Rexel S.A. (RXL) Earnings Call Transcript & Summary

My name is Agnes Touraine. I'm Chairman of Rexel's Board of Directors. I am delighted to welcome you to the company's Annual General Meeting. On my side are Guillaume Texier, General Manager; Laurent Delabarre, Group Chief Financial Officer; Isabelle Hoepfner-Leger, Secretary General and Secretary of the Board of Directors. I declare the meeting open. First of all, let's elect the officers of the assembly. In my capacity as Chairman of the Board of Directors, I chair the meeting. The two shareholders, namely the Rexel Actionnariat Classique France represented by Mrs. Isabelle; and the Rexel Actionnariat Classique International, represented by Mr. Peter Aman, present and accepting, are appointed as scrutineers. Isabelle Hoepfner-Leger will act as Secretary. The KPMG SA and price WarehouseCoopers audit consultancies are present. The attendance sheet shows us that we have reached a quorum of 1/5 of shares entitled to vote at the Ordinary General Meeting and the quorum of 1/4 of shares entitled to vote at the Extraordinary General Meeting. The shareholders present, represent or voting by mail together on 256 million to 628 actions, and they does have voting rights. Consequently, I declare the documents required by law have been deposited in the meeting table. These documents were made available to shareholders at the registered office and were posted on Rexel's website within the required deadlines. For the sake of simplicity, we will not read the entire following reports, the Board of Directors management report on the company's activities and the 2023 annual and consolidated financial statements, the Board of Directors report on bonus shares, the Board of Directors report including detailed explanations of the proposed resolutions. The statutory auditors will be given the floor to present their reports, and we will be happy to answer any questions you may have. I would like to remind you that the Annual General Meeting has been convened to consider the agenda set out on Pages 72 to 86 of the notice of the meeting, which you received. Lastly, the company has not received any written questions or proposed resolutions -- draft resolutions, rather, or items to include on the agenda coming from shareholders. I now hand over to Guillaume Texier, Managing Director. Guillaume You have the floor.

Thank you, Chairman. Along with the [indiscernible], I would like to examine the group's financial results and put them in a historical perspective, because indeed, the performance in 2023 were historic. First of all, a record turnover of EUR 19.2 billion growth, gains in market share and our active acquisition policy over the past few years mean that our group is [indiscernible] [Euro mark], a symbolic figure that should be passed in the coming years. In 2023, we grew by 4.3% on a like-for-like basis, an excellent performance considering that we operated in a slowing market in the second half of the year. In fact, this growth was exactly in line with [indiscernible]. As for profitability, it was also a superb year if we look at the historical series. These figures have been restate for exceptional effects. And they show that since the end of COVID, we have been evolving in a range of 5.5% to 7%, so well above the 4% to 5% that used to be our standard. The reason why we have reached this milestone is because of the profound transformation of Rexel that we've carried out over the last 3 years, thanks to the addition of multiple projects that have enabled us to progress towards excellence in all areas of our business and in all countries. Finally, there is a third indicator, which is crucial for your group. The production of free cash flow, which enables us to fund our growth and pay dividends. Here again, a record level in 2023, approaching EUR 1 billion and the level of conversion of EBITDA into free cash flow higher than our targets as ever since 2019. As you can see, 2023 has enabled us to achieve historic performances testifying to the group's new profile and solidity. I would now like to hand over to Laurent Delabarre, who will give you further details.

