Société BIC SA (BB) Earnings Call Transcript & Summary

Dear shareholders, good morning. My name is Nikos Koumettis. I'm the Chair of Société BIC's Board of Directors. On behalf of all Board members, I am delighted to welcome you at Société BIC's Shareholders' General Meeting for the financial year 2023. This AGM is webcast live on the BIC's corporate website and will be available for replay. Let me now first introduce the directors and members of the management team who are attending the event here in the auditorium with us. Attending directors today are Carole Callebaut Piwnica, the Chair of the remuneration committee and member of the nominations, governance and CSR committee; Candace Matthews, Chair of the nominations, governance and CSR committee and member of the audit committee. Maëlys Castella, Chair of the audit committee and member of the remuneration committee; Héla Madiouni, Director representing employees and member of the remuneration committee; Marie-Aimée Bich-Dufour, member of the nominations, governance and CSR committee; Édouard Bich, who represents MBD and who's a member of the audit committee; Véronique Laury, member of the remunerations committee; Jake Schwartz, member of the audit committee; Pascal Chevallier, Director representing employees; and Gonzalve Bich, Director and Chief Executive Officer. Some members of the executive committee are also attending in the event here in the auditorium. We are also joined by Laura Vanhoutte, the secretary of the Board of Directors who will be acting as the secretary for this AGM. I will ask you to allow the presence of journalists and analysts here in the auditorium. Yet as this being a big Shareholders' General Meeting, priority will be given to them for the Q&A session. The following persons will act as vote tellers, Mr. Édouard Bich, who represents MBD, shareholder and Director; and Mrs. Domitille Meo , who represents Faison Capital, shareholder. I hereby declare the general meeting of our company open, and I now hand over the floor to Laura Vanhoutte.

Thank you, Mr. Chair. Let me remind you that this general meeting was convened by prior notice of meeting, which was published in the French Journal of Official Legal Notices from the 9th of April and, the company's gazette of the 13th of May 2024. Let's now move on to the attendance sheet and the quorum. An attendance sheet was drawn. It was signed by each member of the general meeting, either in the personal capacity or someone else's authorized representative. 1,740 shareholders who have 35 -- more than 35 million shares that account for 85.91% of the capital are present or represented today. As 25% of the shares that constitute the share capital and that's how with voting rights attached are present or represented, the general meeting is declared lawfully constituted and may validly deliberate on ordinary and extraordinary matters. I will close the final figures before the vote on resolutions. All documents provided for by the law have been laid before me. They were made available for shareholders at the corporate head office as well as on the corporate website within statutory deadlines. We will remind you of and explain in detail the AGM's agenda before the vote on resolutions. This agenda was set by the Board of Director meetings on the 19th of February 2024, and the 26th of March 2024. Besides, for your information, no shareholder has tabled any draft resolution. Thank you very much.

Thank you, Laura. Ladies and gentlemen, dear shareholders, thank you for attending in person or online this general meeting on the financial year 2023. First, we shall look in detail at the strategic advances of our Horizon Plan in 2023, then we'll comment the 2023 financial results as well as Q1 2024 operations that we recently published. Besides, we'll take stock on the advances of our CSR program, and we shall give specific presentation on our Flame For Life activity in Europe. We will also be looking at governance-related issues, and our statutory auditors will comment their audit reports. Last, we will be presenting the resolutions that will be put to your approval, and we will take time to answer your questions before moving on to the vote on resolutions. Let's now start with the highlights of the financial year 2023. That I will summarize with 2 slides. In 2023, we maintained our sturdy capacity of delivery with the support of our Horizon Plan initiatives that we keep building on to reach our growth and margin objectives for 2025, thanks to the commitment of all our team across the world. 2023 was again a growth year for BIC. We have recorded a rise in our sales in constant currencies across all our divisions. Our revenues stood at EUR 2.63 billion, up 9.2% in constant currency. We won market share in our key regions, mainly thanks to our strong commercial delivery as well as our constant innovation with the successful launch of several products. In order to fuel this growth, we continue to strengthen our marketing skills by implementing innovative campaigns to boost growth across the different categories and to develop our retail or brick-and-mortar presence and online presence with now 13% of our revenues of the group revenues generated in e-commerce in 2023. Our operational excellence efforts contributed to an improvement of the gross margin by 240 basis points against the previous year. This is mainly the result of the optimization of our procurement process and of our supply chain. Our performance enables us to prepare for the future, but it also allows us to maintain an attractive remuneration or compensation policy for you, our shareholders. In line with the BIC's capital allocation policy, the Board of Directors have decided to propose for the financial year 2023, a total dividend of EUR 4.27 per share, including an ordinary dividend of EUR 2.85 per share and an exceptional dividend of EUR 1.42 per share. The ordinary dividend of EUR 2.8 per share is up 11% against the dividend paid out for the financial year 2022. And this corresponds to a ratio of 50% of the net earnings per share generated in 2023, in line with our policy. Besides for the current year, we launched a share redemption program that can reach up to EUR 40 million. Thus, the overall remuneration occurring to shareholders should reach EUR 220 million. It would account for a 5% increase if compared with the overall compensation of EUR 220 million for FY 2023, which itself is significantly up against the previous years. Let's now watch a video that will give greater details about our 2023 performance as on our progress on the Horizon strategic plan. François Taine, our Group's Vice President of Financial Control, will then be presenting the financial results for FY 2023 and those of the Q1 in 2024. Thank you.

