Stellantis N.V. (STLAM) Earnings Call Transcript & Summary

Thank you, ladies and gentlemen. Dear shareholders, good morning. I declare the annual general assembly of our company open. In the context of the present health crisis and with the aim of protecting our shareholders, employees and service providers, this assembly is exceptionally taking place behind closed doors as in accordance with the Decree 2020 3/21 of the 25th of March 2020. I'd like to thank all of the shareholders who voted remotely upstream of the assembly and who are following this live broadcast. The recording will be available for [ Internet ] after broadcast. We are going to create the assembly's bureau. I ask Anne Guérin and Robert Peugeot from FFP to accept -- to serve as scrutineers for this assembly, functions that they have accepted. They are on my left-hand side. We would like to complete the bureau by appointing Grégoire Olivier, Secretary General, PSA, as assembly secretary. I have next to me Carlos Tavares, the President of the Managing Board; Maxime Picat and Olivier Bourges who are members of the Managing Board. Michael Lohscheller is with us by audio at his office in Rüsselsheim, Germany. I will also ask Philippe de Rovira to be present. He will present in detail the financial results during this session. Because of the impossibility for shareholders to be present because of the implementation of health measures, the shareholders were invited to vote remotely upstream of the assembly, either by mail, using their ballot or by Internet. And in the vote in count, the proxies are taken into account. Now the -- according to the attendance sheet which is established by the centralizing bank, shareholders present or represented representing 1/5 of shares with voting rights. Together, they had 702,651,928 shares, which represent 78 -- 330% (sic) [ 78.33% ] of shares having voting rights. The quorum being definitive, the assembly can duly be constituted and deliberate. All of the documents have been made available on the desk of the assembly secretary. No resolution or appoint owner having been submitted by the shareholders, our assembly is duly constituted. The universal registration document has been submitted to the financial market authorities in April 2020 on the 21st. The documents are also available in digital version. You've been invited to this general assembly, and the universal registration document as well as the CSR Report of the PSA Group are available. I'd like to start off by giving you the Board -- Supervisory Board's report on the company's activities. Then I will give the floor to Carlos Tavares, who will give you the group results for 2019. Philippe de Rovira will then present the financial results for 2019. Then Carlos Tavares will present the progress in the implementation of the Push to Pass plan. Then we will have the presentation of the merger project with FCA, a film of the brand's history will be presented. Then we will have the Supervisory Board report on the corporate governance. Philippe de Rovira will read the auditor's report. Then we will have the questions which have been asked and their answers. Then Grégoire Olivier, the secretary of the assembly, will present the resolutions and the result of the votes. I now would like to present the Supervisory Board's report, which I'm not going to read, but I'd like to give the substance of the report. Prior to that, I would like to recall the mechanism organized at the disposal of the shareholders. The Shareholders Advisory Committee, which was created in 2012, its mission is to express the expectations of the individual shareholders. It presents -- it participates in the elaboration of communication tools dedicated to the shareholders. The committee met twice in 2019. I had the pleasure of meeting the advisory -- shareholders advisory group and answering the questions in March 2019. The members of the committee were able to visit timely as well as a number of experts. Now I'd like to come back to the Supervisory Board's report on group activities. The complete version of the report is available, in fact, on the net. The group sold 3.5 million vehicles in the world and has maintained its registrations in Europe, achieving a 16.8% market share in a market which was up by 1.3% while respecting strict discipline so as to meet its objectives in terms of CO2 emissions. The PSA Group achieved exceptional financial results in 2019 with a recurring operating margin up by 8.5% for the group, reaching EUR 6.3 billion; and 8.5% for the automobile division, which was up 0.9% compared to 2018, EUR 5 billion. The net income group share has reached a record level, EUR 3.2 billion. The PACE! plan objective, that is to say 6% recurring operating margin in 2026 has already been achieved with a 6.5% recurring operating margin at Opel Vauxhall. As of 2019, the group free cash flow was EUR 2.7 billion, including the acquisition of Clarion; and EUR 3.2 billion for the automobile division. The PSA Group continued to deploy its CSR actions to achieve the CO2 emissions for its vehicles in terms of energy, but also in terms of the industrial carbon footprint of the company. The -- we, in fact, are working to take into account the European Commission to reduce the CO2 emissions by 37.5% in 2030 as compared to 2020. This is already well underway, thanks to the specific governance set up in the CO2 monthly committee. The PSA Group has already launched 10 new hybrid rechargeable models or fully electric models. And by 2025, 100% will be -- of the model range will be electrified or have a rechargeable hybrid version. The CSR performance of the PSA Group is recognized on an international level. The group was ranked leader, a sectorial leader, for the Dow Jones Sustainable Index for the third year in a row. And the Vigeo agency has present -- is present with the ISR indicators such as [ stocks ], FTSE4Good, et cetera. You need to know that in December, the PSA Group was the head of the Climate and Energy Benchmark of WBA, too, which ranks the automobile carmakers according to their ability to promote actively no-emission vehicles and new technologies. Based on the criteria assessing the group's competitiveness, profitability and liquidity, the 3 rating agencies, Moody's, Fitch and Standard & Poor's have maintained the robust financials rating of the category investment grade, IG, and has evaluated, in fact, the outlook as stable for Fitch and negative for Moody's and Standard & Poor's because of the COVID-19 crisis. 