexans. I started at Alcatel and we never reached this performance in terms of financial results. So congratulations to the teams. Of course, this is -- we have the right strategy, the right momentum, but we need to get results. And we have a record EBITDA and free cash flow and return on capital employed. And we are also looking for growth, mainly in terms of value and not so much in terms of volume. Why? Because we have our commitments in terms of environment. And Marc Grynberg will unveil them. So it's important not to look for volume for the sake of volume and consume a lot of raw materials. That's the challenge of our transformation platform. We want to have the right economic performance and right environmental performance, liquidities reinforced. Jean-Christophe will come back to it with a robust balance sheet. Therefore, we can increase the dividend up to EUR 2.10 per share. Given our strategic road map, we have just completed the acquisition of a firm in Finland, and we are disposing the telco activities. The telco activities are nice activities like the industrial activities, but since we want to refocus on the electrification of the world, we need to reallocate all our R&D and financial resources and managerial resources on the purely electrification activities. Order book, which is a record one. I do not know whether you saw the last information -- the latest information. In December, we announced the signing of the signing contract linking France to Ireland with a subsea cable of over 700 kilometers. And I was in Berlin 2 days ago to sign EUR 1.7 billion contract for wind farms in Germany and in the Netherlands, the largest contract in our history. So Marc will talk about the acceleration of the decarbonation, and we had minus 78%, a very nice photovoltaic facility in Morocco. Each year, we organize our climate today with experts and analysts for the sustainable world. In New York last year, almost 900 people were present and connected, so huge success for Nexans for this climate today in New York. And we are doing it this year with the Moroccan government and all our employees from Morocco. It will be in September. So I'm not going to come back to the foundation. It was already mentioned in the video clip. We are still climbing the mountain in terms of financial performance. EBITDA was at EUR 325 million in 2018 with 2 profit warnings. I know you were unhappy about that in 2018. There was a new team in July 2018, so up in 2019. Of course, COVID came around in 2020. And in spite of everything, we're still improving EUR 600 million. And you can see the number for EBITDA versus sales. There's a curve that you've never seen over the past 10 years in Nexans. Generation of free cash. We generated EUR 1.2 billion, nearly EUR 1.2 billion in free cash flow while still investing new ship -- with the new ship Aurora to lay cables at sea, and our plant, which is running at full capacity for offshore wind farms in the U.S. EUR 1.2 billion in cumulative free cash flow. And our transformation is structural, and it is not based only on a specific situation. You see that ROCE for electrification, which has always been around 9% for a number of years as well, we jumped from 9% to 29%. And their strategic investments -- we exclude the strategic investment as well, above 32%. And the group jumped from 9% to 20%. So in terms of financial performance, we need to pay tribute to the teams because, thanks to them, we've been able to reach very high levels for these 3 criteria. As I suggested, well, just a few weeks ago, we signed the acquisition of a beautiful company near Helsinki. 270 people, 3 plants, EUR 172 million in sales in 2022. It's not a mega acquisition, but what -- we are looking at areas that we considered premium areas. And where we know that there will be plenty of investments when it comes to sustainable electrification, a great acquisition with Reka here. And we are still disposing of telecom, a fine business, indeed. But telecom is a new partner to grow. Investments must be doubled for 5G, and we prefer to focus our capital on electrification. So the disposal is in progress. Before I hand over to Jean-Christophe, this is a photograph that was taken 3 months ago. A month ago, it was different from this. This is the extension of our plant in Norway, a new production tower. It's vertical production for submarine cables. The delivery of this plant section in Norway should take place by the end of the year, December or early 2024, in line with the schedule. And we will begin the production of 2 key projects, Salt, which I mentioned, and Borwin 6, one of the longest offshore wind connections by Tenet. And the new contract will begin in 2026. So it's a part of that. Okay. I'll come back later to speak about Nexans' performance model. But I'd like to hand over to Jean-Christophe Juilliard, deputy CEO and CFO.