Hello. We will showcase what BIC has accomplished in 2023 and glance the path we are in 2024. As you know, our Horizon strategic plan in forefront of our minds and continues to drive the BIC behavior. In 2023, we grew net sales across all divisions, supported by disciplined execution, but also by our innovations and successful launches. We boosted our marketing capabilities with impactful campaigns that drove growth across multiple sales channels and geographies. All in all, we delivered net sales of close to EUR 2.3 billion, up 9.2% at constant currencies, whilst improving strongly our profitability as our operating margin rate now stands at 14.7% against 14% in 2022. 2023 was about execution. Understanding our consumers' evolving needs enabled us to maximize how we deliver the right product in the right -- the right product with the right price and on the right channel. With our revenue growth management initiatives, we have continued to streamline our product portfolio by reducing the SKU count, whilst increasing net sales per SKU and optimizing our inventory level. Alongside our expanding retail channels, our e-commerce performance was robust in 2023. We successfully outpaced our key markets in value in the U.K., France, Germany and the U.S., and our e-commerce net sales grew by 13%. Geographic expansion remains a significant contributor to BIC's group sales. We continue to -- and this has positively contributed to our profitability. We mainly relied upon our existing infrastructure to have access to fast-growing markets, such as Eastern Europe, the Middle East and Africa, all of which saw double-digit net sales growth in 2023. 2023 was also a great year in terms of product innovation. For example, our EZ Reach lighter achieved a milestone of EUR 100 million of cumulative net sales since its launch in Q3 2020. Overall, the products launched in the last 3 years have generated close to 10% of the group sales in 2023. This shows that our consumer-centric approach, which is enriched by data, actively contributes to boosting our sales. It's important to remember that in an inflationary environment, one of BIC's strength is offering true value for money products for consumers. And the results speak for themselves. I'm delighted to announce that BIC was ranked 12 out of the 1,300 most loved brands by the French public in an annual survey. This recognition is a testament to our brand loyalty and the demand for our products. Besides our efforts in terms of operational excellence, contributed to a strong improvement in our gross margin of 240 basis points over 2022. This reflects mainly our work to improve our operational process and our production assets. In 2023, we also made progress on our environmental, social and governance goals. And we took steps as well to reduce to minimize overall carbon footprint. We continued our engineering work to provide more value, for example, by overhauling some parts or subassemblies or redesigning them to reduce mass without compromising on quality or usability. This is something which is very close to my heart. The fact that BIC contributes to promoting a lifelong love for learning and provides educators and students with the tools they need to succeed. We have put a lot of energy into the creation and execution of programs that focus on the first stages of handwriting development, particularly amongst highly underprivileged communities in Europe and Africa. In the last 5 years, BIC initiatives have improved the learning conditions of nearly 200 million children at the world over. Thus, we are well on track to meet our goal, which is to support 250 million children by 2025. In 2024, we'll continue to innovate to improve our products. As regards, for example, the EZ Reach lighter, we'll make targeted investments in brand support and to improve our delivery. I'm also delighted at the recent launch of our very first reloadable utility lighter, BIC EZ Load. It's a long-lasting eco-friendly model, which can be reloaded up to 10 times with a BIC Maxi Pocket Lighter for up to 15,000 lights. Besides, its body is made of nearly 50% recycled plastic. This innovation perfectly illustrates our strategy which is meant to seize various opportunities to light a flame and to meet a demand for a more sustainable Lighters with the lower environmental footprint. As for our iconic 4-Color pen range, it will be adapted to meet consumer needs in the various regions. I'm delighted that BIC was chosen by the Paris 2024 Olympics to deliver a range of officially licensed products to celebrate the upcoming Summer Olympics. This special collection features 9 new designs of the BIC 4-Color pens, which are being sold across retail and in official Olympic stores. Besides the launch of new products, we continue to boost growth across all our categories by relying upon excellence marketing with the launch of several innovative marketing campaigns in 2024. Before I wrap up, I'd like to remind you of the 3 imperatives that reflect BIC's performance in 2023 and that will help us to continue our success in 2024, momentum, confidence and disciplined execution. As long as we continue to harness our unique manufacturing footprint and embrace the new capabilities built under our strategic Horizon Plan, we remain in an excellent position to reach our strategic ambitions and generate long-term profitable growth for all our stakeholders. Since the beginning of our Horizon Plan, we have reached our targets. Actually, we have over delivered on our growth and free cash flow targets for the last 3 years. Our solid results in 2023 allowed us to further improve our return to shareholders totaling to more than EUR 200 million, including dividends and share buyback. I am confident in our ability to reach our goals going forward and to further create value for all stakeholders. These achievements would not be possible without the outstanding engagement of our 15,000 staff across the world that I'd like to thank for their contribution to our success that we are sharing with you today. More than ever, we are determined to double down our efforts to deliver on a Horizon Plan and to continue profitable growth. Thank you very much.