Thank you very much, Guillaume, and hello, everyone. As mentioned in the introduction, 2023 was a record year for the group, and I'm going to tell you a little bit more about this. So let's start with Slide 8, which shows the various components of our annual performance. The turnover for 2023 is at EUR 19.2 billion, so it's risen by 2.4% on a reported basis, thanks to the positive effect of portfolio management. So we have an evolution of 4.2% and an acquisition strategy, which provides 2.7 extra percent, thanks to the WESCO operation in the Netherlands. More specifically, this good organic performance is explained by the 2% rise in volume and the price rise of 2.3%. Let's look at the trend evolution per geography. [indiscernible] has an increase of 0.1%, thanks to the electrification and the photovoltaic activity. North America increases by 4%, thanks to industrial production being brought back to these countries. Asia Pacific has a stable evolution with different [indiscernible] is doing well. But it is neutralized at a temporary situation in China. There's an overcapacity, production capacity and because of industrial automation. On Slide 9, we see the elements that have allowed us to reach an EBITDA margin that is [indiscernible] 2023. If we look at the 66 basis points effect in 2022, the adjusted EBITDA margin in 2022 was at 6.7%, and it's increased by 13 basis points to reach 6.8% in 2023, thanks to two effects. First of all, a [indiscernible] effect of 16 basis points because of the accretive effect of the WESCO acquisition in the Netherlands and the divestment of our Norwegian operations in Rexel. Secondly, the inflation operations that have allowed us to reach this level. Europe posted an adjusted EBITDA margin of 7.2%, largely as a result of the improvement in gross margin and the control of OpEx. In North America, the adjusted EBITDA margin rose to 7.4%, largely thanks to the operating leverage and productivity gains. Asia Pacific has improved significantly, reaching 3%, thanks to Asia, where internal actions have been carried out, which has allowed for a better customer credit management. On Slide 10, we can take a look at the lower part of our income statement, zooming in on other income and expenses, financial expenses, tax rates and recurring net income. Other income and expenses amount to minus EUR 45 million, breaking down as follows: EUR 24.1 million from acquisition and integration costs, EUR 12.9 million in restructuring costs, mainly to support logistics transformation. The financial expenses totaled at EUR 168 million, an increase compared to last year due to higher gross debt and higher interest rates. The effective interest rates rose to 3.7% against 2.3% in 2022. Our income tax rate stood at 26.1%, so about the same as 2022, adjusted for nonrecurring items. As a result, the recurring net income, which the dividend is based on, came to EUR 823 million as compared to EUR 912 million in 2022, which had benefited from record inflation in noncable products. So Slide 11, we have our dividend proposition for 2024 -- 2023, which will be handed out in May 2024. So EUR 1.20 per share, so 3x as much as 2016. So this means that there's a 43% distribution based on the net results. That's in line with our distribution policy. This requires your approval, and it will be one of the resolutions that will be voted soon. On Slide 12, we show the good share performance -- stock market outperformance of Rexel compared to the last 5 years. This shows that the group has good results. We are satisfied with this performance, but we consider that the valuation of the group remains attractive. And we, thus, took this opportunity to implement our share buyback plan of EUR 400 million over the period '22, '25. Since this plan was announced in June 2022, we have completed more than 55% of the program. Lastly, the dividend of EUR 1.20 per share detailed in our previous slide is in line with our capital allocation policy and highlights an attractive yield of about 5%. And now allow me to show you the sales of the first quarter 2024, that we have published this morning before the stock market opened. Let's start with the highlights of our Q1 performance. During the first 3 months of 2024, Rexel had a good performance in terms of turnover, all of the components of the evolution of ourselves were in line with what we had planned in February. Our core business of electric distribution is doing well and our order book is increasing -- the new housing and refurbishing business are doing well. And we are happy to see that Rexel's transformation is bearing fruit, and you can see this with the market share gains in many countries, linked to the increase in digital sales and thanks to our acquisition strategy. In an environment that is not as favorable, our teams are reacting to protect our margin and adapt our cost base whilst providing a quality service to our clients. On Slide 15, you can see the sharing of our sales in the first quarter, as well as the impact of sales prices for noncable products -- that the prices have remained stable. As for cables, price have gone down by 1.5% because of a basis effect that was expected, because the price of copper has reached its highest level throughout the year at the first -- during the first quarter of 2023. So let's look at different geographies. In North America, we have a good resilience of our industrial automation activities, as well as our nonresidential activity portfolio, with a good dynamic of the segments schools, entertainment, government, data centers. Our order book is increasing by more than 4% in the U.S. compared to the fourth quarter of 2023, which is a good omen, and gives us visibility for the months to come. For Europe, there's a decrease of 6.9%, which can be explained by the basis effects of the different families of electrification, including for photovoltaic in Benelux, Germany and Nordic countries. Our usual business of electric distribution have resisted better with a 3.2% decrease. In Asia Pacific, sales are going down by 7.7% because of a temporary situation of overproduction of industrial automation products in China, which translates into a pricing volume decrease. I will conclude with Slide 16 that shows us -- shows you our objectives for 2024, that we have reasserted this morning. The trends of the first quarter have been -- the negative one have been anticipated and integrated in our forecast. We should benefit from the favorable trends and improvement of basis effects in the coming quarters. We are also confident that we have the resources to adapt to a new environment in 2024, a less dynamic one. In 2024, we expect a stable to slightly positive like-for-like sales growth, with a high base effect in the first quarter, and adjusted EBITDA margin between 6.3% and 6.6%, and a free cash flow conversion in excess of 60%. I will now hand over to Guillaume, who will present the group's strategy.