Good afternoon, dear shareholders. I'm going to tell you about the 2022 financial results, which Chris broached upon. The financial performance of broke a record ever since the IPO in 2001, across the board of indicators for which we give guidance to the financial community. Let me begin with the statement of income. You can see sales with a strong growth, 6.3% organic growth in 2022. All the businesses grew organically, high voltage. Low voltage cables for buildings, which also grew very handsomely in 2022. EBITDA reached EUR 599 million, 30% growth from 2021. I'll come back to this in greater detail in a moment. Margin jumped 1.3 points, driven by all the businesses. And operating margin was 6.2%, another record for the group. Reorganization costs are still dropping. In 2019, we wrote off a reorganization expense of over EUR 200 million, as you may recall. And this enabled us to speed up the transformation of the group in the first few years of the transformation plan. Now for some years, this expense is normalizing. It has been normalizing. And year after year, it has been dropping. And last year, it amounted to EUR 39 million versus EUR 58 million in the previous year. Other operating items. Down, as you can see, due to one-off specific items. The main item is the change in the price of raw materials, notably copper. As you may know, we have -- we are impacted by swings in metal prices, EUR 100 million or so, an increase in the average price of copper. I mean, in 2022, the price of copper dropped and the expense was EUR 30 million. That explains the bulk of the variation. Operating income amounted to nearly EUR 400, EUR 395 million to be precise. Net financial expense interest also significantly down. That item included impairment of cash in Lebanon. And that had an impact in 2021 that cannot be found in 2022. In 2022, it's more normal, so to speak. Income before tax, EUR 339 million, income tax. This, of course, increases with the result. And with a record net income of EUR 248 million versus EUR 164 million in the previous fiscal period. Now let's take a quick look at EBITDA, plus 30%. As I said -- plus 39%, excuse me, and you see the various businesses. all across the board. There has been an uplift in EBITDA. So all the businesses contributed to that. A word about usage. In 2022, there was a twofold good impact, strong volume demand. And the price environment was also auspicious, notably in North America. Well this, of course, drove further the financial performance. Margin rate, EBITDA over sales, near 9% at the end of 2022. Looking at electrification. As you know, electrification is at the core of our strategy to be a pure electrification player. In 2021, we committed 2 major performance levers in terms of profitability growth in electrification. Every year -- every half year, rather, we report on the progress made in electrification. So EBITDA jumped 39% in electrification, EUR 327 million to EUR 454 million, 2 major levers in our strategy there. Amplify, that is our ability to generate more sales with the existing products through diversification and value creation or by increasing capacity. Typically, our new plant in Charleston, South Carolina ascribes for -- subscribe for EUR 20 million in this contribution. Then there's SHIFT. SHIFT is the increased value through transformation services, packaging. There, we jacked up prices consistently throughout 2022, and we generated EUR 28 million in additional EBITDA. Then there's the acquisition of Centelsa, that's a change in scope. And from H2 2022, it contributed to financial performance and the very favorable impact, which is due to the situation because above and beyond the profitability norm, high levels and the strong prices. Notably in North America, we've been able to generate EUR 61 million. That's what we call conjunctural and one-off 12% margin in electrification. Now moving on to another very important indicator where things were good in 2022, The cash generation, the -- from 0.2 in 2021 to 0.4. So it's stable. We look, of course, at the acquisition of Centelsa in America. You can see this EUR 255 million under M&A here. Of course, part of our strategic plan -- but you do see that operating cash flow was very high, EUR 450 million. We further improved working capital requirement. At the end of 2022, it reached a record in terms of the ratio, an industry record. 2.9% of sales. As you may recall, a few years ago, we were above 10%, where capital requirement over sales. So a lot of efforts were conducted with the SHIFT program to rationalize our stocks, notably, and to be more selective in our clients and products. Investment expenses, very high there, but that does include the extension of our plant in Norway to meet ever-rising demand for submarine cables. We invested nearly EUR 280 million to double the capacity of the plant. This is in 2022 and 2023. It straddles both fiscal years, and it accounts for the high level of investment expenses. A normalized free cash flow generation, but there are EUR 393 million normalized free cash flow. Now at a glance, let's take a look at the balance sheet. Very robust, as you can see here. While I spoke about working capital, it's improving. Noncurrent assets, there's CapEx, Centelsa acquisition. I spoke about on the various items here. I think it speaks for itself. Provisions are slightly down because we're still burning provisions from the previous years, and there are no new significant provisions on the balance sheet. Total financing, EUR 2.4 billion. It's very robust. Indeed, if you take a look at the top 2 ratios in our covenants, a slight increase in your ratios, but this is due to the Centelsa acquisition. But it remains well below the covenant requirements, in our bond and revolving debt instruments. Looking at liquidity now. As at December 31, 2022, record cash flow, a little over EUR 1.1 billion in cash flow. I spoke about the net debt, slightly up due to the Centelsa acquisition. Total liquidity, EUR 1.9 billion add this to the EUR 1.1 billion in the cash we have on the balance sheet or EUR 800 million in the revolving credit facility, where we have not used up everything, and we've refinanced we refinanced at the end of fiscal '22. You see the maturity of our gross debt, EUR 1.3 billion mentioned here on the right. The debt -- bond debt due in '23 was refinanced with another bond issue last month, maturity 5 years. And the '23 bond issue was reimbursed. Okay. So much for the accounts with a bunch of indicators. I did not tell you that Standard & Poor's -- well, kept their rating, BB+. But the outlook is better. Now it's positive, used to be neutral. So BB+ in 2021 with a positive outlook now in 2022, which augurs well -- which bodes well to move ahead in the coming months. Now a quick word about our parent company account. Not much worth writing -- saying there, the statement of income and the balance sheet of Nexans. There is an increase in dividend with the subsidiaries. And net profit, EUR 73 million, up from 2021. Increase in financial debt. As you can see here, this is because we drew some money from the European investment bank loan. We had a specific European loan to mainly finance renewable CapEx. And we drew some money there to finance the plant extension in Norway. Okay, now I'm going to comment on sales and the Q1 '23 trend that we presented with regard to the financial community a few weeks ago. We reported organic growth of 2.2% in Q1 '23 from Q1 '22. If you exclude other activities, that's mainly metallurgical works. The strategic objective and excellence is to reduce that business because margin is low. We want to keep it in the portfolio of our businesses, but we want to serve only the needs we have at Nexans. So if you exclude that, the organic growth is 6.5%. EUR 1.7 billion, constant copper price. If you take a look at the chart here, you can see that in this organic growth, there is sharp growth in non-electrification businesses, 2 of major items here in Q1. The exceptional performance of our automotive harness business. In spite of the war on Ukraine, sales have been rising. And mining in the U.S. with American. And that accounts for a big chunk of the organic growth recorded in Q1, excluding electrification. And when it comes to electrification, however, the stagnation of organic growth is due to our will to move away from oil and gas, which is nonstrategic for the group. And in Q1 '23, that explains this drop in organic growth in high voltage. Okay. I'll close with the 2023 guidance, which we shared with the financial community when we presented the 2022 results in February. EBITDA between EUR 570 million and EUR 630 million for fiscal '23. So it's a bit broader bracket there due to the environmental, the economic uncertainty out there. Today, we're starting to have somewhat better visibility. We will probably restate our guidance and our half year results presentation. And the second indicator that we're guiding the financial community to is normalized free cash flow, between EUR 150 million and EUR 250 million. We may see another broad bracket here, but it's also highly dependent on the deposits we got for our high-voltage contracts. Chris spoke about major deposit that we got at the end of 2022, an interim payment, and we're also expecting interim payments in 2023, notably for Tenet, the contract we've just finalized, okay? So, so much for the results and the overview for 2023.