Good morning. I'm going to present BIC's consolidated results first for the FY 2023 and for the 2024, Q1, and I will conclude with our prospects for this year. Let's first start with an overview of our financial performance in 2023. Our sales stood at close to EUR 2.3 billion, up 9.2% in constant currency and plus 3.7%, excluding Argentina. The adjusted operating profit stood at EUR 333 million, up 6.9% for a 14.7% margin. The positive impact of the improvement of our gross margin, which is linked with the price and mix effect and also with the optimization of our operational process was partially compensated by the further -- by the continuation of operational investments and brand support. The adjusted net earnings per share was EUR 5.7, up 11.3%. Last, free cash flow stood at EUR 249 million. Let's now look at our 2023 performance for each division. First, the sales of the Human Expression division stood at EUR 846 million, driven by the success of basic products, such as the iconic 4-Color pen and also by added value products such as our gel pens. Then the sales of the Flame For Life division stood at EUR 852 million driven by distribution gains and strong commercial delivery in Europe, Latin America, in the Middle East and also in Africa. Last, the sales of our Blade Excellence division stood at EUR 537 million. Our 3- to 5-blade razors have enjoyed a growth rate that was higher than that of the market across all 3 key regions. On this table, you can see all key items of the 2023 P&L with mainly our sales, net operate -- the adjusted operating results and net adjusted profit. Let's now move on to the variation in our net cash position between December 2022 and December 2023. Free cash flows that include our industrial investments worth EUR 105 million stood at EUR 249 million. We paid out EUR 110 million in dividends and redeemed for EUR 116 million of shares net of the liquidity agreement. Our net cash position improved in 2023 and reached EUR 385 million. Let's now move on to the results for Q1 2024. Our sales stood at EUR 522 million, which is stable in constant currency, excluding Argentina. This is mainly accounted for by the impact of Asian competitive imports on the North American Lighter market. However, this was partially offset by the good performance of our 2 other divisions, mainly in Europe. The adjusted operating profit for the first quarter was EUR 63 million for a margin of 12%. The adjusted net EPS stood at EUR 1.04. Last, we generated strong net cash flows of -- net free cash flows of EUR 24 million on this quarter, which has contributed to a strong net cash position at the end of March, EUR 393 million. Now in conclusion, let me present our prospects for 2024. Our sales growth should be hovering between 5% and 7% in constant currency, excluding Argentina. We are also expecting a slight improvement in our adjusted operating margin. Last, free cash flow generation should be in excess of EUR 220 million. Thank you for your attention. We are now going to watch a video where Elizabeth Maul, who is in charge of insights, innovation and sustainable development at BIC, is going to present our achievements in sustainable development in 2023. [Presentation]

Now I'll turn it over to David Cabero, Europe Director General, who will present our strategy in the Flame for Life division in Europe.

