SPIE SA (SPIE) Earnings Call Transcript & Summary

Well, thank you very much, Mr. [indiscernible]. Without further ado, we're going to start our meeting, and our meeting is going to be broadcast. And thank you for being here. Together with the Board, we're happy to welcome you to the general meeting of shareholders. Thank you for being here. Jérôme Vanhove, the Administrative and Director and CFO; and Pascal Colbatzky, Head of Legal and Insurance is with us. And I'd like to tell you that this meeting is a public meeting and we're online on the company's website, and the recording will be online as well on our website after the meeting. Except if anybody is against, your image might be used during broadcasting. There's also simultaneous interpreting for those who'd like to listen to the broadcast in English. The time has come to open the session. I hereby inform you that the combined general meeting of shareholders is held on first call or notice. The legal notices convening the meeting of shareholders were published within the regulatory deadlines. The financial statement reports and all the documents required to be made available to the shareholders have been made available in accordance with applicable laws and regulations. The documents are on the table. Please take due note of this. Time has come now to appoint the members of the bureau to check the quorum and have a look at our agenda. I'll be sharing -- chairing, sorry, the meeting. I note that among the shareholders present or represented the greatest number of votes, we have Bpifrance Investment with Madam Adeline Lemaire. The SPIE [indiscernible] FCPE, which is the fund for employee shareholders of SPIE represented by the Chairperson Madam [ Anne Buchen ]. Do you accept being our scrutineers today? Thank you. Mr. Pascal Colbatzky, Head of Legal and Insurance for the group will be our secretary today as far as the quorum is concerned. Now SPIE SA's share capital is made of 166,907,584, and we have to deduct 390 shares to get the number -- total number of shares. Given the fact that we have sometimes dual votes, the total number of voting rights is 196,056,398 the number of shares present. For those present or those who voted by correspondence is 133,883,208. That is the quorum is met because we have more than 20% and 25%, which is the quorum which is required for the validity of deliberations at ordinary and extraordinary shareholders' meetings convened on first noting. The meeting may, therefore, validly deliberate. It being specified that when acting as an ordinary general meeting, resolutions must be passed by a simple majority. And when acting on -- as an extraordinary general meeting, resolutions must be passed by a 2/3 majority. This meeting is called to deliberate on the agenda which was communicated in the notice of the meeting provided to you prior to the meeting. We've received no new resolutions and no changes have been made to the agenda. I therefore propose that we do not read it in full. I would also suggest that the meeting refrained from reading out in full the reports of the Board of Directors, the text of which are set out in the universal registration document or in the notice of the meeting road show that we've made available to you in advance of this meeting. I propose to outline them for you by presenting your group's key events for 2023. As far as the meeting is concerned. I'll be commenting a number of highlights for 2023, then we'll listen to Jérôme Vanhove, Chief Financial Officer, who will be presenting our financial highlights, and then I'll ask Mr. Patrick Jeantet, Lead Director and Chair of the Appointments and Remunerations Committee to come to the elect term to present the proposals submitted to you with regard to Director appointments and Director remuneration. With Isabelle Lambert, the group's Sustainable Development Director, will then outline our objectives and achievements in the field of the environment and human capital. In particular, we'll recall our climate objectives and the actions undertaken by the company as well as the results obtained so far. Finally, I'd like to outline the group's prospects. Then the statutory auditors will present a summary report of their various reports. And we'll be showing a number of videos as well as part of these presentations. After these presentations, we'll give the floor to shareholders present in the room. I'd like to point out to the shareholders who are following our Annual General Meeting online on the company's website that they can ask questions in writing, which were grouped by themes before we answer them. And then we'll proceed with the electronic vote on the resolutions. To start with, I'd like to show you a video that highlights the main events or the highlights of 2023. [Presentation]

