SEB SA (SK) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Stanislas and myself and everybody at SEB, we are delighted to welcome you today for this Capital Market Day dedicated to our ESG strategy. Stanislas and the teams are going to take you through our realizations and objectives. But before that, I wanted to share with you a couple of ideas that reflect not only on the journey that we have gone through, but also on the future we are building. One, today, we're celebrating our legacy, a 167 years of impact, [indiscernible] bad. Groupe SEB history is a testament to resilience and innovation, driven by a mission to improve the daily life of our consumers since 1857. Over generations, our products have touched millions of households worldwide, bringing to them convenience, joy, empowering them to live better from Europe and America to Asia and Africa. We have always remained true to our founding values while continuously adapting to the needs of a changing world. But if durability, repairability, our words, which are -- which have become very popular today, they represent concepts which were already put in practice by our founder, Antoine Lescure, when [indiscernible] in the middle of the 19th century, he was repairing culinary utensils around France. Repairability is indeed part of our DNA. And today, with 95% of our electrical products designed to be repairable with champion circularity. Two, sustainability is at the core for decarbonizing for tomorrow. Groupe SEB has taken bold steps towards sustainability, reducing greenhouse gas emissions from logistics by 40% since 2013 and energy consumption industrial sites by 30% since 2010. Our goal, carbon neutrality by 2050. Milestones like the recent installation of a biomass boiler in our factory in Pont-Évêque, by the way, the only factory, iron factory in Europe, demonstrate our determination to improve dramatically our contribution to a better environment. In addition, we know that the most important factor of energy saving is by reducing the energy consumption of our products when utilized by the consumers, more efficient, smarter appliances, but also change of habits of the consumer themselves will be paramount in the future. Three, global impact with local roots. The environmental situation is not at all the same in all countries. This is why across regions, our initiatives are tailored to local needs and priorities, promoting healthy cooking in Latin America, supporting sustainability goals in China, advancing green logistics in Europe and so on. We strongly believe that as the world leader of the small domestic equipment, but more importantly, the local leader in most of the countries in which we operate, we must set the tone and be at the avant-garde of our industry, and this is what we will continue to do. Progress is inclusive. We see our role as a company, which contributes to uplift communities, ensuring that no one is left behind in the overall journey towards sustainability, like products dedicated to the specific needs of consumers because of their age or their physical or mental condition. Finally, we cannot envisage our future and our development without thinking about our place in the society in all our communities. Helping people escape from exclusion is a cause in which all our companies around the world are involved, providing programs in 4 dimensions: education, employment, housing or health. My fourth point is on innovation, which will definitely drive the future. You know that innovation has always been the engine of Groupe SEB's growth, inventing new products and solutions to answer the needs of the consumers very often even before they have thought about them. These needs are changing, new trends in consumption like fitness, age, health, but more and more needs coming from the desire of the consumers to contribute to a better world. Smart cooking appliances that reduce food waste to air purifiers tackling urban pollution, products made of recycled materials, products that are purchased secondhand. This is an extraordinary chance for our industry, which will lead to tremendous opportunities. Innovation clearly will be the key factor, both in terms of technologies and in terms of marketing initiatives. Finally, a bold vision for progress. Our ambition extends beyond numbers. We aim to enrich lives, prove that sustainability and profitability coexists and inspire trust in business as a force of good. Guided by the principle when we know better, we do better, we are committed to leading with integrity, purpose and innovation. Together with our employees, partners, stakeholders and you, our investors, we are shaping a future where innovation and sustainability go hand in hand. Groupe SEB remains an architect of progress, building a legacy that will make life better for generations to come. Thank you very much. And now I turn on to Stanislas.

Thank you very much, Thierry, for these inspiring words and vision. Now before we get on the meat of the day, what I suggest is we look at the video that embraces the key dimensions of our sustainability strategy. Video, please? [Presentation]

Allow me to welcome on stage the [indiscernible] Delphine Segura Vaylet, in charge of Human Resources; Richard Lelievre, in charge of Industries; Cyril Buxtorf, in charge of Products and Innovation; Olivier Casanova, in charge of Finance; and our Sustainable Development Director, [Juliette Sicot-Crevet], who is known as one of the architects of this day. Now our Chairman's message perfectly encapsulates what guides Groupe SEB: innovation, sustainability and making life better for millions around the world. These elements form the bedrock of our ESG strategy and are central to everything we'll be discussing today. Now I will walk you through together with the leadership team, our journey, our achievements and our ambitious road map. And the starting point on everything is our mission. That's pretty simple. Our mission drives our ESG commitments, and our ESG commitments are totally embedded in our mission. Now what is it? In fact, our mission is to make consumers' everyday lives easier and more enjoyable. And we want by doing that to contribute to better living all around the world, 2 simple sentences. But the first one that I will comment on is, it actually is focused on consumers and consumer re-adhere to that mission. Consumers crave and aspire to get more of our products, more of our innovative products, more sustainable products in our innovations. This is what makes our industry magic because consumer -- we contribute to a better living for consumers. But it's also timeless. That mission was valid 100 years ago and will probably be valid in 50 or 100 years from now. And this mission drives and organizes our ESG strategy. When we say, contribute to better living around the world or around the world, that drives the need for more durable and more secular products and solutions that drive for strong advise and strong input on healthy and homemade cooking, that drives for working on health and well-being in our employees, in our consumers, in all our stockholders as a key dimension of their personal and collective development. This, of course, drives a lot of things on ethics, on diversity, on inclusion. And last, of course, due diligence and strong pressure or tension on our supply chain to make our world less carbon-intensive world. Now before delving into the future, let's have a flashback on what happened in the long and rich story of Groupe SEB when it comes to sustainable development. Thierry mentioned, it all started with Antoine Lescure back in 1857. He was repairing kitchen -- cooking utensils. And this is the DNA of the group. And since then, the group has always been at the forefront of the needs and of the expectations of sustainable development. And I would say, way and long before that became popular or something to look at or to take care of, we created diverse offers, sustainable development department back 20 years ago. We've had in the last 20, 30 years, a lot of breakthrough milestones initiatives. We've developed this repairability strategy. As an anecdote, the word, reparability which in French means réparabilité, became -- was invented by Groupe SEB and became part of the French dictionary, order initiative. We've been promoters of using recycled materials in our products very early on, and we are quite advanced on that front. We've been developing refurbishment programs on the back of the reparability strategy. We are pushing and promoting the use of renewable energy as and when feasible and appropriate. In short, we give ourselves an ambition. We set ourselves high targets and we don't hesitate to take bold actions and bold initiatives to execute those ambitions. Now, when we look at what's ahead of us, we have built our 2030 ESG ambition that will be developed by the team right now for a greater impact on all the items and all the matters I've talked about. But before looking at the near future, let's look at what we've done in the near past. We set ourselves back in 2018, bold ambitions for the 5 years, 2018 to 2023. It was the first time that we had SBTi approved carbon emission reduction objectives. And when we look at the 20-odd KPIs we set ourselves in 2018, we have an average achievement score of 119% at the end of 2023, with most of those 20 KPIs being at around or above 100%. So it's a great testimony of the fact that not only we set ourselves demanding ambitions back 6 years ago, but we've been able to beat them. And let me give a few examples of those examples -- of those achievements, sorry. It is about gender parity. Today, 43% of our employees are female and 42% of our managers are female, could still do a bit better, but we're almost there. It is about reduction of lost time incidents. We set ourselves back in '18 a target of below 1, we reached 0.7, lost time injury or lost time incidents by million of worked hours in 2023, coming from 2.6, so very, very significant improvement, and that's key for securing the health of our employees in our factories, in our stores and in our headquarters. We set ourselves an ambition to increase substantially the use of recycled materials, and we've reached 48% in 2023 on this topic, and we set ourselves very aggressive carbon emissions reductions on Scope 1 and 2 with a 40% reduction of carbon intensity that was achieved in 2023. And last, as a recognition, I didn't list all of them, but we know that our company's performance is ranked pretty high by quite a few of those rating agencies that follow and track our performance and our records on that front. Now looking forward to the future, we -- one of the things that will be apparent through the presentation is that for us, there is not a company strategy and an ESG strategy. The Group has developed and shared with you a year ago in our Capital Market Day, December 14 last year, a growth strategy. And we are supporting that growth strategy with a very strong ESG road map. The ESG road map, the ESG strategy is part of the Group growth strategy, and the Group growth strategy depends on the ESG road map and strategy to be executed. Now what is the strategy? It is about growth. It is about strengthening our leadership in the world of consumer goods. It is about becoming a reference player in professional. These both ventures or ambitions are sustained or supported by a strong push on innovation, a strong push on operational excellence. And in fact, we embed the ESG strategy at every level on product design. We'll talk about eco-design. On supply chain management, of course, we reckon and we want to prove and we know that sustainability can be synonymous to profitability, sustainable development can be synonymous to profitable growth. Looking forward, it's going to be around increasing the use of recycled materials. It's going to be around increasing the use of renewable energies, increasing, developing, breaking through our circular economy models, all this with this double goal of meeting a very strong ESG ambition and at the same time, being able to drive profitable growth for our business. Now I will hand it over to Juliette Sicot-Crevet that will take us through the pillars of our ESG strategy.