Thank you, Gonzalve. Hello, everyone. I'm David Cabero, General Manager of Europe. Let me talk to you today about our strategy to accelerate the growth of our Lighter business in Europe. As we all know, France and Europe was built around a historical pillar, which was writing, since 2020. And with the Horizon Plan and its implementation, we decided to accelerate our growth in Lighters in Europe with a strategic decision. Can you hear me better? Yes, much better. Could you hear the beginning at least? All right. Great. Well, I was telling you that we made that strategic decision for Europe of accelerating our Lighters growth and building the second pillar. A second pillar that makes Europe stronger, because we now have more sources of growth for the future. If you look at the 2010, 2020 decade and the growth during that period, in Europe, our sales of Lighters grew at an average annual rate of 2.9%. In 2020, as part of our Horizon Plan, we made the strategic choice to push Lighters, which led to over 12% growth in the period 2020, 2023. Let's talk about the product as the growth lever. We expanded a range of high value-added products with Grip EZ Reach, the small series like the ones you're seeing on the screen right now. Since this great success of EZ Reach in the U.S., we also launched it successfully in Europe in 2023. It was a great success in France, where we reached EUR 8.3% of market share in mass distribution. We're now rolling it out in all our European countries. The decorated series are also very important. We managed to make a very small limited series that have much higher profitability, which helps the category at group's P&L and profitability. So as you see, we are focusing on value creation through the product mix in addition to the price increase that we see every year in Europe. The EZ Reach launch was supported by a major media campaign, the 360 degrees advertising campaign with the in-store presence, digital communication, outdoor advertising and advertising on television channels. And that leads me to our second lever, which is distribution, as you know, our Lighters can be found in many places, in supermarkets, cafes, petrol stations, everywhere, and people buy them every day. And so this is a highly fragmented and heterogeneous distribution depending on the country. Our strength is the fact that we have very extensive network of subsidiaries in Europe, and that's a great competitive advantage we have over our competitors who don't have these subsidiaries. And so we're very present in the field and do a lot of work there with our people who are helping us extend our retail and distribution, make sure we have visibility in stores, animations in stores, and help us extend in countries where we're not present yet. And so where new countries, particularly in Eastern Europe. And the great thing is, even though we've already done, a lot there remains -- a lot that we can do, lots of opportunities to seize. For example, new regions in Eastern Europe, discounters, online sales, which we're trying to do. Lots of opportunities in immature and in emerging markets, in other words, where everything must be -- still needs to be done. Which brings me to our third lever, which is geography. You see the difference between both periods, 2010 to '20, the mature markets went up by 1.3% annually on average. And after 2020, that's when we decided that we would have this category and started implementing all these changes. We rose or increased our sales by 7%. And so a clear acceleration in countries like Spain, Greece, Germany, et cetera. And we've also observed an acceleration in growth market, which has reached a higher level from 21% to almost 30%. So you see both periods and how our geographic expansion is helping us. High-growth markets and their share in our country portfolio continues to grow, which will be a great help to continue to support our growth for 2024 and beyond. And so geographic expansion is something else that is going to help us increase our sales in Europe. So 3 levers: the products, POS, distribution, retail and geography. And we've used all of those 3 levers, have reached to 33% market share in Europe, up 5 points in 3 years, doing much better than Asian products. But also it means -- and that's a good thing that there's a lot of market share that we can still capture, which is going to be reflected in great results in the coming years. And so in conclusion, Europe is building its second pillar with this European acceleration. We're doing this through the Horizon Plan, which we built together. The strong acceleration has already led to 12% annual growth in Europe. We're expanding our range of products. We're doing communications and advertising investment to support this. We've improved our distribution, and we've continued our geographical expansion. And so I'm proud of all things that we've managed to achieve together and very confident that this strength, this acceleration is going to continue, and continue to be reflected in net sales growth as well as helping the categories profile and be reflected in our P&L with more profitability.

Thank you, David. Ladies and gentlemen, I now propose that we move on to governance. Starting with a few words on the organization of this governance and the work of the Board of Directors in 2023. The Board of Directors is responsible for defining the company's strategy. In this regard, it oversaw the deployment of the major initiatives of the Horizon Plan and discuss the major strategic orientations for the group's development, particularly in terms of innovation and acquisitions, in developing and reevaluating this strategy, the Board has paid particular attention to the social, labor and environmental aspects of this company's operations. In terms of risk management, our directors, this year discussed the result of the group's initiatives on compliance with the Sapin II law, the cybersecurity strategy and risk management procedures. The Board has also worked on the compensation policy of its corporate offices. As part of their fiduciary duties, our directors also discussed various financial, legal and operational matters. In 2023, the Board met 10 times, with the participation rate of 96.5%, attesting to the commitment of our directors. Throughout the year, Board of Directors was able to benefit from the expertise of its 3 specialized committees. Maëlys Castella, Chair of the Audit Committee; and Carole Callebaut, Chair of the Compensation Committee and member of the Appointments, Governance and CSR Committee, will now present the reports of their respective committees. I give the floor to Maëlys Castella for the report of the Audit Committee.

Thank you, Nikos. Ladies and gentlemen, dear shareholders, as you may have noticed, the composition of the Audit Committee remains unchanged compared to last year. It is composed of 4 members. including 2 women and 2 men, and 75% are independent directors. During 2023, the Audit Committee met 6x with an attendance rate of 100%. Our work this year focused, in particular, on the following: the results of internal control and audit missions and the examination of treasury mechanisms, and in particular, liquidity bank financing in the exchange rate hedging policy; review of potential acquisitions and post mortem of completed acquisitions; monitoring of the share buyback program; the review of risk management and the organization of the finance role, insurance and cost coverage; the review of cybersecurity management for the group. I will now give the floor to Carole Callebaut who will present the work of the Compensation Committee and the -- of the Appointments, Governance and CSR Committee. Carole, you have the floor.