Well, thank you for watching the video and remaining very, very quiet. Now highlights for 2023, if we may. Well, 2023 was an excellent year for SPIE. We had a very good organic growth, as you can see, 8.4%. And then the margin has gone up better than what we anticipated and planned. The margin was up 40 bps to reach 6.7%. Our free cash flow has reached an exceptional level with a cash conversion rate of more than 100% and our leverage has reached a historic low. We've also managed to have faster bolt-on strategies and we are a leader in sustainability. 48% of our revenues or entrenched production is aligned on the European taxonomy. Now some numbers. So revenues in EUR 8.7 billion; EBITDA EUR 584 million, organic growth, 8.4%, total growth, 7.6% restated from the disposals of the U.K. in 2022. Our free cash flow is really good for EUR 427 million. Therefore, our leverage ratio is really low, historically low at 1.2x. And revenues from acquisitions EUR 702 million, 9 acquisitions. Earnings per share, EUR 2.05. And the dividend we recommend for this general meeting is EUR 0.83 per share. Therefore, up 13.7% from 2022. So our organic growth, as I said, was really good through-and-through throughout the year. When we started off the year. Well, compared to 2022, the beginning of the year was easier, and then it became more difficult during the year. All in all, 8.4%. That's our organic growth, which really shows that the markets were quite buoyant for us, and we have good positions in our markets and also look at the price impact, more pricing in 2023 or rather higher prices in 2023 because the inflation was higher than the historic levels. Volumes are good, but margins even better. Our margins have been going up in all the segments where we operate, 20 bps, that's for France to reach 6.7% in 2023, which is the average of our group, 20 basis points as well in Germany, reaching 6.6%, really close to the French margins now and nice improvement as well in Northwestern Europe. Now there are 2 aspects to this. First, the fact that we no longer have the U.K. business, which historically had a dilutive effect on the group. That accounts for part of the increase and also and mainly we've improved very much in the Netherlands. That's our historic scope that has grown, and we took over work share in 2022 and they joined the group in terms of the margin level, and we're very happy with this acquisition. Nowadays, we're #1 in the Netherlands with more than EUR 1.5 billion worth in revenues. That's the third leg of our group that's very solid with France and Germany. And then the other segment, which is Global Services Energy, which is the new name of the former OGS, Oil and Gas Services, and nuclear. Well, they're up as well. So our margins gone up by 20 basis points as well in an environment which is more conducive for oil and gas in 2023. The margins are historically very solid in the nuclear business. All in all, up 40 basis points, that's the margin of the group to reach 6.7% margin at group level. So very good year in terms of bolt-on acquisitions. We'll start with the biggest one, which is ROBUR, signed off in 2023, and we closed the deal beginning of 2024, EUR 380 million in Germany, which is where we intend to go. This is one of our priorities and part of this business is a business where we were not present. We usually don't cover industry in Germany. This is a sector that is very important. If you look at German industry, it's 3x as big as French industry. And therefore, we thought we had to operate in this industry. We're good in France, in Belgium or also in the Netherlands, and we needed to have this position, which is what we did. We are now present in industry in Germany with ROBUR, and they have another line, which is maintenance of wind farms. And that's also an interesting business for us in the future. And then there's bridging IT that's for Information and Communication Systems. And ECS, it's smaller, 3 acquisitions in France, in networks, information, communication services and also Tech FM. As you can see, we have acquired a whole gamut of companies in France in 2023 and then 2 other acquisitions in the Netherlands, one of which comes from [indiscernible] which is in the transmission, distribution of energy, T&D. We're good on that market, but we'll have a stronger position because we've gained or bought extra capacity. And then Correll, which is in the U.K., but they operate throughout the world. That's to connect high voltage lines and the wind farms. It's in the former oil and gas business, and now it's called Global Services Energy, the new name for this BU. So all in all, if you look at our numbers, and look at the SPIE IPO, the IPO that was in 2015. Look at the considerable progress. Revenues going from EUR 5.3 billion to EUR 8.7 billion, EBITDA up to 66%. Our operating cash flow, up 71% to reach EUR 629 million. The leverage is down. We were at 2.6 during the IPO at the end of 2023. We reached 1.2 and earnings per share was up 64% which really shows that SPIE has got a good positioning. And it really -- we're good at executing. I'd like to thank all of our teams for what they did, all the SPIE teams, which work day in day out with our clients, they're highly dedicated to our clients, and they're highly skilled. And that's what we see in this very good performance. Now before I hand over to Jérôme Vanhove, our CFO and Administrative Director, we have another video that will show you the main acquisitions in 2023 and this video will be the ROBUR video. I hope we're going to have sound, who knows, there are miracles. [Presentation]

