Solocal Group S.A. (LOCAL) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I am not Philippe Mellier. I'm Ghislaine Mattlinger and I'm a member of Solocal's Board of Directors, have been since last June and I chair the Audit Committee. And I'm stepping in for Philippe Mellier this afternoon, who was unfortunately unable to attend this meeting. He's unwell. So I'd like to thank him on behalf of all of us for his excellent work, chairing the Board of Directors for the last 3 years. I am delighted to be here with you this afternoon. As you know, we are meeting in a very unusual context, we'll come back to that. Now I have with me Cedric Dugardin, Director of Solocal Group; and Olivier Regnard, who is the CFO and Administrative Director of the group. We also have with us members of the Board, Marie-Christine Levet, Delphine Grison, Alexandre Fretti, Sophie Sursock, and Catherine Robaglia. We also have [indiscernible] over there in the back of the room. Maurice Lévy is a Chairman of Ycor being with us. He will be reporting on his plans for Solocal later today. Now what is the unusual context in which we meet. Let me say a few words about that as promised. 2023 was a very difficult year. We were under tremendous pressure, both for sales and business. SMEs in France, just as in many other countries, faced rising costs. And so clients reduced their marketing spend because they were unable to invest. Now that economic pressure quickly had a significant impact on our sales and on our financial structure. So we had to react. We had to contend with a very unusual situation, and it became necessary to change the management team and appoint people in a position to respond appropriately. So we have a new Director General as of last year, Cedric Dugardin, who had joined us on the Board in June. He is very well placed to perform his work. He knows the group very well and he's very good at restructuring and his experience in turning businesses around is invaluable. We are very pleased that we chose him for that position. Under his stewardship, it became clear that Solocal had to solve its financial structure problem. So to be able to invest once again, and Solocal also had to find an industrial partner in order to deploy its full potential. So management sought and found that industrial partner able to share our long-term ambitions and provide the complementary skills to turn this company around, and we are pleased to announce that, that partner has proved equal to the task. And thanks to Solocal's management, we successfully merged the 2 ventures, and we can now better serve our clients and our employees, both. There are benefits for all the stakeholders in the company. We have and will have to make some sacrifices, some financial sacrifices. There has been some discontent in some quarters, this has been a difficult process but an inevitable one to ensure the future of the business. I'm convinced that Solocal will be back on track very shortly and able to strike out for new territories and open up new markets. The Board of Directors has been very supportive right from the beginning. We met twice a month on average in 2023. So far this year, we've met 17 times in order to ensure that this venture will be successful. So restructuring the debt was a critical step to turn around your company. We can henceforth make productive investments and develop synergies with Ycor and capture new markets. And we now have the wherewithal to succeed with Ycor and Maurice Levy by our side. So that is what we wanted to report on to you this afternoon. We will also be reporting on the past year's accounts and discussing all of the resolutions that we have set out for you. Before we look at the agenda, just a few words of a legal nature pursuant to the law and Article 29 of our bylaws, I will be chairing this meeting, which is held on first convening. The convening notice was published on May 15. And then again, on June 3, we have a quorum. We have 32.20% of the shareholders, 42,000,340-some shares and I will give you the final figures once we have them in hand. So I hereby call this meeting to order. We will have, as officers, as tellers, sorry, 2 shareholders in the back of the room with the largest number of shares directly or indirectly and who've agreed to serve ias [indiscernible] and [indiscernible] office, Mr. David Amar, respectively. We will have, as a Secretary, Anne Cette, who is the Secretary of the Board. We also have our statutory auditors, [indiscernible] from Deloitte and Mohamed Mabrouk for Auditex member of the Ernst & Young network, and they will be reporting their work in the course of the afternoon. We have provided all of these reports on our website and in the annual report. Both [indiscernible] are going to be transcribing our discussions. We have 9 shareholders among us. There has been no request for any addition of new items to the agenda, and all of the documents are available to you. We sent out all the legal documents to those who requested them. They are available at headquarters. You can also read them online on the website. The agenda is also available in those documents. So with your approval, I will not read out the reports nor will I read out the resolutions. They have been provided and made available to you ahead of the meeting. We will vote on refinancing resolutions, which are designed to provide financial stability through modifications of our financial structure and thanks to your support, Solocal is turning a page in its history and opening up a new chapter where we're going to be very ambitious, which brings me to the agenda. Mr. Dugardin will report on 2023 and 2024 challenges; and Mr. Regnard will report on the financial results for 2023 and will explain the financial restructuring. Then Mr. Levi will describe to you Ycor's project for Solocal, then I will report on governance and David Amar will discuss compensation of the officers and also the compensation policy for 2024. Mohamed Mabrouk will provide a summary view of the auditor's reports, and then we'll have Q&A, which will last some 20 minutes. Then we will vote on resolutions. So Cedric Dugardin has the floor as CEO of Solocal.

