Pernod Ricard SA (RI) Earnings Call Transcript & Summary

Hello, everyone. Ladies and gentlemen, dear shareholders, I'm very happy to be with you today for a traditional general assembly. Each meeting between us is obviously, very unique and privileged. But in the difficult times that the world is going through, being together here as a family even more important than usual. So thank you all for being here. And thank you for being so numerous. The present general assembly was invited according to the legal specifically, no request for a resolution or an item on the agenda was formulated following the publication of the notice of the general assembly in the legal journal today. We have the present shareholders that are present and those not present, I declare this mixed general assembly open. As President of the General Assembly, I would like to create the bureau of the assembly. I'm asking Mrs. Patricia [indiscernible] representative of the company Pernod Ricard and Mr. Laurent Raets representing [indiscernible] to be the auditors. I am nominating Mr. Anne-Marie Poliquin, as Secretary of the General Assembly, will be present in the Central Bureau, Mrs. Patricia Barbizet, Senior Director; and Ms. Helene de Tissot Executive Vice President, Finance and IT. The auditors will be represented by Mr. Marc de Villartay from Deloitte & Associes and Mrs. [ Galin Bonodiaz ] from KPMG. I also say that the provisional quorum is 83.75%, representing 200 -- 211,390,847 shares, representing 9,058 shareholders. In the spirit of the law, the legal document in digital are made available digitally and are available. They are sent and made available for the shareholders the general assembly is declared regularly constituted and you can deliberate on all of the resolutions that are featured on the agenda. I'd like to remind you that the General Assembly is deliberating on the resolutions that are all featured in the notice of meeting that was delivered to you. In a few moments, I'm going to present our management report for the fiscal year 2022, 2023. I will start by presenting the points of on -- our financial aspect that Helene de Tissot will explain in details after that. Then I will talk about the strength and the singularity of the Pernod Ricard. Then I will share with you how we intend to make our business sustainable by really focusing on what was always a commitment for our group, your group, our corporate and social responsibility. Lastly, I will share with you our forecast for the future and our ambitions. Before all of this, I would like to come back this year 2022, 2023 with a video. We saw a tremendous growth of all of our brands. Please launch the video. [Presentation]

The relevance of our strategy can be -- and of our choice can be seen in the performance of our figures. I would qualify the financial performance for '22, '23 by calling it very solid in an international context that is really highlighted with what I would call permacrisis. Internal growth of 10% of our sales and 11% of the TRO are translating by an internal growth of our profitability, which is our operational margin by 32 basis points. And because of this, I want to thank the employees of Pernod Ricard, some are in the room for these performances that are the result of their talent and of their commitment. These results are theirs. I also want to thank you, the shareholders as well as the members of the Board for your support throughout the year. this result is also yours. Our sales are growing across all categories. And on this slide, you have 6 categories that are generating 85% of our growth. You have the details of the growth of the sales with the volume and the price effect mix by brand for the international strategic brand. These results are perfectly aligned with our strategy of diversification of our sources of growth. here, we don't want to depend on 1 or 2 brands or single segment. This strategy is also the 1 we have from a geographic basis. As a reminder, our geographic profile is also very balanced. If I was to summarize it, it's 1/3 in the Americas, 1/3 in Europe, 1/3 in Asia, half in mature countries and the other half in emerging countries. Over the fiscal year that went by all of the regions are growing, as you can see on the slide. And almost all of our countries are also growing. Lastly, we have won market shares in most of the countries. We never obtained a sustainable growth without a long-term strategy. If year after year, we are delivering our performance. If year after year, Pernod Ricard is further reinforcing its position in a highly competitive market, it is because we are relying on a model that is unique, powerful and relevant. This Pernod Ricard model relies on 3 levers: on which I want to spend a few moments. First of all, our brand portfolio. Next, our distribution network. And lastly, our company culture. These 3 levers, if we work hard on them, do more than just adding up. They are multiplying 1 another to contribute to the success of your group. First of all, our brands. They are the most comprehensive and the broadest portfolio in the market in categories as in prices. In India, our bottle start at EUR 5, and we go close to EUR 1 million, in some cases for some bottles. I have mentioned the 6 categories that today are supporting the growth of your group but Pernod Ricard is 240 brands amongst the most desirable in our industry from spirits to the alternatives to alcohol going through ready-to-drink format. Lastly, our portfolio, and this is something that we wanted is more and more premium. It is a portfolio that really leans into the less but better, less volume, more value. In '22,'23, our premium brands are already contributing 80% of our growth. And on -- at the top of our segment, our prestige brands are seeing their growth increased by 15% to bring a little bit of humor in this general assembly, allow me to bring you into the universe of the Jameson whiskey with our very latest campaign that has been shared since last Wednesday. So since as of 2 days in the U.S.. Video please. [Presentation]

Our brand portfolio is alive, and it is part of a strategy that we call the dynamic management of our portfolio. Every year, we improve it. We have actually made 30 acquisitions and about 15 divestments since 2016. '22 '23 was the most active in 10 years in order to meet a dual strategic stake. Number one, to reinforce our exposure to the U.S. market, which is the first global market in value; and number two, reinforce our presence on the most dynamic categories. You can see on the screen, we have in the U.S. consolidated our partnership with the sovereign brands company. And you can see the brands on your screen. There is the Bumbu Rum. It's sparkling wine, [indiscernible] that has actually been very successful. And the latest baby of this brand, the whiskey, the peated whisky Deacon that was able to rely on our unequaled expertise in terms of whiskey. On the tequila segment, we have acquired the Código brand. And on the whiskey side, we are further reinforcing ourselves on flavored whiskey, which are a segment that has experienced the greatest growth, especially in the U.S. You will see the specificity of the Skrewball brand, which offers a whiskey that is flavored with peanut butter. Again, this is for the U.S. market. Let us be very clear here. But it's not that bad. I like it. In Canada, in the same -- with the same logic, we have purchased the ready-to-drink cocktail Ace ready-to-drink segment is currently the category with the strongest growth in North American market. It has a benefit of the culture cocktail and premiumization, the ultra practical aspect and the increase of at-home leisure. And again, it is the most dynamic segment in the U.S. The second segment is tequila. The third segment that is the most dynamic is the U.S. whiskey, specifically bourbon. And I'd like to remind you that we had acquired the Jefferson brand and the fourth most dynamic segment is flavored whiskeys. So when I say that our brand portfolio is alive, it's because we are never stopping to explore new frontiers and new ways of being convivial together. I'm thinking about ready-to-drink and a recent partnership with Coca-Cola to launch Absolute Sprite and on stage as well, you have the infamous Twist and Mix by Glenlivet that we have just launched. You no longer need to be an experienced barman to have a perfect cocktail at home. All you need to do is turn the cork of the bottle to free the right aroma in the right quantity. We're also meeting a growing demand for alternatives to alcohol. Not wanting alcohol should no longer be lived as an exclusion. This is why we have launched in Spain, the Seagram Zero Gin before launching in a few weeks, the Beefeater Gin Zero. But it's never easy. We have needed several years of research and development and investments to get to a quality result while retaining the style and the spirit of Beefeater. Finally, for Absolut, which is always very avantguardes, we are using a brand new sponsor in China. So it is [ REA ], which is a virtual sponsor. It's in the virtual world. It's cheaper than in real life. And is very successful on social brands. And because of this, the Absolut night world of cocktail in China was seen more than 425 million times. I also want to salute 4 new ambassadors that have met the company Pernod Ricard by accepting to represent some of our brands in their latest campaign on biodiversity, Perrier-Jouët champagne is having as an ambassador [ Milano ]. For Martell cognac, it is Eddie Peng, the actor who was chosen to represent the house in China. He is the latest generation of Asian action movies that are international. You also have Lisa for the Scotch Chivas 18-years, with a lot of followers on Instagram. And for our coffee liqueur, Kahlua, we have collaborated with the Mexican actress, Salma Hayek. I want to recognize here the incredible capacity of our teams to bring to the forefront, the cultural identity of our brands. through local activations that are extremely powerful. Thank you also to all of our ambassadors that allow us to feed into the desirability of our brands behind which we invest quite a lot. We invest a lot because our long-term success really relies on sustained investments over time to develop the capital our brands. Because of this, the ratio between the expense in advertising over sales remains constant at 16%, which is about EUR 2 billion invested in our brands over the past fiscal year. We're also investing in CapEx in order to meet the growth of our products. We are in an industry that requires significant investments to modernize, but also very importantly, to decarbonize our production tools, other specificity of our industry, we are aging our ground alcohol starting with whiskey. I would like to take this opportunity to bring you to Scotland, Ireland, in the U.S. and even in China through this video. [Presentation]