Thank you, Stanislas. To deliver greater impact and value creation at the same time, we have structured our new ESG ambition around 4 pillars. All 4 are embedded at the center of our business activities and all of them do support our company mission. Acting responsibly and ethically in business is absolutely fundamental. It cascades into all our company policies, and it is the foundation of all ESG pillars. The Act for nature pillar includes our commitment, not only for climate but for nature as well. Both are cornerstone, and we plan to increase our ambition. Acting as a leader in circular economy is the strongest levers of both impact and value creation for the group. On this pillar, we will pursue the efforts undertaken in many areas and we will invest in new initiatives. Act for all is a must for our group. Not only we want to do more for our employees, but also we want to engage and work with suppliers. We want to do more proactively and responsibly for our consumers and the communities. Over the coming years, you can count with us to collectively strive to deliver with excellence on these 4 pillars. This will contribute to maintain our brands and product attractiveness with retailers and consumers. This will also contribute to engage further our employees and make them proud. And this will obviously make us keep up building a very strong extra financial performance for the group, alongside its financial one. Now let's review our 2030 targets and action plans. We will start with act for nature. We'll follow with circular economy and act for all. The Group has been engaged into fighting global warming for many years already. I can quote that we have been CDPA for several years in a row. I can also quote that we had our first commitment with SBTi back in 2018, and we did mobilize ourselves and we did deliver on Scope 1 and 2, which as Stanislas mentioned, where we achieved our decarbonation target by 2023. We have also, on Scope 3, improved the efficiency of our products, thanks to technical solutions at design phase. Now you have understood that we want to go further, and we want to accelerate our decarbonation. The vision that we have for 2050 is we want to be net zero, and we want to continue to reduce our impact on the environment. We will do that with more and more demanding targets on climate, water and substances. Starting with our carbon ambition, let me remind you that the carbon footprint of our group is of 80 million ton of CO2 equivalent. As you can see, there are about 80.5% in what we call Scope 3, which are the indirect emissions, which is quite common for an international consumer good companies like us. In the Scope 3, the vast majority are into 2 categories. The first one is all the emissions linked to the purchasing of materials accounting for about 31%. The second, and by far, largest chunk, representing 64% is related to the use of the product that we sell and the energy consumed by the consumers. In the coming years, we will particularly intensify our efforts on these 2 categories. I'd like to mention that even though they do represent a small portion of the footprint, our Scope 1 and 2 emissions do represent an important priority for us because these are emissions that are in our control, and we think that this is our responsibility to continue to decarbonate them. Now you have understood that we really want to step up our decarbonization trajectory. After our first commitment with SBTi, today, we are very happy to announce that we've just been approved by the SBTi with our trajectories near term and long term to be at net zero. And this is really a continued commitment to decarbonization of our emissions. On our way to net zero by 2050, we have set challenging though we think realistically achievable targets for 2030. We want to continue to decarbonate the emission coming from our production sites all over the world by 42% in absolute terms. For the Scope 3, everything related to our product activities, purchasing of materials, logistics of our products, our product usage. We have set an objective of minus 25% to be achieved by 2030. This considers decarbonation adapted to different level of maturities by country or by consumers over the world, which is impacting the pace of the decarbonation of Scope 3. I'll let now Richard drive you through how we are going to achieve those targets.

Thank you, Juliette. So to achieve our ambition goal of 42% reduction in Scope 1 and 2 emissions, despite our anticipated growth, we have implemented a threefold strategy, deploy in the following order. First, a strong emphasis on energy sobriety as the best energy is still the energy we do not consume. Second, a plan for modernization and electrification of our largest energy-consuming equipment. Third, an ambition to deploy renewable energy with a specific focus on our most carbon-intensive locations. I will now provide detailed example of these plans. First, we aim to anchor energy efficiency into our process and insights. In this plan, we will leverage 2 strong assets of the group. Our energy management system, all our sites are today ISO 50001 certified or follow equivalent standard for the smaller one. The deployment -- second, the deployment of a digital monitoring tool developed internally. This tool monitor consumption at the equipment level and enable the development of highly detailed action plan to save energy. In 2024, we have already achieved 20% energy saving within the last 24 months at the site where we have deployed the tool. By 2027, we will roll out this tool, and we aim to cover more than 90% of our energy consumption with this tool by 2027. The second lever to decarbonize our processes is the progressive modernization of our largest energy consuming equipment. For example, we have continuously replaced traditional injection molding machine with electrical equipment. Injection molding machines represent 50% of our small domestic appliances operation energy consumption. And the latest generation machine can save up to 75% of emission depending of the model. In 2023 and in 2024, by replacing most of our Cajica, Colombia facility equipment, we reduced our energy consumption by 30%, despite increased production volumes. By 2027, at least 25% of our global equipment will be of the latest generation, further reducing our energy consumption. The final lever to decarbonize our operation is investing to replace carbonized energy by renewable energy. We already have 7 sites equipped with solar panel all across the globe. It's in France, Italy, Colombia and China. In October, we inaugurated 2 new biomass boiler in Pont-Évêque, France which will reduce the site carbon footprint by 45%. In the coming year, we will continue to deploy renewable energy at new sites. We have an extensive pipeline of project to install up to 300,000 square meters of solar panel by 2030, which will cover approximately 25% of the electricity needs of those sites. Regarding the reduction of our Scope 3 carbon emissions, which we aim to reduce, as Juliette said, by 25% by 2030. We will first focus on the upstream emissions from our purchase material by activating 2 levers. Firstly, we will further increase the use of recycled raw materials, plastics, metal, packaging. We aim to boost this usage from an already pretty good 48% in '23 to 60% by 2030. Using recycled material can reduce the carbon footprint by up to 90% for the most carbon-intensive material, making it a powerful strategy for decarbonizing this segment. We will provide more detail about this initiative in our circular economy section. Secondly, we will engage our 500 most important supplier in our ESG program, which we'll describe later in the presentation. But this program, I can already tell you, aim to help our supplier decarbonize their own operation, targeting a reduction of 1.4 million tons of CO2 equivalent.