Good morning, dear shareholders. Now I'll talk you through the main highlights in -- for financial year 2023. We will start with revenues, at a bit more than EUR 8.7 billion, therefore, a total increase of 7.6%. This total increase is mainly due to our organic growth, plus 8.4% for this year. Then total growth is slightly lower than that number due to the deconsolidation effect of our U.K. business, EUR 250 million, more or less, in terms of revenues in 2022. Therefore, the impact was 3.1%, a negative 3.1%. And -- but we acquired as well companies in 2023 to the tune of 2.4%, and therefore, total growth, 7.6%. EBITA at EUR 584 million, which means an improvement of our EBITA margin by 40 basis points as our Chairman said. And for the full segment, 20 bps and a bit more as well, if we look at the Netherlands, and that also factors in another effect, which is the accretive effect of the fact that we disposed of our U.K. businesses to the tune of 10 basis points if we look at the overall improvement of financial 2023. Adjusted net income reached EUR 344 million, therefore, up 14%, which is quite in keeping with the fact that our operating EBIT or EBITA has gone up as well. Net income, therefore, was at EUR 239 million, a sharp increase, almost 60%. And you might remember that in 2022, the book loss was due to the exiting of our business in the U.K., and this weighed on the net income in 2022. Now back to the P&L or income statement and the EBITA. First, the cost of the financial debt. Well, we have moderate increase, 9.6%. That's mainly due to the fact that we've reduced our debt during the financial year, as we will see later on, but also it's due to the very structure of our debt, growth debt structure is with fixed rates, mainly or if it's variable rates, they're hedged partly. And therefore, during this year, when we saw a quite a sharp increase of interest rates in the short term or midterm interest rates, we managed to contain the increase of the cost of debt. Then if we look at other financial expenses, there is a sharp increase -- and this includes the interest connected to the pension schemes we have mainly in Germany. The increase in interest rates triggers an increase in the expenses that have increased more than twofold in 2023. And if we look at the like-for-like basis, in 2022, we had net gains in terms of exchange that were higher than usual. And these gains and losses look neutral in 2023. And that's why we have such an increase during financial year 2023. If we look at the adjusted income, 9.7%. If from that, we deduct the normative tax level on basis of our normative rate, which is not far from the effective rate, what we get is an adjusted net income of EUR 344 million for fiscal 2023. Therefore, up 14%, again, very much in line with the increase in our operating performance during the same period. We will now have a look at our cash flow. As the Chairman said earlier on, our cash performance is quite exceptional for this year. Our cash flow from operations is at EUR 629 million, therefore, higher than the EBITA. This is measured on the basis of a cash conversion rate and the target each year is 100%. And in 2023, we had a cash conversion of 109%. And we also managed to correctly manage our working capital requirement. And at the end of December 2023, the structure of our WCR was improved with a reduction in the number of payables and a reduction in the number of days for bills that we need to issue, which each year is a very important objective to meet. On the basis of this cash flow, EUR 170 million of cash out for the taxes to be paid. So EUR 97 million, more or less, EUR 96 million and the debt and interest paid on the debt. Therefore, all in all, the free cash flow was at EUR 427 million for the year, which is a record high. I think that speeds has never gone that far. And in terms of capital allocation, with this, we managed to buy companies. That's external acquisition. There's EUR 196 million that we cashed out during the financial year. Two of these transactions that we mentioned last year will be closed only at the beginning of 2024. And of course, the dividend, EUR 128 million, which means that with all that, we've reduced the net debt by EUR 130 million, more or less during the financial year. And this to reach EUR 793 million on the 31st of December 2023. Then we measure the leverage ratio, that's to mention the debt that is EBITDA during the period, which is a pro forma number. And given the good performance, we've reduced the ratio to a historic low with 1.2x and I think you've heard us before when we were saying that the maximum was 2 is what we wanted between 1.2 and 2, that's the room for maneuver we have to continue and buy out companies and these will be self-financed. As I said, the ratio is 1.2x at the end of December 2023. If we set aside the impact due to the cash outs for 2 of the acquisitions announced last year, ROBUR in Germany, that we've just presented. And Correll, that's the wind business for our segment, which is the former Oil and Gas segment. Therefore, it goes without saying, if we look at 2024, as you will see, we will see again an increase in the leverage ratio. Then let's have a look at the balance sheet and structure of our debt, as I said before, 80% of the gross debt and the vehicles issued by the group are with fixed rates, only 20% floating rates. And in 2023, what we did is that we issued a convertible bond in ORNANE bond that you can see on the right-hand side. This is mainly what we've changed in the debt structure. And with this, we've reimbursed a year before the realtime a debt that we had on the balance sheet by EUR 600 million. Therefore, we've reduced the gross indebtedness of the group during the period. There's no need to go through all the benefits of the ORNANE bond. But with this, we have a very low coupon at 2%. And the level of cash at the end of the year is really high, EUR 1.7 billion, more or less the level we had the year before, EUR 1.7 billion, which is going to be very useful mainly if we look at 2024 when we'll have to cash out some sums due to the M&As that we're thinking about, the ones we announced, and I hope there will be more. On that basis, we've had a better rating that Standards & Poors and Fitch. And today, we're rated BB+. Finally, the dividend that we recommend that you'll be voting on, up 13.7% for 2023, therefore, EUR 0.80 per share. And we paid out an interim dividend, EUR 0.22 in September 2023. So the rest will be paid on the 16th of May 2024 and the coupon on the 14th of May '24. So EUR 0.83 because that's what we've always done with our dividend policy. That is the equivalent of 40% of the adjusted net income per share. Thank you very much for your attention.