Thank you, dear Maëlys. Ladies and gentlemen, dear shareholders, good morning. The Remuneration or Compensation Committee is composed of 4 members, 75% of whom are independent and met 6 times during 2023. 2023, our work focused in particular on the compensation policy for executive corporate officers. We also worked on the performance criteria to be included in the long-term incentive plans and on the general policy through allocating shares to all our employees. We have continued to reflect on the philosophy and structure of variable compensation within the group and have reviewed all the documentation relating to the say-on-pay with Laura's help. On the next slide, allow me to give you more detail about the compensation policy that we're asking you to give your opinion on. As far as the Chairman of the Board, he's the only Nonexecutive Corporate Officer of the company. The Chairman's remuneration consists only of a fixed component, there is no variable part. And in fact, he's not eligible for it. And his remuneration for 2023 is unchanged, it amounts to EUR 300,000. With regard to directors, on the recommendation of the Compensation Committee, the Board has adopted a compensation policy for nonexecutive directors, which is in line with the requirements of French legislation and best governance practices. In 2022, already, the compensation policy for directors was revised for a period of 3 years, '22 to '24. And so there have been no changes. The amounts are paid in respect to the 2023 financial year, they are aligned with this policy. And I just wanted you to know that the amount allocated are paid according to the directors' role, responsibilities and participation in meetings. For the '24 financial year, this compensation policy will remain unchanged, but the overall budget will be reduced from EUR 600,000 to EUR 550,000 because there's not only take into account the pro rata related to changes in directors unlike -- was the case in 2023. Gonzalve Bich is our Chief Executive Officer, he's the sole Executive Corporate Officer of the company, his total compensation for '23 consists of 3 elements: BIC's compensation variable remuneration, which will be paid subject to your approval and represents 111.02% of the fixed remuneration as of 31st of December 2023. I'll be coming back to this in a minute; and then the long-term variable compensation in the form of an award of performance shares with a vesting period of 3 years. With regard to the variable component, short-term variable component, it should be a record that the objectives of the CEO's remuneration are closely related to the group's financial objectives, which are determined on the basis -- and that they are determined on the basis of the annual budget, established on the recommendation of the Audit Committee and, of course, after approval by the Board. If we go into a little more detail on the bonus, to the details of Gonzalve Bich's variable remuneration for 2023. First of all is look at financial objectives. Those are the first 4 lines. Those objectives were set by the Board at its meeting in February 2023, with 3 criteria: revenue growth at budget rate of 7.9%, then adjusted operated income growth of 13% and then 183 days of cash conversion cycle. So those are the 3 financial criteria. And as you will see, only the target for adjusted operating income was exceeded, not the other 2 criteria. In terms of individual objectives, that's the fourth line. The Board has validated that they have been achieved at 80%. The calculation of '24 bonuses will be done according to the same philosophy, same approach, same criteria. So that was my presentation of the compensation. And I think we are now supposed to move on to the Appointments Committee. So Candace asked me to present that. And so it will be in French, as a result. So here's a report of the Appointments, Governance and CSR Committee to give it its full time. It's a very busy committee, as you can tell. It is made up of 3 members who met 7 times in 2023, with an attendance rate of 100%. So once more, we are proud of our directors. As we do every year, we have reviewed the composition of the committee in terms of diversity and expertise. We've worked on the emergency and long term succession plans for the Chairman of the Board and the Chief Executive Officer, and on the review of talent within the group. We also conducted an annual review of the sustainable development program, the monitoring of social, labor policies, nondiscrimination, diversity and gender equality, and we examined the group's CSR activity. In this month, we have also worked on the appointment of a new auditor in charge of certifying sustainability information. We have chosen the company Grant Thornton, whose appointment is subject to your vote. The choice is based, in particular, on this company's extensive knowledge of the group's challenges and organization as well as on the continency between Grant Thornton geographical coverage and the group's activities. The appointment of Grant Thornton will also strengthen the interconnection between financial and sustainability information. This concludes my presentation, and I will now turn it back over to our Secretary of Council, Laura Vanhoutte. Thank you for your attention.

Thank you, Carole. In terms of governance, we suggest that you -- we renew the term of office for Director, Marie-Aimée Bich-Dufour for 3 years. Société MBD is represented by Édouard Bich here as a member of the Audit Committee. Marie-Aimée Bich-Dufour has been in this very nature since the 22nd of May 2019 and is a member of the Appointments, Governance and CSR Committee. Subject to your vote, the Board will thus be made up of 5 administrators of 12 directors, including 5 independents and 2 employee representatives. I'll now give the floor to Jeremy Thurbin, representing our statutory auditors.