Thank you, Jean-Christophe. Before I hand over to Jerome Fournier, who is in charge of innovation. I'd like say the world has been electrifying. So the risk of fire has been growing in the world. There is a fire that starts up every other minute in buildings. 80% of these fires are due to faulty electrical architecture. 50% of buildings in Europe and in the U.S. were built before the '70s, and electric consumption is constantly rising, so risks are rising. But there are solutions, as you will see in this video. [Presentation]

[Foreign Language] Ladies and gentlemen, shareholders, as you've seen here in this video clip, the protection against electrical fires is a necessity to save lives, to save habitats, to reduce economic losses. I would like to come back to some key figures. In Europe, over 1 million fires each year, with consequences like 4,000 deaths and economic losses of common goods, about EUR 25 billion each year. Worldwide, it's over 4 million fires each year, 20,000 fatalities, a real disaster. And the World Bank reported EUR 330 billion of economic cost in the world each year since we are having this energy transition. And since we are starting a wave of electrication, 4.0 over the 20 years for decarbonated electricity, the analysis of these statistics is not acceptable because we have solutions. Solutions do exist. And I would like to comment on the development of fire within a few minutes, 4 steps. First, you have the ignition, the spark, the cigarettes or forest fire, the short circuit, the hot point for an electrical system. The second step is the smoke coming very quickly, especially when it's a PVC cable or halogen. Third step is the spread of flames along the systems or in the buildings. And the fourth step is called flash over, a total ignition, smokes of organic matters at high temperature start burning. And we reach a temperature of over 1,000 degrees -- 1,100 degrees. There are technological solutions for each step, preventing from ignition with small flame solutions, enabling to reduce the quantity of a smoke drastically. And this is a real difference with the current PVC cables. Smoke arrives in the buildings within a few minutes and is often the origin of the problem. The solutions we offer allow us to postpone the appearance of smoke after 20 minutes, so that the people, the fire brigade, can come and we can rescue, we can save lives. We have solutions to slow down the spread in the ascending columns. And during the flash over, there are solutions, so as to feeding the safety systems in the buildings like the risk emergency exists, doors which have to close and so on. Cables can supply those systems from -- with electricity for several hours at a temperature of over 1,000 degrees. Those solutions exist within Nexans. We've been working on innovations and on those solutions for over 20 years. At the research center, AmpaCity, we have over 100 researchers, over 1,000 simulation tests in different conditions. We have a portfolio of over 150 patents. We are working in cooperation with the very important international bodies, and we have accreditations on -- and certifications on the protections against fire. As you understand, what we want to do is keep on innovating, of course. But we also want, first and foremost, to deploy those innovations. We want to roll them out and use them. We believe that the plan will be aligned in the next few years, and it is absolutely essential. Given the energy transition and the wave of electrification, it is absolutely essential to limit and take into account the risk of electrical fires. First, building market. This market could reach EUR 81 billion by 2030 versus EUR 55 billion in 2019. And you have the acceleration of the decarbonated electrification plus 20% of electricity consumption by 2030, confirmed by all analysis and electrification players. The acceleration of the new buildings and the revamping, refurbishing, we see new standards, new regulations in terms of safety coming. And of course, a lot of innovations in the high, medium and low voltage, the reliability of the electrical grids. And this reliability exists as well for usage, to respond to these electrical mobility with the recharging systems in the houses or in the cellars. The renewable distributed electricity, photovoltaic panels on roofs, the new air conditioning systems, which should be electrical. So we have a usage of electrification behind all these figures. And the technological solutions to protect from fires, those could reach EUR 9 billion by 2030. That is to say, 10% of the whole electrical system market. Nexans would like to play a very strong leadership in the deployment of those solutions to protect from the electrical fires. We wish to be the leaders in the replacement of PVC. And we did that already in some parts of the world, to move from PVC to higher technology called cables to protect against the fires. And in using this know-how of Nexans, the margins of those systems will be higher than the commodity systems. It's a matter of protecting buildings, and it's not a matter of selling just commodity cable per meter. The protection systems of buildings incorporate more digitalization of the service of people and goods with sensors, with the digitization of electrical systems, enabling higher protection level. And then we will give the priority to countries with higher safety standards. But we should not wait for standards. We have to anticipate on the regulation in order to better protect buildings. We'll start, of course, with the data centers, hospitals, acquiring higher safety level renovation in the city centers. And we will deploy the solutions of cabling systems with protection against electric fires. I would be delighted to answer all your questions after this presentation. And now I'm going to give the floor to Christopher. He's going to talk about the new operating model of Nexans.

Thank you, Jerome. To conclude on the cable resistance to fire. Next week, we are going to deliver, and we were on the work site 2 months ago. We are going to deliver 200 kilometers for Notre Dame de Paris. Of course, we deliver that freely resisting fires. Because if those cable would have been present at the cathedral, especially in the roof, the fire would have not been as dramatic as it has been. Good afternoon, Maria Lorente. You and I are going to organize a session on the operating model, performance model of Nexans. We launched it 2 years ago, and I'm going to give the floor to Maria. It becomes more and more complex to manage a company for several reasons. First, as you saw, the world is entering into constant crisis cycle. Beforehand, there were some rest between crisis. Now there is piling up of crisis: The climate crisis, and the intensity of which it keeps on increasing; the geopolitic crisis; health crisis; cyber crisis; economic, social crisis. So we have a plethora of crisis. It is very difficult to make shorter-term projections, that's why we work in the long term. And we also have to manage the paradoxical injunctions, volume versus value, profit versus environment, growth versus sobriety, productivity versus social impact and infinite resources versus resource constraints. We consume 1.7x each year what the planet can offer us. In Europe, we tend to be with indicators. We put indicators on everything. We believe that, that's solution to the major problems. This is not the case. So we have a plethora of indicators, sometimes without any logical approach. So we wanted, therefore, 3 years ago, during the COVID crisis, the world was having a rest. So we were wondering how managing differently and shedding a new light to our managers to help them on a daily basis to manage those injunctions and this constant crisis situation and the current world. So we examined and reviewed a lot of our training courses existing worldwide, in Harvard, Insead, HTC, everywhere. And we did not see a holistic approach with the 3 pillars. We saw very nice training programs on environment, on the social impact, but it was always in silo. We read a lot of books as well, but it was always according to a silo approach. So we decided to develop our own performance model. It's been a ramping up process. Each business has a profitability objective. You saw the results profits. So today, our investments for tomorrow, it is out of question to put profits aside. But how can -- do we generate this profit, and which impact it has on the environmental portion and which impact has on the expertise? So we created our own model. I told you last year, it is seldom to hear companies announcing, giving up 13,000 customers out of 17,000. That's what we did. The sales of Nexans in the past came from the 17,000 customers. Now we only have 4,000 customers we serve each year. So we got rid of 13,000 customers for proprietary reasons. And more and more, we force our factories to work in a very local scope deliver their products within less than 800 kilometers for economic reasons, but also for foot -- carbon footprint reasons. As you see -- in the introduction, we work on the Roche and we also work on the return on the carbon employed. And not only the capital employed, we serve -- we want to make sure that we have this indicator, the return on the carbon employed. And through the presentation of Marc Grynberg, you will see the parallel we make between the economics and environment. But Maria Lorente will talk about the engagement.