Thank you, Laurent. Now I'm going to tell you about Rexel's strategy and its deployment, illustrated by several key events in 2023. Last year, I had told you about Rexel's purpose: electrifying solutions that make a sustainable future possible. And the year 2023 was the first opportunity for the group to live out this purpose on a day basis. And every word of it has [treated] it in action. The year 2023 was electrifying, both literally and figuratively. It was a year of solutions, increasingly combining advanced products and services. It was a year in which we shifted gears on sustainable development. And it was a year in which all our energies were turned towards preparing the future of Rexel and more generally, the future of our industry. As you all know, in 2022, we unveiled our strategic plan for 2025. We are more than halfway through this plan, and I felt it was important to report to you on the group's transformation, which has exceeded our expectations, both in terms of quantity and quality. As for the quality side, I already mentioned this when I commented on the historical perspective of our results. So I won't say it again. We're clearly ahead on our plan. But what's really interesting is to get into the details of how our group is evolving and improving in terms of quality, how it adds value for its customers and how its internal processes are optimizing. The Power Up '25 plan is based on three pillars. The first and most important is excellence in our fundamentals. It's about doing our historic business, our distributors business as perfectly and optimized -- as perfectly as possible in an optimized way because that's what enables us to satisfy our customers and win market shares, of course. But also because it's what underpins our profitability, which is higher than that of most companies in the sector and growing steadily, as you've just seen. So the forefront of our fundamentals is the commitment of our employees. What would Rexel be without the passion and energy of its employees? Today, there are more than 27,000 Rexel employees working on a daily basis in all of the group's businesses. Our Rexel teams believe in our project, which is why 81% -- we have a commitment rate of 81%. It's worth noting that 86% of our employees think that Rexel is concerned about respecting the environment, and 88% think that Rexel demonstrates integrity in its dealings. These figures illustrate the progress made every year, thanks to the action plans in our countries. Rexel is also committed to promoting diversity in our teams. We now have 1/3 of women in leadership roles. A figure that is up from 2023. We accelerate on diversity, and we have launched the Wire Women Network, which counts more than 4,800 women in 8 Rexel countries. Our [indiscernible] -- the drivers of the changes that currently take place. And it's our responsibility to support them so that they can support our customers. This is why we've launched our new online training platform, Skill Up, accessible to all Rexel employees that offers training paths for all business lines and enable skills enhancements in our strategic areas, such as digital electrification services and sustainable development. So our collaborators, commitments, skills and training is something that we really focus on. Second axis, expertise. And training is an [indiscernible] transition towards that topic. How can we help our customers tell the difference between products that are environmentally friendly and those that are less so, without our expertise. We want to play this part to the fall so that our industry can make an effective contribution to the energy transition. Today, our expertise lies in AI, algorithms and tools to accelerate decarbonation. For instance, we have set up the carbon tracker portal, a tool, that calculate the emissions of purchases made at Rexel. The CO2 counter calculates the CO2 emissions of products on customer pages and the CO2 impact gas with detailed information on emissions of their shopping baskets. Finally, the ECOscore rates products according to their emissions. Here are a few examples among hundreds of expertise services that we offer in our countries. Then logistics is at the heart of our value proposal. In this area, we have made major investments in 2023, notably with the opening of three robotized logistics centers. These investments are part of our ambition to triple the number of robotized distribution centers we operate. These three new ones are located in Germany, Austria and the U.K. Each of these centers has its own unique features. Indeed, in Frankfurt, we have increased our storage capacity to meet the growing demand from our customers in new geographical areas, including for new energies and photovoltaic. In Vienna, we have improved the level of service for our customers in the region and throughout the whole of Austria. Lastly, in the U.K., digital technology has enabled us to improve our performance and guarantee a delivery in 1 day, on most products. These three new products are all part of the same strategy to improve efficiency, productivity and above all, service levels. We have also expanded our logistics services, taking them even further to make it [indiscernible] in the marketplace, in all countries. For example, to the right, you can see that in the Paris region, our plus enables our customers to be delivered within 2 hours or in store at 2:00 p.m. for any order placed before midday. Our customers can also pick up their orders in Rexel boxes, available 24-hour/7 in parking lots. This unique service is meeting growing enthusiasm from our customers, who see it as a way of substantially improving efficiency. Finally, for us, fundamentals are partnership with our suppliers. And year after year, we developed a collaborative approach with them, that enables us to offer a better experience to our customers, notably by strengthening our focus on digital, advanced services or sustainable development. And in this last area of sustainable development, for example, in 2023, we launched the Rexel Sustainable Selection with over 100,000 products, that have been selected for their environmental impact and their suppliers' commitment to the Rexel supplier charter. More than 80% of our partners have signed this charter in terms of ethics, human rights, employee rights and environmental protection. So that's it. For our fundamentals, we're making progress and quickly towards excellence. The second major pillar of our strategy is to stand out compared to other distributors by being at the forefront of future trends. Our industry is at the heart of profound transformations