Good afternoon, ladies and gentlemen. As you know, when crises occur and when one must steer our way out of them, we behave just like emergency physicians in hospital, and that was our task when Solocal's vital signs started to deteriorate, and we worked very hard to turn the situation around. The situation was dire, indeed. There was a lot of tension on business, and you will see this in the figures. So in a few words, 2023's key figures are as follows. There are no particular comments to make at this point. 2023 was marked by major developments for Solocal, successively. The return to audience growth at [indiscernible] since April '23. The initiation of discussions with main financial creditors in June 2023, in order to reshape the balance sheet structure while preserving the company's cash flow, the beginnings of an industrial partnership search and the appointment of Cedric Dugardin as CEO. The revenue figure, as you saw, is down by 10%, down by 10% to EUR 360 million, hard hit by the digital marketing decline, and the [indiscernible] product, which accounts for the bulk of that business. The Internet website suffered as well, but the financial impact remain limited, representing or accounting for only EUR 4 million. I will skip over the figures for the moment. We'll come back to them later. Now the churn rate is still high in 2023. It's over 20%. We lost 27,000 customers last year as against 22,000 the previous year. Fighting churn is our priority, and we have a customer experience head office to help us there. We worked hard to put the customer front and center at Solocal, notably by simplifying our sales pitches, by simplifying our offering, by simplifying our processes and so on. The hardest hit indicators have you seen were the sales performance, very disappointing, and hard hit by what we call acquisition, which is far below our 2022 goals down by EUR 32 million. The right-hand side of the screen, we'll show you how this breaks down. The sales force called Hunters was merged in 2024 with the farmers in order to facilitate value development because of that disappointing results previously. Now in 2023, flagship yellow pages, PagesJaunes is doing much better since the January 2023 sales or advertising campaign. PagesJaunes increased its income by 2.8 million units. Those are single visitors, 2.8 million new single visitors. And in the last 3 months, it's been in the top 50 of media [indiscernible]. Now these figures made it necessary to bring in an emergency rescue plan and recover our health. We had to pull Solocal out of the ICU. And because time was short, we immediately set up plans to address 5 major issues. As you can see on the screen from left to right, in 7 months, we implemented emergency measures to undertake the necessary transformations of the business. I'm not going to go into details, but the main thrust of this project was to simplify the product offering, which is hard to read, overly complex and often ill suited to our customers' expectations and needs. We're still in the process of deploying that. And then we tackled customer satisfaction and churn and improved, thanks to AI, the quality of the content. We also redesigned and redeployed the organization of our sales force and merge, as I said, the hunters with the farmers, and we organized better synergies with remote sales. We reorganized the key accounts and networks, departments, and we work to protect our flagship, PagesJaunes, through targeted initiatives, which were highly successful. And I wanted to bring in new talented senior executives, give the [ Comex ] a new role. And gradually, all of these measures have yielded encouraging results, although restructuring never looks good on paper. The fact is though that these emergency measures were essential because we needed to convince a partner to join us for the long term and also because we needed to save the company. Now it's too early to reap the results of all these initiatives. The performance on ground is down 10% relative to 2023, but that's not the main point. The critical point today is the rescue of Solocal and its financial restructuring, which we have completed. In 2024, we sped up our efforts to find partners that we had started to look for in 2023. And we identified a sound expert partner, seeking to develop powerful synergies, recapitalize the company and give the company a second wind and that strategic backing was everyone's first priority, including the business court. We were able to make tremendous strides in moving this project forward and save jobs and improve the service provided to the customer and also satisfy our financial partners, our long-term financial partners. We worked hard to choose the right industrial partner able to shoulder the necessary responsibilities by our side. Many players were in the running. We had the lenders who made several very serious proposals, which we studied closely before rejecting them. They were very reliable and concerned to see the customer recover better health, but they always behaved responsibly. I want to thank them, notably thank the Lazard Bank who agreed with our final choice, Mr. Levy. And thanks to that consensus, we were able to save time on the initial time line. We also met with several business operators who wanted to take over Solocal, but Ycor in the end turned out to be the best choice for Solocal, its teams and its clients. Our discussions with Maurice Levy and his teams convinced us that their vision was the right one for us, their knowledge of the market invaluable and their experience extensive. They're able to make the necessary investments and bolster the financial structure of our company. Ycor will ensure the sustainability of this business. They will allow us to give concrete expression to our huge potential that -- in which I'm a firm believer. All of this has significant repercussions for our shareholders. And I think I did my job to save the company, rescue the company, save jobs and ensure its future. That was my role. That was what I was called to do. Now the figures don't lie. I didn't take on this job just to pull the wool over your eyes, but to rescue the company. We had to restart the transformation plan, give all the employees a sense of urgency to immediately recover our lost health. That has been done. And then we needed to find a long-term solution, that has also been done. So we're now going to hand over to a new team. Before that, I'd like to thank the Board for its support, it's trust in me during these difficult 7 months, I'd like to thank our employees for their unstinting commitments and efforts, the executive committee that did its role, performed its role to the full and all the members who participated in this project. [indiscernible], who has been really precious ally, Christophe Bus, and [indiscernible] and Jean-Pierre [indiscernible] from Gibson Don, our legal advisers as [indiscernible] and all of their respective teams. I'm going to hand over to Olivier Regnard, who I also thank for his unstinting efforts to contribute to this very complicated restructuring program. You have the floor, Olivier.