That always gives me shivers when I see this video. And when I go there, distillation is an art and an expertise that is being shared from generation to generation. And it's just magnificent. It is what we call our production tool. So as I've mentioned our brand portfolio across all of its dimensions. The second strength of Pernod Ricard is its distribution network. With a presence in more than 160 countries and a direct presence of our sales team in about 75 countries, we have no peers across our industry. This network, we have built it patiently over time with a balanced exposition to mature an emergent markets, as I've said earlier, this is a very, very precious legacy that gives us a position of leaders of the industry in India, in China and in travel retail, for instance, without forgetting, of course, the United States, where we continue to grow, as I've explained a few minutes ago. We are further enriching this legacy with new channels of distribution through B2C platforms like the whiskey exchange, which is specialized in the distribution of rare and premium spirits. Distributing listing as well. More than a simple selling tool, this network allows us to listen to our consumers to understand our customers and to really managed to catch the post of the world and hear what the expectation is. And it's this mixture of power on the markets and capacity to understand the era that allows us to develop spirits brands throughout the world. So I would like you to discover the example of Lillet, which is a Bordeaux brand that joined us in 2008 and which has had a sales volume has been multiplied by 20 since then. Please launch the video. [Presentation]

I hope that this video will have made you want to sample some Lillet. We will have a specific surprise for you upon exiting this general assembly. Portfolio of brands and distribution network. These 2 assets would be nothing without the people who make them come to life on a daily basis. the employees of Pernod Ricard are the soul of our group. Our culture of conviviality is both what holds us together and what sets us apart what makes us and what makes us unique. We are a company that has used a long duration of time as a barometer. And that aims, as Patrick was saying, the creation of value over time with employees that are fully committed. If there is something that I'm proud of, it's that our employees are feeling home with us. We are regularly checking in on their level of engagement that is really well beyond the standards of the sector. For the third year, we are now featured amongst the world's best employers by Forbes. It's an opportunity for me to thank everybody for their commitment and say just how grateful I am. I would like to illustrate this and see a few of them in a video. [Presentation]

I mentioned our model. And now I would like to share with you how we are seeing the future of your group. First of all, by mentioning what was always for the group a commitment, our corporate social responsibility. As you know, sustainable development and corporate social responsibility for the group anchored in the history of Pernod Ricard. All of our products draw their nature from the terroir in which they were born. We have formalized our CSR road map, which is preserving in order to share in 2019, itself aligned with the sustainable development goals adopted by the United Nations with the same horizon, which is 2030. First of all, we are acting with strength to protect and preserve our territories. More than 120 ingredients are composing our products from 350 terroirs throughout the world to preserve these aspects we are banking on the transformation of our practices to regenerative agriculture. Those of you who took part in our previous general shareholders meeting will remember the detailed presentation that we made of this. We want to reintegrate nature into the agricultural landscape lowering climate change, resolving the loss of biodiversity and improving the living conditions of agricultural communities. We've already deployed regenerative agriculture in 7 of our 8 wine territories throughout the world. And we are already sharing our new expertise with our partner farmers throughout the world. The effects of our choice are already positive for the soil, which is more fertile, richer, more resistant to climate events, and biodiversity is reinforced as carbon emissions are lowered. We also want to create values friendly for humans. This year, we have a parity in terms of wages between men and women with the same profile at the level of the world. Our Board and our directive -- our executive committee are balanced in terms of gender. And we continue to accelerate the hiring of women across our management teams. To be responsible our status as the leaders of the industry is giving us a specific responsibility that of fighting abuse, that of fighting the toxic consumption of alcohol. You can see here an illustration of our campaign, drink more water, which has impacted more than 400 million people online and more than 9 million people in festivals and in bars. Another stakeholder that has a growing significance and influence is bar tenders, this year, we have exceeded our objective to train more than 10,000 bartenders to sustainable and responsible practices behind the bar through our program, the bar world of tomorrow. Lastly, I want to finish with a pillar on circular economy. It is the same objective as for regenerative agriculture to protect and preserve resources while reducing carbon emissions, water consumption and the generation of waste. The first results are there. At the level of the Pernod Ricard Group, we have reduced our carbon emissions by 12%. The ones that depend directly on our activities, which are scopes 1 and 2, since 2017, 2018, which is a reference year. We have also invited 130 professionals, including competitors, to visit a few days ago our low-carbon facilities on our site in Glentauchers in Scotland, and it is the photo that you can see on the slide. The fight against climate change is first and foremost, a fight across our industry, and Pernod Ricard is doing its share as a leader. I would like now to focus on the efforts of our group in terms of packaging. Today, we are pioneer in packaging with the task -- cross-functional task force between Sweden, Scotland, Ireland, Paris and our other main sites around the future of packaging, with the licenses, prototypes and that are deployed on the global scale. You have seen on this stage behind us, there are a few of these packaging innovations that are presented. In this matter, we are following 5 very simple principles. One, rethinking. It is about thinking without any taboos, the bottle of tomorrow or the Absolut vodka made of paper, this is -- it required several years of R&D or the glass bottle for the Royal Salut whiskey, which will substitute ceramics with 70% of the decrease of our carbon emissions -- reducing. It is the end of secondary packaging for a number of our bottles in India, for example, on all the whiskey for Indian whiskeys in our portfolio, other categories of Chivas Brothers, we faced criticism. People said, okay, they're reducing secondary packaging, but they're increasing the price and reducing the margin. So it is not made to be more expensive, but I'd like to say we need to make what is sustainable, more economic, and we can accelerate the transition. Reuse them in partnership with the start-up ecoSPIRITS, we are developing ecoTOTES. So I think you have 2 here. That help the builder Bulk Spirits into bars and restaurants at the key savings in raw materials weight and reducing our carbon emission and waste. Fourth, respecting -- respect. We are fighting against the plastic packages. For example, as this Beefeater bottle, retrieving plastics for the top and the label and this -- the objective will be less than 410 tonnes of plastic per your safe recycling, then our carbon footprint does not stop at the purchasing of a bottle, but we support financially the development of recycling infrastructures for glass on our main markets as namely in the United States. You can see by the way with -- this Absolut bottle which was produced with 56% of recycled glass. The circularity is a reality of every day at Pernod Ricard. It is also a formidable opportunity to open up to a whole ecosystem of start-ups that embody the avant-garde in these areas. I suggest to listen to the founder of 1 of them called [indiscernible] the floor is yours.

Hello, everyone. I would like to thank Alexandre Ricard and his teams for the invitation. I'm delighted to be with you to talk about circular economy. My name is [indiscernible] and I'm a French entrepreneur passionate with circular economy. I discovered the concept 10 years ago, and I worked with Airbus in Mexico. I decided with [ Rafael Mavenir ] to leave the group and to dedicate to circular economy to really look at what's done around the world and create a company, which I did 7 years ago to support great companies public collectivities. We work with the Pernod Ricard as half of the account companies today. I would like first to start my speech by showing you an image, what you see on your screen is like mamos that we visited in Senegal. As you can see, it's no longer a lake, but it's 1 of the open waste lands in open air. And I think this is very representative of our world today. We say it's a linear economy, why we extract resources. We -- throw them away. So there are many issues. It means there are risks in the -- no longer having any supply. There are impacts of social, economic environmental, and we create value in the upstream phase, but then we lose it very suddenly after usage. So circular economy will suggest to rethink this model by creating added value upstream by trying to make last the usage phase as long as possible and to reuse so that there's no end of life. So this will have advantages for the environment. This was mentioned by Alexandre Ricard for CO2, biodiversity, water, but also an economic advantage because we will use what already exists and what is on the market. And years ago, it was a concept that was confidential. Today, we hear about it more often and for main reasons. The first, the risk in supply when we implement circularity, we -- the resources in the circle and thus, it's -- there's -- we're more dependent -- less dependent on raw materials and the chain that supply is more resilient. This is what we have seen for 2 years now. Then legislation on the European level and the French level. There were many countries in the world who are working on the topic, we have the consumers as well that are turning more and more towards sustainable brands and talents. We have realized that these topics of the environment can attract the good talent and retain them within the group. Now I'm going to talk very briefly on what we do at Pernod Ricard, we act upon several levels. There are different initiatives that I wanted to zoom on, the reuse. This is really topical today for packaging in France and Europe. There's the AGEC law that asks group to increase their part of reuse up to 10% in 2027. We also have a fund for the -- for EUR 54 million that was creating this year, and it is really time to position ourselves on these fields. What do we do? We take a bottle, a bottle can be brought back to the store, and then it's cleaned and it's reused. So this has a great number of benefits for the environment, as you know, and it is good for the value chain. It has economic advantages as well. It's not as complicated as it seems. You just need to create a network. You need to -- so it is a big question on the European level. We have been working for a year with Pernod Ricard to test, but also to see how the consumers will receive this and to see how we can develop these reuse of Systems on the French market. When we talk about transition, circularity, we need new skills and competencies. We need to raise awareness also extensively to the teams. And to have circular economy, we need skills to evolve. We cannot design in the same way marketing cannot be done in the same way and HR is different as well. So we need to raise awareness and make these skills and competencies evolve. This is what we have done with some people at Pernod Ricard, and this will be highlighted in all of the groups, in the economic world. Finally, I'd like to close with this. I think that if there's 1 thing I have learned in the 10 years I spent in circular economy is to have it, we need ecosystems. We need collaboration to have circular economy. I need my suppliers, some of my clients, competitors at times, and it is through this, that we can make it profitable from an environmental and economic standpoint. Pernod Ricard has chosen to join 2 of our coalitions, the circular group that we launched we have a measure of circularity to align -- the key KPIs to measure circularity and help answer to what is this and to prove the interest of the business of this circularity. And I'd like to close on this. I believe that the whole objective to move towards circular economy is at the height of the challenges for our society. I think it's also a huge place for opportunities. A lot of things need to be recreated and to invent this calls to a lot of great creativity to all economic groups on a different level. And to conclude the pioneers and circular economy today will be the leader tomorrow. Thank you very much for listening.