in the world. It has a part to play. And it will only play it if its stakeholders are quick to embrace new issues and new technologies, and to champion innovative solutions that are also simple, effective and cost efficient, as well. It's our mission to do that. So this profound transformation over the world depends on us. You will find a list on this page, which is not comprehensive. And it is striking to see that it gets longer every year. Many of these trends are linked to the energy transition and sustainable development. To fight against global warming, there's only one possible way, which is to replace fossil energies by renewable energy as much as possible. That's why heat pumps are gradually replacing more traditional forms of heating, thanks to government initiatives that introduce standards and financial incentives. It's also the reason why photovoltaic energy production, often coupled with battery systems, is growing exponentially in many Rexel countries. And it's why building energy management is an extremely effective way of saving energy and it has a bright future ahead. But beyond sustainable development, which is very important, there are other fundamental trends in our markets that represent opportunities for us. For example, the relocation of supply chains in Europe and in the U.S. This means that we are seeing a reindustrialization of our markets, the growing need for automation, or the growth in the use of data and AI is resulting in strong demand in our weak current activities. Finally, all of these uses require a strengthened and modernized electrical infrastructure. And here, too, we have part to play. Today, we estimate that these mega trends account for just over 20% of our turnover out of EUR 4 billion -- or EUR 4 billion rather, an increase of 36% in one year. And this share of our business will undoubtedly continue to grow in the future. To accelerate our growth in these fields, we are creating teams of experts and new technologies in the field to help our own customers, and we are actively strengthening our positions through strategic acquisitions in these forward-looking areas. When we speak of the future, we have to zoom into sustainable development, of course. And you know Rexel's ambition is to be at the forefront of sustainable development, both because it's our responsibility and because it's what our customers are increasingly asking for. This is why we have defined the precise corporate projects on these topics based on four pillars and very concrete action on daily basis. First, a planet pillar focused on achieving our climate objectives and growing our sales of electrification products. This means installing photovoltaic panels, recharging stations and energy-saving systems in our buildings, as well as managing our waste, an important subject for us. Second pillar, employee pillar with strong aspirations in terms of diversity and training of our employees, in terms of sustainable development. 83% of our employees attended what we call Climate School last year. Partner's pillar, talking about our suppliers, applying active [indiscernible] with the suppliers on these topics. I talked about this a few slides ago. And lastly, an ethics pillar by actively continuing to train employees in compliance issues. About the first pillar, the planet. We have set ourselves ambitious targets for 2030 and 2050, including a 60% reduction in Scope 1 and 2 and a 45% reduction in Scope 3 by 2030, which has been validated and approved by the science-based target initiative. I'm happy to confirm that our trajectory is well in line with our objectives. As we are now, we now say that minus 32%, minus 22%, respectively, compared to 2016, with minus 10% and minus 13%, respectively, for 2023 alone. On the right-hand side of the slide, you can see some concrete examples of actions that have allowed us to achieve these results, which is the energy performance of our new distribution center in Ireland, one of the most efficient buildings in the country. With the progressive electrification of our vehicles, including delivery vehicles, for example, in the U.K., not to come back to sustainable selection already mentioned. In this field, again, helping our clients adapt for the future. Here, you can see the rapid rise of digitization in our businesses, which has made Rexel a leading B2B player with digital technology now at the heart of our offerings and platforms. Our digital sales already reached nearly EUR 5.3 billion. And we aim to continue growing this year significantly to reach 40% of our sales by 2025. Our digital sales are growing strongly by more than 16% from 2022 to 2023. This slide also shows some key indicators and give you an idea of the breadth and depth of our digitization. Digital technology allows us to guarantee more than 3,000 part numbers in our branches on day 0 and our entire product brand available in Europe D+1. We're strengthening continuously our AI tools for customers. Even though AI is the talk of the town, has been for a year, we've been working on this at Rexel. And you've heard about this in previous general meetings. We've been working on it for years. Lastly, last element for the future, advanced and innovative services. It's your group's strong point to be able to offer not just products, but complete solutions and bring added value to our clients. Our extensive, highly developed portfolio of services is centered around 6 plugs, which you can find on this slide, logistics, sustainable development, expertise, digital technology, product integration and finance. Take logistics, for example. We offer tailor-made supply chain services to our customers and branch offices or on size preparation [indiscernible], or technical configuration. Offering services also means going further with the products. We do this hundreds of expertise services, including energy audits of service security, to help clients define the technical solution that meets their needs exactly, especially when these needs are highly technical as for industrial automation in the U.S., Canada or France. Lastly, partnership with expert organization. So we offer our customers financing, insurance and leasing services for complex projects such as solar-powered furnace or assistance in raising, public funding in different countries. These are just a few examples of hundreds we offer in our countries, and further enriching this catalog is a strategic area of transformation for us. And lastly, last pillar of Power Up 2025 is about using all our levers of action, including strong points to accelerate the implementation of our strategy. In