Thank you, Cedric. Good afternoon to all of you. I'd like to focus on 3 topics in this presentation. First of all, of course, results for 2023, the financial results that you will have to vote on. And then I will tell you about the operational difficulties that led us, in the first half of 2023, to look for a financial solution. But not only a partnership solution that would lead to a long-term project for the company. And then as Cedric said, I will tell you the details of this financial restructuring operations that you will also have to vote on during the vote on resolutions. As Cedric said, the revenue of 2023 is 10% lower than 2022, EUR 360 million. That's the consequence of the value growth of our current customers and the acquisition of new customers, which was lower than the churn. You know that we monitor the sales performance and the revenue performance in terms of ranges of products. We have 3 product ranges. Number 1 is Connect, which is digital visibility. That's the product which allows our customers to be present on the Internet and also to display their information, news and content on all the main web media: Google, Facebook, Yahoo, you name it. And this range of activity has grown by a little bit over 2%, which shows that our customers absolutely need to be visible and to publish content on the Internet. The second branch of our activity is Booster. That's digital marketing. Digital marketing, as Cedric said, 75% of this is priority ranking. That means that it's the capacity for our customers to be at the top of the list on PagesJaunes when somebody enters a query. And this is the part of our business that has suffered the most, and it has gone down by about 15%. Remember that this priority ranking has a very high margin because it costs very little to the company to position a customer on top of another. But as you've seen, even though the audience of PagesJaunes grew a little, we haven't reaped the benefits of that in terms of commercial sales performance. And then if you look at websites, you see it's minus 7.5% in revenue compared to 2022. If you look at this, more closely, you see that the more complex the website and the better -- the higher rank it is, the more the trend is positive for Solocal. If you have a low range website, the trend is not so positive for us. And you see that this degrowth was due to the fact that the low-level websites decreased. Now what does this mean in terms of income statement? Well, you know that we have fixed costs, which take up part of our revenue, actually. So you know that we have the gross margin, which is about 90%. So if we're going to lose EUR 40 million in revenue, we're going to lose EUR 35 million in EBITDA. As I said, since the priority ranking product, which is the one on which we have the highest margin has gone down in terms of revenue contribution, the product mix is unfavorable to us, and we lose 1.5 points in margin. That is EUR 5 million in EBITDA. So just the effect of revenue on EBITDA would be EUR 40 million. In terms of external expenses, you see they have increased, which is a little bit strange. But you know that we wanted to invest in PagesJaunes. This is why we launched an advertising campaign that was worth EUR 4 million. There was also an increase in the cost of the unpaid bills. And just like any other company, we had also an inflation on our costs. We managed to mitigate the effects of that, but not sufficiently to make up for all the other expenses that increased. Personnel expenses, plus EUR 4 million. That's because we wanted to preserve and to maintain our sales forces. We wanted to continue investing in sales forces because if we don't have sales forces, we don't have order intakes. We don't have revenue and then the spiral continues to grow. There were, however, 2 nonrecurring items, which had an impact on staff expenses. The first one is that there was a regulation of the paid holidays. You must have seen this if you read the financial press, that was -- that contributed EUR 2 million. And then there was also some comparability. If you were there in 2022, you see that the pension expenses were rather low because a certain number of people retired. So basically, the personnel increase -- the personnel cost increased by EUR 2 million. The rest was compensated by continuing our efforts in maintaining or reducing our support function expenses and increasing wages in a very limited fashion. All of this leads us to a recurrent EBITDA of EUR 63.5 million. Now there are nonrecurring items, which impact this EBITDA, mostly due to the restructuring project for EUR 6 million. So the consolidated EBITDA at group level is EUR 57.4 million. Depreciation and amortization, you remember that this includes the rents that we pay. So it's basically amortization of the right to use on leases. But at the end, it's EUR 20 million, which is indicated here, plus EUR 34 million of amortizing our historical capital expenditure. So the operating income, as you can see, comes out even almost at EUR 3 million compared to EUR 58 million the year before. All this overall is the impact of the drop in our revenue. The financial result is at EUR 36.6 million. It's in the negative, of course, EUR 36.6 million in the negative. So EUR 36 million, that's 2/3 of the burden of the debt, that's the interest of the bond debt that we have to pay back and that we are currently restructuring. And the other 2 elements are, first of all, the deactualization cost and also noncash amortization of the cost of the debt. So the consolidated net income before tax is EUR 33.5 million. Income tax, 12.4 -- EUR 12.4 million. This is not a cash effect. It's a depreciation of the deferred tax. So the deficit carryover that we had in the P&L -- in the balance sheet, which has been indicated here. So it's a noncash item. Consolidated net income of the group is EUR 45.9 million. It's a result on which you will have to vote later. And in small print here is the net income of Solocal Group, which is minus EUR 293 million. Why is this so negative? Well, because we depreciated the shares of Solocal S.A. in view of the outlook. How -- what does this mean now in terms of cash? Because, of course, this is really what matters. You have the recurring EBITDA here, EUR 63.5 million. You know that we have working capital requirement which is negative. That is our clients or customers pay us in advance or at a very early stage of their life cycle with us. And so when the number of customers drops, well, then the working capital decreases. So we have less resources. So we have to give money back to the customers indirectly, of course. And so you see that the EUR 63.5 million is impacted, EUR 19 million in the negative by the working capital requirement. You see that the CapEx was reduced from EUR 30 million to slightly over EUR 21 million. You know that this -- it's mostly payroll or subcontracting, but mostly payroll. So we cannot just stop it all. Otherwise, it would mean that we have to leave them in the P&L account or we would have to implement a social redundancy scheme. So we have reduced CapEx as much as possible in order to preserve the cash situation of the group. So you see that the recurring operating free cash flow is at EUR 25 million, of which you have to take out the rents, which are on the top line of the flow chart. And it means that we are just right above breakeven point before the nonrecurring items before the financial reimbursement. And this is what led us as early as the second quarter of 2023 to stop paying the interest of our debt and to start discussions with our creditors. You see the free cash flow here, you see the impact that the stopping of paying the interests had. We only have EUR 9 million in financial interest and you see EUR 7.8 million in free cash flow. And in total, we have consumed about EUR 15 million in cash. And we did not pay EUR 15 million of financial interest because had we paid this EUR 15 million, we would have had another EUR 15 million in the negative here. Now, of course, logically, all the ratios and the bank covenants were actually breached as we said. And so the main covenants, which actually are the leverage, that's the debt divided by EBITDA and the coverage of financial interest by EBITDA. So all this was in breach. And so we were in a situation of breach of governance as the 31st of December, and so our RCF and bond creditors granted us a waiver because we were still discussing with them at that time. Now before I go into the details of the restructuring, I think it was important to tell you about the context in which we operated here. As you can see, generating cash. The cash generated was very, very low on that year. And because of that, even before we paid the interest and before we paid back the debt, this led us to this very simple and cool conclusion that is we were not capable of repaying the debt. And this is what led us to get in touch with [indiscernible] to start an ad hoc [indiscernible] procedure to start discussing with our RCF and bond creditors. And you know that the situation of Solocal, it's not just because of the debt. It's not the debt's fault. It's the fault of our performance. And this is why, on top of the talks with our creditors, we also wanted to try to find an industrial partnership because we thought that it was the right time, and it was probably the only way to find something that would lead us to have a long-term strategic project. And so here, you have a summary of all the work that was done. We didn't just choose Ycor by default, but it's a selection that was done very carefully by the management and by the Board of Directors. We started during the summer, we conducted 22 potential buyers, strategic buyers, both from France and abroad, who are very close to us on to what we do. 9 NDAs were signed, 7 letters of intent were received and read together with our creditors, of course, 5 were shortlisted for due diligence. And then 3 offers were actually selected for a 6- to 8-week due diligence phase in December and January, up until 2 firm offers were received and they were read thoroughly and analyzed by the Board of Directors by management and we decided to support Ycor's offer. The other one was good, too, but we decided that for the company, Ycor's offer was the most sustainable one. And so you see April 12, of course, we had to go back and forth a lot with Ycor and with the main creditors. And on April 12, we were able to announce the major principles of this restructuring procedure that you are going to have to vote on. Just for your information today, all the conditions are met. We just need your approval. And of course, we also expect the ruling by the commercial court that is expected to be pronounced within the next 2 weeks. Now just a few words. This restructuring transaction is EUR 43 million of new money injection, with a reserve share capital increase for Ycor, EUR 18 million in capital increase, with preferential subscription rights. That is all the existing shareholders can subscribe to this capital increase. It is done against, it is guaranteed actually by Ycor and by some creditors because in case you don't know, you cannot start a capital increase with preferential subscription rights without a warranty at a certain level. And Regicom will contribute in kind. And I'm sure that we'll get back to this, but Regicom is a company of the Ycor Group, which has an activity that's very similar to ours. And we hope to really be able to identify synergies with them and to be able to learn a lot from this partnership. EUR 262 million of the debt has been restructured. The new debt will be EUR 45 million. That's basically in order of seniority. EUR 14 million in RCF, EUR 5 million on the bonds, EUR 21 million in mini bonds, the maturity date of which has been completely reviewed and EUR 5 million in the TSSDI bonds or securities. Now how is this going to take place? If we want to go into the details, it's really important to understand that all these steps in blue here are exactly the resolutions that we will ask you to approve. The general resolution is resolution 17, but they are actually all interconnected. So there will be a capital increase rights issue with the preferential share, that's Resolution #18. Then there will be a conversion of debt to equity EUR 196 million in debt will be converted into equity. That's resolution #19. Then there will be a reserve capital increase for Ycor, EUR 25 million, that's resolution 20, and then contribution in kind of Regicom to the Solocal Group, this is going to be resolutions 21 and 22. I was also telling you about the warranty in backstop fees for some creditors, and this is going to be exactly what is indicated in Resolutions 23 and 24. In total, that's EUR 274 million in additional equity for Solocal. And the shareholding, should you decide to approve this restructuring process, as you know, it will depend on the take up in cash on the rights issue with the preferential subscription rights. If there -- should there be no PSR, Ycor would own 73% of the capital and bondholders at 27%. But in case all the PSR were subscribed in this operation, well then the existing shareholders and the people who will decide to subscribe to this PSR because they have it or because they want to buy it on the market, will be at 17%. And so Ycor would be diluted with 61% and the bondholders at 22%. And in summary, the debt will be significantly reduced by EUR 217 million. The yearly financial expenses will also be reduced by EUR 24 million. You must have seen this, but we also decided to renegotiate the lease and the rent for the social headquarter, so that we are going to reduce our surface area by about 2/3. That's yearly savings of EUR 14 million. And all this will actually come to fuel the investments for up to EUR 130 million over the period going from '24 to 2027 in order to reinvent Solocal with the Ycor project. What's the timetable after today's meeting, well, on July 4, perhaps earlier, we will have the court ruling in the SFA and the homologation of the protocol. As soon as that ruling has been handed down, we will undertake the capital increase and maintain the preferential subscription rights. We had said that, that would be at the latest by July 11. We tried to do that even earlier, so that we can get as many people subscribing as possible, and then the capital increase will be undertaken immediately after with the compensation clearing and settled by the end of July. Thank you all very kindly. And again, I will take the floor once again.