Thank you very much, Julia, for shedding light on circular economy. A model -- a solid model, a road map that is CSR road map that is clear, concrete, we are trustful that we have the ability to generate in the 10 next year a growth that is profitable and sustainable, for the profit of all our stakeholders. If Pernod Ricard was able to take advantage in the last years of a favorable economic context, I'd like today to assure you that we still have the same weapons to pursue our path in this growth even though the times have accumulated crisis. In this context, we can qualify it as a [ permanent ] crisis. In a general manner, the outlooks for our market remain very favorable for the mid term -- medium term. I'd like to come back on 3 elements that have come from these outlooks. First element, the momentum on spirits. In 2022 compared to 2015, the spirits have become the first category in value amongst all of the alcoholic beverages before beer moving from 35% total to 41% in 2022. Second element, if the volumes for spirits are declining on the global level, in a structural manner, the premium brands and international spirits precisely the segment in which we operate, are making progress and thus, in a very structural manner as well. It is this premiumization phenomena, we drink less, but better. And finally, a third element, we observe the resilience and value of the spirits category. As you can see, between 2019 and 2022, the value -- the market value of spirits has gone up by 15%. Our sector is also taking advantage of the favorable demography. Populations are growing, and to the number and thus, the number of people in age to consume alcoholic beverage. It's plus 1.3% per year. In China, where we are leaders, if the global Chinese population is declining, the high class with most money is growing by 7 million people every year as the middle class by plus 20 million people per year, and this is the segment on which we are operating. These populations that consume more and more Western spirits, Cognac and Whiskey ahead. Finally, in India, the age -- the population age of consuming alcohol is increasing by 20 million per year. And this is also a very positive factor for our group, which is also a leader on this market. The ambition of the group for the next years -- 10 years is very clear, generating a profitable and sustainable growth for all stakeholders. First of all, our organization is agile and enables us to fully take advantage of the global market evolution in wines and spirits. Our portfolio, as you have seen, our distribution strategy, our network, our company culture and our teams that are so committed are as many as managers to succeed and create value in all of our activities. We have to do so, implemented a growth model that is very singular that is unique in order to overperform the market. At the level of our -- or concerning the core of our activity, we want to highlight 3 access accelerating or ramping up our prestige brands, improving the marketing efficiency and commercial efficiency of our portfolio, number 2. And finally, strengthening our efficiency in terms of prices and promotional offers. Beyond their core activity, in order to look at the long term to widen our horizon for our growth, we are exploring new experiences and services, new roads to touch consumers and new product categories as alcohol alternatives or the ready drinks that I mentioned before. By betting on the use of the data in new technologies, it represents a major competitive advantage for your group. The objective is to reach the precision at a very high scale to be even more able to understand our consumers' preferences and our clients' preferences and to answer to their needs very acutely precisely. It is about offering the good brand or the good experience to the good consumer at the right time at the right moment and in the right place and at the right place. Let me quickly show you how through 4 programs fed by millions of data and the power of AI we are able to optimize the efficiency of our brand portfolio, our marketing actions and commercial actions. The first idea is to know who wants -- desires our brands, who are our consumers and what are their needs. Thanks to our [ Analyse ] program, we are collecting and analyzing market data, and we are mapping them when they are consumed for very high precision, we can determine the value of these moments when they're -- for the consumption. Then we determine for each brand, the most relevant consumer segment, the channel of distribution that is more relevant as well, bar, restaurant, supermarkets, the best strategy for the activation and even the best consumption strategy, which we call the perfect serve. Then the different algorithms that we have developed ourselves and that we want to continue to enrich as time goes by, that help us optimize our indirect marketing investments to optimize our promotions and our commercial activations at a very high scale with a maximum of impact. All of this transformation that started now a few years ago, has logically led us to have the organization change in order to adapt as it was always the case at Pernod Ricard. We removed the regions. We moved from 22 geographical areas to 10 geographical areas that are more -- have more viscosity. And now we have 6 brand companies. Despite the growing complexity of our environment, we are benefiting from a unique positioning and precious competitive advantages that give us all the trust in our ability to free our potential and overperform the market. In this transformation, we highlight -- first highlighted the dynamics of the turnover than the progressive increase of profitability. We always talked about what we would do and we always did what we said we would do. I remain confident in the possibility for the group to reach the objectives for the medium term and internal growth of the revenue at the highest part of -- between 4% and 7% for the medium term and expansion of operational margins, plus 50 to 60 base points, all of this to create value for all of our stakeholders -- shareholders. The value creation for shareholders. It's still present here again this year. We will offer in a few minutes to vote for a level of dividends that has never been seen EUR 4 for EUR 70 [indiscernible] a historical high. In 10 years, the share has almost doubled. It's overperformed the CAC 40 and the sectorial indexes of reference between first of July 2014 and October 25, 2023. Before closing this management report, I'd like to pay homage to our premium club for shareholders at Pernod Ricard. I had the pleasure to meet several of you during the year. And I would suggest to watch a short video now. [Presentation]

Ladies and gentlemen. As you will have understood, I am optimistic in terms of our ability to deliver a sustained growth for the next years, continue to remunerate our shareholders at the height of their commitment. I am because we have solid basis, a portfolio of brands, a network of distribution a corporate culture so that is like no other that strengthens our digital leadership. I'm also and foremost, because never our vision created everywhere, creates -- creating conviviality or friendliness has never been so relevant. We are evolving in times where there's a tendency to close in and exclusion has never been so strong. Closing in vis-a-vis other nations vis-a-vis others that produce polarization or divide. Solitude also that touches more and more women and men everywhere around the world. For [ Labicia ] known as a man that gathered people that the biopic was just released last Wednesday, 2 days ago, the film. So this is what I mentioned it. Hell isn't others, hell is oneself divided or separated from others. I'm proud to be at the head of the company that on the opposite works on meeting is in favor of dialogue of mixing people in storing a little friendliness and conviviality when often everything becomes a conflict confrontation and source of tension. At Pernod Ricard, we do not try to be more than what we are, a company with its imperatives to perform for financial performance and extra financial performance. We are designers or creators of conviviality, and we are very proud of it. because a little more every year, conviviality is a commitment. I would like to thank you. And before giving the floor to Helene de Tissot, I suggest to see an advertisement. [Presentation]