particular, sharing best practices between countries, a strong acquisition and consolidation drive or momentum and a culture of constant innovation in the service of our customers and employees. About sharing best practices, we're proud to capitalize on the strengths of everyone in our 19 countries. Since 2022, we have created 14 communities, since 2022, bringing together [200 members] to share know-how and experience and initiate new offers. The aim of these communities is to identify the best initiatives launched in different countries to drive inspiration from them to launch new services and innovations in other countries. This is how we can rely on our presence in 19 countries. In terms of acquisition, we're continuing to accelerate our growth with an acquisition strategy in adjacent growth markets, such as HVAC, solar and datacom, as you can see on Slide 33. This is how we reach EUR 2.3 billion in additional sales since 2022, thanks to 11 successful acquisitions. For example, we acquired Mayor and Buckle Smith, which allows to strengthen our position in our traditional markets, and WESCO in the Netherlands to grow on the Dutch heat pump market. These acquisitions are among our growth drivers on the successful integrations and significant synergies and cost savings. This morning, we announced a new acquisition in France, which is subject to the approval of the competition authorities in the field of security materials. And lastly, innovation is at the hardware strategy and allows us to make a difference, which in curiosity and initiatives are at the heart of our DNA. The four examples you see here, whether circularity, the use of AI robots in our operations or augmented reality, have in common, that they are local initiatives, truly innovative and offering a different use of technology for the benefit of our customers and employees. To conclude this action, I would say that all the conditions are in place to continue on the path to sustainable growth. 2023 was a record year. But as you have seen, it enabled us to deepen Rexel's transformation and to -- and prepare for a very promising future on accelerating markets. This is why we see 2024 as point year on our markets as a year of confirmation and differentiation and hence, a year of opportunity. And I'd like now to hand over to Agnes Touraine, who will introduce you to Rexel's corporate government on executive compensation.

Thank you very much, Guillaume. Okay. So now talking about governance. I was appointed Chairman of Rexel's Board of Directors on September 1, 2023, replacing Ian Meakins, who resigned to take up the position of Chairman of Unilever. I was a member of the Board since 2017, and was an independent Lead Director and Vice Chairman of the Board since 2023. Your company uses best practices with the Committee Board, and 95% [indiscernible] rate in 2023. Of course, there were some illnesses. So I can't say, that without that, we'd be close to 100%. So we have a remarkable team spirit in our Board, as shown by the smooth transition after Ian Meakins' departure. It's a tight knit board with 11 members, including 4 women, 2 directors representing employees and 8 independent directors. We met 12 times in 2023, and the directors have been highly available and every meeting was prepared with utmost professionalism. And once again, there are discussions during our Board meetings that are highly constructive. All directors are on the front row here, except for Steve Borges, who is in the U.S. and who is listening to us online on our website, for personal reasons. And I want to thank warmly all directors for their contributions and what they bring to the efficient operation of the Board. We also have complementary skills from finance to digital, SG service and retail. All directors have value at Rexel. Let me also highlight our international exposure with 4 directors of four nationality. This mix of culture experience contributes to the different strategic approaches of the group. About our committees. So the three Board committees are chaired by independent directors, which is compliant with best practices. They issue recommendations -- they make recommendations to the Board before decisions are taken, each in its own area of competence. CSR is at the heart of Rexel strategy. And the Board decided at the close of last year's AGM to create a CSR committee, and it was touched to the appointments, governance and committee. So it's now the called the [indiscernible] , governance and CSR committee. And the six members, 80% in [indiscernible] at five times last year with a 90% attendance rate. And then we have the Compensation Committee with five members, all independent. I mean five times last year with an attendance rate of 87%, once again because of illness. Lastly, the Audit Risk Committee has six members, 83% of whom are independent and met five times in 2023, with an attendance rate of 97%. And I would also like to share with you the conclusions of the Board. Every 3 years, we have an outside evaluation and we have an internal evaluation in between. It was [conducted] by Egon Zander, an international consultant, independent -- external international consultant. The findings underline the adaptability and chief merit of the Board and committee members and the progress made since the previous assessment. This has allowed us to upgrade our governance and successfully transition to a new Chairman of the Board. For the future directors, suggests we maintain every strategic skills and skills specific to finance and energy in view of our activities and market positioning. And this is why we suggest appointing Catherine Vandenborre and Eric Labaye. About Eric Labaye, as you know Francois Henrot resigned from his director's functions at the end of this AGM. One year before the end of his term. He had joined the Board at end of 2013, where he was the reference Independent Director [indiscernible], traditionally. On behalf of the Board and all of you, we want to thank him warmly for his involvement, his loyalty and great contributions over all the years. As part of the Board of Directors' succession plan, the Board had already identified the need for additional expertise to adapt to the market evolution. So we subject appointing the following new directors, Eric Labaye, the Co-Founder and Chairman of IDEL Partners since 2023. He was Chairman of the Board of Directors of École Polytechnique from 2018 to '23, and Senior Associate Director in McKinsey from 1985. He will bring to the Board his expertise and strategy and innovation. I've said it all, but go ahead and introduce yourself, Eric, Labaye.