Thank you, Olivier. We're going to hand over to Mr. Levy, who's going to run us through the Ycor project.

Good afternoon, greetings. Some of you have met me before because we run into each other at the Publicis general meetings. But I'm here as a representative of Ycor, a business I established with some friends and my children. Now let me say in a very few words that it's a great honor for me to speak to you this afternoon and to be privileged to describe to you our project in broad strokes. Now surprisingly, this project is completely counterintuitive. Solocal is a counterintuitive proposition. If you look at the curves, and this has been said before, if you look at the graphs, this has been the case for some 15 years. Well, the company has been in a prolonged slide and has gone through terrible suffering. Apparently, there would be no objective reason to step in. The fact that we have stepped in does not mean that overnight, the situation is going to be turned around. The reason we have decided to step in and to put the company back on track establishes a very extensive partnership between our 2 businesses. Well, that's all because it seemed to us that Solocal was a storehouse of very promising assets, and that there was every possibility of turning the company around, relying on our very successful background in similar situations with Regicom as an example, a company that we turned around and put back on its feet in bonus, i.e., profitably. And another good reason to step in is that as a publicist by background, I saw every reason to believe in Solocal's potential. Why is that? Well, because Solocal holds a powerful business called PagesJaunes, and PagesJaunes has been built up over the years. It's become very successful. And around PagesJaunes, I believe we can rebuild a whole series of extensions that will be fueled by the local business fabric, and that will trickle down to every individual person inhabiting the territory of France. The capillaries reach down that deeply into the local fabric. The mom-and-pop shop and the local inhabitants will all benefit from this initiative if we can breathe new life into the network that fuels the local business community, well, Solocal will pull out of its slump. But this has got to be done as a collective effort. And I'd like to thank, very warmly. I'd like to thank the financial backers, the bondholders who have been standing by the company's side for years. I'd like to thank you as shareholders, you have been through periods of huge losses in value. And nonetheless, you're still here. And it is my hope to restore to you, at least part of that lost money. And the management has worked very hard. The Board has worked very hard as have all the other stakeholders. And I'm not forgetting the employees, who have been very active and who will remain so in order to turn the company around successfully. Much remains to be done. We need to work harder. We need to work better. We need to work more intelligently. We need to simplify the structure of the business. We need to simplify the processes. We need to make the offers more accessible and simplify operations. I will not go into details. I have no slides for you. I just thought it would be more interesting to you to hear me speak off the cuff. I have with me my son, [indiscernible], who's been by my side for many long years now, with whom we set up Ycor, and we're here to answer any questions you might have. So in a few very broad strokes, that is my description of this transaction and our plans. You have heard how much has been injected into the company. By way of new funding, we are entering into new agreements, some of which have already been signed, but we want to make sure that we have your support. We want to make sure that the Commercial Court finds with us and supports our project. And I have to say that on our discussions with the Board and with the senior executives have been extremely cordial and very fruitful. At every juncture, we came away with a firm conviction that everyone was fully committed and fully determined to pull the company out of this extraordinarily painful situation in which the revenues had plummeted, in which the financial fundamentals were very low and the value of the business was declining. With your support, we intend to put paid to that downward slide. And we are here once again with every intention of answering all of your questions and willingly so.