Thank you, Richard. Good afternoon. We aim at increasing the energy efficiency of our products via 3 levers: technical innovation, smart solution, guide and accompany consumers towards eco-design products and toward more sustainable behaviors. We'll now address the first two of those levers, starting by technical innovations to lower the energy consumption of our product with no compromise on performance. Two examples here, with Effitech motors on vacuum cleaner with up to 50% less energy and with fans with up to 65% less energy consumption. Our new boiler resolution on Professional Coffee machine, reducing energy loss by 30%. Technical innovation that even in some case, improve the performance. And you have here the example of a toaster, which has a faster heating system while saving 30% energy. The second lever is to propose smart solution for sustainable ways of using our products eco mode on linen care with 30% to 45% less energy consumption. Temperature control on kettle to reach only the necessary temperature with 20% less energy consumption on average or just heat the water for one cup of tea, thanks to the one cup indicator to save 35% energy.

Thank you, Thierry. But actual nature is not only about carbon, it's also about water consumption reduction. Regarding water preservation, we pay special attention to our cookware site, which account for 2/3 of our water consumption. All our site globally are our ISO 14001 certified and are required to implement optimization measures. We have a proven track record and have developed best practices in this area. For example, in Rumilly France, we reduced our water consumption by 35% over the past 3 years through process optimization mainly. In Selongey, we recently invested in a new washing tunnel, reducing their water consumption by 70%. Moving forward, we aim to achieve an additional 25% reduction in water consumption by 2030. We will do it through installing new washing tunnel, like in Selongey, both in Omegna, Italy; in Canonsburg in U.S.A., implementing systematic closed-loop cooling system at a global level and overall maximizing recycling opportunity at every step of the process. The last part of act for nature is management of substances. The last pillar is management of substances, sorry, is our management -- particularly those referred to substance of concern. Our goal is to achieve the highest standard for substances management, exceeding anticipating regulatory requirements. We follow 2 important principles in this effort. First, we implement a rigorous process for substances that may pose a concern globally. We stay informed by monitoring the latest publication and opinion from leading international scientific and health agencies, such as FDA, ECHA, World Health Organization or EFSA, as well as regulation in the U.S.A., Europe and Asia, including Prop 65, REACH or RoHS. But based on this thorough screening, we conduct systematic risk assessment for the identified substances. Second, when risk is identified, we proactively take all necessary actions to reduce or eliminate the risk wherever it is possible. Often, well before regulation taking place, as you can see from the example on the slide, we are committed to proactive risk management.

Moving to the second pillar, act as a leader in circular economy. You've heard from Thierry and Stanislas that durability is in our DNA, that we've been a pioneer in repairability, and you've just heard that we have close to 60% -- 50% of recycled materials in our product. These are some evidence out of many that really prove our unsurpassed commitment towards circular economy. Our vision for the future is quite straightforward. Being a leader in our sector, we want to continue to lead the sector. We want to do more, and we will do it by investing in all 3 phases of the circular economy to reduce impact, to reuse products and to recycle them end of life. To do so, the primary pillar levers -- and levers remains the eco-design of our product based on life cycle analysis. What we want to do is to deliver more eco-design products. We've measured lower impact without any compromise on their performance. Second, what we want to do is to invest to scale up our refurbishment business model.

Our eco-design practice is at the center of our circular economy strategy. Our eco-design practice includes 5 drivers to develop products that last, reduce their impact and enable reuse and recyclability. Durability of our products with high quality standards while ensuring reparability. Recyclability of the product, recycled material, eco packaging. Last, product energy efficiency that we have already addressed in the act for nature section. So the first lever, durability, thanks to both high-quality standard and reparability. Our products are designed to last. They are developed to last with robust design practice, which is applied. The critical scenario of use and the components with the risk of failure are identified, assessed and addressed. The product development process includes numerous life tests, high number of cycles that are repeated in our labs. For example, on Ingenio, our removal handle cookware range, this cycle, opening closing, is tested 660,000 times. We prepare over 6 million cups of coffee to test our full automatic coffee machine and kettles every year. And kettle are tested more than 10,000 -- almost 10,000 hours every year. On top of the test realized in our labs, we run consumer panels to assess consumer experience and ensure high-quality standards. Groupe SEB has a historical commitment of entering reparability of its products. It demands to design products easily dismantable to make the spare parts available and to make the repair possible, possible at affordable prices. Over 90% of our electrical appliances can be repaired at fair price during 15 years, a clear hedge versus our competitors. This is made possible thanks to the 7.5 million units on 50,000 references that we keep in our stock. And thanks to our 6,200 repair centers worldwide. This access to reparation, extended repair services are proposed with self-repair, repair corners in some of our stores, warranty extension, repair pack and technical support. The durability made of high-quality standard and our 15 years reparability at fair price is recognized by our retailers. You have here the durability barometer of [indiscernible]. Our brands are acknowledged as #1 in most of the categories, contributing to 70% of our sales in France. And you can see that when we are not #1, we are #2. On the right-hand side, you see the details of this barometer on the [indiscernible] category. Groupe SEB brands are capturing the 3, first position on the podium with durability index of Tefal at 191, twice higher than its first 2 followers, the player #4 and the player #5. On Professional business, reliability and reparability are part, of course, of the value proposition. Availability of the spare parts are guaranteed during 8 years after the last manufacturing of a given range. Perfect coffee, 24/7 is ensured, thanks to preventive maintenance and to a worldwide service network, including our own service technicians. Second driver, recyclability. Our products are easily recyclable by design. Recyclable to 80% for cookware, thanks to the endlessly recyclable aluminum. Recyclable to 80% of small domestic equipment, a ratio that could be increased to 85% by 2030 with priority given to plastic and to metal. And recyclable to 90% for Professional Coffee maker. We support recycling, we support recycling with in-store recycling operation on cookware and on small domestic appliances, and we're actively engaged with eco-organism in Europe. Next 2 drivers, recycled material and eco packaging. A key metal is aluminum. Aluminum accounts for 10% of our direct purchasing, but for 50% of the associated carbon emission. This, when recycled aluminum, allows a saving of 90% of CO2 emission. Already today, 40% of our aluminum is recycled aluminum. It is 50% in Rumilly, our largest cookware factory in France, and 30% in [indiscernible] in China, 30% now versus 10% in 2022. From 30% recycled aluminum today, we will reach 65% by 2030. Recycled plastic is our second priority. Recycled plastic allows 70% savings on CO2 emission versus virgin plastic. We collaborate with suppliers to co-develop new recycled plastic, an internal tool allows during our product development process to identify the opportunities of substitution of virgin plastic at design stage. You have here some example of achievement, 37% of recycled plastic in this cookware, 52% on [indiscernible] full automatic coffee machine and 70% for our Green Force vacuum cleaner. From 5% recycled plastic in 2023, we will reach 20% by 2030. Strong momentum on eco packaging as well. Packaging are made of 90% of recycled cardboard, 90% of our packaging are without expanded polystyrene, will reach 95% by 2030. No virgin plastic bag in 100% of our product by 2030 is our commitment. Half of the solution being to stop using plastic bag at all. We have already reached 47%. For the other half, when there is no way to avoid using plastic bag, we will be using only recycled plastic. We already addressed the product energy efficiency in the act for nature section. I mentioned earlier that eco-design is at the center of our circular economy strategy. Our product development process is addressing eco-design matters in an organic systemic way. Part of our offer is eco positioned with every eco parameter pushed to the maximum possible. And you have here 2 examples showing good sales performance of those eco position products, our Evidence eco full automatic coffee machine is ranked in the top 10 best sellers in Europe. And our Green Force vacuum cleaner ranges account for 21% of our canister sales. In short, our eco-design will reach by 2030 the following targets. Maintain 15 years reparability on over 90% of our small domestic appliances, reach 85% recyclability for our small domestic appliances products versus 80% in 2023, raise the use of recycled material from 48% to 60% in 2030. Eco packaging with 100% of our products without virgin plastic bag. Last, product energy efficiency, contributing to scope-free decarbonation 2030 SBTi targets of minus 25% impact. Act as a leader in circular economy includes as well to develop a business model on product refurbishment. We want to grow this business with 3 motivations. Buying secondhand products is a growing consumer trend in all industries. It allows to recruit consumers to categories that both consumers would not consider if at full price. Thus, of course, it does contribute to sustainable development ambition. Refurbishing operations are realized today in France, in Germany, in Spain. We want to scale this. And industrial operation will be opened next year in France. Sales of refurbished product should reach 3% to 5% of our sales on the targeted West European countries by 2030. Let's wrap up on circular economy with a video now. [Presentation]