Thank you very much, Jérôme. Now I hand over to Patrick Jeantet, the Chair of the Appointments and Remuneration Committee.

Good morning, ladies and gentlemen, dear shareholders. As every year, the Board of Directors considered the compensation of the Chief Executive Officer for 2023. For the variable part of the compensation, the criteria for the year 2023 did not change compared to 2022. You have 2 parts. You have quantitative criteria, EBITA. We look at the EBITA compared with the budget. The target is 30% of the fixed compensation. And in light of the outstanding performance, the -- well, the CEO outperformed to 40.4% on criteria 1. Criteria 2 is cash flow. As measured against the budget, the target is 30% of the fixed part of the compensation. There was -- again, he outperformed that because -- well, you had a maximum of 60%. The third criterion is the -- well, in acquisition, the volume in terms of revenue and then the quality of integration into the group that's ex post. So the target there is 10% of the fixed compensation. And here, we are at 9.5% of that. So all in all, the quantitative criteria up to 109.9%; above target, but below the maximum, which is 141%. Then you have the qualitative criteria, individual objectives set out by the Board on such issues as CSR, the work of the members of the Executive Committee in relations with shareholders in financial communication. Now that's qualitative. So you cannot overperform there. And there, you have 25 out of the 30% that is what decided by the Board. So all in all, the variable part is 134.9%, so that's applied to a fixed compensation EUR 850,000, so the grand total is EUR 1,146,650, and that's 2023. 2024 now, the fixed compensation for the CEO had been increased to EUR 800,000. So that was an increase of 6.25% initially. That amount, 850,000 was supposed to remain unchanged throughout the term unless there were changes in his duties or a change in general economic conditions. So the compensation for 2023 remain unchanged at EUR 850,000 even though there was significant inflation both indeed in 2022 and 2023. The Board said that should high inflation remain in 2023, then the fixed annual compensation will be reconsidered, revisited in 2024 with a sense of being more fair in line with that. Now if we found that inflation indeed in 2023 was upwards of 5%, then there was an acceleration of the business and indeed significant growth as the CEO pointed out, there was because of external growth that made a significant contribution in H2 with the ROBUR and other acquisitions, both, of course, both in terms of scope and revenue that made a big difference. In any case, for all these reasons, the Board of Directors felt that the annual compensation should be adjusted to EUR 900,000, up 5.89%. So that amount will be slightly above the median compensation for that is for the fixed part in a benchmark but that should remain unchanged until the end of the term set out in May 2026. Regarding the variable compensation, what we propose is to adjust the criteria to give more significance to the issue -- a more transparency to the issue of safety. It's not just looking at weighting the EBITDA. But here, you have criteria that is independent of financial criteria in the quantitative parts. So that will be 5% of the target compensation. It will be worked out on the base of 2 criteria equally accounted, the total recordable case frequency rate and the lost time injury frequency rate. And these are indicators that the Board and indeed, our company as a whole have been monitoring constantly, and that is well accepted by the profession as a whole. So there's a lower, median and upper scenario, we'll see how the safety indicators perform. And of course, the idea is to improve safety by 2% a year based on these 2 criteria. So this variable part and so the quantitative part rises from 70% to 75% if you add in this safety criteria. And then conversely, the qualitative will come down from 30% to 25%. So the target remains 100%. If you do away with that qualitative criteria that is relation with shareholders and financial communication, that criteria, that seems no longer relevant. That indicator was introduced when -- during the IPO, that was about 10 years ago. Now then we also increased the weight of ESG criteria to reflect, of course, the significance of our ESG strategy, which we'll present in a few moments. So the variable compensation for 2024, quantitative criteria, 75%. You have 4 criteria EBITA, cash flow, external growth, just like this year indeed. But then you have this safety criterion and the qualitative criteria that only account for 25%. You have CSR, risk control and then succession plans for our key managers. And then you have the next issue, and that is the compensation of Directors. The structure -- the present structure for the compensation goes back to 2015. That's when, again, the company was IPO-ed. And we felt it was relevant to look at that compensation in line with common practice in 2023. And so what we found, we worked with consultants to produce a benchmark, and what we found was this. There has been an increase in the number of meetings of the Board and its committees and the meetings themselves lasted longer than in 2015. And because of an increasing workload, especially because of CSR, and then we have the number of annual meeting is on the upper bracket of that benchmark. Amongst our peers, there is very often a lump sum per meeting, and that gives a better correlation between the compensation, the number of meetings and attendance to these meetings -- attendance of these meetings. Then the compensation of the Chair of the Audit Committee is well below the benchmark and then you have a budget for the Board meetings, and that is, again, the compensation is well below what we find in our peers. So we decided to revisit the variable part of the compensation of the Directors. That is capped. We also are revising upwards a compensation of the heads of committees, especially the audit committee, better transparency on the compensation of specific amounts given to Chairs of committee and the lead director. And then there's an increased budget for the board itself, taking on board a new compensation policy, but also we can add in a new director should the Director -- the Board wish to do so. So that accounts for this bigger budget. So this is what we have for the Directors. You have a fixed amount, which is 40% of the total, which is EUR 24,000. That remains unchanged, the variable amount is now 60%, so a maximum of EUR 36,000, that means it would be now EUR 4,000 per meeting of the Board with an annual ceiling of EUR 40,000, EUR 2,000 per meetings of the committees, then capping EUR 12,000 for the audit committee, EUR 8,000 for the others. Chairing the committee would be EUR 10,000, EUR 18,000, that was EUR 10,000, it would be now EUR 18,000 for the audit committee, EUR 12,000 for the others. And then for the lead Directors, it's now capped at -- it was EUR 19,000 both parts included -- including chairing of the committee. Now you have EUR0 20,000 for specific missions of the lead director. And if that director is also Chair of the committee, the maximum would be EUR 112,000 provided that director, that Chair of that committee attends all meetings of his/her committee. Now there was a question, a number of investors was wondering what happened at the end of the term of the CEO, that is after the AGM of 2026? So the Board of Directors takes great care at looking who will step in and all members of the ExCo and the CEO, in particular, would like to see what the plan is. It seems a bit early days. Now we are only half way of that term, but early days now to communicate on that. So neither at this AGM, nor next meeting will be addressed this issue, but we will, of course, be addressing this in 2026, and the Board is working on this right now. Thank you.

Thank you, Patrick. So ladies and gentlemen, dear shareholders, as you know, the climate issues and the energy transition, these are major issues and SPIE has been very much involved in this. Before giving the floor to Isabelle Lambert, who's in charge of sustainable development, let's watch this video telling you about what is at stake and what SPIE has been doing this to meet the challenges. [Presentation]

Good morning, ladies and gentlemen. Let us look at our performance in terms of sustainable development. As you were able to see in the movie, our main performance is that we are close to the customers, and we help them reduce their own carbon footprint. That is what we've been doing. That's what we've been measuring since 2019 using the European taxonomy. And you can see that part of our revenue is indeed in line with the taxonomy criteria from 35% to 48% by the end of 2023. And as you can see, we're working on a number of lines. The most significant one is what we do to improve the energy efficiency of buildings of a number of manufacturing processes. Then line #2 is what we do to improve the energy mix with a lower carbon footprint on energy grids, on electricity grids using renewable energies. And then number three, we work for mobility with less carbon footprint there. So we're talking about other individual mobility or public transport. So here, you have a few typical examples. You have substations that connect renewable energies to the grid, then you have lighting. When you have LEDs instead of standard bulbs, you save 60% in energy and then recharging stations with the [indiscernible] network, we'll see a video of that later on. And then we also try and bring the carbon footprint down in line with the provisions of the Paris agreement. So in a matter of 5 years, we're supposed to bring our carbon footprint down by 25% by -- and we were already at 20 -- at 10% by 2023. Now we're not moving completely in line with our objectives because most of the carbon footprints are due to our fleet of vehicles -- we're trying to, of course, have electric cars instead of the, I see cars, as you can see the orders of new cars, that's a blue line. We're ordering electric vehicles instead. So from 6% in 2021 we ordered the share of the electric vehicles or 54% in our orders, but the delivery times are long. And so even though we are on paper, we're ready to have a large portion of electric cars; in practice, they haven't been coming in quite as fast. Still, we now -- we were at 2% in 2021, 4% in 2022, now 11%, and there will be even more this year. So a few examples of that. These are LCVs. So we have 30% of those in Switzerland electric vans. Regarding the buildings, you have a large number of buildings. So if you look at those buildings, accounting for the footprint. The footprint was down 37% since 2019, the footprint or the share of the carbon footprint, the share of buildings in the carbon footprint is now down 37%. But now we want to propose low-carbon solutions to society as a whole. These are the charging stations. We have 25 stations on the French Motorway Network, but also in local authorities, they also have these stations, but we use it ourselves. We use these stations ourselves for our own electric vans. [Presentation]