Very well. We will now field a few questions for Mr. Levy. He can't stay with us very long this afternoon, but he will have time for some questions. So raise your hand if you have questions. We'll bring you a microphone. Now I find it hard to believe that you have no questions. It's true, it's nap time just about, but still, I'm sure your curiosity has been -- I'm sure your curiosity has been sparked. Have you got questions?

Ladies and gentlemen, hello. With my wife, we are first and second-generation shareholders going back to 2014. And throughout that time, our fingers have been crossed hoping for signs of improvement at Solocal. And year after year, AGM after AGM, we heard the same promises, the same announcements and the same disappointment ensues. Now you are reassuring us today saying that once money has been reinvested in the company, that it will once again flourish. Well, I find that hard to believe. In 2019, the promise has turned out to be empty. The promises were similar to quick sand and the company sank. I like to ride a 4-wheel motorcycle and quick sand is hard to drive through, as we all know, the manager's situation has been comfortable. They've had nothing to fear when it came to their compensation. But the shareholders who have been bled dry to follow the company and all of its capital increases are now -- yes, we've been the geese that laid the golden eggs and you've really sucked us dry. The money that we have sunk into the company is gone for good. So if we do participate in the capital increase, perhaps one day, we might recover some of our lost money, but I'm 75, and I know that, that's high in the sky. So as I've told Mr. Dugardin, I will vote no to every resolution. So I'm being above board with you. No longer will we put up with these promises. And the CFO knows me very well. I say the same thing every year, and every year, he sort of throws up his hands, saying you can do nothing, but seems to me the CEO's job is to pull the company out of the quagmire, well that hasn't happened so far.

Well, I assume you're not expecting me to answer that question. No, you're not directly responsible for what I've said. I understand. Well, I hear you, sir. I hear you loud and clear. I did say that it was sort of not a sure bet to invest in Solocal at first blush. Solocal has lost a tremendous amount of value over the years. That is a fact. And so I can only say hats off to all of you for supporting the company. Now whether you're going to continue to support the company, that's up to you to decide. What I can say is that I am fool enough to believe in the potential of the company, and I will be putting my money where my mouth is. I will do what is needed. And I'm sure that with the support of all of you, I will succeed, quite confident in that. Plus, I'm convinced I will succeed.

My dear Maurice, I am flabbergasted to see you here after the extraordinary success of your company and mine and other shareholders of Publicis here this afternoon. I am dumbstruck to see that you have agreed to -- well, I have to say that I admire you for spending some of your retirement money to save one of your neighbors, a company that does have some things in common with Publicis because it's in the advertising business. But really, sir, I think you are in for a very rough ride indeed, a very rough ride. I don't know how far this ship will sail. Aren't the planks a bit disjointed? Isn't there a risk of shipwreck? It seems to me that last year, where was it? It was at the trade show, I forget which one. There was a trade show last year in periphery of Paris. And at that trade show, I saw Solocal manning their stand, and I went to chat with them. They looked awfully down cast. I believe the General Secretary was there. And he recognized me because I often speak up during the AGM. And that gentleman said that I should just be patient, that the company would rise again. Well, rise again. When? I mean he's young, he can afford to wait. He's got his whole life ahead of him. I'm not a youngster. And I know that unless you are very savvy indeed and extremely efficient, the turnaround is not for any time soon. So I don't think I will be seeing it. I think some people deserve to be fired, I'll say that plainly. They've been sitting comfortably, but I think they should be told that their days are numbered with the company. I am really horrified, in fact. You know that I'm in the habit of speaking plainly.

Yes, yes, I am well acquainted with you, sir. I don't know how long you've been a shareholder at PBC, but it's been quite a while, and I'm quite sure of at least 20 years -- well, several decades, in fact.

COVID has wiped out some of my memory banks, but some of my friends are on the board today. And I'm very well acquainted with that company. So at the risk of repeating myself, let me say that if you succeed, good for you, good for us, but I'm really -- I fear for your -- I fear for your retirement, sir. I think you may end up strapped for cash. I mean, I wish you every success. I may reinvest because you're with us because you have stepped forward. I mean I believe in you, but I'm not very sanguine when it comes to your chances of success. I think it's a pretty risky wager because really the rogues who've been running this business for as long as I can remember, as long as foreign investors have been with the company. When the company was privatized, the cash flow was excellent. These investors came on to the scene. Everything started to be paid for through bank loans, and it's been downhill ever since.

Now we would like to save time for further questions, sir. So if you would kindly relinquish the microphone, that would be very kind.

Yes. Thank you. No, I won't leave with your microphone, rest assured.

Thank you very kindly for your support. And we'll have another question.

Maurice, I don't have a question. We know we admire you so much. This is really -- it's really about love. You shouldn't have called this [indiscernible] Ycor but ICA like Icarus. So don't fly too close to the sun, that's exactly what I said. I don't want to burn my wings. Anyway, thank you, and good luck because you really come here as a savior.

Well, thank you. We will do what we have to do for everybody. I would like to reassure those of you who think that there are gangs of rogues and people who just spend their time in their chairs and not doing much. Well, I can tell you that the people I met were sincerely committed to try to defend this company and to try to turn it around and to rescue it really from all the dangers that it's facing. Now about those foreign funds that you were talking about, or that did not invest, but rather contributed debt? Well, these actually, these people burn their wings. And you will see this in the restructuring and in the resolutions. This is another restructuring process during which these people are going to lose almost every cent that they injected. So maybe they didn't do exactly the right thing. But anyway, they are paying the high price for that, and we can only thank them for accepting to contribute to this restructuring process so massively. And then the last thing I want to mention also is that we are going to do everything, and we are not going to be alone, we're going to be supported by the people from Solocal and Regicom and my partners inside Ycor, we're going to do everything to make you proud of this company, which still has the capacity to succeed. And we are going to inject money. Of course, we are going to inject a lot of energy, and we're going to put our hearts into that and our talents in order to turn this company around.

I don't know if you want to take one last question? Okay. Great.