2019 was, for the Supervisory Board and the Managing Board, an historic year with the negotiation and approval, then the signing of the combination agreement committing Peugeot SA and Fiat Chrysler Automobiles N.V with the aim of a 50-50 merger of its activities. This new entity will represent the fourth largest car manufacturer in the world in volume and third in turnover and will make it a key player in the industry, remarkably balanced between Europe and the American continent for its range of products and automobile technologies. It will have management knowhow, resource as such, enabling it to seize all opportunities in this new sustainable mobility era. And Carlos Tavares will talk of this later. The new entity will have an efficient governance structured to promote performance. The Board will have 11 members, the majority will be independent, 5 will be appointed by FCA and its reference shareholder, John Elkann as its President and filed by the PSA Group and its reference shareholders, that is to say its reference administrator and Vice President. The shareholders -- the strategic shareholders, EXOR N.V., EPF, FFP, Bpifrance will have a seat on the Board. And once the operation is completed, the Board will have 2 representatives for the employees of FCA and public and Groupe PSA. Carlos Tavares will be Chief Executive Officer. The Supervisory Board has taken note of the Managing Board's report and the accounts for the year presented by the Managing Board on the 25th of February. The Supervisory Board congratulates Carlos Tavares and all of his collaborators for the excellent results obtained in 2019 and the combination agreement between PSA and FCA. The Supervisory Board continues to accompany the Managing Board in this important phase, signing to closing of the PSA-FCA project. The year 2020 was marked by an exceptional health crisis of a scope and brutality that our group has not noted before. The group has followed a clear line here to protect the health of its employees and protect the long-lasting survival the company. Responsible decisions were made and implemented in accordance with the deployment of all of the reinforced health measures on our industrial tertiary, research and development sites and commercial sites. The industrial start-up has been gradual since 18th of March. I would like to congratulate and thank all of the company's employees who have shown commitment, unceasing commitment to move forward. Thanks to this extraordinary commitment, under the leadership of Carlos Tavares, the company has shown its ability to face this crisis. In this difficult context, the merger project is more than ever an opportunity for the 2 companies to take a position as a stronger automobile industry, and in this way to prepare for a new mobility era, one of sustainable, safe and affordable mobility. The Supervisory Board has full confidence in the capacity of Carlos Tavares and Mike Manley. Carlos Tavares, you have the floor.

Thank you, President. Good morning, dear shareholders. I'm happy to be able to meet with you again to comment the 2019 results, to bring you up-to-date on the health of our company in a context whose specificity is notable. First of all, let me say that the company is facing its challenges with the with the performance and determination necessary. You have in front of you a President of the Managing Board who is confident in the future of the company. As far as 2019 is concerned, as the President has said, we've achieved record results in terms of profitability of the auto division with almost 8.5% operating margin. This is the sixth year in a row in the improvement of these results, and this obviously pays tribute to all of the PSA employees who have worked to achieve this. In these results, we also have an excellent performance by Opel Vauxhall, which has succeeded in totally implementing its PACE! recovery plan to achieve 6.5% operating margin. All in all, this performance is in line with the commitment of all the group's employees, who I thank and congratulate on your behalf. I'm not going to come back to all of the figures already mentioned by the President, whether we talk of income, which increased by 1%; operating margin by 11%; net income by 13%; group net financial position up at EUR 7.9 billion, which protected the company in this very terrible COVID-19 crisis. And I think you can consider that the results we have collectively achieved in the last 6 years were the best defense in the face of the challenges we are facing because of the COVID-19 crisis. But these very good financial results should not leave us to forget our other responsibilities, which are our contribution to fight climate change and climate warming. This would only be credible if this was, in fact, verified by independent entities. On this slide, you see a number of entities, independent entities, which confirm quite clearly that the objectives that we have in the company to reduce our emissions are coherent with the Paris Agreement, limiting climate warming to 2 degrees. So you can see that everything that we are doing within the company is our contribution, proportionately speaking, but well dimensioned, so as to contribute in a coherent way to the limiting of this climate warming to 2 degrees as stipulated in the Paris Agreement. This has been confirmed by SBTi as regards all of our objectives. Now this has been recognized by the CDP, the disclosure program, which has placed us in its A-List because of the initiatives that we undertake. And at PSA, we are happy to be able to make this contribution in the battle against climate warming. And this is for simple ethical reasons. You know that when our employees and colleagues, after a tiring days of work at home, they are questioned by their family, their children on what their company is doing to fight climate change. And I want each of our employees to be able to say to their children that in their automobile company, they have objectives which are very difficult to achieve, but which we support day after day. And the attainment of these objectives represents our societal contribution to this battle against climate warming. And with regards to this, it's essential that each and every one of our employees be able to explain to the next-generation that we are making our contribution within the framework of the work that we do day after day in the company. This is extremely important for us, but it's also important for the Managing Board. Having said this, let me say that in 2019 as compared to 2018, we have reduced the emissions of passenger cars by 11 grams and 6 grams for the LCVs. We have also significantly reduced our real estate footprint to reduce our emissions by not less than 5%. And all of this moving in the same direction, of course, with the aim of improving not just the fight against climate warming, which is a vital societal objective, but also so as to improve the total efficiency of the company. We are very proud of this, and I must say that I place these assessments and this recognition externally, if you look at -- and this is just as important as the financial results we've communicated. And all of this to say that within the company, we share values, values which are shared by our employees. There are 3 of them. These are, first of all, to win together. We work as a team. Our work is teamwork. Every employee in the company is contributing to the same objective, that is to say to assume our societal responsibility and to work towards a long-lasting survival of the company, thanks to our results. We want to work together and win together. Agility. We all recognize that we are evolving in a chaotic world, a world where upheavals, incidents, disturbances are a day-to-day thing. And if I were to present a whole series of crisis we have been facing in recent years, you will note that they were extremely numerous and important. These crises are outside of the company, external