As I said before it's very complicated to continue, but I would like now to present the consolidated accounts for year '22, '23. We have achieved a very good performance in an environment that is normalizing. This performance is translated by a balanced growth that is of diverse sales in all regions and categories and to our premium portfolio of brands. Despite a strong inflation, we have been able to maintain the margin and increase the operational margin by plus 32 points. We are pursuing our investments in the desirability of our brands and the future growth with record levels of investments for primarily promotional and CapEx and stock strategic -- strategy. The portfolio -- the management was very active also based with a priority on premium brands and Código and Skrewball. Finally, we are creating value in the long term for our shareholders with excellent return to shareholders with the dividends reinvested TSR by plus 14% for 2023 fiscal year. We also announced a buyback program for actions, EUR 500 million to EUR 800 million for '23 2024. And this has already been done during the First Quarter. Let's come back to our key figures. Our turnover, [ 1.237 billion ], plus 13% facial and plus 10%, in turn. The appreciation of the American dollar compared to euros. So PRO, plus 11% internal and plus 11 facial as well. After taxes, EUR 2.34 billion, plus 10%. The net result of EUR 2.262 million plus 13%, a strong progress due to the increase of the results. The free cash flow, EUR 1.431 million helps accelerate CapEx and in strategic investments. Let's now move to our turnover per region. The turnover is growing in all of the region with a price effect that is important and the resilience of volumes. Americas, the Americas plus 2% for the fiscal year, with a moderate growth in North America with a stable turnover in the United States, and plus 2% growth. The activity is very dynamic in Lat Am pulled by Mexico. Asia and rest of the world are growing strongly, plus 17%, pulled by India, mainly the rebound of travel retail, Turkey and China. The performances in Japan, South Korea and Southeast Asia are also very robust. The growth in Europe is also a very robust plus 8% with a strong price pulled by Spain, Germany and rebound of Travel Retail. As for the turnover for categories, our spirits categories have experienced strong growth. We see the international strategic growth, excellent growth, plus 11%. And pulled by Scotch and Martell, Jameson and Absolut. Our strategic local brands are growing strongly, plus 10% pulled by in Seagram in India and tequila Olmeca. Our specialty brands still are still very dynamic, plus 8% pulled by Lillet, Aberlour, Spot Range. The performance in wine is more mitigated with only 2% in the United States and North America. I would not suggest to review our results, our plus 10% internal growth. We talked about the gross margin, plus 10% turnover. Thanks to our portfolio of premium brands, our initiatives for revenue growth management and initiatives of operational efficiency. The spend for promotion is growing by 11% with a dynamic allocation between brands, markets and distribution channels. the ratio of expenses over the sales is 16%. The structural costs are showing a strong discipline and targeted investments. Consequently, the TRO is showing growth of 11%, so 27.6%, which is growing. It is a decrease of 68 basis points for the reported because of a change of EUR 70 million. Let's now move to the net income group share. I've mentioned the TRO, it is growing by 10%. The financial fees are reflecting a context of interest rates that are much higher. Our average cost of debt is 2.6% as opposed to 2.3% last year, which was our historical low. The net income share group is growing by 13%. Let us now look at the evolution of our net debt and the net debt-to-EBITDA ratio is now 2.7x because of the increase of the net debt, which is now 10.273 billion with a free cash flow of EUR 1.43 million that has helped us to increase our investments in CapEx and our strategic and to finance our M&A over the year with the payment of dividend for EUR 20 billion and a share buyback for EUR 915 million. The net debt increase have more technical effects like a favorable foreign exchange that has done with the improvement of the U.S. dollar. Let us now look at the accounts of Pernod Ricard SA. The net income is beneficial with 184 million more than the previous year, with an increase of the dividends intragroup. We would like now you to approve the distribution of a dividend of EUR 4.70 per share in line with the policy of distribution of about 50%. This corresponds to an increase of the dividend of 14% compared to the previous year and an annual increase of 23% since '21, '22. We have also announced a new program of buyback between EUR 500 million and EUR 800 million. As mentioned previously, we've already done a first tranche over the First Quarter. These are the 2 1st quarters, allow me to come back to the sales for the First Quarter of '23, '24 that we've shared a few weeks ago. For this First Quarter, our sales are slightly decreasing by minus 2% on a high comparison base. We had grown by 11% at the same time last year, minus 2% of internal growth with a strong mix of price it is minus 8% reported because of the exchange rate. The sales in the U.S. are decreasing by 8%, reflecting the adjustment of the inventory of the stocks with the retailers because of the normalization of the spirits market. The trends are better than the sales because of the technical effects that I've mentioned. The sales are also decreasing by 8% in China on an unfavorable base of comparison but it is, however, showing improvement throughout September, at the beginning of October. Because of a diversified geographic presence, the results in China and in the United States, we're compensated by a very dynamic performance throughout Asia. A modest growth in India, Europe, that is resilient, a stability of travel retail with the phasing of the expedition and high basis for comparison in Europe. The price mix effect is significant by 6%, and this reflects the price increase of the last year across markets and brands. Thank you for your attention. And I am giving the floor back to Alexandre for the forecast of the year.

Thank you, Helene, for the forecast of the year. In a context that is going to remain quite complex. We're anticipating a growth of the diversified sales with a perspective for the U.S. and China and a strong growth that we can expect in a Travel Retail and in India. A decrease of the inflationary pressure priority of our initiatives in terms of revenue growth management and operational efficiency, expense ratio for advertising over sales, that is stable around 16%, optimized dynamically with our new digital tools. Disciplined investments in terms of structural costs and internal growth of the current operational margin, significant investments in terms of CapEx between about EUR 800 million to EUR 1 billion in levels of investments in strategic stocks that are similar to the previous year and a share buyback program between EUR 500 million and EUR 800 million, with a first tranche of EUR 150 million that we've already carried out over the first quarter. I also want to remind you a unfavorable exchange rate effect that will be compensated in part by the perimeter effect. I'm now yielding the floor to Mrs. Patricia Barbizet for the presentation of the governance of the group.

Thank you, Alexandre. Dear shareholders, it's always with joy that I see you to present our governance to you. I am speaking to you. First of all, as a Senior Director whose role and missions are defined in the rules of the Board that are accessible online, but also as a President of the Committee of Nomination and governance. I'm going to first start by introducing our Board. It is made up of the 14 Board members that you can see on the screen, including to independent directors and one, our Board is part of the strategy of the group with diverse and complementary skills. Your illustrators have -- your directors have expertise in the next -- in the following, finance, audit and M&A general management and strategy, digital and technologies, CSR and HR, innovation, knowledge of the industry and the consumers, governance and compliance. Currently, the percentage of independence and of gender parity of the Board of 58.3%. I'd like to draw your attention on the fact that after the shareholder meeting, if you renew the mandates that are suggested and nominate Max Koeune as Director. The Board will be made of 15 members with 8 independents and 7 women. So we will be 65.5% and 53.8%, respectively, for independence and gender parity. Over the past year, the Board has met 9 time with rate of presence of 99.21%. We have focused on the following issue. Review of strategy and monitoring of the growth of the group, health and safety at work reporting across all of the appeliates of the group, the review of all of the accounts on both half year and full year basis, the review of the compensation of your CEO and Chairman of the Board and the evaluation of his variable share for 2022 but I'd like to clarify that, of course, these debates took place outside of the presence of Alexandre Ricard. We have examined and reviewed the work of our 5 committees and organized an executive session. During our General Shareholders' Meeting, I would also like to talk about the work that I've done as a Senior Director. This year, like every year, I have taken part with some of the directions of the group to governance roadshows, which are meetings with our main shareholders in France and abroad. I have also annually evaluated the Board based on individual interviews with each director and a full report was made to the Committee of Nomination and Governance as well as to the full Board. I would like to now detail the 5 specialized committee to which the Board delegates the preparation of specific topics. The Audit Committee, which is made up of 3 members, you can see on the screen, it is chaired by Philippe Petitcolin during this year, this audit committee has reviewed the projects of the half yearly and yearly accounts. following the treasury and the debt of the group, management of the risk and the mapping of the risk approval of the audit plan for the year and a follow-up of the renewal policy for 1 of the 2 auditors, the Committee of Nomination and Governance, I'm chairing it, and you can see 3 members on your screen. We have examined the independence of the Board members. We've thought about the composition of the Board and its committees in order to have the best balance and the most adequate composition. We've reviewed the diversity and inclusion policy of the group as well as the actions carried out to retain our talent. We have examined the succession plan for the top management and the self-evaluation that I've just spoken about. The third committee, which is the Compensation Committee that you can see it is chaired by Kory Sorenson. She will going to present the ex-post and ex-ante having to do with the compensation of your Chairman and CEO. During this year, we have -- they have reviewed and analyzed the practices and trends of the markets concerning the compensation of the Chairman and CEO as well as the Director. They have analyzed the criteria for the variable compensation of the Chairman and CEO and validated the policies for the compensation, introducing the strategic committee presided by Alexandre Ricard, and you can see the members on your screen. This committee is dedicated to thinking about the strategic orientation and long-term orientations of the group. Last committee created by the Board, the CSR Committee that I chair. You have the 3 administrators that you can see in this year in this committee. Of course, again, we communicate all of our work to the Board. We have focused on the various topics. Climate scenarios, the decarbonization strategy of the group and the monitoring of the strategy within the group to fight against the abuse of alcohol. This was the presentation of the governance element that I wanted to share with you today. And I invite Mrs. Kory Sorenson, the Chair of the Compensation Committee to meet us on stage to introduce the compensation of our Chairman and CEO for the ex-post and Ex-ante votes.