So this is an overview of SPIE's full carbon footprint. You can see that our direct footprint that is that coming from our own buildings and cars. It's only a small fraction of the group's total footprint. And SPIE is no exception. The CO2 emissions from our own value chain and that is the upstream value chain. So goods and services purchased ahead that accounts for 90% of the full of the total carbon footprint. And so that's why we're paying great attention to that. And we work on the value chain upward -- upstream from our own work. We want 67% of our supplies by 2025 to come from supplies who themselves are committed to drastically reduce their own carbon footprints. And there's been significant progress there over the past 3 years. In 2021, we stood at 17%. At end of 2023, we already stand at 47% of purchases made with the suppliers that themselves have committed to reduce their carbon footprints. And so that, of course, comes along with a strong mobilization of our procurement people who are raising awareness amongst their operational people in every single country, especially for those suppliers that have not already made that move, we raised awareness there during performances -- doing performance reviews or webinars. We're also helping them along because speed, as you know, has many suppliers. Indeed, we work with many SMEs, many of whom that haven't started greening their business, and so we're helping them do that and especially our procurement people are doing just that. And then you had a good examples with the previous video. Mrs. [ McKario ] who is Operational Director for low-carbon mobility and city networks in France. We want to improve the gender balance. We've been working on that for a number of years. And there, we want to have more women in key managerial positions to raise it by about 25% in a matter of 5 years, which means instead of having 16% of women in managerial -- in key managerial positions by 2020 -- as was the case in 2021 -- 2020 would like -- 21% of women by 2025. And we already stand at plus 17% in key managerial positions. So how are we achieving this? Well, you have to keep in mind that today, women only accounts for 30% of the total headcount, but 18% of all managerial positions. And so -- and we're looking at that. We're looking these -- we're talking here about 250 positions in the group. And so we're looking at a better performance, both in recruitment but also in keeping our top people. And so we are -- we always try to make sure there's at least 1 woman in our shortlist and there is an overrepresentation of women in all development programs of the group. So this is a clear strategy. And then we have a dedicated gender balance program which goes beyond EMEA awareness raising. And now I'll give the floor to -- we will be talking about the safety on the work site. This will be my colleague, Gauthier Louette.

Gauthier Louette, CEO, of course, yes. Thank you. We have reduced by 25% number of severe injuries. And there was a slight increase in 2023, especially at the beginning of the year. And in Germany, in particular, we had a higher number of incidents. And so there's quite a bit of work to do. In '20 -- well, the year 2024 hasn't started well because, as you know, there was a real tragedy in Africa. As many as 6 people were killed on an oil platform including sank 5 employees or subcontractors of -- so naturally, we will help out the families and the inquiry is underway to see just what happened. But nonetheless, in purely statistical terms, and of course, statisticals obey their own logic, what we have found is that there is some improvement in 2024 compared to the same period in 2023. Nonetheless, regarding our employees, they have 50,000 people, indeed 54,000 people now that we have these new acquisitions. In 2023, SPIE showed its ability recruit 6,400 new employees and 1,300 new apprentices. And of course, apprenticeships are important, significant. At SPIE, we work hard on that. We'll train our apprentices. You have young apprentices, who spend half the time in the company and the other half at school. We also have a coopetation policy. We have as many as 100 as -- 1,600 people, who were recruited as part of this recommendation program, up 25% compared to 2022. So this is a significant. You have to -- of course, we don't just want to recruit them, we want to keep them. And in 2022, there were fewer resignations down from 8% to 7%. You may remember that after COVID, the numbers were higher. Now we are down to more normal levels. We stood at about 6%. And so we've started bringing down the number of departures. That's a good news. One way of keeping our employees is the employee shareholdership program. I'll get back to that in a minute. And then we also work hard at keeping women in our company, and there are well structured initiatives in all our countries, where we have a very positive policy there. So regarding employee shareholders. Our shareholders are the main group of shareholders at 7.4%. In 2023, there was another operation to open up the capital to employees. Share For You was the name of the program that was very successful in terms of subscriptions in 2023. As many as 17,000 employees joined the program. So that's up 55% compared to 2022. And that is, of course, significant. That included 5,000 employees, who took up SPIE shares for the first time and in the overall amount was around about EUR 34 million. So we have a strong bond with our shareholders -- with our employees, who become shareholders of their own company. And in 2024, we'll have similar plans as well to increase employee shareholdership. And I'm happy to see [indiscernible], who chairs the fund of the -- the fund running the shares of employees. And that accounts -- it's worth more than EUR 350 million altogether. So we have 2 lead shareholders and we very much appreciate their presence. The LAC 1 from BPI France. And then Peugeot -- Peugeot Invest, they each have about more than 5% of the capital stock and the float is about -- is about 80%. So regarding the year 2024 and beyond, the outlook for 2024 remains robust. We certainly expect growth to -- organic growth to continue, albeit not quite as strong as 2023, but still pretty good. We expect our profit margins to increase as well. We already have -- we finalized a number of acquisitions for this year. And so this will be another buoyant year in terms of acquisitions and speed in 2024. As Jerome was saying, we keep unchanged our dividend policy, about 40% of the net adjusted income. And regarding 2025, we gave guidance back in 2022 that is being revisited, not so much on organic growth, where we are still looking at about 4% for the period. Neither on our ambition to step up on the bolt-on acquisition program. We are committed to keeping our cash conversion rate at 100% or above. Our CSR commitments, ESG commitments remain the same, and that includes converting our vans to electric vans. What we do propose to do is be even more ambitious on profit margin. We're looking as close -- we want to be close to 7% in 2025. That's the target. Initially, what we announced, we said 6.7% by 2025. This figure of 6.7% we reached as early as 2023. So we have a reason to believe we can revisit the target upwards for 2025. All in all, the markets remain, as I said, buoyant, and our employees are very much committed to our activity. They are highly skilled. There's a close relation with our customers and the demand is such that customers are well aware of the skills we can provide. And that accounts for a high level of orders. So that makes us confident for the future. And now without further ado, let me give the floor to our auditors, Edouard Sattler and Pierre Borja. You have the full reports at your disposal. They'll give you a brief summary of their work, so they can join us -- they can join us here at the.