to the company, but they are a factor which enable us to face a world that is changing, changing fast, rapidly and despite our will or desires. This agility is important for our company. Then there's a third value which is efficiency. We greatly differentiate between efficiency, which is linked to performance, to the use -- which concerns the use of rare resources, be they financial, planetary. In this concept of efficiency, we talk of performance. And each time we use a resource, we have to use it with a return of performance level which is better than that of our competitors in this industry. So these 3 values, win together, agility and efficiency, are the values which have carried us forward, which have enabled us to work in a coherent manner in the company. And I'm happy to note today that there is good convergence between the company's values, which enable us to guarantee the transversal nature of this work, and the financial results, which ensured the long-term survival of the company. With what took place in 2020, we were able to note that the robustness of our balance sheet, which has been nourished over the last few years, served as a shield, a shield protecting us from this challenge created by this pandemia. Let me say that since the beginning of the pandemia, that is to say since the 16th of March 2020, we have paid very close attention to the steering of our activities and of our employees' health. We have deployed, reinforced sanitary and health measures, that is to say measures that went beyond the recommendations that appear here and there. We were ahead of the tempo of these measures. We were ahead in terms of the demanding nature of our measures. We have deployed these protocols with great rigor and with the possibility of implementing audits to ensure their good application and the rigor and exhaustiveness of the implementation of these measures. It was not an easy thing to do daily. We have had to calls -- to have to call into questions certain players in the company who -- to ensure their commitment to these protocols. We have obviously received the support of our social part -- our industrial partners, our social partners and all our employees. These protocols have been deployed on a scale of 1 to 5, where 5 corresponds to the implementation of the protocol. And then through an audit by specialized team, we have been able to verify that the protocol was correctly implemented in the site concerned. This concerns the industrial, logistics, administration, R&D and commercial sites. So on all of the scope of our activities, we have been able to do this. And I would like to thank all of those who have worked so hard sometimes under difficult conditions, under difficult psychological conditions as well. And so I would like to thank them for the leadership role they have played in the company. We've adopted other initiatives of the societal nature. First of all, within a very short period of time, we obtained sufficient quantities of masks to protect our workers and employees. We have donated masks to other institutions. We donated 700,000 masks to various institutions for health care workers so as to be able to make up for shortages of masks in that very difficult period. I would like to pay tribute to the work done by our human resources and purchasing teams who were able to procure these masks in a difficult period. And we were able to guarantee the results because our employees were thus able to wear these masks and protect themselves. And we also ensured that the people in the front line were indeed mobilized in maintenance, re -- and spare parts activities. Here, again, these people who were in the front line were mobilized and maintained their activities. And I salute those who continue these activities, not just for the shipping of spare parts, for example, the [ Wizzam ] warehouse, but all of the automobile workshops, the workshops of PSA retail who maintained their activities to guarantee safe mobility to all of those who were fighting, on our behalf, the COVID pandemia on the front line. In addition to that, we have been able to use our industrial know-how in a major initiative carried out by Air Liquide for the production of respirators. And on the Poissy manufacturing line, we were able to accelerate the manufacturing of these respirators. So I would like to simply say that I am the spokesman of all of this generosity expressed by the PSA employees. Let me say that we have set up a reserve, a PSA reserve, for all of the volunteers who wanted to take part in this effort. At that time, the central factor in the battle was time, and the PSA reserve included more than 600 PSA volunteers who answered present in this crisis, who went to answer the needs that were expressed in various areas. So I would like to pay tribute to them and their contribution. And I would like to thank them for their responsibility, their sense of duty and their societal responsibility. Now furthermore, let me say that in this very difficult period, all of us were searching for a new balance, a new rational, more flexible operation of the company. The rarity -- the scarcity, excuse me, of resources, the importance of health, the importance of a good balance between private and professional life is obvious. What appeared to be very obvious here was the power of the modern tools, digital technology. You know that what's important today is, first of all, to understand what's happening and to act in a rational way, in an efficient way with regards to what is taking place. So we have launched a major program called the New Era for Agility. It is a program whose objective is to go deeper into the understanding of these new operating methods. And we have opened up our imagination here, putting telework as one of the elements in this process. The aim here is to give our colleagues the means, the framework for defining the company's operations in a more productive way, in a way which better respects the balance between private and professional life. We have carried out a broad survey. We have questioned 40,000 of our employees. The response rate to the survey was more than 50%. And almost 80% of our employees who answered the survey spoke in favor and support of the initiative adopted. This is extremely important, and this information will be communicated to you in greater detail in the coming weeks by our human resources people. More than 40,000 people questioned. More than 20,000 answered. And 80% supports to this very flexible discussion on how to find more efficient, agile operating modes, more respective of the quality of our life that we all want and more in line with the societal trend of our company. I'm very proud to be able to speak about this initiative, and I would like to thank the human resource teams who have taken the risk to change things and to make this available to our colleagues and to establish this dialogue. The dialogue with our social partners will be further modernized and will be push forward for the happiness of our employees and our company. This is what I wanted to say and I wanted to share with you. Now I'd like to give the floor to our Financial Director, Philippe de Rovira, who's going to present the financial results.