I'm an individual shareholder, and I'm also a Publicis shareholder for that matter. So I would tend to trust you, Mr. Levy, even though I'm sick to see that almost 99% of the share price has been lost. But I wonder, how come we didn't think about this before, to work more, work better, work more cleverly, simplifying the structure. I mean this is really interesting, but how come it did not occur to the previous directors, to the previous Executive Board? I mean they didn't think about this before? What happened?

Well, the next question, you will save it for the Q&A session, right? Because you will have the possibility to express yourselves at that moment.

Okay. My second question was, of course, I understand that you have great and brilliant ideas, and I'm sure it's possible. But how can we still fight today against the American players with, obviously, not the same level of means?

Well, you are also a shareholder of Publicis, right?

Yes.

Okay. Yes. Well there you go. You've seen that a lot of communication companies lost a lot in value. We gained some, and that's because we put together strategies that were complementary to the strategy of these American companies. And that it's because we brought our customers solutions that the others could not bring. So it's just the fact of the matter. You have people in the field. Now how do we sail this sea in the storm in order to find the channel that is going to allow us to reach our objectives without having to bump into these platforms because if you want to crash into these platforms, you're going to lose. So I really insisted on local life, community life. Look at your own life. You live in a community and you're interested in what's going on there. And it's really so valuable to have assets like this. Now if you want me to go in your direction, I could do this, I will say, there have been a lot of missed opportunities for Solocal, and they know this. They are very much aware of this. And it's not the same people, but they know that there were a lot of missed opportunities. Dr. [indiscernible] should have been invited here because they had all the data. They had it all. So we know now we know this. Now of course, you can always turn towards the past and cry and say, "Oh my God, it's awful. Or you can just say, okay, this is the situation. How are we going to swim now? And what are we going to do? Well, we're just going to roll up our sleeves and work on this together. We're going to work hard. We are going to have to work hard and harder and better than the others. And in the end, we may win. That's my answer to you, sir.

Thank you. Thank you very much, Mr. Levy. Thank you, sir. If there are no burning questions. Maybe one last question. Do you have 2 minutes, Mr. Levy?

Yes, there was this gentleman here. But of course, I can take more, because I don't want people to be frustrated. I still have a little bit of time on my hands. I have a plane to catch, but I'm fine.

I'm an analyst and also a shareholder of Solocal. And I believed in Solocal. I think that you are right. There is a lot of value. You have financial costs. You have, and this is going to be spared, but there is something which I don't understand, which I would like to have your opinion on. Solocal has been underperforming compared to the industry. The top managers were not bad, but they never had sufficient means because if you want to be [indiscernible], you have to accept that you're going to earn EUR 100 million per year, right? So what's your explanation for this underperforming of Solocal? How do you understand this? And what do you think that they should do to maintain their market shares to start with?

Well, that's going to be the first objective. It's going to be to stabilize the situation. And there is -- or there are 2 very simple reasons. The first is that strategic mistakes were made, and everybody is aware of that. And this is why we now have a new management at the top. Without these strategic errors, I think that we would probably not be here today. There were strategic mistakes. That's a known fact. But then the second thing is that the extraordinary machinery of Solocal and PagesJaunes stopped producing what it was capable of producing in terms of marketing, in terms of selling and what it should be capable of producing and what I'm -- I'm sure it will be doing tomorrow. So we are going to carry out a certain number of actions, which we explained briefly those documents. But to start with, we are going to boost PagesJaunes, to revive PagesJaunes. A lot of work has already been done in that respect. And you know that it is really something to regain growth in the audience of PagesJaunes. It's a daily struggle, and the work that's been done so far has proven to be very satisfactory, and it goes to show that the teams have really understood what had to be done. And then when PagesJaunes becomes the place that people go naturally to, well, then the revenue will come. When you've got the audience, you get the revenue. We have to make ourselves indispensable to all small- and medium-sized companies, to all professionals and all the local fabric in order to regain our commercial relations and to -- if we manage to do this, we would not be in a stabilization phase, but in a conquest phase, and this is really, really our objective, to reconquer those market shares. I think there was another question here. Right. Okay.

Well, I came in a little late, but I have a question about [indiscernible]. Is it still in the group?

No.

Oops, too bad because I think that there could be something there because ViaMichelin is still very much used today, and I thought that it was the same for [indiscernible] and maybe there was a way to look for something there. But well, no.

Okay. Thank you. There was another question here.

Thank you. I'm an individual shareholder. Since the beginning, I've seen everything. And I hear the message, but the problem is that you're doing a lot of thinking, but not a lot actually happens. And I'm really sorry about that. There is something important and I'd like to mention. We've talked about money. But I think it's interesting to see the profile of the people who stay on board and who can actually do things. It is going to take some reskilling of the staff of the people. I understand that some people can change, but some cannot. And you will have to find a way to make sure that the people are there and that they are the right people. We're talking about back office, but we're also talking about front office, people who go and sell the products to the customers. The people who make sure that these products actually are marketable. What is going to attract people. People from SMEs, what they're interested in is to buy a product that will help them increase their business at the end of the month. They don't want us to pay to get something that will not help at all. So I think it's interesting, and this is really something that we need to do. And this restructuring process with Ycor, I don't know if the teams are aware of what they're going to have to do because -- the -- if you keep the same people, will there be a merging of the teams with Ycor so that we can actually move forward. And my last point, I see more and more artificial intelligence and a lot of websites use AI, and this is going to accelerate the process. Now the people who will stay in the group and who are going to contribute their effort, will they be able to do the same, to boost the company? Because if you have a company where you just put a lot of money and then the people don't do anything, well, it's not going to work. It's like the Army General, who says, let's go and then he goes and nobody goes with him.

Well, you have given us the checklist of what we have to do. Thank you, sir, and it's already part of our plan, and this is what we're going to start doing because, yes, of course, this is the fundamentals of what we're going to have to do with the caveat, I am going to be committed personally. It's not just going to be like this. It's going to be like that. We're going to roll up our sleeves. Yes, and this is what we're going to do together. And I can assure you that Solocal people are very much committed to the success of that operation.

Okay. If there are no further questions -- or just one last question, if you allow me.