Thank you, Mr. Chairman. dear shareholders, on behalf of EY & PwC, we will share with you what we've done for 2023. What we have done is that we have produced audit reports to check the sincerity and compliance of individual accounts, annual accounts as well as the consolidated financial statements of your company. And also, we've reviewed other elements that are communicated. And we've also reviewed the regulated third-party agreements. We have produced 3 reports that cover 3 of the ordinary resolutions, which will be voting on later on. As far as the extraordinary resolutions are concerned, we've reviewed them, and we, therefore, reviewed the reports produced by your corporate management, and they require specific reviews on our side. We've produced a number of reports that you could see on the slide, and I'll share with you our conclusions. To come back to the first aspect that is the ordinary general meeting, in terms of the annual financial statements, but also the consolidated financial statements of SPIE, our opinion is without any reservations for the 2023 financial year. In our reports, we've highlighted the key audit points. We consider that 1 element that is a key point. It's a very important item that is the most important item for auditing, the financial statements. For instance, the equities and for the consolidated financial statements, it's the goodwill plus the recognition of revenue on the long-term contracts. Then as far as specific reviews are concerned, which is our duty when we ordered the financial statements, we checked that the information sent to you in the management report and in the other documents made available to you are compliant with the regulation. We have no observations on that. You have the full list on the screen. I'm not going to read it out. We've checked all of these items in terms of they have being exhaustive, correct and compliant with the financial statements. And another amount for those who use the modern version, which is the XHTML version, we can confirm that all of these account respect the European Single Electronic Format, ESEF yet some items might be slightly different from the paper version that you have. And finally, as far as our special report is concerned on the regulated third-party agreements, we have seen that there's no new third-party regulations and no regulation prior to 2023 that was continued during this fiscal year. And now the final slide, this is for the extra ordinary resolutions. We have produced 5 reports because we -- there are many delegations of powers given to the Board and that you'll have to vote on at the end of the general meeting. For each of these items, we have checked the content of the Board report for these transactions. For some resolutions, we have to express our opinion on the information provided to you to set the price for the shares to be issued. And also, we have to give an opinion on the suppression of the preferential subscription right. We have no special comment to make on that. And as far as capital reduction is concerned, we looked at the conditions -- terms and conditions to reduce the company's share capital connected to Resolution #11. Generally speaking, these are our conclusions. Well, we have no observation to make concerning the causes and conditions leading to the reduction in the company's share capital. That's for Resolution #11. And for the other resolutions, our reviews are such that we have had nothing to highlight in particular. As far as the share capital is concerned, resolutions from 16 to 18, we, as have not been set, and therefore, we have no opinion to express on this as well as we have no opinion on the cancellation of the preferential subscription rights, which is what we did in 2023. There was a resolution that was submitted to the meeting in 2022, therefore, last year's general meeting. And in this specific report, we can confirm that the increase in capital with a cancellation of this preferential subscription rights for the past employees and current employees and corporate offices is compliant with the terms and conditions that you delegated to the Board for carrying these formalities out. This is it as far as we are concerned. Thank you very much for your attention.

Thank you very much. Now before we listen to the shareholders in room, I must say that we have not received any questions in writing for the shareholders. Now maybe you have some questions in the room, and we have 30 minutes for the Q&A more or less. We'll ask you to ask quick questions, if possible. And we'll have a limited number of questions, but of course, if you have more questions, we'll listen to you again. We will start this session now, I think.

I'm Jean-Francois Delcaire. I represent the HMG DECOUVERTE Fund. We have 40,000 SPIE shares. Well, Congratulations. Well, it's a terrible thing to say. We say bravo to the Board members, but also congratulations to the team. Thanks to whom you've achieved such good results. I have 6 questions. I'll ask 3 in a row, which is what I always do. The first question. Could you tell us more about the competition, please? Could we have more color on that? Could you tell us how the competitive landscape is changing or not changing for all we know? Question number two. What do you want to do with your operating margin? You've said that from now on, your target is 7%. Well, congratulations again for that. That I'm not an expert at all in this industry. How would you compare this 7% with what competitors do in Europe or elsewhere? Would you say there's a maximum? Is this a maximum, the 7% target? Or could you consider other business lines that you would have a more accretive effect so to go beyond the 7%? Is it usual habit in your industry, is it quite low? I don't think it's a low level, the 7% is. But then my third question. When things go well, you should perhaps think about the things that might go badly. So is there something in particular you pay attention to that you're vigilant about? I thought about those myself. And I thought what would be the dangers at SPIE and I thought maybe your organic growth that could be normalized. I don't think you're going to go down to 4%. I know you're very conservative, so your organic growth could go up. But if you look at the macroeconomics, there's perhaps some type of slowdown to expect? What about working capital requirement? Is it more difficult to have a good cash conversion rate? It's difficult to have money in or inflows of monies. Are you worried about this? All perhaps as well, which is something very important in your company, I know is people, the people you manage. Would you say there's some people-related tension or perhaps there's nothing that might go wrong, because the company is doing very nicely? These are the first 3 questions.