Thank you, Laura. Dear shareholders, good morning. On behalf of the Board of Statutory Auditors, members of the EY and Grant Thornton Networks, I am delighted to report to you today on our mandate for the financial year that ended on the 31st of December 2023, and to give you a summary of the different reports we issued. Our reports for ordinary matters for the general meeting mainly pertain to the annual and consolidated statements as well as related party agreements. We also issued a certification on the company's patronage spending. As regards to extraordinary matters for your general meeting, we have 3 reports. First, the potential capital reduction by cancellation of shares, and 2 potential issues of ordinary shares and/or marketable securities that give access to capital in each situation for a specific scenario. As regards the Société BIC's corporate statements, we issued reports on the annual and consolidated documents that you will find on Pages 286 and 311 of the universal registration document. Now if I may, I shall not read these reports in full, but I will simply present our conclusions. We have issued an unqualified opinion on the consolidated statements and annual statements. In compliance with the provisions of the Code of Commerce, we informed you on the -- we have informed you on the key audit points. First, the assessment of the goodwill recoverable value regarding our report and consolidated accounts, and the assessment of equity interests regarding our report on annual statements. We also performed the specific verifications provided for by professional standards of practice and do not have any observation to make on the truthfulness and consistency of information given in the management report, as well as on the statements and on the existence of information required by the law in the report on corporate governance. Besides, we issued a so-called special report that relates to related party arrangements or agreements, which is available on Page 315 of the universal registration document. We were not informed of any authorized agreement that was entered into during the past financial year that would be put to the approval of this general meeting. Also, we're not informed that any approval or an agreement that was already approved by the general meeting that would have further executed in FY 2023. Besides our certification on patronage spending does not require any observation on our part. Last, as regards to the resolutions proposed for the extraordinary matters reviewed by your general meeting, we issued 3 reports. First, as per the 16th resolution, authorization to the Board of Directors for a period of 18 months to reduce the share capital by canceling treasury shares. This report does not require any observation on our part. As per resolution 17, authorization to the Board of Directors for a period of 38 months to grant existing bonus shares or to issue for employees and corporate officers, so granting existing bonus shares to corporate officers who will -- were waiving their preemptive rights. As per Resolution 18, delegation of authority to the Board of Directors for a period of 26 months in order to increase the share capital by issuing new ordinary shares and all marketable cities granting access to the share capital with shareholders printing rights being maintained. The Board of Directors' report does not include any information on the methods to determine the issue price that are provided for by regulation. Besides as the final conditions which issue will be carried that have not been said, we do not issue any opinion on this. This is the end of our presentation of the review of our reports. So dear shareholders, thank you very much for your attention. Let me now hand over the floor to my colleague, Virginie Palethorpe of Grant Thornton, Virginie?

Good morning, everybody. In compliance with the new European CSR directive, your group will be publishing in 2025, its first-ever sustainability report on the 2024 data. The report will include environmental, societal information, information related to the group's governance. This reporting is based on the concept of dual materiality, that means that the report will have to account all the impact of external factors on your group's financial performance and its long-term operations, but also on the impact of the group's activity on society and the environment. This report will have to be certified, and it's the subject matter of Resolution 8 that is proposed to you for your vote. It proposes the appointment of Grant Thornton, the firm that I represent, as sustainability auditor. Grant Thornton has been the statutory auditor of your group for 17 years, which gives us in-depth knowledge of the group, of its business lines, teams and processes. And this in-depth knowledge is paramount to understand the link between financial and extra-financial information. In France, with the sustainable transformation business line teams, we have 80 people. These teams have been strengthened in the last months. We have now experts on climate, biodiversity and human rights in compliance with the new requirements of CSRD. Our firm, Grant Thornton, was proposed as sustainability audit this year to 21 companies, and I'd like to thank the Board of Directors for proposing our appointment as first sustainability auditor for the Group BIC. Thank you much.