In 2019, the group has delivered positive results, an increase of 13% for the net income group share, which represents EUR 3.2 billion. The recurring operating income, EUR 6.3 billion. This progression in the remarkable performance of the automobile division is, therefore, to be noted. The recurring operating margin for the automobile division stands at 8.5% in 2019, an increase of 0.8%. The revenue of the automobile activity is up 0.7% despite foreign exchange, especially the peso in Argentina and a drop in the sales volume with the runout of some Opel models that was scheduled in the second half of the year and the drop in sales in Latin America. Now the negative effects have more than been offset with a big improvement of the product mix, thanks to the success in the renewal of our range, the positive effect of the prices. Now the recurring operating income for the Automobile division stands at EUR 5 billion in 2019, up 12.8%. This result, despite an unfavorable context, representing EUR 486 million; with the foreign exchange effect representing EUR 243 million; inflation of our input costs and especially the raw materials, representing EUR 201 million. The performance of the automobile division contributed, in fact, EUR 1.057 billion. The product mix contributed, in fact, EUR 818 million, combining the 3 successes in the Push to Pass plan, the successful launches, pricing power and then the core model strategy. Now this has more than offset the effect of the drop in market share. Our efforts to reduce costs, in fact, have been carried out with determination, whether we're talking about production and procurement costs and structural costs. This graph shows you the evolution of the net financial position of the automobile division in 2019. Significant improvement of the working capital of EUR 1.1 billion made it possible to compensate the restructuring cash out. The cash flow represented twice the amount of investments, which means EUR 3.3 billion in free cash flow. The dividend paid to our shareholders brings the net financial position, in fact, to EUR 10.6 billion end of 2019. The following slide shows the evolution of the cash flow, including Faurecia, very positive cash flow, more than EUR 2.7 billion in 2019. The financial position of the group stood at EUR 7.9 billion end of 2019. Now compared to the former slide, the main difference is the acquisition of Clarion by Faurecia. Now concerning the market outlook following the COVID-19 epidemic that has hit the world since March, we foresee a decline in the automobile market by 25% in Europe, 25% in Latin America, 20% in Russia, 10% in China. The first signs of recovery are appearing in Europe; France, Germany, since the end of May; China, since April. Thanks to a breakeven point that is low and the drastic decisions taken, in fact, on cost, the company was very responsive and reactive in this new environment. Finally, the strong financial position of the group before the crisis made it possible to face the change in the working capital connected to the drop in trade payables which will impact the first semester and without having to use the EUR 6 billion of credit line.

And now we give the floor to Carlos Tavares, who will present the execution of the Push to Pass plan.