Let's talk about act for all. Social responsibility is deeply rooted in the group values and culture. That's why we want to act for all alongside the entire value chain. Act for all means that we want to be a company that is inclusive for all, a company that cares for its employees, develop them so that they feel well, can grow and can be proud of the company they work for. We also want to act responsibly all along our value chain. We are going to lead you through our objectives and action plans on how we engage with suppliers, how we accompany consumers in the sustainable transition, what we do to do more with employees and how the group and its employees do support communities.

Our act for all supplier initiatives ensures how all our suppliers meet our high standards in responsible sourcing. This includes sustainability, ethical practices and regulatory compliance. We focus also on our top 500 supplier through a strategic plan that maximize the impact of our policies and accompany us on our own decarbonation objectives. By setting this rigorous standard, we ensure that our supply chain respect both the environment and the community involved. The purchasing charter last updated in 2024 under the [indiscernible] on our website, aimed to set high standards for responsible sourcing. It includes commitments on environmental and social aspects as well as pledge to avoid controversial sourcing and conflict materials. Supplier also required to engage their Tier 2 and Tier 3 suppliers with the same principles. Currently, more than 80% of our direct and finished goods suppliers outside the charter, and we aim for full coverage by 2030. To ensure proper enforcement of this charter, we systematically screen all our suppliers, both direct and indirect, and conduct targeted audit based on identified risk. For anticorruption, for example, and compliance aspect, we perform systematic assessment based on external standards, such as Moody's Compliance Catalyst for all suppliers identified as medium or high risk. For social and environmental aspects, we employ an external audit company to physically audit 100% of our identified high risk Tier 1 suppliers, which audit occur at least once every 4 years. Our suppliers and partners are also part of our ESG road map. We are launching a new program aimed at engaging 500 of our top suppliers, which together represent approximately 80% of our carbon footprint. With these suppliers, we are defining specific road maps to further align our social and environmental standards and to monitor their engagement with their own suppliers. We are also developing clear road map with them for their decarbonization trajectories. They are strongly encouraged to define target validated by the science-based target initiative, SBTi. But we implement also task force on specific subjects, such as the use of recycled materials as necessary. Additionally, we are implementing an end-to-end tool to collect and monitor their progress as well as their contribution to our Scope 3 decarbonation efforts.

We are mobilized to ensure consumer safety and to inspire and facilitate changes in consumers' habits. Consumer safety, which is ensured with quality management system tests at each stages of product development, systematic review of voice of consumer. A robust product recall policy is in place in all geographies. We facilitate healthy home-made cooking with our products that allow fast and easy preparation with delegation modes that secure perfect results, and with thousands of recipes, proposed on our sites, on our app, on our smart products to inspire consumers. On this chart, you have example of communication developed to accompany consumers toward more sustainable behaviors. Sharing tips, a [indiscernible] is reducing the energy consumption by 25%, promoting products with better performance on eco-design standpoint. This air fryer saving up to 70% energy versus a classical oven, and by the way, being 50% faster. Last, running a pilot project in some African countries with NGO organization, replacing charcoal cooking by affordable electrical pressure cooker.

Good afternoon, everyone. We'll talk now about people, because act for all is also for our employee everywhere in the group. We want to create a better workplace where people feel good, supported and able to be themselves and to be developed. We defined 4 pillars to achieve this objective. The first one is to set high standard of working conditions. It is about providing high level of labor conditions concerning wage, working hours, but also respect of human life everywhere. Our KPI to measure our performance on this domain is notably through external social audits done every year in our industrial sites. This indicator is embedded in our short-term incentive plan since a long part of the year. The second pillar is to aim to provide real and equal opportunities in career development. It is about encouraging various career evolution to develop strong competencies of our employees and develop themselves to have stronger employability. Our KPI to follow this equal employee development are the following: The first one is a number of hours of training per employees, but also the percentage of internal mobility among the total number of job open. We have 2 other pillars that I will detail now to you more in detail, yes. Act for all is primarily act for health and safety. How do we ensure that our employee feel safe in their day-to-day work on-site? First of all, as said Richard, all sites are committed on the health and safety management system, respecting the ISO norm. The second, we developed ourself a specific program that we called WeCare@SEB to provide social protection in case of deaths, in case of hospitalization, but also providing psychologic support when needed. And we've run a training program on safety everywhere in the industrial site, but also in the tertiary sites, to make sure that everyone is aware about what is the importance of safety. How we measure these results? The measurement is done on the lost time injury rate indicator. This indicator is also in the incentive program that we have in the group. It is a short-term incentive, but also in the profit sharing. We succeeded, as you can see in the graph here, to decrease over the year to reach a high level of safety with 0.7 LTIR. Our objective by 2030 is to be below 0.5 LTIR, which is part of the highest standard in the industry. The fourth pillar is to act for diversity and more precisely on gender balance. We want to have more women in the group at every level and in all functions. We have set an ambition action plan with the CEO and the COMEX. And to define this program, we look at different indicators. We have 2 major objectives. The first one here is to increase the ratio of the women on the overall population, from 43% that we have today to reach 50% and also to increase the ratio of the women manager among the manager, from 42% of women manager to 50% and globally to achieve a ratio of 1 between the percentage of women in the group and the percentage of women manager. The second objective is really to increase the number of women at the highest level of position of the group. Our ambition is to have more women at the top position, from 24% of today to reach 32% of the top 200 key position of the group. This is a real global worldwide ambition, and this indicator is also included in our incentive scheme in the long-term incentive program to make sure that it will be really visible for all.