Thank you, Chris. Good afternoon to you all. I'm going to talk about the engagement. I've been thinking quite a lot over what is the engagement for Nexans. And I said to myself rather than trying to explain it, I was going to illustrate that with a few pictures. Engagement starts with the individual. We have to recognize and value our employees. As you see here in this example, in our Belgium site, our employee, Jacques, is being applauded by the whole site for an exceptional contribution. He was just awarded the Remarkable People prize. Engagement, it means also to welcome and onboard the new employees within the Nexans family as we did that for Centelsa, the celebration integration, and we stated that with our Reka teams in Finland. Engagement also imply -- involves our customers, our partners, our suppliers. On this picture, you see our customers, Huawei, who visited us in May in France. And you see our employees in the field to make sure that we're close to the customer needs. This example that's very important to me because it reflects our contribution to have access -- to giving access to a sustainable energy. It's a team of volunteers from Nexans working with the NGO Fondem in Brazil within the framework of the foundation. And I wanted to show you an example of our family day. During those days, we invite all our employees, but also their families, their relatives. During those days, everything revolves around safety. We reassert our beliefs, safety and the well-being of our employees, our priorities. And that's an obligation, a duty to us all. In this example, you see this is the inauguration of our photovoltaic power facility in Mohamedia in Morocco. Because engagement also means to contribute to the carbon neutrality in showing an example in setting. So we did that in Morocco. We did it as well in Turkey and in Lebanon. And I wanted to finish with this picture. It was a short, a few days ago in Lebanon. As you know, Lebanon to us is a relay of engagement. They understood that engagement could create very strong links among teams to overcome all possible challenges. And that's what they do every day. This photograph was taken after team building exercise. The 350 employees of the factory worked all together to build a bridge of 20 meters within less than 2 hours. All those examples reminds us of something: Engagement more than ever is key for the success of the company. Our engagement rate keeps increasing each year. In 2022, it was 77%, which is very good. But I'm convinced that we can do even better. And we can do better -- we are going to do better in resorting to the 5 pillars you see on the screen, the basic needs of the employees. This way, the employees will feel well at work. And when we share a clear vision, a source of inspiration for the future and when we work for the well-being and the professional development of our employees. When we create a trustworthy environment, then the employee will give the best of himself or herself. They will be more engaged, more creative and more innovative. And our model, E3, is already showing results. 85% of the sites with a higher level of engagement, have the best economic performance as well. Our objective is to develop this model where economy, environment and engagement converge for the common good. All this around culture, whereby employees embark upon the adventure with us, not only because that's their job, but because it is meaningful for them. This is the culture, source of inspiration and source of success for Nexans.

Thank you. Thank you, Maria Lorente. Thank you to you all for this interesting presentation. I would like to invite Marc Grynberg, the Director in Charge of Climate, to come to the rostrum, to the stage, and to talk about the climate strategy of Nexans and the actions taken in this field.

Ladies and gentlemen, shareholders, it's a pleasure for me to make a presentation on our ambitions and road map in terms of climate. The role of the Climate Director was created about a year ago and mainly consists of helping the management prepare the works of the Board and the committees of the Board in the field of climate. In the last year, we focused, as a Climate Director, on the road map to reduce the greenhouse gas. And we also examined the effect of the current standards, like the European taxonomy or the future standards like the new Corporate Sustainability Reporting directive for 2024. In 2023, at the beginning of the year, we finalized and fine-tuned our ambitions and our road map in the field of climate. And I will give you the explanations in a few minutes. And later, we'll -- during the year, we'll focus on biodiversity, the practical impact of the implementation of this new European reporting directive. And later during the year, we will concentrate on our strategy in terms of recycling. This strategy aims at increasing the recycled content of our products to reduce the carbon content and securing the raw material procurement. Before looking at our ambitions and the road map, I wanted to recall that at Nexans, when we talk of an ambition, strategy or a climate challenge and stakes, it's not just a matter of talking about the way we reduce the environmental impact of our industrial activities, but we wanted to see how we can contribute to the energy transition, a crucial challenge mentioned by Chris some minutes ago. It is important to outline that Nexans plays a major role in this energy transition. It's a key player since we provide innovative technological solutions to link the wind farms offshore, to connect them to electrical grid, to connect the grids of different regions together, or to distribute these renewable electricity to the consumers. So social impact, which will keep on -- increase and which is very significant. And we want to reduce, of course, the greenhouse gas effect. This contribution is quite significant. The emissions generated by our activities amount to 240,000 tonnes of CO2. It is just a small fraction of what we could do in terms of energy transition as well. Let's talk about those ambitions to reduce our emissions. In order to do so, let's say that if we talk of green gas, greenhouse gas, there are 3 categories of emissions. There's Scope 1 emissions, that's the greenhouse gas generated by our industrial operations by the equipment we use in our factories. The Scope 2 emissions regarding the carbon content of the electricity we buy. And then the emissions of Scope 3 are emissions or carbon content associated to our activities, the upstream of our activities when the carbon content in the raw materials we buy or emissions generated by the freight of those raw materials to our production units. And then the Scope 3 emissions, downstream of activities, regard the emissions linked to the use of our products like the freight and so on. So on the right-hand side, you see our targets, Scope 1 and 2 and Scope 3, two different colors. The blue -- Scope 1 and 2, that's the blue line. And Scope 3, that's the black line. The reduction of the Scope 1 and 2 emissions depends on our actions and investments. For instance, we make in our factories to improve the energy efficiency of our equipment or the purchase of decarbonated electricity, representing 40% of the electricity we buy already. On the other hand, the Scope 3 emissions, as far as the reduction of those emissions, will depend on the decarbonation trajectories of the various countries where our products are sold. So we depend on the choices made by others. Let me move on to Scope 1 and 2 emissions generated in our plants or in tank with the electricity we buy. While we are committed to reducing this to 46% from the benchmark here, which is 2019. On the left here, you can see a graph that extrapolates the trajectory from 2019 to 2030, whereas the dotted blue line shows our best estimate of the trajectory as we stand today. At the end of 2022, very good news. We had already reduced our Scope 1 and 2 emissions by 28%. And we did this, essentially, by reducing the complexity of our activities, the reduction of the number of clients, the reduction of the area of action of our plants. The improved efficiency and -- energy efficiency of our equipment, and the procurement of low-carbon, no-carbon electricity for 40% of our requirements. We estimate that by 2026 we will go from minus 28% to minus 37%, owing to other energy efficiency improvement measures in our facilities and owing to the more widespread purchases of renewable electricity or by setting up facilities. That's what we've done in Mohamedia. And we should achieve minus 46% by 2030. So visually, it appears that when we spoke about intensification a moment ago, virtually, if you take a look at the done blue line, well, you may not think that there's considerable intensification between 2022 and 2030 from minus 28% and 22% to achieve minus 46%. But intensification comes from the fact that on the line from 2022 to 2030, we've integrated the effect of growth. So in addition to what I mentioned, we'll have to remove the emissions generated by the growth we are expecting, which should be sharp in the coming years. If you take the growth into consideration, well, it is and the compensation of that growth, it's fair to speak about intensification of our efforts by 2030. Okay. Let's move on to Scope 3 emissions, which have to do with our upstream and downstream operations. I think I have to point out here that virtually all of these emissions, 94% to be precise, are the result of the use of our cables. And they are dependent upon the nature of the electricity content of the cables where we sell them, a small part of the emissions have to do with the carbon content of raw materials. And in that regard, we try to increase, or to buy more low-carbon materials. Or we try to increase recycling, or we try to reduce the carbon footprint of our raw materials. But again, in Scope 3, the factor that makes all the difference is the decarbonation trajectory of the different countries where we sell and install our products. And since we do depend on this exhaustions factor, decarbonation trajectory in various countries, that is why I would rather give you a bracket for the reduction objectives by 2030, rather than set a hard and fast number for you because of the uncertainty there is. And as far as the velocity of the execution of the decarbonation plans in countries are. And we estimate that we should achieve 30% to 43% Scope 3 emission reductions. That's our product and activities. But between 30% and 43%. It all depends on the speed at which the countries where we sell our products manage to decarbonize their electricity. There are plenty of projects. This is a very bustling area, decarbonization. There's recently announcements were made regarding the North Sea projects in Europe to significantly step up the production of renewable electricity for a number of European countries. The uncertainty lies in the speed of execution of these projects. And that will determine where we end up in 2030 between minus 30% and minus 43%. There, let me hand over back to the Chairman. Thank you.