Good morning. Thank you very much for your introduction. Just a few words. I have 30 years of experience at McKinsey, where I worked for clients in technology, telecom and [IT mostly], and also industry, energy in transportation and also on strategic and innovation issues, how to digitize. That was a big topic, how to grow digital, had a trends from the company, and worked on [indiscernible]. I was also the President of the McKinsey Global Institute. So I worked on productivity questions and major global trends, geopolitical and industrial trends. I also spent 9 years at Board of McKinsey, the Global Board in charge of the client committee, which determines the development strategy, new services, clients and geographies. So of the developments over the last 15, 12 years at McKinsey. And I just mentioned in the last 5 years, I was President of the IDEL and École Polytechnique. The idea was to develop the [indiscernible]. It's in the top 40 worldwide with 4 other schools on [indiscernible] Polytechnique, to have a leader, which is on the edge of training and innovation and research. And we implemented several interdisciplinary centers, including one on climate. Energy for climate research, one on AI, and one on the impact on business, between academics and impact and also materials, raw materials, more and more important. And lastly, I also worked a lot on economic development and questions. I was appointed by the Prime Minister of France to chair the committee, monitoring forward-looking investments. All the investments made by the government to get France ready for 2030 and 2050. I'm very happy to join the Board of Rexel.

Thank you, Eric, and welcome if the Board approves. And Catherine Vandenborre has been Elia's Interim CEO. She used to be CFO of the group, she is Belgian. From 2005 to 2012, she was Managing Director [indiscernible] of Belpex and a member of the Executive Committee of APX-ENDEX. I can't really tell you much more, but it's an Anglo-Dutch gas electricity company. She will bring to Rexel her knowledge of the electricity sector and her financial expertise. And now I invite her to tell you more things, we're very happy to welcome such a competent personal, component in electricity, if the Board approves.

Thank you, Madam Chairman. Good morning, everyone. It's such an honor to stand here before you today to tell you more about my background and who I am. I'm currently, like Agnes said, an Interim CEO of Elia, which manages electricity in Belgium and Germany. We are massively investing in infrastructure to transport electricity, and we manage the delivery systems in our countries. So we have geopolitical interest, energy is highly sensitive industry, especially since the Ukrainian crisis, we want to increase Europe's electrical independence. So there's a massive shift towards renewable energy, especially for the purpose of protecting the climate. And also financing is important, funding infrastructure takes a lot of money. And we need to find creative ways to do that. There's also risk management issues where -- and efficiency issues as well. In feels having to do with managing electrical networks, we have to seek out flexible and consumption more and more, especially with electrical cars and heat pumps -- you're all aware of that, of course, your company. [India] works mostly in Belgium and Germany, but well -- also in the U.K. and in the United States of America, we are listed on Euro next to Brussels, where in the [indiscernible] index comparable to [indiscernible]. I am an interim CEO. I'm not going to be replaced as soon as they find the new CEO, and I will return to my position as a CFO. In the past, I managed platforms in energy training, and origin guarantee, and green certificate that was Belpex and APX-ENDEX and are about, as of experience in the [indiscernible] industry, I worked several years there, and also in auditing. In terms of terms in boards, I am currently a Director of a telecom company called Proximus in Belgium. I'm also the Chairman of the Audit Committee. And I was a Director in air transportation company, Brussels Airlines, a subsidiary of [indiscernible] where the Belgian government had asked me to take a position as director during COVID and when funds were invested by the government to support the company. That's it. Thank you very much.