Thank you, Patricia. As Chair of the Compensation Committee, I'm going to present the compensation policy of the CEO. I'm going to detail the ex-post vote mentioned in Resolution 9 as well as the ex-ante vote mentioned in Resolution 10. You will find all of these elements in your universal recording document between Pages 62 and 75. The elements for the compensation paid or granted to Mr. Alexandre Ricard for the fiscal year '22, '23 mentioned in Resolution 9 include an annual fixed compensation of EUR 1.250 million as of the first of July 2021, a variable compensation of EUR 1,890,625, corresponding to 151.25% of his fixed competition with a target at 110% maximum at 180% the detail of each criteria. As mentioned, pages 67 to 68 of your universal recording document an attribution of 13,062 action performance share, including 7,532 action submitted to internal performance condition and 5,529 shares submitted to external performance conditions. This also includes an attribution of 2,000 for -- 2,438 performance shared for an IFRS value of EUR 349,916 as well as a payment of EUR 350,000. Mr. Alexandre Ricard also has a company vehicle and a insurance coverage. He has no compensation as Chairman of the Board. Let us now move to the policy of compensation for the CEO for 2023, 2024, which is the subject of Resolution 10. The Board, based on the recommendation of the Compensation Committee is implementing a balanced compensation policy, encouraging performance, reflecting the strategy of the group and respecting the social interest and the interest of the shareholders. Like every year, the compensation of Mr. Alexandre Ricard was reviewed and compared with that of its main competitors, which has made it possible to confirm that it was both balanced, including a significant variable share to encourage performance adapted to his responsibilities to his performance and to the excellent results of the company. Thus, the Board has upon recommendation of the Compensation Committee decided during its meeting on the 31st of August 2023 to carry the compensation policy for the CEO. All of the elements of the compensation policy unchanged compared to last year are shown on the screen. Given these elements, we are proposing to you to approve Resolutions 9 and 10. Thank you.

Patricia and Kory, thank you for your presentation. I would like to now have Mr. Marc de Villartay from Deloitte & Associes to present in the name of the auditors, the reports that are submitted to the general assembly.

Thank you Mr. President. Ladies and gentlemen, hello. In the name of the auditors, Deloitte and KPMG. It is my pleasure to report to you on our mission and the report that we have published for the year wrapped up on the 30th of June 2023. We have published several reports and I would like to suggest in line with this the practices of this assembly to not read them in full, but to summarize them for you. our report on the consolidated accounts and on the company accounts were made available to you within the framework of this current assembly and our pages 254 to 257 and pages 283 to 285 of the universal document. We remind you that our work aims to have a reasonable assurance on the sincerity, the regularity and the faithfulness of the account and to make sure that they do not include any significant anomalies. In order to do this, our 2 firms have intervened in France and internationally in all of the significant entities within your group. Following our assignment, we have presented our conclusion to the general management, to the Audit Committee and to the Board of your company. Our reports on the consolidated accounts and on the accounts of the company mentioned the key points of our audit and the work that we have carried out in order to meet them. For the consolidated accounts, the key points of the audit are the evaluation of the brands and the fiscal risk. Our reports include for each of those key points, the description of the risks identified and the answer that we have provided. In conclusion, the consolidated accounts are regular and sincere and are giving a faithful image of the results of the year as well as of the financial situation of the company. We have emitted a certification report on the consolidation of account of the group without any reservations or observations concerning the annual accounts. The key point of the audit was the evaluation of the participation security. The detail of our work is also described in our report. Following our work, we have also certified annual accounts of your company without any reservation, sir -- observations. Our reports on these accounts include moreover, the conclusions of some specific verifications as outlined in the law on information that are in the management report. Because of this, we can testify about the exactness and the sincerity of the information provided in terms of compensation and advantages paid to the CEO as well as the sincerity and concordance with the annual account of the information pertaining to the payment deadline. Within the framework of the ASF regulation, we have to make sure that the presentation of the accounts respected the electronic format of information that is in that of Europe. We are now moving to the special report on regulated convention that is on Page 286 of your universal document. In this report, we inform you that there is no new regulated convention that is submitted to the approval of your general assembly and that no regulated convention prior approved in a prior time has been carried out throughout the year. Lastly, talking about the resolution that has to do with the social capital of your company that are suggested as the extraordinary part of your general assembly. We have emitted 4 special reports presented between Pages 309 and 313 of your universal document. One was a report of the reduction of capital by canceling of actions within the limit of 10% of the capital. I report on the emission of shares and various [indiscernible] values were maintaining and suppression of the preferential right of subscription. A report on emitting ordinary shares, giving access to the capital reserved the people that have subscribed to the company savings plan and the report emission of ordinary shares, giving access to the capital with the removal of the preferential right for subscription. For all of these resolutions report do not include any mention or any specific observation. Lastly, I would like to inform you that we will establish a complementary report if the case arises. In case of the use of by your Board of these authorizations or delegation. Ladies and gentlemen, I would like to thank you for your attention, and I'm yielding the floor back to the Chairman and CEO.

Thank you for this presentation. I would now like to invite Mrs. Anne-Marie Poliquin, the Secretary of this General Assembly to present the resolution that we are submitting to your vote.

Thank you, Alexandre. Thank you, everyone. I have a good news. I'm going to present to you in a very summarized way, the resolutions that are suggested for you because the integral text of them are in between Pages 39 and follows of the brochure that you have had. This year, resolutions, ordinary and both -- ordinary and extraordinary are submitted to your approval. Let us start with the presentation of the ordinary resolutions. The first resolution is the approval of the social accounts of [ Pernod Ricard Group ] for the 2022, 2023 year. The second resolution, we're asking you to approve the consolidated account of the Pernod Ricard Group the same year. The third resolution is approving the way -- the allocation of the result. As Helene has mentioned earlier, you can set the dividend for 2022, 2023 at EUR 4.70 per share and payment on dividend of EUR 2.06 was paid on the seventh of July 2023. The remainder, which is EUR 2.64 per share will be paid on the 24th of November in 2023 with a record date in -- on the 28 of November 2023. For the fourth resolution, we are suggesting to renew the directorship of Ms. Kory Sorenson for a duration of 4 years. Through the vote of the fifth resolution, we would like to suggest renewing the directorship of Mr. Philippe Petitcolin for a duration of 4 years as well. Through our sixth resolution, we are suggesting to appoint Mr. Max Koeune as a Director for a duration of 4 years. Dear Max Koeune I would like to yield the floor to you now, so you can introduce yourself in front of the assembly.

Hello, everyone. My name is Max Koeune. I'm 51 years old, I'm the Director General of the McCain Group, which is a Canadian family company in the agri food sector, we are the global leader of frozen fries and potato products. I've been in disposition for 6 years. And before I was the Financial Director of this group. And before that, I spent 14 great years within Danone at HQ and in operational positions. In the HQ infusion and acquisitions. And then its Financial Director in Switzerland and in the U.S. I'm delighted to have the opportunity to join the Board of your company because it's a wonderful company that really impresses me in many ways. First of all, through the talent and the commitment and the ambition the teams through the depth and the strength of the brand portfolio, but also with the brands, the very strong value of responsible consumption and sustainable development. I'm also delighted to have the opportunity to contribute to Pernod Ricard through the experience that I have the role that I have today because McCain and Pernod have many similarities. Similarities in terms of size because McCain is a company with more than EUR 10 billion of sales with 20,000 employees like Pernod Ricard, we're present in 160 countries with production sites all over the world, similarities in terms of the markets because our important markets or North America, Europe and, for a lesser extent, Asia, similarity in terms of stakes, developing our talents, innovating in our products, but in our way of working in a world with a lot of technological upheavals, and also a stake of a sustainable and profitable growth. So I thank you in advance for your support. Thank you.

Thank you, Max. Through our seventh revolution, we are suggesting to renew the mandate of Deloitte & Associes as a statutory auditors a duration of 4 years. Resolution 8, we are submitting to your approval in the setting of the global maximum annual amount allocated to the directors to pay their mandate to bring it to EUR 1,350 million as opposed to 1,250 million previously. Through the vote of the ninth resolution, we would like you to approve the fixed and variable elements that are compensating the compensation and advantages paid for 2023 to Mr. Alexandre Ricard, our Chairman and CEO. All of the elements are presented, which is 65 to 69 of your universal documents. Through vote of the tenth resolution, we are submitting to your approval elements of the compensation policy applicable for 2023, 2024 to Mr. Alexandre Ricard, Chairman and CEO. All of this information is presented in your universal document, Pages 70 to 75. Through the vote of the 11th resolution, we are submitting to your approval element of compensation paid or granted for '22, '23 to the CEO. These elements are presented in pages 75 and 77 of the universal document. Voting for the 12th resolution, we are suggesting to approach the policy of compensation of the compensation for 2023, 2024. These elements are presented in Page 77 of your universal document. For Resolution 13, it is clarified that no related party agreements were concluded or carried out during the fiscal year. Resolution 14, we are suggesting to authorize the company to trade in company shares in the limit of 10% of the capital. This authorization will be granted for 18 months with a maximum purchase of EUR 330 per share. Let us now move to the presentation of the extraordinary resolution. Following resolution 15, we would like you to authorize the Board to reduce the social capital by the canceling of share cap of canceling treasury shares, subject to a limit of 10% of the share capital for a duration of 26 months. Resolution 16 is a delegation of authority for the Board of Directors to increase the share capital with -- for a maximum nominal amount of 130 million through the issue of ordinary shares and/or securities granting access to the share capital. This is the global common aspect that can be done for financial delegation submitted to your vote today. This authorization would be granted for a duration of 26 months. Resolution 17 would allow the Board to increase the share capital without any preferential subscription right for a maximum amount of EUR 39 million, which is about 10% of the share capital. This allegation would be granted for 26 months. Resolution 18 would be allowing the Board to increase the number of securities to be issued in the event of a share capital increase with or without preferential subscription rights, in the limit of 15% of the original emission. This would be granted for a duration of 26 months. Resolution 19 would allow the Board of Directors to increase the share capital for qualified investors or [ reuse ] circle investors with the -- without preferential subscription rights for a maximum amount of EUR 39 million, which is approximately 10% of the share capital. This delegation would be granted for 26 months. The 20th resolution, delegation of authority for the Board of Directors to issue ordinary shares and/or securities renting access to the share plan, of the company and other company as consideration. The 21st resolution would give the possibility to the Board of Directors to increase the share capital by a through bonuses, benefits and others by a maximum nominal amount of EUR 130 million that is approximately 33% of the share capital. This authorization would begin in for 26 months. It is said that this resolution, an extraordinary 1 would be thus adopted with a simple majority. The 22nd resolution is the delegation of authority for the Board of Directors to increase the share capital subject to a limit of 2% for all the members of the company with savings and without preferential subscription rights. This limit is of 2%, and this authorization would be given for 26 months. The 23rd resolution has for object delegation of authority for the Board of Directors to increase the share capital subject to the limit of 2%. Once again, this [ threshold ] is in line with the 22nd resolution, it would be given for 18 months. Finally, the 24th resolution. It's purpose is for all the powers to carry out the necessary legal formalities. This presentation of the resolutions being closed, I will give the floor to Mr. Alexandre Ricard.