Thank you. Thank you, Marc. Now I give the floor to Anne Lebel, who is our Independent Lead Director and who heads up the nominations, governance and compensation committees, and she is going to tell us about the corporate governance and she's going to speak about the applicants who sit on the Board and the resolutions drawn up by the committees. Anne, over to you.

Ladies and gentlemen, dear shareholders, as Jean has just said, I'm going to tell you about the resolutions that have to do with corporate governance, each of the resolutions that you will have to vote upon today, and which reflect the work done by the Board's committees. To start off, first, a word about our corporate governance. As you can see on the slide here, the governance of your company fully complies with the AFEP-MEDEF code, independence rate, 54.5%, one Independent Chairman, and we have a lead independent director. There's a separation of duties between the Chairman and CEO. This has been the case since 2014 and all strategic decisions, projects and investments of over EUR 50 million subject to the Board's approval. Also, stakeholder representation is balanced. There are 4 directors representing the main shareholders, 1 representing the employees and 2 directors who represent the employees. The regulations were set up in February '23 in compliance with AFEP-MEDEF code in order to formalize the integration of the climate strategy among the missions of the Board. A word about what I do as Lead Independent Director. I am the go-to person for independent directors. In that regard, I conduct meetings of independent directors. There was one in 2022. I also hold executive sessions with the Board. We held two in '22. I can review the agendas of the Board meetings with the Chairman, and I can suggest additions. And I could also ask the Chairman to invite the members to attend an exceptional Board meeting, and I can also invite the directors, or head meetings in his absence. Let's take a look at the makeup of the Board. It is balanced, diversified on the Board. We seek to enhance diversity and to have complementary skills. When I speak about diversity, it's gender, nationality, age, background experience, you name it. The role of the Climate Director was introduced at the beginning of 2022. The missions and activities were described to you a moment ago by Marc Grynberg. In 2022, the main changes in the makeup of the Board were the following. One, Kathleen Wantz-O'Rourke resigned replaced by Laura Bernardelli last year and who now chairs the Audit Accounts and Risk Committee. Finally, as Jean suggested earlier, there was a change in the permanent representative of Bpifrance Participations, Karine Lenglart, who I'm going to introduce in a moment, was appointed in December 2022. And the committees looked at her application and made a recommendation to appoint or to the Board, but this has to be approved by the shareholders at the AGM today. There are 4 very active committees. In last February, there were a few changes in the makeup of these committees. On the one hand, Hubert Porte and Bpifrance left the Audit Committee. Marc Grynberg joined the Audit Account and Risk Committee, and Hubert Porte joined the Strategy and Sustainable Development Committee. The purpose of these changes was to increase the rate of independence of the Audit Accounts and Risk Committee, so that it'd be fully compliant with the AFEP-MEDEF code, and it is now represented by 75% of independent directors/and also to strengthen the expertise of the committee members when it comes to the climate and the environment, in particular, to prepare for the enforcement of the Corporate Sustainable Development directive. As I mentioned, in order to comply with the AFEP-MEDEF recommendations as far as independents go and to enhance the experience of the Climate and Environment Committee. Now let me move on to the directorships that we are submitting to your approval. There are 4 renewals. We suggest the renewal of the directorship of Jean Mouton. If he is elected, Jean will be renewed as Chairman of the Board. We are also submitting to your vote the renewal of the directorship of Bpifrance Participations for a duration of 4 years. Bpifrance Participations, as I said earlier, introduce herself.