Now let's talk about communities. Driven by our mission and our values, everyone at Groupe SEB wants to reach and support the communities in the many territories where we operate. The Groupe SEB Foundation wants to support the people who suffer from exclusion and lack what is essential in daily life. That's why there are 3 main domains of actions: Access to cooking equipment, access to education and access to housing. We donate close to EUR 4 million each year either in financial or product donation across our different regions. This is only possible through the involvement of many, many of our employers across the world, which I'd like to thank, thanks to this presentation. And I will also quote a couple of these projects. In France, we have been supported and we have been at the creation of Emmaüs Défi more than 10 years ago. And since then, we provide on a yearly basis a small equipment to equip homeless people when they first get access to a house. Via the association L'Entreprise des Possibles, we also support homeless people who, unfortunately, is a growing population. Looking at Asia and mainly in China, our Supor colleagues have been involved for 20 years to build and manage schools in rural areas where children otherwise wouldn't be able to go to schools. In Latin America, our Colombian colleagues have built a program to support the Tinteros, who are serving coffee in the streets, in order to make sure they can have an improved livelihood. And this program has extended to support also families to get some support in housing. That's how we are engaging our people throughout the years and also especially all around the world during our Charity Week program that is happening each year for 10 years in a row. We want to thank you, and we want to thank them, and we want to continue this progress. This closes the presentation of our action on the 3 pillars. I will let Olivier Casanova explain to you how we will manage our extra financial performance.

Thank you, Juliette, and hello, everyone. I'd like to continue by showing you how Groupe SEB ESG road map and ambitions are fully supported at the highest level of the organization and fully integrated in the decision-making processes across the group. It's first embedded into the group's corporate governance. The framework is very comprehensive with various committees both at Board of Directors' level on the left-hand side and at management level on the right-hand side that all have distinctive and complementary roles to play. First, on the -- starting on the left. In 2022, we refined the organization of this ESG governance with the creation of the Strategic and ESG Committee, a committee of the Board of Directors. It plays a key role in defining and approving the overall ESG ambition, its strategy and its translation into precise targets and milestones. In addition, the Governance and Remuneration Committee defines and monitors ESG-related incentives within the framework of the group's remuneration policy. As a reminder, on top of short-term bonuses, which already include ESG targets, ESG criteria have now this year been integrated into our long-term incentive plans, accounting for 20% of the overall consideration. Finally, the Audit and Compliance Committee oversees the review of extra financial information, the evaluation of ESG risks and validates the durability report. In addition to these committees that support the Board, the management team steers the ESG road map through additional bodies. First, the General Management Committee is, of course, primarily responsible for the setting of the ESG ambition, the definition of the strategy and the implementation of the measures that will enable us to meet our target in the defined timing. It does so whilst ensuring, of course, that these are fully aligned with the broader corporate strategies and business priorities. Second, the ESG Steering Committee manages the day-to-day implementation and execution of our ESG road map and the compliance with the CSRD reporting. And therefore, by integrating our operational goals with our ESG ambition, we aim to foster a more resilient and sustainable organization. This framework is also designed to facilitate an efficient implementation of the CSRD. We have adopted guiding principles that emphasize transversal responsibilities supported by senior leadership. This approach ensures that ESG is not siloed but integrated across all functions of the organization. Under the sponsorship of the General Management Committee, our cross-functional governance consists of distinct but equally critical roles. Business leadership first is, of course, principally responsible for the execution of the initiatives identified. It's particularly important for transversal topics such as climate change and circular economy that require sponsorship, both of industry and product level. The sustainable development team provides guidance, support when needed, monitors our progress and coordinates the production of the reporting. Meanwhile, the finance function ensures the accuracy of our extra financial data and, of course, its consistency with the financial data. And finally, but to name just the major roles, the IT function manages the CSR tools that we use to measure performance and report on our achievements. You have seen that today's presentation -- during today's presentation, there are 2030 ESG ambition translate into concrete actions and initiatives. And we strongly believe that this ambition must rely on tangible and measurable targets for each of our commitments. The following list of KPI is not exhaustive, of course, but presents the main ones that we consider key to achieve our 2030 ambition. They are articulated, as you will see, as we presented them, on the 3 pillars: act for nature, act as a leader in circular economy and act for all. I won't go through each KPI again, as we've already presented them, but I will focus on the rationale behind each pillar. And I will highlight also that many of these KPIs are included in the short-term and the long-term incentive policy of the group, and therefore, make it a collective responsibility to achieve this ambition. Beginning with act for nature. We are committed, as you've seen, to reduce our carbon footprint and our water consumption. By 2030, our ambition -- ambitious goals are to reduce our carbon footprint across Scope 1 and 2 emissions by 42% versus 2021, our Scope 3 emissions by 25% and equally, our water consumption by 25%. And because our own operations are where we have the levers and the primary responsibility, we have decided that the objectives related to Scope 1 and 2 emission reduction would be reflected both in the short-term and the long-term incentive plans. Moving to the next pillar, act as a leader in circular economy. The main KPIs are presented in the table. As you can see, they are around repairability, recyclability, the use of recycled material and the aim to develop a business of selling refurbished products. As you can see again, the KPI around the use of recycled material is included in our long-term incentive plan with the most weight, in fact, 10%, because it will be the lever to both achieve decarbonation targets, but also to limit our impact on resource scarcity and biodiversity. Finally, our main targets for the act for all pillar. We continue to commit, as you've seen, to high standards in responsible sourcing. As reflected notably in our purchasing charter, we'll support our strategic supplier to increase their environmental and social standards and to engage -- to drive -- and we will engage them to drive their decarbonation. The main KPI monitoring the improvement in the safety of our employees remain the lost time injury rate. And as you can see, it is included both in the short-term incentive plan and also in the calculation of the employee profit sharing. Finally, we have set ourselves objectives for gender balance. And this KPI, as already mentioned, is included in the long-term incentive plan. I'll now hand over to Stanislas for the conclusion of this presentation.