Thank you very much, Anne-Marie. So what I suggest now to open our Q&A session. Before our discussions, I would like to inform you that a series of 10 written questions were sent by the responsible investment firms, the FIR on October 8 and received by the company. As last year, the Board was held this morning and decided to answer to it by written publication and to answer on the website of our company. It was published, and I checked just before the beginning of this general assembly. In order for these elements, therefore, I declare this session of the Q&A open dear shareholders.

Mr. President, hello. Mr. [ Sholanskar ], the association for individual shareholding. Let me approval of the successes and give an explanation to the members of your family who are here present and who represent faithful shareholders who sometimes wonder about the sudden decreases in the shares. Since you do not spend time explaining why the market fluctuates, and I understand, one of the explanations could be, well, that this touched a lot of the shares on the Paris Stock Exchange. It is due to the fact that we have a lot of passive management. And when there is passive management and a few assets want -- or people want -- or those who are active want to sell their shares and they don't have the good counterpart, then there are really significant changes, not to say abusive ones from the market. That being said, I'd like to come back to my 4 questions if you accept. You announced several structural changes to strengthen your strategy focusing on consumers by creating an executive committee instead of the executive bureau that is composed of 9 members by including the new Vice President, the Executive Director for in charge of brands and markets, the general -- the CEO for North America and the Director of the operations. Could you give us some feedback from this committee? And my second question, you asked an institute to design and to deploy a scheme to measure performances in order to assess 5 of your brands during musical festivals or thematic evening. So why did you retain these 5 brands Ricard, Havana Club, Jameson, Absolut and Beefeater. And why not Perrier-Jouët Champagne and for what is the strategic reason for that? My third question, group of your committed employees and the mayor of [indiscernible]. We're very proud on October 25 to show the biodiversity of Perrier-Jouët diversity and the -- of the ecosystems that act on the climate and conversely, with what data do you rely on in order to measure the impact on biodiversity. And have you implemented also corridors of biodiversity -- corridors to regenerate the fauna and the flora? And finally, how does the generative AI will change your programs to recruit globally? [indiscernible] has announced that the great house Publicis had just got rid of telework for the good of the teams. Are you going to follow this example?

Well, great, thank you for your questions. We are going to answer them, of course. I'm going to start with the first one. We have a new operational governance that is working since last September and are active. And this is to continue very naturally and follow all of the changes that we perform. So I will take a few examples that you have mentioned, having a head of the brands that represent all of the brands and marketing with the 2 managers in North America and the rest of the world. And also -- and he is present, and also head for all of the supply chain that creates the link between the brands that produce and put the products in bottles in the rest of the market. And it was to generate more smoothness and fluidity to be more agile in the allocation and the reallocation that is continuous for our resources. And behind these structural changes, we also have tool changes and I will come back to AI. But concerning finance and budget, we have moved from beyond budget. In rolling -- with rolling forecasts every 4 months. This helps us to reallocate our resources in a world that is very volatile. And the good news -- and especially for a group like Pernod Ricard that is extremely diversified, there are high and low cycles everywhere in the world, and it is never the same cycle. So of course, we allocate our resources continuously, where we see there are growth bubbles and for the long term. And in the same way, we readjust things when necessary for where the growth is lesser. So it is this organization that's simplified, which means that there are less contact points. It is really smoother and this is a good starting point from this point of view. For the festivals, now why did we choose the 5 brands that you mentioned because these are the 5 brands that we activate in the festivals. So if I take the example of champagne, we do not activate champagne in these festivals because if I take the example of Tomorrowland, this is a festival where our target of consumers who are there are not really champagne consumers. They're not Perrier-Jouët consumers. So maybe a Mozart concert, perhaps, it's a different audience. So this is why we chose and targeted these brands for these festivals. Knowing that festivals are spreading everywhere and developing everywhere around the world, this is something that is really working. People love the festival experience and pay a lot of money to go -- to attend. So this is why we chose these brands, especially for biodiversity. And I will give the floor after having finished on artificial intelligence. I will give the floor to Noémie Bauer. She is our Business Sustainability Director for Pernod Ricard. For AI, it is already really changing completely our ways of working. I gave an image of it in my presentation in the management, but the algorithms that we have developed are algorithms that make us extremely efficient. I will give a simple example, a concrete example in terms of promotional efficiency. Our data scientists have developed based on data that we recorded along the years. We recorded the criteria for promotion and the number of criteria could become infinite. We could -- it could be enriched infinitely. The frequency of the promotion, the depth of the promotion, the duration of the promotion, the typology, et cetera, there are 32. And once we have identified, recorded this criteria, but we also record are the consequences of the implementation of the promotion. So we see the additional sales, and we record indeed, what is generated, then we change things, we iterate, et cetera. And this algorithm can do 2 things currently. It is able -- well, we play with the criteria, and it can predict, it can forecast the additional sales that will be generated with a level of relevance, that -- trust from this, that is very high. And now we are -- we can even say that we want to maximize the net turnover generated, how with these 3, 4, 8 maybe not all the criteria, otherwise, we can go crazy, but this is what we do. And we do this for the promotional efficiency, for prices for our investments, our marketing investments and these are tools that really are changing the way we work. The human brain has a certain limitation, which means that for a market being able to generate more than 6 to 8 priorities is complicated or doing it in a very efficient manner, at least. Thanks to machines. Thanks to these tools, we can activate a lot more the number of units times the brands, times the state, times the number of prices in the United States at about 50,000 different combinations. So doing this manually, it's extremely complex. Now we're able to do it thanks to the algorithms and the efficiency generated in terms of marketing investments, provides resources, and this was the other limit. We had the human limit, and we had the financial limit and they are reinvested in other brands. So this is where I can say it's a competitive -- a major competitive advantage with our widest portfolio in the industry. So now I will give the floor to Noémie for biodiversity.

Thank you for your question on biodiversity. In fact, this pathway has helped visitors to see the agricultural retentive agricultural programs we have and the corridors, the green corridors that you have mentioned, are they not the only initiatives taken for the regenerative agriculture. We aim at restoring the health of the soil to add new cultures between the vineyards. You see this activation, adding vegetable quarters working less -- using less of the soil, and this will help diversity, pollenization, fertility and resilience of the soil. We base ourselves on IPCC data and the IPBES, The Intergovernmental Platform of Biodiversity and Ecosystems, but also local organizations like -- such as [ agricultural DeVivo ] that we work with in the Champagne region.

Number 3.

Hello, Mr. President. Same thing. We are really delighted by -- of the results that you have presented. But for me, it's not only about this. Of course, last year, you consolidated the family culture to the American culture and you know how to mix efficiency and being relaxed at the same thing. So continuing this way for a long time, and we will all be happy. Nevertheless, I would like to make one reproach. In fact, it is a pity to refuse to give us by a written document. Well not the universal document, but the brochure that was -- no, I didn't receive anything. In fact, I asked for it, and I was told, yes, you will receive it by e-mail. This is not really good because I haven't received it. Maybe it's 40 pages long. Maybe it could be possible to send it to us. And I will -- it's not about, well, avoiding paper. We can take notes, but it's not easy to take notes in the dark. So really, I would like you to come back on this decision for the next general assemblies and for the rest. I was amongst the privilege members to visit your headquarters, and it's quite remarkable and very original and very adapted to the way you are heading this company. So a great thank you. Thank you for listening.