[Presentation]

[Foreign Language] Thank you, Karine, for this introduction. Now the renewal of the directorship of Oscar Hasbun, submitted by Nexans Limited for another term of 4 years. Finally, we are submitting to your vote the renewal of the directorship of Hubert Porte for a duration of 4 years. Up until now, Hubert was an independent director. And from the November 11, 2023, Hubert Porte will have been a director for over 12 years. In compliance with the recommendations of the AFEP-MEDEF code, the Board, therefore, proposes the renewal of his directorship as a non-independent director this time. Now let me move on to the resolutions pertaining to compensation. Let me begin with the compensation for 2022, and I will begin with the resolutions pertaining to the compensation of the board members and of the Chairman of the Board. 2022 compensation of the Chairman of the Board, this is under Resolution 9. And then we will address the 2022 compensation of the CEO, which we will find under Resolution #10. So for the '22 compensation paid to the directors, it was EUR 651,000. You voted to approve EUR 700,000, and there were 24 committee meetings. There were 20 meetings in 2022, and that explains the difference. Regarding the compensation of the Chairman of the Board, it was revised in 2022 after a long period where there was no change. It was EUR 250,000 since 2016. Following an external survey, it was set at EUR 320,000 in 2022 with your approval. The amount accounts for the total compensation of Jean Mouton as Independent Chairman. And he does not get any other fixed or variable compensation and no other benefit, whatever that may be. Now let me move on to the 2022 compensation of our CEO, Christopher Guerin. This will be under Resolution 10. Regarding the fixed compensation, I would like to remind you that the compensation policy for the CEO is set for a term of 3 years. And in that regard, fixed compensation in 2022 remained unchanged. It was modified in 2021. Regarding variable compensation, the compensation policy for the CEO includes a variable portion, which accounts for a maximum of 150% of the basic salary. It involves quantitative and qualitative objective, 60% of collective and quantitative objectives, 40% of individual objectives. For 2022, the variable compensation of our CEO amounted to EUR 1,080,900, 96.1% of his maximum, which reflects the performance of the company. The collective portion and quantitative portion is based on 3 criteria: EBITDA, ROCE and the normalized management of cash. This collective portion was not achieved to the maximum. The individual portion was based on 4 main objectives: representing 25% of the individual portion had to do with the deployment of the strategy, operating efficiency, culture and engagement, and the deployment of the ESG strategy. This individual portion was 90.2% achieved. The CEO is also given the long-term compensation made up of performance shares. The maximum is 130% of the fixed compensation. In that regard, 14,000 Nexans shares were granted to the CEO and the value is EUR 854,562. These are performance shares. The acquisition is over a period of 4 years based on 3 criteria. One is economic. It accounts 40%. It has to do with cash, generalized -- cash generation, financial external criterion, another 40%. And this has to do with the performance of the share price compared with a panel of comparable companies. And ESG criteria, 20%, which is based on the achievement of the objectives set in the company's scorecard. Also, the CEO gets other compensation components presented here and there are -- for example, the noncompete clause or the pension, among others. Let me move on to the compensation policy for the directors for 2023. The policy is submitted under Resolutions 12 and 13 regarding the directors. First, the compensation policy for directors follows the principles of -- the '22 policy, variable portion prevails with -- it depends on the attendance in Board and committee meetings. The '23 policy for directors remains unchanged from 2022. Regarding the climate and lead directors, the Lead Director and the Climate Directors are -- do not get any compensation for their additional missions. Given the increase in their workload, and if compared with the SBF 120 companies, there is a proposal to give them compensation this year for these functions. Compensation would be EUR 35,000 each. Regarding the Chairman of the Board, his compensation remain unchanged in 2023, EUR 320,000 fixed with no any additional compensation whatsoever. Now let me move on to the CEO's compensation policy for 2023. It is submitted to your vote in Resolution 14. As I suggested earlier, the compensation of the Chief Executive Officer covers a period of 3 years. It remains unchanged in 2023. And as you can see on this slide, it is balanced between the fixed compensation, both short term and long term, and the fixed compensation. The fixed compensation, EUR 750,000, unchanged. Variable compensation, 100% of the base salary, and it can reach 150% of the base salary. Structure remains unchanged for 2023, 60% quantitative and collective, 40% individual objectives. Variable compensation with performance shares, maximum 130% of the base salary. And that also remains unchanged for fiscal '23. The following resolutions pertain to the employee shareholding plan. These are Resolutions 25 and 26, which pertain to capital increases reserved for employees in France and abroad. As you know, employee shareholding is an important component in the company's social policy. 10 plants that were -- have been launched since 2002. 20% of the employees are currently shareholders and they account for 4% of the company's capital. In 2022, Nexans set up a plan with a 2022 to finance environmental projects within Nexans amounting to at least EUR 10 million. Regarding the 2024 plan. The plan aims at once again mobilizing the employees to value creation and strategic plan. And it's under Resolutions 25 and 26, authorization of 500,000 plans. Resolution 25 pertains to our 400,000 shares for the employee shareholding plans beneficiaries. And Resolution 26 has to do with 100,000 shares, to offer comparable conditions to employees in certain foreign subsidiaries. This remains unchanged. This will remain unchanged in 2024. The last 2 resolutions pertain to our long-term compensation policy. First, we are looking at performance shares for the CEO and the main managers and free shares without any performance conditions for high-potential employees, or employees who have key expertise for the company. Regarding performance shares, the vesting period is 4 years. And the performance conditions cover a period of 3 years. Performance conditions -- or there are 3 of them. First of all, a stock market performance condition and economic and internal condition and the CSR condition to make this in line with the strategic plan of the group. There is not only an EBITDA criterion, and this has been the case until now over a period of 3 years. And there's also a cash conversion criterion -- and there is a condition, cash conversion of at least 40%. I'd also like to remind you that the grant of performance shares to the CEO cannot exceed 12% of the total amount in 2023, it was 4.5%. We are therefore submitting to the vote, 300,000 votes. That's 0.7% of the share capital. And regarding free shares, they are to be granted to key experts in the company. And there's only a condition of attendance for a period of 4 years, and we are submitting a maximum of 50,000 shares, i.e., 0.1% of the share capital. Okay. I have finished with the presentation of the translations pertaining to corporate governance and compensation, and I thank you for your kind attention.

Thank you, Anne. We're moving on to the statutory auditors, I would like to ask the statutory auditors to give a report. And we're going to give the floor to Ms. Juliette Decoux-Guillemot from the Mazars company representing our colleagues, and send their reports to the general meeting.