Dear Maurice, you are brilliant. And you said such clever things. You said that mistakes were made. Well, a mistake is something that you repeat. Somebody like you does not repeat a mistake. It's okay to make a mistake. It's not okay to repeat it.

Well, you can always invent new mistakes.

Oh, I'm sure you can. You will succeed anyway. You -- we should read or reread Alexis de Tocqueville about Democracy in America.

Well, thank you very much. And no, many thanks. Thank you very much, Mr. Levy, and we're going to go on with our presentation on the other topics on the agenda.

Thank you. Thank you very much. And thanks for your trust.

Now it's going to be difficult to go back to the presentation now. We will look at governance, nonetheless. And I would like to show you the Board of Directors in 2024, you know these people. The President is Philippe Mellier, as you must have noticed, he's not with us today. He's the Chairman of the Board and also Chairman of the Strategic and Innovation Committee. We have David Amar, who's the Vice President of the Board. He's also a member of the Executive Board Governance Committee. Cedric Dugardin; we also have Alexandre Fretti, who's a member of the Strategy and Innovation Committee; Bruno Guillemet, member of the Governance Committee. Unfortunately, he couldn't be with us. Delphine Grison, she is a member of the Audit Committee. Marie-Christine Levet, member of the Strategy and Innovation Committee; Catherine Robaglia is a member of the Governance Committee; and we also have Sophie Sursock, who is a member of the Audit Committee. So that's the Board of Directors in 2024. And you see that many of them are with us this afternoon. Now in 2023, our activity has been intense. We've had a total of 23 meetings -- 2023, not 2024. There's a typo here, with a 92% turnout on average. Now during these Board meetings, we reviewed the financial results, the business. We also looked at financial communication. We examined business with the CEO and his team. We also actively reviewed the group's restructuring process, and we closely monitored the financial situation. And in particular, as Olivier said, the cash position of the group. We also selected 3 new directors who joined us in June of 2023. We appointed a new Chief Executive Officer, that's Cedric Dugardin. We also reviewed the strategic orientations and discussed the company's corporate social responsibility. Now this is going to give you a little bit more details about the committees. But before I look at the audit committee, I would like to tell you about the committees in general. We held 5 audit committee meeting, 8 governance committee meetings and 2 Strategy and Innovation Committee meetings in 2023, with a turnout of very high, which was very high, on average, between 94% and 100%. About the Audit Committee, we had 5 meetings in 2023, during which very typically we reviewed the financial statements, the quarterly accounts, cash flow situation, risk mapping, the internal control, and we also reviewed a major project, which was the back office systems. About the Governance Committee, it is made up of 4 people and chaired by Bruno Guillemet. They met 8 times to discuss a certain number of matters related to governance. That is the recruitment of the 3 new directors and the new CEO, that's Cedric Dugardin. They also worked on drawing up a compensation policy for corporate officers and the deployment of CSRD. And then there were 2 meetings of the Strategy and Innovation Committee. They looked at the evolution of the market and the group's strategic priorities. In terms of the changes on the Board, as I said, we have 3 new members, Cedric Dugardin, Alexandre Fretti and myself. And we -- it means that we have a Board which is now made up of highly qualified personalities in order to help us steer the group in this ever fast-changing evolution. We are going to ask you to renew the terms of office of Marie-Christine Levet and of Cedric Dugardin. These are resolutions 13 and 14, respectively. And we're going to renew them for 4 years. We are going to ask you to appoint Cabinet de Saint Front as a sustainability auditor for term of office of 3 years, provided that they are registered to the [indiscernible] because it's an obligation. We now have to have our sustainability report audited and certified by an auditor. And that's the [ DP 2F ] obligation. And so resolution #15 will be exactly about that. And I'm now going to give the floor to David Amar, who is going to tell you about remuneration.

Thank you very kindly. I too am standing in for the Chairman of my committee, unable to join us here this afternoon. So it falls to me to report on compensation. Regarding the Chairman of the Board for 2023, this is resolution #5, Philippe Mellier as Chairman of the Board was paid to EUR 150,000, to this was added EUR 18,000 pursuant to his role as the Chair of the Innovation Committee. Now Hervé Milcent was paid EUR 412,500 during his term, which started January 1 to November of last year, EUR 98,760 was paid to him at the Board meeting of February. This amount was calculated according to his ability to meet the goals set for him and his attendance. On November 17, the Board decided to authorize the acquisition of 36,000 shares and added to that a booster of 18,000 shares pursuant to the restructuring program and the value of those shares was unfortunately for him, 0. He was paid no severance pay, but collected benefits in kind in the amount of EUR 48,070, and there is a defined contribution to supplementary retirement plan, so he was paid the same amount in that regard, EUR 9,061. Cedric Dugardin now. For the period November 22, 2022 through December 31, 2023, he collected EUR 50,000 of fixed compensation and EUR 12,153 for variable pay based on the same criteria applied to Mr. Milcent. Cedric Dugardin also collected benefits in kind in the amount of EUR 1,383, in addition to the defined contribution supplementary retirement plan in the amount of EUR 1,100. As part of the financial restructuring of Solocal, the plan is that Mr. Dugardin will step down once those operations are completed. Pursuant to the compensation policy currently in effect, since last year's AGM, and pursuant to his being privy to sensitive information, the Board decided to impose on Mr. Dugardin, the requirement to not join a company that is in competition with us for a period of 12 months. So he may not work for businesses in the same business as Solocal in France. In compensation, the Board will pay him in noncompetition indemnity of EUR 225,000 to be paid in a lump sum once he steps down as CEO. That's 6 months' worth of the fixed and variable compensation calculated on the basis of the average monthly fixed compensation paid during the last 12 months of his term. No variable compensation will be paid to him during that period and the noncompetition lump sum will be put to your -- put to a vote for your approval today. As to the directors, this slide shows you it was paid to all of the directors, including those who stepped down in 2023, the fixed compensation, the EUR 37,700 to which are added EUR 18,000 for the Chairman of each committee and EUR 7,000 for each committee member. The total envelope was fully complied with as laid out at the 2023 AGM. Now the ex ante compensation for the Chairman of the Board of Directors, this is 10th resolution. This compensation would be renewed this year, EUR 50,000 plus EUR 18,000. This compensation will be unchanged as it has been for the last 5 years. The Chairman of the Board and the CEO's compensation will not be paid to the CEO, only the compensation described hereafter will be paid to the CEO. Ex ante compensation for the CEO. The EUR 450,000 figure will be maintained. That is the same amount as in 2023. The variable portion will be calculated based on the same criteria, EUR 450,000, 100% of the base package. In addition to which, under exceptional circumstances, we can depart from the compensation policy, which will be implemented pursuant to the Code of Commerce's provisions, and will be paid out with a view to ensuring the sustainability of the company. We also provide for the possibility to add an indemnity for taking up a term of office, as this -- the person coming in would be losing out upon leaving his or her previous position. The severance pay remains unchanged, has not changed relative to last year's, same for the noncompetition indemnity, which is the same as last year's. The additional retirement scheme has not changed. Just like last year, we've decided not to implement a long-term incentive plan for the reasons that you can imagine. The directors, the EUR 547,600 envelope will be maintained at the same level as last year. It's a lump sum, not indexed on the number of meetings. Each director will be paid EUR 37,700 plus EUR 18,000 for the Chairman of each committee.