Yes. Thank you, Chairman. Of course, I will focus on the most important points, and I will start with the automobile business, in fact. Now let me talk about quality which is essential for the sustainability of any car manufacturer. In 2019, we have seen an improvement in our quality performance, and we have noted that we still need to go on making efforts and speed up the positive slope, of course. We want to accelerate in this area. Our objective is very clear. We want to become the #1 in terms of quality, whether the quality of the products or services. What we can see is that in 2019, we faced a certain number of difficulties in our industrial system, especially connected to the strong demand and commercial success of our vehicles. This has led to some tension in the area of supply of parts and in the production in our production plants. We have made some progress, but there's still a lot to do to reach our objective. The first result we obtained beginning of 2020, in fact, show us that we are moving in the right direction and at a higher speed. We have also seen that we had made progress in the area of service quality, in the area of sales and aftersales. Now this is very satisfactory to see this progress slope. And today, we can say that on the 5 major European markets, we are among the top 3 for customer satisfaction in terms of sales. And we're in the top 5 from the point of view of customer satisfaction in aftersales. So I must say that we're working hard in this area with our network. We, in fact, are very rigorous in putting in place our standards. We have good standards, and we make sure that the implementation of the standards is very rigorous. Now if we look at the recommendation rate from our customers, in fact, for the sales recommendation, 92.3%, that's plus 4 points. And for aftersales recommendation, we have progressed by 6 points to reach a recommendation rate of 86%. So still a lot of work to do, but the rate of progress is good. But the way is still -- there's still a long way to go. Now concerning the product, the product satisfaction, the competitiveness of the product is seen, thanks to the quality of our sales. And we have a very high sales quality. Our products are systematically positively welcomed by the market. The products, therefore, are very successful. And this sometimes leads to some problems in -- at the production level and at the level of supply deliveries. Now you know also that we try and offer good prices, but prices that represent the value of our products. And here, we can say that the pricing power is good. We still have to work on the quality of the products, but let me mention some successes. We can say that Peugeot, in fact, was rated #2 as brand; and DS, #3, as brand in their respective categories. So this in Europe, so it's a progress. And the Peugeot 3008 was #1 in its segment, and the C5 Aircross was also #1 in its segment. That is for the product overall satisfaction. So things are improving in Europe, and this is the result of the work that was done in this region to apply rigorously the quality standards, not only in the network, but also in the factories where we have to make efforts and there are efforts still to make. But we also saw outside Europe, like Brazil, for example, in terms of service quality, we are among the top 3. I could also mention the results in Turkey for the African and Middle East region. So overall, the situation is improving. Now, of course, in our eyes, it's not improving quickly enough. So we'll go on working hard and with determination on this direction because we want to become #1 in terms of quality, not just to satisfy our customers and ensure the sustainability of our company, but we want to be compliant. That's our #1 priority. Now of course, we can be proud of the progress made until now, but we have to do even more and move even faster. For CO2, I've given the main elements. And the President mentioned this. We have a CO2 Committee which is based on a disciplined process. We have forecasting tools that are very performing. They are part now of the company's knowhow. Today, we manage our CO2 performance on a monthly basis. In 2019, the situation was satisfactory. In 2020, it's even more satisfactory. We can say that CO2 has become a competitive edge for PSA, and it's important to say it here because this means good control management. It means we have a company that can meet society's expectations. And it is important because it's not just manufacturing a car. On top of that, we have to master the whole value chain to make sure that we offer the right mix on the markets. And on the markets, there are a certain number of objectives to be met and set by the European Union. In the area of competitiveness, let me say that our company is now able to master its destiny. So I wanted to share this with you. This is a reality, and we see that in 2020, in fact, this is even truer. I would like to thank the teams in Europe, because they are the first to have to follow, in fact, the instructions of the corporate CO2 committee. It's not always easy to do that, but they've done it with success and discipline, and I would like to thank them for that. Now concerning electrified mobility. You know that the raison d’être, the purpose for PSA, is very easy to understand. We want to offer our customers a mobility, freedom of movement, in fact, and something that is safe and affordable. So a mobility of movement that is clean, affordable. Now we have done a certain number of market studies. We studied the consumer to understand the needs in this area and to understand how to balance, in fact, the production of electric vehicles, PHEV vehicles, and to try and understand when the traditional ICE systems will disappear, even though these systems go on making progress and have reduced CO2 emissions. So understanding the market is crucial for the future because you know that we are in an industry where changes take time. They are long-term industries. Now the decisions that we are implementing today were taken in 2014. It's thanks to that, that we have a successful e-208, successful PHEVs, whether they are Peugeot, Citroën, DS, also the Opel Corsa. So it's very important to understand the expectations of society, to understand the regulations to steer the company in the right direction. And this is what we're doing. For electrified cars, we have 2 challenges ahead of us. There is, first of all, the question of cost to make electrified vehicles affordable for many people. So this cost dimension, in fact, for the 5, 10 years to come is more important than the technological dimension because electrification technology within PSA is now mastered. But the real challenge is to make sure that clean vehicles are affordable, accessible to the largest number. So the challenge for the company and for the global and European automobile sector is more a challenge of cost more than technology, even though progress will also be made in the area of the driving range of these vehicles. So we have tried to really understand what customers expect, and I think that we can say that the strategy we have of using multi-energy platforms, we have the CMP and EMP2. Well, we consider that this is the right strategy because we can closely manage the mix between these different technologies. We are able to stick to the market. We're not trying to impose something on the market because this is always an additional cost. Now let me mention also that in the area of services, with the Free2Move brand, we have been able to introduce a certain number of initiatives on the market to guarantee this mobility, this cleaner mobility, at a more and more affordable price. Very soon, you will see with the Free2Move services, the Ami Citroën, a zero-emission vehicle, fully electric, very affordable. And this is an object to protect individual freedom of movement in town. And you will see this vehicle coming up in our Free2Move entities. Now concerning our industrial strategy. Now here again, the strategy, in fact, started in 2014. And our approach is a vertical approach to integrate all the components of the electric driving train. First of all, here, the electric motors, as you can see, we have set up. And with our Nidec partner, we have a joint venture that works on developing, designing electric motors. And