Thank you, Catherine. Once again, welcome if the directors approve. We will have a program for on-boarding new directors. It's already established and will allow Eric and Catherine to move fully and quickly to the heart of their mission. We also proposed reappointing to Brigitte Cantaloube as an independent director. Her term is coming up for renewal. She was first appointed in 2020. The Board has praised the wealth of her contributions, the diversity of her skills, and her indepth knowledge of Rexel. Brigitte has chaired the Compensation Committee since September 2023. If you approve these points and renewals, the Board will comprise of members, as many women as men and 80% in [indiscernible] directors. The Board of Directors meeting to be held after this AGM will be a second from the composition of the committees and to update its internal rules. In conclusion, I would like to assure you once again of the quality of your group's governance with a constructive and vigilant board of directors, supporting a high quality and efficient management team, as illustrated by the excellent results for 2023. Let's move on to a review of executive compensation. Regarding the conversation of directors, I would like to tell you about the continuity of our compensation policy that has not changed in many years already, and that is aligned with good practices and policies. And there are a few points to highlight. The compensation policy aims at attracting and retaining quality directors so that you can have the best policy for dividends. It takes into account the interest of various stakeholders in particular, CSR issues because Rexel has a long history of commitment and involvement and of course, because CSR is at the heart of our strategy. Of course, it is in line with the MDF code. Finally, let me remind you that, remuneration is subject to your ex ante and ex post approval. You will, therefore be, as [indiscernible] resolution 5 11 22 regarding the free share plan, the [indiscernible] plan, that I will tell you about as well. First of all, I'll start with the Chairmanship of the Board of Directors. We've had two Chairman in 2023, which, of course, means that there are extra resolution. So let's start with [indiscernible] He was Chairman of the Board of Directors until August 31, has ex both remuneration of EUR 200,000 for 2023, in line with the remuneration policy. And Resolution 9. As for me, at the time of my appointment, my fixed remuneration was set at EUR 400,000 by the Remuneration Committee as recommended by the Board of Directors. It was set taking into account market practices in accordance with the remuneration policy that you approved, which amounts to a maximum of EUR 500,000. As a reminder, Iam Meakins remuneration had been reduced from EUR 500,000 to EUR 300,000 in 2021 due to his concurrent appointment as Chairman of the Compass Group for '23. And say on [indiscernible] post prorata temporis from September to December 31, 2023, Resolution 10, [indiscernible], EUR 133,000 for the period of September to December 2023. For 2024, NSA on Pay ex ante Resolution 5, the Board decided to maintain my fixed remuneration at EUR 400,000. Let's continue with the remuneration policy of Board members. It has been unchanged since 2014, I think. And of course, it remains unchanged for '24, which is in line with Resolution 6. The remuneration is detailed on the slide. It comprises a fixed portion and a variable portion linked to the directors attendance at Committee meetings. The total annual remuneration package allocated by the general meeting has remained unchanged since 2014. It amounts to EUR 1,315,000. In 2023, only EUR 916,850 was paid to directors. As for Guillaume Texier, General Manager, his remuneration for 2024, this slide is exposed. It gives you a comprehensive idea of the elements that are due for 2023. They're in line with the remuneration policy that was approved last year. The fixed remuneration is EUR 800,000 for the duration of his mandate, the variable portion, which is depending on financial performance and individual performance was set at EUR 974,000 because the bonus was at 101% because of an excellent year 2023. Based on financial performance, for the variable performance, 70%, the goals were passed to reach 106.20%. As for the individual performance criteria, 30%, the Board of Directors has assessed the majority of objectives reached very positive and the level of performance is at 90.5%. Let me present this in more details. As for the performance portion, Guillaume Texier was granted 106,000 performance shares in April 2023 valued at EUR 1,758,540 at the grand day, taking into account the IFRS 2 fair value of EUR 16.5 from EUR 59 per share. The vesting period for these shares is 3 years. As for Guillaume Texier's variable compensation, you can see how these are granted on the slide. With regards to the nonfinancial portion that was presented earlier. No, the financial portion was presented earlier. As for the nonfinancial portion, for digital, the target was 85% achieved for strategy, 95% achieved for ECG, 97%; and for talents, 85% achieved. And you have on the slide the different points of these indicators. So a total weighted attainment level of 90.5%. The details of the performance indicators for each of these objectives is set out in the 2023 universal registration document. We ask you to approve Guillaume Texier's variable compensation, which is fully deserved in view of the excellent work and results achieved by Guillaume Texier and his teams. Now moving on to Guillaume Texier's compensation for the ex ante pay for 2024. Of course, the 2024 policy is unchanged compared to 2023. And since his appointment on the 1st of September 2021, consists of the volume components, fixed remuneration of EUR 800,000, short-term variable compensation in 2024, which may not exceed 120% of fixed compensation to a maximum amount of EUR 960,000. As you well know, this variable compensation depends on financial targets and individual objectives for [indiscernible] 30%, respectively. So for the financial targets, 40% on gross margin target volume, 40% on volume adjusted EBITDA target, 20% based on an average operating working capital requirements targets. For individual objectives for 2024. So worth 30%, 25% on ESG objectives, 25% on operational excellence targets, 25% on strategy and digital objectives, 25% on challenge objectives. As for the long-term variable compensation, 24 27 to recognize sustainable performance the -- and as we said earlier, the Board of Directors awards performance [indiscernible]. I will give you more details on the following slide. On the NTI, the vesting periods of 3 years, the [indiscernible] may not exceed 100% of the fixed and variable annual compensation. As for the other elements of compensation, the financial scheme benefits and guide and severance pay shown