Thank you very much, Virginie. I'm now going to give you a summary of the resolutions proposed before we move on to the Q&A session, which shareholders will have priority. In summary, we propose the following resolutions. We put to your approval the corporate statements and consolidated statements for the FY 2023 after the various reports been made available by our company and statutory auditors. We also propose the payout of a dividend of EUR 4.27, with an ordinary dividend of EUR 2.85 and an exceptional dividend of EUR 1.42 per share. The detailed information pertaining to these 3 resolutions were presented by François Taine at the start of this AGM. Besides, we put to your approval, the statutory auditor's special report on the absence of related party agreements for the FY 2023. For the fifth resolution, we asked you to renew the authorization given to the Board of Directors to operate on BIC shares within the limit of 10% of the share capital for a maximum amount of EUR 1.3 billion for maximum purchase price of EUR 300 per share. In this regard -- as regards the authorizations granted by AGM in 2023, our company bought in 2023, a total of 1,951,722 shares for an average stock price of EUR 59.52 and canceled them. In terms of governance -- yes, 1 million. 1,951,722 shares with an average stock price of EUR 59.52. In terms of governance, we ask you to renew for a term of 3 years, the terms -- director terms of Société MBD, represented by Édouard Bich and Marie-Aimée Bich-Dufour. As part of the duties that have been recently imposed by the CSRD directive, we propose to appoint Grant Thornton as statutory auditor entrusted with the certifying of information in terms of sustainability for 3 financial years. Resolutions 9 to 15 pertain to the compensation of corporate officers. Besides the presentation given earlier on by Mrs. Carole Callebaut Piwnica as well as in the notice of AGM, these compensations are put to your approval in compliance with the provisions of the Code of Commerce. Resolutions 9 to 11 specifically pertain to the compensation policy, particularly Gonzalve Bich's policy, the Chief Executive Director -- Chair and Chief Executive for 2023 and to the applicable principles for 2024. Resolutions 12 and 13 pertain to the compensation elements for the Chair of the Board for 2023. Resolutions 14 and 15 pertain to the directors' compensation policy and to the overall compensation amount for directors for FY 2024, EUR 550,000. Now let's move on to extraordinary resolutions. You are requested, as per resolution 16, to renew the financial authorization given to the Board of Directors in order to reduce the share capital by cancellation of shares. Resolution 17 pertains to the delegation of authority given to the Board of Directors to grant bonus shares to employees and corporate offices with the removal of the preemptive rights. Resolution 18 pertains to the delegation of authority to the Board of Directors to increase the share capital by issuing ordinary shares and maintaining the preemptive rights. Resolution 19 pertains to the delegation of authority for the Board of Directors to decide upon a share capital increase by retained earnings, profits or bonuses. And the last resolution, Resolution 20, is a usual resolution pertains to the issuance of powers of attorney for the completion of statutory formalities. Now let's move on to written questions. So far, we have received 4 written questions from the Forum for Responsible Investment regarding our policy in terms of human rights related to strategic decisions in operations and conflict-affected or high-risk areas in Russia, particularly. With your agreement, I will not read out all questions and answers. They will be published at this day on the web page dedicated to this AGM. However, I wanted to point out that group BIC plays particular attention to the importance of human rights and make sure that human rights of employees are respected in all our operational areas. Group BIC makes sure that -- well, before the conflict in Russia, we introduced at group level, a due diligence policy for human rights audits for our suppliers, which is applicable in each country. Particularly in Russia, we introduced a crisis management process that involved the Executive Committee in order to assess the risks of our operations, particularly for human rights. Let me now hand over to our Director and Chief Executive Officer for the Q&As.

Thank you, Laura. We are now going to move on to the Q&A session. Good morning. We have roaming mics.

I have 2 questions about Russia. Do you have any production facilities or any -- is there any consumption? But my main question is about your compensation. In relation to shares, I do not really understand what was said about the shares that were granted to you. Is it actually over 5 years? And can you specify whether this is a European French regulation and also what is the tax treatment of all this? Because I think you've only been in this position for 3 years, so could you specify how much is left after -- how much will be left after 5 years? And I'm not sure, I don't understand what was said about the share price. Could you specify the regulatory aspects?

I've asked our Director and Chair of the Remuneration Committee. So I will ask her to -- I will ask Carole and Mallory to answer, both Caroles. I will ask both Caroles to answer this question.

I'm in charge of remunerations for the group. So I will answer your question on shares granted to Gonzalve. This is a bonus share performance related scheme, it's a French scheme, which is subject to French regulations. It's the same for all group's employees, that Gonzalve is part of. So a vesting period of 3 years, subject to performance criteria. So it's all detailed in the universal registration document. So shares are definitively acquired after 3 years if all conditions have been met. So the evaluation -- so it's all approved by a decision of the Board. So currently, the IFRS value is EUR 415 million per annum. That's about 23,000 shares per annum. In practical terms, in the compensation policy for corporate officer, a ceiling of value ceiling, which is set that the Board is entitled to grant to the Chair. The ceiling is EUR 2 million. So for many years, shares have been granted, and so it's been evaluated by an external firm. It's been the -- so it's about EUR 1,004,000 per annum. It was valued by an external firm. So it's the valuation of -- it's the value of all shares granted every year to Gonzalve.

Thank you, sir. As regards the first part of your question about Russia, we do not have an industrial or production facilities there, and we do not buy any commodities or raw materials in Russia. We only have commercial activity to make our products accessible to consumers in that country, access to our most essential products. Like I said last year or even the year before, we had strongly downsized our ranges by 80%. So you will correct me if I'm wrong, but we have really reduced our available range there to the most basic products there. But we are really mindful of the safety and health of our employees there. And more importantly, we want to abide by all regulations in force.