you know that the yield, the efficiency, is crucial in this area. So it is very important to -- for us to control the efficiency, the cost, the yield of these motors. We have now a strategy concerning electrified transmissions. This has been strengthened with the setting up of a joint venture called Punch. So we work on the industrial aspect, but also in the area of engineering. Now this has been finalized, and we can move to develop and produce e transmissions. We had also, in fact, worked on reduction gears. We have taken some initiatives in the area of battery packs to produce them in-house, but also we want to think what this means in terms of fine architecture of our platforms in the future because we're not sure that in the future we'll want to have batteries of 300, 500 kilos on our platform. So we really have to think about the architecture of the platforms. And of course, you all know the initiative taken with Saft to create a European supplier of battery cells. And you see that with these 5 pieces in the puzzle, you can visualize the strategy of the PSA Group for the past 5 years. This vertical integration from e-components to battery of the future. And this is important for the future of our industry in Europe. And it's important for society. This is what I wanted to say concerning the automobile sector. And now let's talk about the mobility service suppliers. Let me -- sorry, there was this slide, I forgot. I skipped one. Let me come back to this slide. This is a slide on efficiency. Now, of course, the important thing for us is to reduce costs. And I would like to share with you a simple idea here. Maybe it's not a common one, but the simple idea is that clean mobility is under control and safe mobility is under control. What we need to improve is the affordable aspect. This is the major challenge for the automobile industry, especially in Europe for the 5 years to come. So it's more important than ever for the success of the group to be able to reduce our costs because this will make it possible for us to offer a clean, affordable mobility and one that is profitable, that is to say with margins that ensure the sustainability of the company. And you will see later that the PSA FCA merger can play a major role in this direction. Now we still have a lot of things to do. First of all, ensure, in fact, the reduction in our -- the variable cost of our vehicle. We want to deliver EUR 700 savings per vehicle by the end of the Push to Pass plan. We have obtained EUR 111 cost saved in 2019, so we're not there yet. And with the COVID situation, we had some difficulties, but we're going on in this direction. What has protected us, in fact, during the pandemic is the good results we've had for 6 years and the fact that we had dropped the breakeven point of the company. We have, in fact, lowered it from 1.8 million cars or -- and this has really helped us, in fact, at the time of the pandemic. I must say also that we are on the right track to reach our benchmark in terms of wages over revenues ratio. All the actions undertaken with our industrial partners have protected the company. And from that point of view, we are in the lead. And everything we are doing year after year makes it possible for us to face crises. I know that many are tempted to say, "Okay, maybe now we have done enough efforts and we can relax a bit." But this is something you cannot have in our sector because our industry is so competitive. It is this ability to continuously progress with all our employees and industrial partners. This makes it possible then to face times of trouble and situations that, in fact, can be very difficult. And today, if you look at PSA situation and the situation of our competitors, we have been protected. So all the efforts we make, in fact, even when we think we're performing enough, well, even then we cannot stop because this really makes it possible to protect the company, and it ensures the sustainability of the company. And here, I would like to thank all the employees for having understood that need. Let me now come to the mobility services, general mobility, to say that our strategy in the area of aftersales, in the area of parts for aftersales, all this is bearing fruit. Now the parts are not always, in fact, our own parts, but the Euro Repar parts also -- are also very successful. They're quality parts at a competitive price. So this is interesting and attracts our consumers. Therefore, this business has increased, has increased by 35% in 2019 compared to 2018 for the IAM business. Now we can say that outside Europe, the growth was 70%. So our strategy, which is cover the market with the manufacturers parts for the branded network, the IAM parts, especially the Euro Repar parts with an attractive price and the online sales, thanks to Mister Auto. Well, this ability we have to cover the market with these 3 approaches is, today, bearing fruit, and this is what you can see on this slide You see also that we go on developing our Euro Repar car service network. And in 2019, we have 5,000 garages. We started with 2,000. So you see, we go on developing that network, which is a franchise network. So we're able to increase profitable sales under that brand. Now our strategy in the area of distribution of these parts with hubs at Distrigo. This is also bearing fruit. Now when it comes to the commercial service we offer to different repairs, we have a very rich catalog, including not just PSA parts. So this type of hub approach is deploying in Europe. We have 150 hubs deployed in Europe. These hubs make money. Therefore, they are sustainable. So this makes it possible to offer a good service to our repairers. The catalog of parts is developing. And this European success is now extending to other areas around the world, especially in Turkey, where we have put 8 new hubs in 2019. We are also progressing in China. Our revenues in China have increased by 91% in this parts distribution business. And we know now that Mister Auto is established in 19 countries. That's 4 countries more than in 2018. For the used cars, that business is also developing. There's a growth in revenues, up 6%. And the number of transactions has greatly increased. A big success of the Aramis Group, which is controlled by PSA, they are doing excellent work in the area of used cars. The turnover figure is up 27%. And here, I would like to pay a tribute to the work done by the teams and leaders of Aramis, and a very smart cooperation between our used car business unit and the Aramis Group. So we were able to offer some good things without interfering with the running of that company. And the results show that we have adopted the right approach. Let me go on with the financing of sales. There, the results are remarkable. You see that the financing by banks has gone on. Now this represents EUR 1.6 billion net banking revenue. It's the sixth year of growth, in fact. And now the penetration of sales to private customers represents 50% -- 50% of financing. The number of cars financed by this approach is increasing, and we have reached 1.15 million in 2019. So it's a discrete performance, but remarkable. And it does contribute to the financial results that have been presented. And here, I would also like to pay tribute to those companies who are in the backstage that contribute to the success of the company. And finally, I would like to end this part by this slide. This slide is of the resilience. It is the slide which shows the obsessive search for performance. And if you like, it is the heritage that we have in our DNA of Back In The Race. Back In The Race is in our sports DNA. It's our search constantly for performance, which has led us to lower the company's breakeven point. We fully understand the interest of this. Especially on it, when we are faced by a crisis like COVID 2019. It is this slide, which needs no comments. We brought the breakeven point to be lower to 53% of our sales. We've continued to improve our cost structure, which will enable us to adjust, to face the crisis in a clean way. And contrary to what we've said a few years ago, in fact, the PSA Group is not in a difficulty concerning CO2 emissions. The PSA group has made CO2 a competitive advantage, thanks to our technological mastery, but also our industrial expertise as well. Thank you, President.