[Foreign Language], Olivier. Thank you to all the team for this very, very good and the synthetic work that we've done today. I think coming to the conclusion of this section of this session today, we've seen that we share with you our journey through our vision, through milestones, through ambitions. And there's one thing that is undeniable. We stand at the crossroads between possibilities and progress. Looking at our timeline, we show a history of bold and forward-looking decisions. Our growth strategy, our business growth strategy lays a clear path forward, and we see that our commitment with ESG demonstrates that leadership isn't just about doing what's required, but also doing what we know and we feel is right. And I think that's exactly the way we've tackled that ESG ambition and thus, this ESG strategy. For the innovations we launched, the initiatives we undertake, we want them to also create value for business today, but also generations to come. We want to empower our people and our communities. We want to achieve gender parity in leadership roles, driving equity and inclusion at all levels of the organization. And we want to do that because we think we believe it's right. We want to expand our global community engagement programs to enhance education and skill-building opportunities. This is great for the communities we deal with. This is also great for all the employees, thousands of employees that get deeply committed and involved in those initiatives. We want to innovate for impact. We want to deliver smart, energy-efficient products that reduce weight, empower consumers to make sustainable choices. We are challenging our supply chains to become low carbon emissions and to guarantee ethical sourcing in a fast-changing and fast-evolving world. We are integrating digital tools to monitor and accelerate our ESG progress. As a conclusion, our 2030 ambitions are a reflection of our determination to lead with purpose and conviction. You've seen an ambition that is both visionary, but very concrete that is set with two feet on the ground with very concrete, practical, pragmatic ambitions with action plans and commitments behind those. Together with all our stakeholders, because it's not only a Groupe SEB, but Groupe SEB employees' endeavor, all our stakeholders are involved, we want to build a future where sustainability and profitable growth are aligned. Thank you very much. Thank you for your attention. We will now take your questions through a Q&A session.

[Operator Instructions] The first question comes from the line of Sarah Thirion calling from TPICAP.

I had a few questions for you, 3 of them, actually. I was wondering, first, what your ambition means in terms of cost inflation on the part of ESG. The second one would be to understand how you will achieve your new targets for recycled materials inside of your product and what -- which would be the most challenging raw material subjects inside of this. And the third one would be to understand is -- if ESG strategy would be a discriminating subject when you look at the potential acquisition, meaning that if the company you are looking at is not having the same standards as yours, would you pass your way or try to improve the company you are looking at?

Thank you very much, Sarah. Thank you for your, as usual, precise and to the point questions. I will take the third question. Richard will take the second question. And Olivier, you will take the first question. I will start maybe with the third one. Do we make an ESG discrimination when we evaluate acquisitions? Well, of course, as we said, we think we are kind of ahead of the pack of our industry. And we don't expect all companies to be as developed, as advanced and in particular, when we speak about smaller companies, smaller entities. So I would say we are, again, and as always, very pragmatic. We look at the company 360 degrees. We try to understand their strengths, their capabilities, their know-how, their knowledge. We also look at what's missing, what are the gaps. So I would say a bit, we would look at a company with an ambitious view on their ESG performance, but that can be driven through a road map, a journey the same way as we drive quality improvements, health and safety improvements in companies that we acquire. So in short, it is not maybe a discriminating factor. I'm talking about companies working in a safe environment. I mean, we are not talking about buying mine companies in Congo. I mean, that's within the companies we're looking at. We would look at their ESG footprint and performance. And if they are not at our standards, we would work and strive to bring them to our standards very fast. Richard?

Okay. On your second question, if I understood right, what is our most challenging raw material that we'll have to -- what's the main challenges we'll have to have to change and go to more recycled material? I mean, increase of recycled plastic is definitely going to be the main one, for sure, for different reason. First, for a technical reason, because we -- it's not always easy to find today a good plastic grade that can replace our grade, especially as we -- most of the time, we require food-grade contact. So it is not completely available still today on all our grade. The second one is the consumer acceptance for this project. And here, it's very cultural where in some region, we have an appetite for recycled plastic. In some of the region, we actually may see recycled plastic as less clean. And I think here, especially in China, people may see the recycled plastic more as less clean plastic. So we may have less acceptance and sometimes difficulty to get the same aesthetic. But things are going very fast. Innovations are going very fast, and we are getting closer and closer. And year after year, we get more and more grade that fulfill all our requirement. And the last one is availability, because with -- or a lot of company now are trying also to improve the level of recycled material. We may face difficulty here or there to get the necessary supply. However, I think we are engaged in this process relatively early on. So we are pretty confident, however, to get there. Olivier?

On the -- okay. On the first question, Sarah, I think the short answer is, no, we don't think that this road map should translate into materially higher cost. First, of course, as you have seen, a large part of this ambition, in fact, doesn't per se translate into cost. For example, all of the work that we are doing on the eco-design of our product involves many actions that do not translate into either spending internally or, let's say, cost in purchasing components or material. But the second part is that it's true that some on the, let's say, the purchasing of recycled material, for example, in some cases, it can be slightly more expensive. But we believe that over time, the difference will certainly become more and more minor. There are, of course, some instances where, in fact, recycled -- I think I have in mind, in particular, the polypropylene recycled, which may be slightly, in fact, cheaper than virgin. But in most cases, it is slightly higher. But the difference, as I say, over time will reduce. Then there is also the part of the plan which relates to our own production. And here, we expect that the CapEx will be, by and large, let's say, managed within the normal envelope of the group. And in fact, the new machines are -- the new generation of machines, in particular, the plastic injection molding machines, do not necessarily cost more, but are definitely much more efficient and much more, let's say, energy saving. So on balance, we don't think that this translates into a material impact on cost base.

[Operator Instructions] The next question comes from the line of Alessandro Cecchini calling from Equita.

The first one actually is on copper. So it seems a very scarce resource in this moment and probably also in the future. So how do you think to cope with this kind of material? So if your ESG strategy, announced ESG strategies can help to smooth this utilization of this, I would say, important raw material that probably will increase in the cost over the next years. My second question is that, all in all, if do you think that your announced ESG strategy can reduce your unit production cost? Or I mean, is there something, all in all, balanced between additional costs and savings?

I think Richard will take the first one on copper. And Olivier, you'll take the second one on the cost evolution. It's a bit like the previous question. So...

Yes, same answer. Okay. So regarding copper, I mean, first, maybe we say we are not a significant buyer of copper directly. We are an indirect buyer of copper. However, we do follow very closely the evolution of all metals and especially copper, and we see the trend that we have seen in the past few years. Also right now, it might be a little bit different. Again, it's -- I think we are not a very big buyer. We are exposed in an indirect manner because we buy products that eventually use copper. Today, we follow it. I think everybody, anyway, the industry will follow more or less the same trend. We do not think, however, this is material and significantly material in our cost base.

[Foreign Language] Olivier?

On the second question, I think I, let's say, will repeat a little bit the same answer as the answer to Sarah's question. I think on balance, there are, of course, elements which will drive the reduction of the production cost. If we save on energy, for example, by a new generation of injection molding machine, then of course, we spend less in the production process. But at the same time -- and there are, of course, also some products which are cheaper, let's say, in their recycled version. But there are also other products which are more expensive. So on balance, we think that this will not lead to a material, let's say, increase in the PRU of our products. And therefore...

PRU?

Sorry, the production cost. I think you mentioned the unit production cost. So on balance, the answer is no, we don't think that this, let's say, changes significantly the business model and the balance of cost and price.