Well, thank you very much, sir. As far as the competition is concerned, Equans was taken over by Bouygues and this is quite positive. That is there's more discipline in terms of pricing policy at Equans and they're more careful about their cash generation. And therefore this competitor, I'd say is no more reasonable on the market compared to what they were doing in the past. This is good for us. And apart from that, some companies are consolidating. Eiffage has taken over EQOS in Germany, I think. And people are disciplined. And we are all aware that resources are scarce, so we have to be careful about our resources and how we use our resources. This has an impact on our operating margin, since resources are spare. You have to choose the battle you want to fight and therefore, decide who you want to work with, the clients you want to have. And the ones who really like our services, they're quite willing to pay for our services at a good level, which was good for us. If you look at our margins and how they upped. And we know that, as I said before, our resources are scarce. And in all the countries where we operate as well by enlarge let's say, that we always execute better and better, which means that our margins will be improving and there are acquisitions as well that have an accretive impact. Who are the best in the industry? [ Verse ] Energy in 2023, said that their margin was at 7%. We are at 6.7%, not far behind them. And yes, that's our target. We want to get disclosed as we can to this 7% goal. And as early as 2025. This is the commitment that SPIE has made, and we intend to meet the objective. And is 7% a maximum? Well, who knows? We do things step by step as you know. First, let's reach the 7% goal, and then we'll see. But if you look at the backdrop, it's quite favorable. We acquire companies and businesses where we have better margins. And if you look at the historical businesses of ours, we're more demanding with our margins. We've improved our margins, which is good. The margins are going in the right direction, and we'll go in the right direction in the future. Now, what about your next question, things we pay attention to, that we're vigilant about? Well, we always have to be all ears and eyes out for anything that might go wrong. Otherwise, the road will be a slippery road. So we look at contractual terms and conditions. We look at price levels that we negotiate with our subcontractors and suppliers. We are very vigilant about the teams we work with, the quality of our teams. We pay attention to our teams all the time, as you know. And what's very important for me at the begin of the year is safety. It's what I pay attention to really. We constantly have to keep an eye on safety. And as far as working capital requirement, I'll hand over to Jerome.

Well, I'm not going to say that cash collection is an easy thing. It's what most of our operations as directors do damned out, and they do a good job. I showed you the structure of our WCR at the end of 2023. And we've improved compared to what we did in the past. With this level of performance, we get off to a good start in 2024. We -- there's nothing artificial about our structures. We pay our suppliers earlier. We have a better WCR structures, so that we can do better job. It's never easy. We work on this every single day. I think with this negative level of WCR, we think that we can have a good level of EBIT. And yes, sir.

I have 2 questions. The -- what you do against takeover bid? First question. 80% of the general public has shares. So that's the float. And the Peugeot Investor is 5% and BPI, 5.5% of the share capital. So it's not fully protected. What can you do to avoid a hostile takeover? Back to the employees who own share. I looked at Page 282 of the universal registration document in French, Page 282. Everything is done for institutional investors, the socially responsible investors and the analysts. What about individual shareholders? Nothing at all about them. Don't you think you should get closer to these shareholders? With the club of shareholders visiting sites, or having meetings in Paris and in the regions. In doing that, you would focus more on the shareholders that you could count on should you need these individual shareholders. Thank you.

Well as far as the weapons we can use against hostile takeovers, a bit bogus. There's no such threat. And I don't know which weapons we could use. If you look at our market, there are smaller fish and bigger fish. We're not the biggest fish in the pond. If you're not the biggest, the best thing is to run faster than the others. If you look at the bottom line, the income of our company, that's our best protection. Each year, we're more and more expensive. That's the best protection. As far as individual shareholders are concerned, we meet institutional shareholders, but also our employees who have shares, the so-called FCB, the employee share ownership plan, the share view plan, where we meet these individual shareholders, and that's all we have for the time being.

I have a question, I have 3 questions in fact to ask. Mr. Louette's answered the first question about your replacement. That was crystal clear. In the press releases, I saw that you decided not to acquire sometimes 100% of the shares of some of the targets you wanted to buy. Is there a specific reason? Maybe Jerome can answer this?

Thank you, [ Juan ]. That's true these acquisitions we announced in 2023, we decided to have a minority stake. Well, this is not a revolution, but we decided to adapt, because we want to convert on joint objectives between the management teams that have shares in their companies, and they've given us control and the joint ambition that we have, that is we want to grow these companies we acquire. But If you look at all the M&A portfolio, you can have all types of closes. That is an [indiscernible] close on basis of future performance that you're targeting and that you have to meet or you take a minority stake in the capital structure of the company, in the share capital with other closes to buy back or to sell the shares. And then at the end of the day have 100%, but then the minority shareholders will benefit from the improvements. We've not changed our policy in general. We've just adapted to the situation. That's for specific cases. We don't do this systematically. But we need to have a management team that owns shares.

I have another question about Belgium. You're not talking a lot about Belgium. And from the Head of SPIE, Belgium, as you know. And SPIE Belgium is really minimal competitors SPIE Netherlands. My question, therefore, is, are you thinking perhaps about something along the lines of what you did with the U.K.?