Well, thank you for your comments. We are duly noting the brochure point. And you're right to mention that the reference document, it is, I think, 334 pages long. So it is part of our policy, our CSR policy, 0 paper. And when we moved from [indiscernible] to The island at the heart of Salazar and neighborhood, we implemented a certain number of initiatives, including to drastically review the printing. So we have only 1 printer now or 1 or 2 per floors maybe not even. We have a clean desk policy. As you know, we no longer have any offices. We are all in flex office mode. So all of the offices are extremely clean. The use of paper at Pernod Ricard has very clearly gone down. For the -- we're noting for the submitting to the general assembly. Well, we'll see with the CSR teams, but it means I haven't answered to telework. The only country well culturally -- well, it's not a subject for Pernod Ricard, but rather for countries, telework in the United States is something that is anchored in their culture. And we are trying to have people come back to work, but around the world, I think there are no main issues. I think in the United States, the presence is mandatory at least 2 days in the United States. So you see in Paris, telework, and this is framework of talent, recruitment attraction. We could go up to 2 teleworking days per week with the agreement of the manager, but I think it's full almost every day, very dynamic. People want to come to work. meet one another and work together. So it is not a big issue for us unless the cultural exception of the United States.

So number two, please.

Thank you. [indiscernible]. One question. In April 2023 Pernod Ricard signed the first line of credit for EUR 2.1 billion for the -- ending at 2028 based on indexes of sustainable development. The first reducing CO2 gases, the second greenhouse gas effect and reducing water consumption by -- for the alcohol produced. In September 2023 still Pernod Ricard launched a EUR 1.2 billion, EUR 600 million for 7 years, EUR 650 million for 4 years and EUR 750 million for 10 years with 375%. In September again Pernod Ricard signed with PSI service provider for investments, the buyback of his own shares for EUR 150 million following a program of EUR 700 million for '23/'24. That's my question, how can we make compatible and in proving call for money to face these needs in CapEx and investments for growth with a buyback of your own shares that appears as a sterile operation since it consists in counseling a fraction of its own capital? Thank you.

Thank you, gentlemen, for your question. First of all, you are right to mention the fact that we had admitted what we call the green bonds is green bonds. So to show that our commitment in terms of S&R covered also our financing since we were ready to commit with bond share carriers. The obligations in terms of reducing the CO2 emissions and reducing our water consumption. So we also were the first in our industry to create this green bond -- to admit this green bond not this year, but the previous years by being pioneers in this means of access to loans or credit. For your question for the financial policy, first of all, I'd like to take advantage of this question to remind before our 4 priorities, and then I will answer to the refinancing separately. Our 4 priorities in terms of financial strategy, as you mentioned, first, CapEx is and strategic investments because this is the future of our business, and it is important to prioritize. This is why it's our priority. The second priority is to continue to strengthen the portfolio of attractive brands thus M&A to -- beyond the development of our brands for -- with an internal growth going to find attractive brands that correspond to the new consumption at the time and that are already available, but for most smaller and the distribution that we can deploy. Third priority, the payment of dividends. Of course, this is important to share the value creation and to share it with all of our stakeholders and with shareholders. The fourth priority and the last is the buyback of shares which can give back value to our shareholders and increase our result per share. The fact of accessing the market of refinancing through bonds or to cover the refinancing of our bonds that we have been working on several years. We have a maturity that is solid. We have the duration. We have no peaks in our debt and I think this is relatively well managed. And we have access to the markets, the bond market in September, as you said in what I say is very good conditions. Since we raised EUR 1.3 billion with 75%, which is higher, of course, than what we had done a few years ago, and we used part of our funds to pay back a part that was lower. So 375% in the current environment is really very good conditions, which are totally in line with the quality of the credit at Pernod Ricard, which is the objective very -- we see how stable it is with the rating agencies. On the credit line improvement of the...

That's maybe 5 now, number 5.

Hello. [indiscernible], individual shareholder. First of all, congratulations, and thank you for the excellent performance that you delivered and the good outlooks that you mentioned for next year. My question concerns rather the division of wines that Madame de Tissot qualified as mitigated. I would much like to be a party pooper, but I also noticed that you talked about 2% of decrease and 4% the previous year. Thus, could you tell us a few words about the future and the outlooks for this segment of products? And sorry for this question.

Thank you for asking the question. But well, first of all, before answering, I will not comment the rumors that you have heard or read in the press on the wine activity. If it is to say that, generally speaking, and this is in the dynamic management of our Pernod Ricard portfolio. We often wonder and ask ourselves questions about certain segments and brands for the value creation for our shareholders. For the performance of wine compared to spirits, not very good. But in the wine industry, we are not doing so bad in the reality and as you have seen in 1 of the slides I presented earlier, wine, indeed is and beer have lost market share in all of the alcohol and to the benefit, and we won't complain of spirits. So in fact, wine currently is suffering at the same time because of an overcapacity in certain regions of the world. I'm thinking of Australia mainly and this is experiencing difficulties, especially if I take the first world market, the United States because the new generations of consumers of alcoholic beverages are going towards our spirits. Now just to look at it. It represents 3% of our activity. If we look at wines and -- but believe me, this is something that we are following closely on a daily basis. We have a wine division that is really working hard in order to see if we can premiumize our range because, in fact, it's an average range and the value is -- this is this part that is not doing well. So this is a phenomenon that is for all of the wine industry, in fact.

Let's move to the next slide, maybe question number 6.

Individual shareholder. I had a question. One of your competitors, French, very well-known competitors for Cognac, presented figures during the third quarter that were bad with a negative outlook. So my question is, is it the Cognac market that is slowing down at the profit -- to the profit of other spirits, other ranges or local alcoholic beverages? Because apparently, some are doing well in certain countries. What about the Asia zone China that is slowing down and perhaps this is touching to the wide range of spirits or finally is Pernod Ricard -- has Pernod Ricard won market share?

Thank you for this question. I will come back to our strategy that I mentioned before. It is about diversifying our sources of growth. We do not want to be dependent on a brand or a segment because when we are dependent on a brand or segment, when this segment knows -- well, when it is growing, it's great, but then there's a more complicated cycle and things go wrong. So I mentioned before that concerning Pernod Ricard, 6 different segments have contributed at the height of 85% of our growth. The whole objective is to become agnostic to the cycles of these segments and specifically for Cognac. First, I would say that I'm -- I have full trust in the future of Cognac. Cognac is going through difficult times for 2 reasons. In fact, the 2 main markets of Cognac, where we have issues for the short term. The first one are the United States. In the United States, to be honest, we are less exposed to Cognac than our other competitors. During the COVID period, consumers in America really rushed on Cognac because they had purchasing power. They did -- they had the accelerated premiumization and Cognac benefited for it to such an extent that it -- we started to have a problem in terms of supply of the Cognac and this led to increases of prices that were very significant, to such an extent that consumers started to move to other categories. And if I was to name 2 [Technical Difficulty] high range also and to a lesser extent, whiskey. So the time that all this was digested -- well, we'll have a few issues for Cognac in the United States, knowing that the stores are destocking because the cost of credit and especially the cost of their BFR has increased with the increase of interest rates. If now I move to China. China strategy, Zero-COVID that, in fact, there was a very bad Chinese New Year last year. The reopening -- it reopened everything, all of the channels, et cetera. And we knew for months that were very difficult -- very high -- sorry, very high consumption. So since July, we felt a slowdown, an economic slowdown that is weighing on the trust of the Chinese consumer for several reasons. The investment -- direct investments are down by 70%, 1 person -- young person out of 5 is unemployed. The manufacturing is decreasing in China. And finally, potentially, there's a real estate prices that is going to appear. So the consumer that has money in China prefers to save it for the moment rather than consuming. As Helene mentioned it in her presentation, July and August were not very good, and we are starting to see in September a stability on the Chinese market stabilization. So the consumption for the medium term remains perfectly unchanged. So the 2 main markets of Cognac experiencing difficulties for different reasons, it is true. At Pernod Ricard, we are very happy to have this diversity in our portfolio and in the geographies.

Thank you very much. Hello. [indiscernible], individual shareholders. My first question is as follows. Summer 2023, in E.Leclerc supermarket, when I walk around the spirits, I see sign saying we're no longer distributing Pernod Ricard products. I would like to know how and why? Because even there was a promotion on Valentine. Second point, I saw your accounts earlier that Facebook sign, do you have agreements to get data from this site? And how can that work? Last point, you have a share buyback program and I saw in your diagram that there was a strong threshold around EUR 160. Can you indicate at what price you did the share buyback? And can we consider this threshold of EUR 160 as the low point?