Thank you, Mr. Tavares. I would now like you to present the merger project underway between FCA and PSA.

Thank you, President. It's with great pleasure. On this slide, you see that in the last 7 years, we have undergone 3 major structuring events, moments of great intensity, great excitement, but also of great satisfaction as well. Collectively, thanks to our employees, thanks to the confidence of the Supervisory Board, we've been able to redress the company in 2014, 2015, thanks to the Back In The Race plan. It was also thanks to the work of our employees on the Peugeot Citroën DS side, but also on the Opel Vauxhall side as well. Thanks to the support of our shareholders, we acquired Opel Vauxhall in 2017 and have led to its recovery in the same year. In 2019, thanks to the confidence of our shareholders, in fact, we have acted a merger project of FCA and PSA. There are 3 steps here, which we understand in terms of their stakes. We know that this is based on the quality of our teams, the maturity of our teams and those of FCA. And I must say that for all of, particularly the Managing Board, it's a source of pride to lead the company through these challenges and opportunities. Now why is this merger step with FCA so essential? Well, first of all, because we are faced with challenges, challenges which are unknown in the world automobile industry. The pace at which the companies in which we operate ask us to advance, advance in terms of clean, safe, affordable mobility. This pace is not accessible within the context of organic growth of a carmaker. Now to make that rhythm, that pace accessible, we must understand all of the dimensions of the challenge involved. And the stakes here, as I said earlier, are not just questions of safe mobility, because the progress made by the automobile sector in terms of active and passive safety are incredible if we look at what has been achieved in the last 20 years. We master these dimensions. The progress made in terms of 0 emissions mobility is visible today at the level of our dealerships. Anyone here can go and buy an electric car or a plug-in hybrid. So in fact, to date, the stakes are economical, because how can we offer this clean, safe, affordable mobility? And how, when offering this affordable price, we can guarantee the long-lasting survival of the company, thanks to margins, which pay us? And it's there where the merger is coherent in terms to ensure safety, cleanliness and the affordable dimension of the mobility? This is why we see quite clearly that the 2 groups have complementarity. We've explained this from the geographic point of view. FCA is extremely performing in the Americas, PSA in Europe. So together, the 2 of us can build a story in China, and it's an opportunity of reinforcing our ability to act in the Chinese market. So these geographic complementarities are obvious. We also have complementarity between the 2 companies from the technological point of view. We have said that the CO2 mastery technology is a reality at PSA. FCA has, in fact, these strengths in terms of the connected and autonomous car because of its past work. So all of the needs, the technological, economical needs of these 2 companies absorb considerable money, considerable expenses in terms of R&D and investment. The scope of the expenses, which will be imposed on us, and because of the speed of which, we need to adapt our industry to environmental demands, well, we cannot face such demand in expenses on the basis of the size of our standalone companies. So this has called upon our companies to adapt to this reality, try to dilute the scope of these R&D and CapEx expenses so as to be able to offer the safe, clean and affordable mobility. And this is where this merger intervenes because it will enable us to optimize all of the objects and assets we create, whether it's in terms of platforms, components, electric components, powertrains, our ability to purchase well, so for all of these components, and -- will enable us to dilute the R&D and CapEx expenses required. The challenge we face is exogenous. It's quite clear that the automobile car -- the automobile manufacturers, which will have to adapt to the demand of the societies in which we live and the dangers of the emanations that arise. And if we don't face this, and we -- all companies will be faced with a Darwinian concept. And so this is why the size of our companies are important to dilute the R&D and CapEx necessary to adapt our technology to these new regulations. So here, on this slide, you see that with the combining of our 2 automobile companies, we would have a new company, which would be third worldwide in terms of revenue, and fourth worldwide in terms of the number of vehicles sold. Now it's quite clear that the number of vehicles sold is only meaningful if you link this to profitability. As far as turnover is concerned, revenue, well, we will be #3 in the world. What's important here is that you have not heard me speak of the impact of size to you. I've always spoken of efficiency, agileness, and it's quite true that the automobile industry still has reserves in terms of waste, resource waste. But today we need to be lucid, especially with regards to the speed at which we are demanded to evolve, the way the automobile industry is required to evolve because of the demands of new regulations. And this means we have to dilute R&D and CapEx, and this is possible with a larger size. Otherwise, the economic impact will threaten the long-term survival of the company. This is the dimension I want to share with you here. You're familiar with the synergies, they can be divided up into 3 parts. The first of them concerns the good use of assets on platforms, components, powertrains, the industrial assets. Here, there's a great deal of synergy. Let me say here that, today, there are 25 groups between the 2 companies working to consolidate the amount of synergies. I'm going to say that this amount today is the floor level, if you like, because the ability of the company is extraordinary. I've known this on the PSA side, and I'm discovering this at