on this slide are unchanged for the duration of the term of office and are detailed like the other items in the universal registration document. I mentioned the long-term variable compensation earlier, 2 years, we ask you to approve the resolution concerning free shares awarded to key beneficiaries of the company selected on a rigorous basis. This is Resolution 22. In a competitive market like ours, we need to retain our talents. Our free share plan is an effective 3-year retention and loyalty tool. Our free shares are granted to a significant number of employees, over 1,000 key employees within Rexel. They include a 3-year vesting period with no lockup period for all beneficiaries and two very distinct plans: a performance plan and a present plan. The latter may not account for more than 20% of the total and may not involve more than 900 shares per beneficiary. Here again, it's important to note that the performance plan should retain the much [indiscernible] collaborators at all levels. What matters is the performance criteria in their weights that take into account the objectives and forecast communicated to the markets within the framework of the financial communication of Rexel. The performance criteria and their weights are: the average annual EBIT -- EBITDA growth rates, 40%; the average free cash flow before interest and taxes on EBITDA ratio, 20%; the Rexel share performance relative to the SBF 120 GR index, 20%; and ESG Index composed of 4 internal criteria relating to the implementation of the company's core social responsibility policy worth 20%. The performance level relative to this internal performance criteria, our assets at the end of the 3-year period and correspond to the average annual performance. The level of performance related to Rexel's shares is also assessed at the end of the 3-year period. The expected level of achievement in the performance achieved, I communicated very clearly in your exposed [indiscernible] in the universal registration document. The financial objectives of the free share plan are not communicated in detail ante for reasons of confidentiality. You will see that the stock market and ESG index objectives are communicated ex ante as they trigger thresholds and ceilings for the first year. All this information is detailed in Section 3.2.1.6 under summary tables of the remuneration policy for the 2024 financial year, Say on pay ex ante of the 2023 universal registration document. I will now hand over to Eric Jake, he will tell you about the statutory auditor's report. Thank you for your attention. This information is sometimes a little boring, but of course, it's important for our company.

Thank you, Madam Chairman. Ladies and gentlemen, shareholders, good morning. On behalf of the Board of statutory auditors, PwC and KPMG, I would like to report to you on our audit assignment for the year ended December 31, 2023. And on the reports, we have drawn up for you in connection with today's ordinary and extraordinary shareholders' meetings. In accordance with the custom of this general meeting, I will summarize them rather than to read them entirely. In compliance with French auditing standards, our responsibility is to express an opinion on these consolidated financial statements based on our audit. We want to ensure that there is no significant anomaly that the financial standards are respected and that the laws in force are respected. The consolidated financial statements of your company were prepared in accordance with the IFRS standards as adopted by the European Union. As far as the annual financial statement, they haven't prepared in accordance with French accounting principles. Our approach is tailored to the group's organization and activities. We have also checked operations as well as exceptional transactions such as acquisitions, divestments, restructuring or financial operations. Our findings were presented in a report to the Audit and Risk Committee and to the Board of Directors on February 13 and 14, 2024. In accordance with the French Code of Commerce, we draw your attention in our report to what we consider to be key highlights in the report linked to the risks of material misstatements that we've identified based on three criteria: one, their relative significance in the financial statements; two, the complexity of their assessment; and three, the extent of our judgment in assessing them. For the consolidated financial statements, this involves sustainably coverable amount of goodwill and the assessment of supplier discounts. With regards to annual financial statements, these are as follows: the valuation of equity investments. We have also carried out the specific checks required by law. So checking the Board of Directors management report, and they find the presentation of the annual and consolidated financial statements in the single European electronics reporting format known as ESEF. In conclusion, we certify without reserves the financial statements of Rexel SA and its consolidated financial statements in our cadence with the first and second resolutions of your meeting. Regarding our report on regulated agreements. We have been advised that no agreements have been authorized or entered into during the year. Regarding the report of one of the statutory auditors appointed as independent third party on the consolidated statement of nonfinancial performance included in the management report. The objective of our segment is to obtain a moderate assurance on the compliance of the separation and the sincerity of the information provided, i.e., policy results and in particular, certain key performance indicators. Based on our review, nothing has come to our attention that causes us to believe that the accompanying information is not prepared, that could call into question the sincerity of this document. Regarding the resolution under the extraordinary part of your Annual General Meeting, we have issued four reports covering Resolutions 15 to 22. And these are the following operations. So reducing capital by [indiscernible] shares purchased up to 10% of share capital for a period of 18 months. The issuance of ordinary shares and/or other securities giving access to the company's capital reserve for members of -- a savings planned by the Board, the issuing of ordinary shares for certain [indiscernible] categories of beneficiaries and the allocation of existing or future bonus shares. We have no comments or observations to make on the terms and conditions described in the Board of Directors report in respect of the evolvement in transactions. If necessary, we will issue an additional report on the use of these authorizations, including an examination of the conditions for determining the issue price. This is the conclusion of my report. [Statements in English on this transcript were spoken by an interpreter present on the live call.]