Thank you for your questions. How can I say [indiscernible] communicated a lot on the little friction that we've had between Pernod Ricard in France and E.Leclerc concerning our price increases to be simple. We felt that our -- the price increase that we suggested were reasonable and reasoned. And I have -- will share with you a figure over the last 10 years, the price of [indiscernible] in 10 years cumulative has increased by 8% in 10 years. I think that is perfectly reasonable, especially if we look at the evolution of our cost inputs that have not increased by 8% over 10 years. They have had a 2-digit increase over the last year. After the summer, I feel that the reason was heard, and we are once again working nicely together. Concerning social media at large, not just Facebook, et cetera. Each social media has its own methodology for monetization or sharing of the data. And of course, we can work with all of them. And we tried to not have an intermediation that is in order to work directly with the social media and not through an agency, it's cheaper and it's more efficient. Concerning share buyback, well, the [indiscernible] we have done over the first quarter had to do with EUR 150 million with an average cost of EUR 170 per share.

Perfect. We have a little bit of time. Maybe we can take 2 more questions. The one at the back of the room, #7.

Hello, sir. I'm an individual shareholder. I wanted to ask you a question on the current decrease of the share by 20% [indiscernible]. Could you shed some light? Is it because of AI?

Very well concerning the decrease of the price of the share, it is not specific to Pernod Ricard, it is generalized. And as far as we're concerned, everything that is luxury brands have all incurred 20% and even up to 30% this year. I'm not going to come back to what was said earlier. But the reality is that currently, with interest rates that are very high, there are very few buyers in the market. And when some decide to sell, there's very few liquidities. So the amplification on the stock price has increased, the stock price for Pernod Ricard over the calendar year of '23. We had a great performance over the first 4 months with a historical high of EUR 218 and this was in the general euphoria of the infamous recovery and opening of China after 4 years of their Zero-COVID policy. Starting in the spring there was the increase of interest rates that has continued, and this is totally mechanical the actualized value of the future flows, the higher your actualization rate is high, the lower the value is. Of course, that's had an impact. And moreover, the economic difficulties of the Chinese market have started to scare off the investors a little bit. So it is essentially due to that. And since the beginning of the fall, 2 things. One, the investors are noticing that the interest rates, such as they are, which is rather high, are going to remain higher longer than expected. So that's the first point. And number two, it's true that at the beginning of September, when we spoke about our annual results, the forecast that we gave for the year especially for our first quarter, we were expecting a first quarter that would be moderated have -- and we were the very first ones to speak have generated a little bit of a decrease of our share price. It bounced a little bit back up today. It does happen that our greatest competitor has issued a profit warning. So they have a share price that decreased by 15% right now. So the reality is, over the medium term, we are trusting and we're going to be very simple for this year at this stage based on what we know and what we said to the market is that over the medium term, we are at the height of the range of our growth of 4% to 6% of our sales. And this year, our intention is to be rather lower in the range. For the full year, the growth will nonetheless be there.

Maybe one final question. Question number 4?

Mr. Ricard, I took the microphone a little bit late. You answered a certain number of the questions that I was going to ask you. So I'm going to be very brief. Indeed, we can note that there is an erratic change across the business sector. You said that today during the general assembly of Pernod Ricard, your main competitor has issued a profit warning. This concerns me because I think that through the various means of meeting you, you are excellent in communicating. You know how to explain the strategy. You know how to explain how you have organized the visit of your new HQ has also strengthened this idea. So I keep wondering indeed, does AI mean that at -- because at any given point, the price of a share falls, it has an effect on other companies and the intrinsic values of the company are no longer taken into account, but it's more based on noise and articles in the media that have an accelerating effect on this. I would like to have your opinion on that.

It's true that the current environment for the markets is a little bit feverish. The markets hate many different topics. They hate uncertainty. So there's a little bit of uncertainty right now. They hate even more bad surprises. And indeed, you saw a certain number of publications from various companies across various sectors. As soon as you disappoint -- as soon as you surprise them negatively, the impact on the price of the share is just amplified over the short term in a macroeconomic environment in which people are asking themselves a lot of questions. Especially on the duration of high interest rates, there are still some volatile moments ahead that we need to anticipate over the coming months. Now if we take a little bit of a step back and if we look over a longer period. And if we look at the past, I remember during the financial crisis between '08 and '09 over a period of 10 to 12 months, the world shook, the stock exchanges had dropped, et cetera, and even people across our industry, we're starting to down trade. This lasted about 10 to 12 months. And then we experienced a period of accelerated premiumization up until now. So the fundamentals that I mentioned earlier are sound. There will be ups and downs and downs, but the underlying growth of the segment in which we operate is there. So it's clear, and I've said it, there will be turbulences over the short term, but we remain perfectly serene and it's where it's good to be diversified and balanced, and it's even better to be extremely agile and adjust to the environment. And that's what our teams and our employees are doing their best to do on a daily basis. On this, I would like to suggest to wrap up the questions and answers. So I declare the session of questions with the shareholders wrapped up. And now let us move to the vote of the resolutions. This year again, the vote will be carried out on an electronic tablet. A little video is going to explain to you have to use these tablet and how to vote electronically. Video, please. [Presentation]

Let us now move to the vote of the resolutions, clarifying that the last quorum of 84.19%. Resolution 1, approval of the accounts of the fiscal year closed on the June 30, 2023. The vote is open. [Voting]

The vote is now closed. The resolution is adopted. Resolution 2 approval of the consolidated accounts of the fiscal year closed on the June 30, 2023. The vote is open. [Voting]

The vote is now closed. The resolution is adopted. Resolution 3, allocation of the revenue of the fiscal year closed on the June 30, 2023, and setting of the dividend. The vote is now open. [Voting]

The vote is closed. The resolution is adopted. Resolution for the renewal of the mandate of Mrs. Kory Sorenson, as administrator. The vote is open. [Voting]

The vote is now closed. The resolution is adopted. Resolution 5, renewal of the mandate of Mr. Philippe Petitcolin as Director. The vote is now open. [Voting]

The vote is closed. The resolution is adopted. Resolution 6, the nomination of Mr. Max Koeune, as a Director. The vote is open. [Voting]

The vote is closed. The resolution is adopted. Resolution 7, renewal of the mandate of the firm Deloitte & Associates as auditors. The vote is open. [Voting]

The vote is closed. The resolution is adopted. Resolution 8, is setting of the maximum global amount allocated to the directors in compensation for their mandates. The vote is open. [Voting]

The vote is closed. The resolution is adopted. Resolution 9, approval of the fixed and variable elements, composing the total compensation and all advantages paid or granted for 2022, 2023 to Mr. Alexandre Ricard, Chairman and CEO. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 10, approval of the policy of compensation applicable to Mr. Alexandre Ricard, Chairman and CEO. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 11, approval of the information pertaining to the compensation of each of the Executive Directors. The vote is opened. [Voting]

The vote is closed. The resolution is approved. Resolution 12, approval of the compensation policy applicable to the directors. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 13, approval of the regulated conventions. [Voting]

The vote is closed. The resolution is approved. 14th resolution, authorization granted to the Board to trade in company share. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 15, authorization for the Board of Directors to reduce the share capital by canceling treasury shares subject to a limit of 10% of the share capital. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 16, delegation of authority for the Board of Directors to increase the share capital for a maximum nominal amount of EUR 130 million, approximately 33% of the share capital with preferential subscription rights. The vote is opened. [Voting]

The vote is closed. The resolution is approved. Resolution 17, delegation of authorities for the Board of Directors to increase the share capital by a maximum amount of EUR 39 million, approximately 10% of the share capital without preferential subscription right as part of a public offer. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 18, delegation of authority for the Board of Directors to increase the number of securities to be issued in the event of a share capital increase with or without preferential subscription right subject to a limit of 15% of the initial issue carried out under the 16, 17 and 19 resolution. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 19, delegation of authority for the Board of Directors to increase the share capital by a maximum amount of EUR 39 million, approximately 10% of the share capital without preferential subscription rights through a private securities granting. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 20, delegation of authority for the Board of Directors to issue ordinary shares and/or securities granting share to the share capital of the company or any other company as a consideration for contribution in kind granted to the company subject to a limit of 10% of the share capital. The vote is open. [Voting]

The vote is closed. Resolution is approved. Resolution 21, delegation of authority for the Board of Directors to increase the share capital by a maximum nominal amount of EUR 130 million i.e., approximately 33% of the share capital by capitalization of premiums, reserves, profits or other items. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 22, delegation of authority for the Board of Directors to increase the share capital subject to a limit of 2% thereof through the reserved for members of company savings plan. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 23, delegation of authority by the Board of Directors to increase the share capital subject to a limit of 2% thereof reserved for certain categories of beneficiaries. The vote is open. [Voting]

The vote is closed. The resolution is approved. Resolution 24, powers to carry out the necessary legal formalities. The vote is open. [Voting]

The vote is closed. The resolution is approved. Nothing remaining on the agenda, I declare the meeting over at 16:29 sharp. Ladies and gentlemen, thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]