Thank you, Chairman. Ladies and gentlemen, dear shareholders, good afternoon. On behalf of the statutory auditors, PwC and Mazars, I'm going to report on -- for the year 2022. I'm going to summarize the main conclusions indicated in our reports. They were made available to you in the notice, and they are in the document -- in the universal registration document. This year, we prepared 9 reports: 3 reports for the ordinary shareholders' meeting and 6 for the extraordinary shareholders' meeting. Let me start with the reports for the ordinary shareholders' meeting. The first report is on the consolidated financial statements. We certified that those consolidated financial statements are fair and regular without any reservations and observations. In this report, we present 3 key points of the audit. We focus on those matters. This year, we have 3 of them: The recognition of the sales and especially the estimation of the long-term contracts; litigations and competition, investigations in progress; and the assessment of the tangible fixed assets and intangible fixed assets. We checked the information given in the management's report of the group, and we checked the presence of the extra financial declaration presence. As far as the second report is concerned, you have the corporate financial statements. We certify that those statements are fair without any reservations and observations. The 2 key points related to the assessment of the participation titles, the competition investigations and litigations. We checked the exactness of the information on the remuneration of the benefits given to the trustees and the commitments to them. Our third report for the ordinary meeting itself, a special report on related party agreements. This report has as an objective to communicate the characteristics, modalities and reasons justifying the interest of the related party agreements. And new agreements are submitted to your approval, both of them with investments. The first one for the refund -- the tax refund in Brazil. And the second, long-term commitment of investment on the Board of Directors. Another 2 agreements are also mentioned in our report. We have no observations to make on those 4 related party agreements. As far as the 6 reports we have prepared for the extraordinary shareholders' meeting, they regard the Resolutions 18 to 28, and you're going to vote on those resolutions. It's the capital reduction, authorization to increase the share capital, authorization for the international employee shareholding plan, and the grant of performance shares and the grant of free shares. We made those reports, and you will give a delegation to your Board of Directors to proceed to those operations. So to summarize, we have no observations to make on the modalities of the operations. And possibly, we issue an additional report during the use of this regulation by your companies. So to conclude, on behalf of the colleagues, I would like to thank your companies, and especially financial management for the quality of the closing and the availability. Thank you.

Thank you very much, statutory auditors. Okay, so we are going to move on to the Q&A session. We're going to answer the questions put in the room and the questions on the website. In the room, please wait for the mic. Only the shareholders can -- may ask questions. And we will only answer questions regarding the agenda. So thank you for introducing yourself before asking your questions. Question is in the middle.

Good afternoon, Mr. Sergio, individual shareholder. I would like to know the percentage of individual shareholders in the equity of the company. And what is your policy in the future to retain those individual shareholders? Are you going to set up an advisory committee of shareholders?

The percentage of individual shareholders. Do we have any exact figure? No, I do not have the figure here on the top of my mind, but I can find it easily. And the second part of your question, we are working on it. We would like to be much more active with our individual shareholders. And Nino, I don't know whether you want to add something.

We try to -- we pay attention. We make sure that we can improve our relationship with the individual shareholders. Initiatives are going to be taken. We have already examined this topic with some people. And yes, we would like to improve this relationship, and work is in progress. This year, we offered our shareholders to visit Lyon, the research center. The shareholders were contacted. And those who answered positively had the opportunity to visit this research center in Lyon. That's the type of initiatives we take. 4% of individual shareholders, to answer your question. Okay. There is one question in the chat. What about your target to recycle copper in the cables in the 5 years to come?

Okay. May I take these questions? Since it's the first time in the electricity, sorry that the developing and developed countries will have a huge need in copper. You have 3 major electricity producers: gold, copper and aluminum. Copper represents 60% or 70% of the raw material used in cables in the world. Because of this global electrification and this acceleration, because of the energy transition and the renewal of networks, there is a disruption and a possible shortage of copper. Two figures. In 1995, the consumption of copper was 9 million tonnes, so all sectors included. 25 years later, this 9 million tonnes became 21 million tonnes. And when we make a projection, the global demand, given all the projects, the European ambition, the Chinese one, the Biden plan, the energy transition, the copper consumption will move from 21 million tonnes to almost 35 million tonnes. So of course, there are a lot of copper reserves in the world, which are not -- which have not been tapped into yet, but it is difficult to have access to them. For the time being, it's 22 million tonnes, the global consumption. Unfortunately, this extraction capacity will not follow the same reason as the global consumption. So there might the potential shortage in 2025, 2026. In 2028, there would be a regulation, but we'd be missing 4 million or 5 million tonnes in the world. And the only way to offset this shortage and not to increase the carbon footprint of the copper extraction is recycling. We have urban mines as we call them, if we want to renew networks, we have to dismantle networks. So we have to remove all, all the cables installed. And our -- in the '50s from the '50s to the '80s are full of copper. And copper can be recycled indefinitely. That's one advantage. This time, well, the circular economy was fashionable. Now it's going to become a necessity, and Nexans will announce in a few months to come huge investments in the field of recycling. We are quite specific compared to our peers and competitors because we kept our metallurgical tools. We directly receive copper from other mines in Chile, in Peru. We smelt the copper to produce this copper bar, which is the core of the cables. And we are announcing investments to increase our recycling capacities, 4% for the time being. At the group level, in Canada, we can go up to 12%. And the objective is to have over 30% of recycled copper. It's better for the planet, and it's a way of compensating for this shortage of newly extracted copper. This is our commitment by '24, '25. We try and educate, of course, our customers. We make them understand that if there is a shortage, we'll give access to our capacity mainly to our customers who are already following a circular economy approach. A lot of contracts are being signed for the time being with customers. And the objective is your waste of today will be the growth of tomorrow. So bring back your cable waste. We know how to recycle them, thanks to our joint venture with Suez, especially -- notably to recycle polymers and recycle copper as well and to reinject them in the process. So yes, it would be a central topic for the general meeting of the next year, the recycling topic. Yes?

Good afternoon, the [ Dominique Chauvez ]. The central theme of the general meeting -- what you're not saying in your answer is if the recycled copper deposit is big enough to offset the shortage you are mentioning given the growth of this hyper cycle -- and it is understandable because the growth will be huge. Do we need to secure copper procurement in a different way, for instance, open up new mines or -- so let me ask the same question as last year. Is there a risk or not of such a shortage? Is the recycling possibility big enough? Or is there a real risk? And do we need to find mines and extract copper? So what is your commitment towards these resources? And as a futurist and not only a shareholder, of course, it is important to know that. It is important to know the availability of corporate security energy transition.