A question off-mic by a member of the public.

No, not particularly.

Yes, my name is Mr. Duche. I'm a private shareholder. In the slide on the early -- the first results, you said that Argentina was excluded. Can you tell us not about the situation of the country, but the situation of your company in Argentina? Second, question, where does the gas in your lighters come from and who are your main suppliers.

Let me start with the second part. I'll ask Clément-Grandcourt to tell you about isobutane.

Good morning, everybody. My name is François Clément-Grandcourt. I'm in charge of Lighters operations Flame for Life. The gas in our Lighter is isobutane. Isobutane has a very specific characteristic. It's not a mix of gases. It's pure gas. As a result, the height of the flame, the life cycle of the lifespan of the lighter remains, whereas when you mix gases, one part of the gas evaporates faster than the other one. So at the end of the lifespan of the lighter the flame is lower, and it's barely usable. As regards to our sourcing now, we have very diverse sources of supply. We have 5 assembly factories for lighters in the world. We have gas suppliers that are adapted to each of these factories. We try as far as possible to source this gas locally or at least as locally as possible. And the main suppliers we have are global players that you're all familiar with now.

Thank you, Francois. Okay. After Francois, let me answer your question about Argentina. This country accounts for 2% to 3% of our sales. Now if you remember our presentation on the 2023 sales are in constant currency, it was 9% including Argentina and 3.7% excluding that country. The situation there is very complicated, there's hyperinflation, prices are highly volatile, the exchange rate is very difficult to predict. So for the 2024 forecasts, in order to give really a true and fair view of things to our shareholders, we have decided to exclude the Argentinian -- to factor out, the Argentinian effect, to really focus on the group, excluding Argentina. But I can confirm that the situation in Argentina is complex. We will continue to sell our products there, and it still accounts for 2% to 3% of the group's sales. But we do not have any production in Argentina.

Hello, I'm a private shareholder. So I have a lot of different questions. First, the 8% of production that -- well, the 8% of products that we do not make and have come from our suppliers, what are the fast-growing European countries? Are they Lithuania, Romania, Poland, Spain? I don't know really. Now how do you count today for the weakness of -- well, I suppose maybe some business lines are not in those countries, but how do you explain -- do you account for the weakness of our sales in Southeast Asia and Africa? And what did I write down, I can't read my notes. Another question about suppliers, oil supplies. I attended yesterday the Maurel & Prom's AGM, it's an oil producer. And Maurel & Prom is a company that sets great store by safety at work, which has a high rate of female employees and which has a lot of CSR programs for the reduction of flaring, for example. So do you scrutinize your direct and indirect suppliers on this? Another question on the recycling of pens. We're in Paris here, where can we recycle our pens in the most environment-friendly way? Because apparently, there are no collection points for this type of items, including in stores where you could expect that -- you could expect this type of collection point like for example office stapler, stationery stores, last point. I'm really fond of the BIC brand. I buy lots of your products. But there's something happening here. And you can see here with this pen, when you want to -- put this back in the plastic part is too thin, and the metal part is not supported anymore. When you put it back in, the plastic is too thin relative to the metal part and it doesn't really hold up as it should. Last question, could you have larger fonts, larger font sizes for documents, because I can only read every other words. So if you could write -- if you could print your documents out with a more ink.

Okay. We're going to start from the end. I'm sorry, I did my best to write down your questions. We have 6, 7 questions.

Okay. The easy one. On the Universal Registration Document, as you realize, it's very long, 350 pages. We're making sure as a group that we don't waste paper. And so as many other companies and groups in Paris, we are doing everything to reduce the amount of paper. That's why it's written in such small characters.

I think you have one and it has slightly bigger characters, isn't it?

Well, we take your point anyway. Thank you. Now in terms of your demonstration of how the pen works or doesn't, I suggest that you go to the person at the back of the room who's trying to write Gary Horsfield who's in charge of production for the whole of the group. Because I'd like you to talk to him because I'm not sure I understand exactly what your saying, but we love to hear from our consumers, yes. We'll have people to translate for you no problem. Mr. Nicolau, Director General Manager for France. Can you tell us about recycling in Paris?

A very topical question. Thank you. We collect 11 million pens per year in France. There will be 2,000 points, collection points in various stores, supermarkets, particularly in fall when students go back to school and you'll find a detail of that on our website.

Thank you, Henri. As to your question on providers, we really have a focus on that. When we created our strategic plan, one of the 5 pillars was to do a strategic review of our major providers. And in the document, you'll find details of how we've moved forward on that. But rest assured that our sales team spend a lot of time on that, looking at some of the criteria that you listed, as well as others that are part of our code of conduct. David, Europe, growth, countries, the gentleman mentioned 2 or 3 countries, perhaps you could give us a short answer.