Before we hear from Mohamed Mabrouk, let me just say that the quorum is 32.22% on [ 42,319,097 million ] shares.

Good afternoon. I am Mohamed Mabrouk from the statutory auditors' college, where we have Deloitte [indiscernible] and Ernst & Young that I represent. So here's my report regarding the certification of accounts and financial statements. For last year's financial year, the statutory auditors produced several reports, 2 on the accounts, the annual accounts and the consolidated accounts of your company Solocal Group, one report on the third-party agreements and another report on capital transactions which you are asked to approve today. With the approval of your Chairman, we will not read them out in full, we'll just sum them up for you. Our job is to certify that the accounts have no anomalies. The audit has taken into account the unusual features of your group when it comes to the regulations, the business, organization, the accounting rules and the internal control rules. And in a word, we agreed with the financial management, with the Audit Committee and with the Board on our conclusions. And here they are. We certify, without reserve the annual accounts prepared pursuant to French accounting principles, consolidated and prepared according to IFRS standards. It has to approve -- the reports show that there is uncertainty regarding the business continuity, and this is described in the appendices to the financial statements. We also have a specific remark on the consolidated accounts when it comes to the accounting of the revenues and the assessment of the shares. We have no observations about the management report and the financial statements, no observations regarding those either. And no observations. So we have no observations regarding the annual accounts and the consolidated accounts to be included in the financial report in the European -- the requisite European format. So the corporate accounts and the consolidated accounts, this all pertains to both of those. We also have a special report on the related third-party agreements. No related third-party agreement has been entered into last year. So there is nothing that you will need to approve. One agreement was entered into, that is a securities account pledge. So look at SA that will be collateral for the loan that was taken out in August by Solocal Group. All of these reports are available on the company's website. We produced several reports regarding the capital transactions that you will be asked to vote on this afternoon pursuant to our professional rules. We've produced a report on all the various capital transactions and we will draw up an additional agreement once your Board of Directors will have used those powers that you will have granted it. So I will now read out to you these reports in details. I have now given you our conclusions. So there's nothing in particular to report on. The other resolutions do not require that we produce reports on them. Ladies and gentlemen, thank you very kindly for your attention.

Thank you, sir. Well, the time has come for our Q&A session. If you'd like to ask a question, please raise your hand, and we will bring you a microphone so that can be heard and translated.

Before we vote, I think that we should pay attention to what we've heard regarding this audience's confidence, trust in your ability to turn the company around. And you are hoping that we will put hand to pocket and support you and you explained to us that this is the only way we can expect to make good on some of the money we've lost. I would be interested to know how much you think we can get back. Thank you.

In the transaction note and in our press release, Ycor has announced their goals when it comes to the turnover and the profitability with landing in 2027. So the next 3 years, will be a show run by Ycor. And the question is what share price you hope that Ycor can deliver. It's really something that is left to you to ascertain.

Question. Question.

Will you give us records that show the increases and pay downs of your debt, because we don't have specific figures. We'd like to know how that debt is going to evolve. And you've also told us that some of the financial information is going to be available in the annual report, but I have leaped through it and have not found that information. We need to know in figures what the human potential of the companies, but we also need some figures so that we can make up our minds about your chances of succeeding. In July, there are some maturities that we would like to know more about. Are you going to be able to redeem what you owe? Answer.

Regarding the financial report, yes, all of those charts will be available on the website. I'm surprised you didn't find the annual report where we provided it. It was available for your perusal at headquarters on paper, and it's also on the website. Now as to the structure of these transactions, we've issued a number of press releases and a detailed report line by line, charting all of these transactions in far greater detail than anything I explained to you this afternoon. If any of this is not clear, I'm happy and available to answer any questions you might have. No microphone.

I requested the documents several times before the meeting.

What document are you referring to?

The annual report.

So you have only to give us your e-mail address, and we will send it to you.

I requested it repeatedly, and I was upset not to be sent when I requested.

Well, the annual report is ready to send off immediately, and it's even been printed on paper sir.

[indiscernible]?

Back again, I am horrified at the way you have wasted 100% of the shareholders' money. You have completely run this wonderful company, this priceless gem into the ground. It's horrifying. To go back to the question I asked Mr. Levy about the solutions he's put forward which sort of seem obvious. I mean, of course, you need to work more efficiently. You need to work more intelligently. You need to make your offering more accessible. You need to simplify your operations and invest more energy into the company. Well, isn't that sort of stating the obvious? How come you didn't do this many years ago? At least one of the directors could not -- one of the directors have come up with these bright solutions to your situation. The loss of 15% -- no, the loss of 10% of your revenues and loss of 15% in your priority offering on party referencing. That ranking offer, which is very desirable. How come you sold it so poorly? And regarding the staffing of your management team and your company, how do you motivate your staff? If you don't motivate them, if you don't hold out the promise of financial reward, they'll never make any extra effort. The Managing Director only holds 1 share. On Page 93, look at that. It's there for you to refer to. That is a symbolic amount. Thank you very kindly for your attention.