Thank you very much for this question. We have a better answer than last year, you'll see, because we improved the model. We went around -- we went with Jean-Christophe to visit the largest copper mines in Chile and the mines of our main shareholders. We -- the reserves are significant, but many opening of mines have been postponed for environmental reasons recently. From a technical point of view, the capacity of recycled matter is big enough. It's available. It's just a matter of industry. You have 2.5 million tonnes of copper in the form of waste leaving Europe each year for China, because the Chinese who have a huge ambition in terms of energy transition, they have to catch up. And they understood that there will be not enough newly extracted copper to offset -- or to secure the energy transition. So they are capturing a lot of waste everywhere in the world. China wanted to deploy the optical fiber worldwide on the domestic market, and they captured within less than 2 years 65% of the global fiber optics. So when they start doing something, they absorb a lot of capacity. So if here in Paris, you have extensions of Metro lines. We had discussions with the IRTP to dismantle old cables in those channels rather than adding new ones and super imposing them to the oldest one -- 30 years old. So it's a matter of education we have to explain to them that we need waste. 2.5 million tonnes leaving Europe is 250,000 tonnes leaving France each year in the form of waste for China. So we educate, we convey messages from the BPI -- via BPI to the government to get organized. And it's really problem as well for the automotive industry. With the electric vehicles, they consume twice more copper than the other -- the thermal vehicles. So we want to have an ecosystem of recycling in France and in Europe. Europe is ambitious, but has not the natural resources. So there might be a blockage there between the synchronization of this ambition and the implementation of our projects. So many discussions are taking place. And a lot of our customers are getting organized to go along the right line.

As Chris said, we always had a strong positioning upstream. So because, as you know, we are the only company having kept this vertical access, this metal transformation because this is a competitive edge, and we can really capitalize on it.

Another question? Yes.

[indiscernible], I wanted to know the correlation between the price of copper and the financial results when copper. When the price of copper increases, well, therefore, the results should not be as good. So I do not really understand the correlation.

The results are presented, are based on the constant standard price. For 80% of our financial statements, we have the core exposure, the CorEx. This core is a buffer stock made up of small amounts of copper we find in some of our factories. It's a kind of working capital, if you want, and there is no hedging on this amount. But the impact is very low compared to the quantity of copper we consume for the production of our cables. And we can find under the operating income in the net income for this portion of nonhedged copper and impact, but it's a tiny part. The remaining amount is hedged. The sales vary, but the current figure varies, but the standard sales, that's flat. And the price is flat, EUR 5,000 each tonne and it is not changed from 1 year to another.

Some years ago, your production could not meet the demand. Given all the calls for tender, for the wind panels, for the nuclear power stations and so on, what about your production of electric cables? Can you respond to all calls for tender in Europe or in the world?

Well, we are quite selective. We work with less customers, as we said. And we want to densify, to intensify our relationship with the customers. In other words, have more orders to the same customer. I repeated it this year. We went from 13,000 customers -- 17,000 customers down to 4,000 customers. So we reduced -- we got rid of 13,000 customers. In Norway, for the subsea cables, there is a huge need, especially also for the subsea interconnection. So demand is going to saturate our capacity, the extension of a factory, which is not over, we are already fully booked until 2025. Our order book is full, and we are going to announce major contracts in the years to come. It's good. It's a good sign, a good momentum. It means that the investments were right. And since we promote energy transition, subsea interconnection, this energy -- exchange of green energy between countries, the solar panels, the wind farms. So the demand is quite significant. We -- some investors ask why couldn't we multiply by a 3-hour capacity? Back to the question of the gentleman, the demand is going to be exponential. So what we want to do is to adjust our capacity to the supply. If you triple your capacity, you'll have mega factories, but those mega factories will not have access to the natural resources, like copper and aluminum. And it won't be possible to produce. So we want to adjust our capacity to the supply, not to the demand because the demand is exponential.

Fine. So back to the question of my neighbor.

Is it possible -- well, given this shift between very strong demand to address the energy transition and what the companies like yours can produce. So there is a gap. And what about the margin power?

Is it -- well, you see the return on capital employed. This ROCE has improved because we've been working on the margin on the selectiveness of our customers. We improved our mix. A lot of customers consumed a lot of our energy for very low profitability. So we decided to get rid of this bad cholesterol. So we wanted to have the good cholesterol, in other words. And of course, in being quite selective, the fact that -- given the growth ahead of us, we are extremely selective in terms of customers, the projects, the terms and conditions, their legal and financial terms and conditions. You can call it margin power. We call it selectivity. But of course, it's an additional asset. It is easier to be selective if the market is buoyant. Anything else?

Question on indexes, a shareholder. It's -- the #1 shareholder, and you have shared interest with Nexans. Does it secure copper in case of a shortage?

Very good question. I'm speaking here under their supervision. But it is surprising that Augusta, the subsidiary of Nexans own copper mines is not the supplier to Nexans. So the largest supplier of Nexans is called [indiscernible]. They are in Chile, a very strong producer and copper extractor in Chile. And the goal of our visits precisely was to find alternatives to Codelco and finance through our shareholder other supply possibilities once there is a shortage. That's what we did in meetings in Santiago, but we also signed a contract of preferential access with Codelco, and it can be renewed 5 years, in order to have a secure supply in case of a shortage. They guarantee that when there is a shortage, we'll be among the top 3 customers served in the world. So that's the goal of our trip tomorrow.

How do you make sure that your products are upscaling?

It is part of the mix effect. Well, the best example -- or the most explicit one is the stop of the cables. We want to have a lot of capacity for the wind farms and we stopped the contracts before our mandate in -- for oil and gas. We just want to have our capacity released for the wind panels and not oil and gas. And as Jerome Fournier said, we'll do it gradually. We will move from the PVC cables in the building industry to non -- or flame retardant or nonspreading cables. So that's a mix. Other questions?

You were awarded a lot of bids of offshore wind farms in the U.S., what about Europe and France?