No, no, no, no, no. No, well, we really decided to bet on the Netherlands. And it's borne a number of fruits with some transactions and deals in the Netherlands. We tried in Belgium. Each year, we've been studying several companies that we intended to acquire, but none of them came to any fruition. But we have more on the backburner. So this is our ambition, which is what we do in all the countries where we operate. We want to continue and grow the business. So the comparison with U.K. is not valid at all. If you look at the profit of Belgium, it's always been good, satisfactory. And if you look at cash generation and WCR, it's 1 of the best performance in our group. So no, we are making constant efforts to find companies we could take over, so as to grow our business in Belgium.

And by the way, I must say that I'm a very happy shareholder.

We have another question in the back of the room.

Mr. Chairman, Mr. Gauthier Louette. Last time, there was an Eiffage General Meeting. Benoit De Ruffray was asked a question about getting closer to SPIE and he said that -- he said lots of positive things about your company. It would make sense in terms of operations. You two companies look alike. If the 2 companies could get together, you could can have a group to the [ EUR 215 billion ]. Bigger than Bouygues. It would be interesting for the investors. It could create value for the shareholders in both companies. This is what Bouygues did when they took over Equans and it looks like deal that's quite profitable for Bouygues. Therefore, Mr. Chairman, do you intend to do this? Or are you listening to those who are singing below your balcony?

Well, this meeting is in Paris, not in Verona. But since you've listened carefully to Mr. De Ruffray, you know what he said at the end of his answer. He highlighted the fact that we are respecting the independence of the company such as SPIE is what he said. Yes, please. Mr. Delcaire, please. Is it the final question.

My 3 following questions. The sequel and the end. I think I saw Bravida somewhere had some problems. Could you tell us more about this Bravida? Could this have an impact on us? Yes or no. That's my first question. Question number two. [ CSRD ] directive, which is for all the main listed companies to be enforced next year. What about CSRD? What about the cost for you, the cost of this directive, the CSRD directive or this new norm, let's call it, norm. And another topic my AFG Professional Association, that is the French association for financial management has seen that 1 shareholder on the Board is not always attending the meetings. Could you tell us more about this? And how come? And that's all.

Well, Bravida. Bravida is a big player in Scandinavia, a market that's totally disconnected. We have 0 business in Scandinavia. Last year, they said it was difficult for them to make sure that the clients would pay for higher prices. That is inflation that would be factored in their prices. I'm just saying was not easy to do this. All of our teams have worked on this to pass on the inflation in the pricing policy, so that's for Bravida. Then the Director of the CSRD. Well, that's a lot of work. We're working on it. All the functions of the company working on this. There is HR, human resources. Mrs. Walser, our new HR Director, is in the room, and there's sustainability, Mrs. Lambert. Finance we have Jerome. And we're working on it. We're organized. We're anticipating. We don't have a real or exact view of what the cost will be like, but we will report on what we have to report in compliance with the laws. And then attendance, attendance of the different shareholders. I don't think there's anything to say about this in this SPIE group. I can tell you that the Board meetings, well, we have quite a lot of Board meetings during the year. Apart from those that are compulsory, the Board meets quite regularly to review acquisitions, possible acquisitions. Some of these will come to fruition. Others will not. The ones we share with you are only the ones that succeed. And I must say that there's good and active attendance. It's an interesting way of working. The different members share their value added. There was a Board meeting yesterday on the strategy to review our acquisitions to see, if they would be a good fit for the company. It seems that there are no more questions. Thank you very much. So that's the end of the Q&A. Thank you very much for all of these questions. It really shows that you're interested in the group. And now we're going to vote. Time has come for us to vote. Before that I'll give you the quorum, the final quorum. The final quorum is 80.23%. So the Board of Directors has decided to submit 21 resolutions for your approval. 10 of which will fall within the scope of the ordinary shareholders' meeting and 11 of which fall within the scope of the extraordinary shareholders' meeting. You've been given a voting device, so that you can vote. I hope that everybody has been given their devices. So this device can work properly only if the chip is correctly inserted. And when the vote starts, which is not yet the case, you have to press 1 for, 2 against and 3, abstentions. And then you will see there's a message on screen, on your terminal, on your device that will show you that you have voted correctly. If you are not from the Y generation -- generation Y, sorry. I'll give you some minutes, so that you adapt to this device. Now I'll ask Pascal Colbatzky, secretary of the meeting, to announce the number and title of each resolution and then I'll tell you when we open the vote and when it's closed.

Right, we'll start the resolutions for the ordinary meeting. The first one is the approval of the company's statutory financial statements for the financial year ended December 31st, 2023.

You can start voting now. [Voting]

That is the end of our vote. The first resolution carried 99.99%. Resolution #2.

Resolution #2, approval of the company's consolidated financial statements for the financial year ended December 31, 2023.

You can start voting now. [Voting]

We'll stop now. You've casted your vote. Carried, 99.99%.

Resolution #3, allocation of the profit or loss of the financial year ended December 31, 2023, and setting with the dividend at EUR 0.83 per share.

You can vote now. [Voting]

Vote is closed. Approved, 99.82%.

Resolution #4. Approval of the regulated related party agreements and undertakings referred to in Article L225-38 of the French Commercial Code and of the statutory auditor special report.

You can start voting now. [Voting]

Closed the votes for this item. This resolution carried 99.99%.

Resolution #5. Appointment of PricewaterhouseCoopers audit as auditor of sustainability information.

You can start voting now. [Voting]

Done. Carried, 97.73%.

Resolution #6. Approval of the fixed, variable and exceptional components of the total compensation and benefits in kind, attributable to Chairman and Chief Executive Officer for the year, for 2023.

You can start voting now. [Voting]

Carried, 96.96%.

Resolution #7, Approval of the compensation policy of the Chairman and CEO.