But maybe to -- if we step back on our products and industrial footprint, we -- as you know, we make 60% of our production in-house. 60% of what we sell is made in-house, and 40% is purchased from outside. We believe that a sustainable production based on good treatment of employees, good social conditions, great attention to health and safety, great attention to our cost base, energy efficiency, less energy consumption, less water consumption, we believe that all these can be managed in the frame of the current investments of the group in the current CapEx and also can -- will be cost neutral. Some things will be more expensive. Some things will be cost-saving initiatives, but we don't see this road map as one that affects one way or another the evolution of the cost base of the group. What we see is that more and more, sustainable production, sustainable sourcing, sustainable -- or the ability to demonstrate that our employees are dealt with in a fair, equitable manner, with great attention to the health and safety, we believe that this is structurally a long-term advantage of the group. And we want to capitalize on being an operator and make the best of that situation and that position.

Okay. In fact, my question was also focusing, of course, on unit production, so costs are also including, of course, energy, energy cost that I was just wondering if, of course, with your announced ESG activity, of course, also including this part. I mean, you answered it, yes. And basically, do you think also that this can lead you to increase the internal production? Or do you mean or you expect, I mean, to maintain the current percentage that you said?

There is no impact and no relationship between the implementation of the ESG strategy and the in-house production or source production. We have the same demanding requirements on our suppliers that we have on ourselves. So this is neutral, and it is not a factor impacting that choice. We choose to source to go faster -- to have a faster access to new products and new technologies. It is not a criteria. It's not discriminating criteria.

[Operator Instructions] The next question comes from the line of Emira Sagaama calling from ODDO BHF.

I had 3 questions. The first one is on your ambition to engage with your suppliers, the 500 suppliers covering a great part of your emissions. I was wondering if you could elaborate on the challenges to roll out this engagement, because maybe it depends also on the profile of the supplier. And if you can also remind us what is the level of fragmentation of your supply chain. This was for my first question, and then I go for the others.

Richard?

Okay. So actually, to elaborate a little bit about this program, so that 500, that represent a large part of our carbon emission, I said during the presentation, around 80%. However, talking to the fragmentation, it's a relatively small part of the number of supplier we have around us. So our idea and our strategy is really to focus on the 500 which are the most important one and on which we can have the main impact. In term of fragmentation of this 500, in fact, it's -- you will find, indeed, the raw material one, the aluminum producer, plastic producer, packaging producer, that represent a big part of them. And with each of them, it's a very detailed and very tailor-made road map that we are discussing with them. So that either the target SBTi or the set SBTi target, either they define with us a very detailed road map of how they are going to decarbonate. It could be with a specific workshop on using or providing more recycled material or using themselves more recycling material or it could be through inviting them to -- or helping them, training them on how to decarbonate their own operation. It's very difficult to give you a very generic answer because it's very tailor-made. It will depend of on region. It will depend on the materials, but bottom line is really to have operational detailed action plan. And I explained in the slide, we intend to monitor that through a digital tool and monthly reporting with them so that we can track, monitor, support them in their journey.

Maybe if I can ask, we have a supplier charter, which covers all our suppliers, which covers a lot of the groundwork like controversial sourcing, et cetera, which I think is -- so the 500 is a very special, specific extra plan to proactively contribute to this reduction of the Scope 3 purchasing emissions. But the base of our interaction with our suppliers is defined by our purchasing charter, which is signed by all of them.

Already 80%, which represents a very, very large majority of all our direct supplier. And as you say, it includes all aspects from environment, social, controversial sourcing, et cetera, et cetera.

All right. Thank you. That was the first question. I hope we answered it. Can I have the second question?

Yes, it was very clear. I have 2 other questions. So I have one question on the circular economy. You are quite advanced in integrating circular economy in your strategy. Do you see it as a competitive advantage versus your peers, especially in Europe because there are also new regulations on eco-design and the repairability of the product? And then just following up on Sarah's question on recycled materials, because we see players such as Danone and Nestlé going back -- scaling back their ambitions on the use on -- of recycled PET. I was wondering if you are exposed to that kind of plastics. Or is there -- are there other plastics that you are sourcing?

I will take the second one. I will let Richard answer the third one because having spent 22 years in Danone, I will...

You will not comment.

Avoid from commenting on that. Maybe on the circular economy, is it a competitive advantage? I think -- I will give you 2 or 3 different answers. First, repairability is something that you decide to have or not. If you want to repair a product, you need to be able to dismantle it. If you want to be able to dismantle it, you need to design it and conceive it and build it in a way that it can be dismantled. Namely, you use screws instead of your rivets or welding. So I think reparability per se is something very structural and very intrinsic. And if you want one day -- if you think that one day, products will be circular, then you'd better start having repairable products. Because otherwise, it will take you ages from product conception, product design to product manufacturing to be able to become repairable. The second thing is today, in our industry, we see a boom in secondhand products purchase in circular purchases, but this boom is limited to 0.5%, 1%, 1.5% of the industry according to what we hear and what we see. These are focused on Western Europe, in some countries in Western Europe. We see some marketplaces having some great and growing successes. One of them, a French-based marketplace is now operating in 17 countries. That's interesting. They will make their first profit this year. That's also interesting. So that business becomes a sustainable business. But we also see that the smartphone industry in some markets is now 30%, 35% secondhand. And who would have thought 10 years ago, 5 years ago, 15 years ago that 1/3 of the smartphones purchased would be secondhand smartphones? So we don't know how big it's going to be. We know that if we lay the ground, if we lay the foundations for being able to be repairable, to be repaired, to have the spare parts and to be able to manufacture this repairability, I think if that market explodes one day, we will be well positioned. And the last part of the answer, of course, is there's not one average consumer. Some consumers are much more sensitive to products that are eco-designed or products that are really meeting a very stringent, demanding set of specifications. Some consumers don't care. So what we do today is we increase the number of products that meet those increased requirements. You've seen in Cyril's presentation that this coffee machine is now in the top 10 bestsellers in Europe, which is an eco-design coffee machine. That's great. Maybe one day, we don't know, this coffee machine will be in the top 3 or the #1 position. What we know is that we have to prepare the future. And we think that if today, there's not really a way of saying it's a competitive advantage, maybe one day, it will be a competitive advantage. And I think the people that will be sitting in this seat in 2 years, 5 years, 10 years will be happy that people that were sitting in this seat 20 years ago, 10 years ago and today have taken those steps to make the company ready for an economy that would become substantially more circular. Recycled material?

Recycled material.

Are we going to reduce the use of recycled material because of the scarcity of their availability, if I got the question right? Yes. Go ahead.

I hope that's that effectively...

Is that the question?

Is that the question?

The question was the fact that -- is there any specific difficulties in sourcing some recycled materials, especially in plastics? Because we are seeing other players in the consumer goods sector scaling back their ambitions. So I was wondering if, for example, the plastics that you intend to use is recycled, is it the recycled PET? Or is this another kind of recycled plastics? It has nothing to do with what players such as Danone and Nestlé use.

I think I partially answered this question before. But effective -- it really depend on the plastic, in fact. It's really -- you have a PET, you clearly face sometimes right now. PET recycled, PET to be even more expensive than fresh material because you have scarcity of possibility. This is not the case of ABS when we can find sometimes cheaper ABS. So it's really different plastic by plastic. However, if we will look more on a longer term, what we do believe is that we have a lot of new technology, a lot of innovation on the chemical industries that are improving the recyclability of plastic. Therefore, the offer is getting bigger and bigger. So I think there's no single answer. What we can see for our raw material and what we are using mainly, which is mainly polypropylene, for the timing, we do not see difficulty in term of availability. What we do see, it's sometimes some technical difficulty because we want food-grade material, which are more demanding in term of specification, indeed, or some difficulty to have a very white polypropylene so that we can have the correct appearance for the product. But overall, I think this is something -- this is work that needs to be done. That's, I think, one of the challenges I was saying before that from the 5% we have today to the 20% we target by 2030, that's the challenge we have to manage. And this will be more a technical issue rather than a market issue as far as we can speak today.

Thank you, Richard. We have a question on the chat.

I'll read it.

Juliette?

Why did you not include Scope 3 objectives in STI and/or LTI remuneration?

Thank you. Well, I think it's a valid question. We have -- well, first, we don't have only carbon objectives in our STIs and LTIs. We have social objectives. We have health and safety objectives. We have carbon footprint objectives. We have gender diversity objectives. And we think that if we want to be meaningful on the quantified and quantitative objectives, they have to have some weight. So we've made some choices. That's the first question. And in fact, in our STI and LTIs, we have one social objective. We have one carbon objective, and we have one gender diversity on long term and health and safety on the short term. Now when it comes to why did we choose Scope 1 and 2 objectives in the STI and LTI, I think in a way, we also reflect the fact that we are more directly in control of those objectives. Those are more driven by our own actions and our own deeds than Scope 3 objectives, which in a way are also influenced and impacted by the country's own emissions. So if you sell more in China, which has a carbon intensity of its electricity that is 10x, 20x greater than the more nuclear market, then your product mix will debalance and unbalance your objectives realization. Besides, we still do have some Scope 3 dimensions. When we set ourselves in our LTIs an objective on the use of -- our STIs on recycled materials, the use of recycled materials is going to be in our factories, but not only. It's also in our suppliers' factories, both in packaging and in products.

And it will contribute to decarbonate our Scope 3.

And it will also contribute to decarbonate our Scope 3.

And it's half of the LTI.

And it's half of the LTI.

So indirectly, we do include Scope 3 in our LTI remuneration.

Thank you.

The next question is about, can you tell us more about the measures taken by the company in the event of stricter regulation against PFAS?

All right. I knew there would be one. Thank you very much for that question. Well, maybe starting with repeating our stance on PFAS. Well, there is PFAS and PFAS. The PFAS we use are polymers, very heavy, long molecules. And those polymers are recognized by food safety agencies as being safe for usage, as being safe for the implementation in our production facilities and as being safe for our emissions in the air and in the water. So today, the PFAS we use, which are polymers, don't present any harmful impact on consumers, on our employees or on the environment. That said, we know that there is -- there are some initiatives in Europe, in the United States that aim at regulating more the use of PFAS. Some of them are calling for a ban. We use PFAS in a number of cookware and small domestic appliance products. And what we can say is that, first, PTFE is the best coating, and the PTFE coated pan is the best frying pan you can buy. It's the best frying pan you can buy because of its cost efficiency, because of its performance, because of its durability. And there's no -- make no mistakes. Consumers buy majority of PTFE-coated pans because they are the best choice. Now we also know that there are some alternative choices, ceramics. Ceramics are less performing on the anti-stick performance. Ceramics are 20% more expensive. Ceramic-coated pans are 4x less durable. That means you will have to substitute them 4x more often if you want the same performance. And we are close to be leader in ceramics in Europe, and we are #2 in the world. And we will be pretty soon leaders worldwide on ceramic-coated pans. So in a way, the best answer is to say, well, we need to be in the alternative pans. Equally, a lot of people talk about stainless steel pans. Well, first, a lot of stainless steel cookware is actually coated with PTFE. So it can be stainless steel if it is coated. It has the same challenge as an aluminum-coated pan, but that's a side comment. We are leaders in Europe on the stainless steel noncoated pots and pans. So the first answer, if I can summarize it, is we have the best product. The second answer is, we are covering all offers that consumers can have access to. And we aim to be leaders in all the categories of the various materials and coatings that are available in the market. But make no mistake, at the end of the day, I often hear, "Why don't you sell more ceramic-coated pans or stainless steel noncoated pans?" For a very simple reason, consumers prefer to buy aluminum PTFE-coated pans. For a very simple reason, it's the best product. It's the best in performance, in cost and in durability.

There is a new question. Do you see your customers accepting to pay more for more durable product?

Today, I wouldn't say in -- on a large scale that consumers are prepared to pay 5% more, 3% more, 10% more for products. On average, we know that some consumers that are more sensitive to these preoccupations are quite capable of paying more. We know that those consumers tend to be a bit younger. We know that they tend to be more and more numerous. We know that there are more of them in Northwestern Europe than in the rest of the world. So the straight answer is probably no. But then we know that this is likely to develop and emerge as a bigger segment of consumers. And we strive to make sure that they find in our company the appropriate and the adequate product offerings that will meet their requirements for more durable products.

Then what is the strategy for your in-store take-back recycling program? Is there an opportunity to roll this out to other markets? And how relevant is this for creating barriers to entry in the industry?

Cyril, you want to take that one? I speak too much.

Yes. So maybe I will take the opportunity to complement the answer of Stanislas on the previous question. In fact, another dimension is that some consumer are ready to take a step back and to look at the total cost of ownership. In some case, a product will be slightly more costly because using other technology, brushless motor, for example. But since it will be saving on energy, the total cost of ownership will be lower. The overall economical picture will be more attractive. Of course, there is no average consumer, and this will depend on consumers. On your question, yes, we do roll out recycling program in several markets. Several markets are already active with this kind of program that we propose to shoppers in the stores. We want to develop this further. True that today, to my knowledge, we are the only one active with this kind of program. And we do get strong support from retailers and strong attractiveness to shoppers on this kind of program.

It seems that there are no more questions.

All right. Maybe one more request on questions. No more questions? All right. Thank you. Thank you very much for your questions and sheer interest. I think we're over 100 people on that call for that ESG strategy. I think you have, in front of you, a company that is -- has been committed for a very long time on managing its business in a sustainable manner. We want to stay at the forefront of our industries. We confront and tackle the challenges of today and tomorrow, and we see that circularity can and could be and will become a key element of superiority and differentiation. So we cannot say today that we are creating more profit through sustainability strategy. We can say that sustainability doesn't impact adversely our profitability, but we are really striving to making circularity something that could transform the relationship between brands, products and consumers to the greater advantage of those companies that are leading in that field of circularity and recyclability. Thank you very much, everyone, and I wish you all a Merry Christmas. We can say that. We are mid-December, and we will meet you all again at the end of January, sorry, for the presentation of the annual results. Thank you very much.