FCA. These 25 groups that are working together represent 500 of our most creative managers, most oriented towards the company. This figure is really the base figure. This figure is based on the cooperation between the 25 work groups. So when we look at the EUR 17 billion in synergy concerns, 40% of better buying, 40% better use of our assets and 20% other areas, but opportunities that arise in the field of IT, et cetera. Now I'm very confident of this amount, and I've said that we're very confident here. So we're targeting annual synergies of EUR 3.7 billion. Where are we today between the signing and the closing? You know that the commitment was signed in December 2019, the closing to take place between the end of 2020 and March 2021. What I can say today is things are progressing, progressing exactly as planned by our teams. So the time table that I have seen regularly with the Supervisory Board is, in fact, respected. We have respected the time table. And it's clear that we are doing this, why repeat, in conformity with our time table. We have submitted all of the necessary dossiers. From the antitrust point of view, we've submitted no less than 20 dossiers. Of these 20 dossiers which ave been submitted, we have received a go-ahead green light on at least 10 of them. This includes the U.S., China and Russia for the 50% of dossiers which have already been approved. So 10 out of 20 already. So in terms of antitrust, the work has started and is well underway. We have, obviously, discussions with the European Union. What are the next steps? The next steps will be to obtain the regulatory approval of the American CFIUS but also the SEC, the Exchange Commission. You know that those are the next steps. All of this will enable us to convene an extraordinary session of the shareholders so as to approve the final transaction. But as you were able to see in today's resolutions, we have already pronounced ourselves with regards to that trajectory. And I'd like to finalize this part of my presentation by saying that we are indeed in line with our schedule to finalize and close by the end of the first quarter of 2021. Things are going extremely well between the 2 companies. This is not just a top-down merger, but it is supported bottom-up by all of the teams working on this, and this is very reassuring because there have been so many who have been critical of this, who have constantly pointed out all of the failures that have occurred in similar types of mergers. We are very much aware that this is a human adventure. I'm aware of it. It is, first and foremost, a question of bringing together 2 families which have the maturity to understand that, together, they will be stronger than on their own. And after having seen each of these families, move these companies forward and after each company has produced financial results of great value. So I have finished, President, on this presentation.

Just a word Carlos Tavares to confirm in terms of the contact that I have had with the President of EXOR and FCA and John Elkann of the quality of the relations between the 2 companies. And this is seen in the relations I have with the President of FCA. To accompany this presentation, I would like to show you a film on the values and history of FCA, so let's look at the film. [Presentation]

So after this presentation, I would like to present the Supervisory Board's report on the corporate governance. And I would like to indicate that in accordance with the law, all of the information concerning governance and remuneration can be seen on Page 95 to 108 of the Universal Registration Document. So I would like to say just a few words on the makeup and exercise of the missions of the Supervisory Board. The Supervisory Board has a balanced composition. It is made up of 14 members, 6 representatives of shareholders, 6 independent members, 1 worker’s representative and 1 representative of the workers who are shareholders. Today, one of the independent member seats is vacant. It is that of Mrs. Kristoffersen, who reigned in 2019. The Supervisory Board, via its Nomination, Remuneration and Governance Committee, started in October the selection work for a new independent member of the Board, but we decided to stop that after the decision to merge with FCA, which will lead to the dissolution of Peugeot SA and on the day -- on the day of the merger. As a consequence, the Board decided that it was not timely to integrate a new member in the Board for the short time remaining. The Supervisory Board met 8 times in 2019. The attendance rate of its members was 92%. I'd like to remind you here that the Supervisory Board benefits from the work of 4 committees. The strategic committee has, as its mission, to study the long-term future of the company and to propose to the Supervisory Board the group's major orientations. It examines the major investment projects, which will then be presented to the Supervisory Board. Special attention has been brought in 2019 to the CO2 and vehicle range electrification plan. On the recommendation of the strategic committee, the Supervisory Board has granted preliminary authorization to major strategic projects concerning the creation of a joint venture between the PSA Group and the total group subsidiary, Saft, within the framework of a project called the Automotive Sales Company, ACC, at the beginning of 2020 as well as the divestment of the stake in the CAPSA joint venture in China. The members of the Supervisory Board met in October in Morocco to hold its Supervisory Board meeting and visit the new PSA plant in Kenitra and the new regional research and development center located in Casablanca. The September strategic seminar, a very important moment for the Supervisory Board, allows us to present the automobile contacts, the major trends in the panorama of competitors as well as the advancement of the Push to Pass plan, the evaluation of activities in China, aftersales, used cars, strategic subjects linked to the piloting of the CO2 and electrification plant, the integration of Peugeot in North America, Citroën in India, Opel in Russia as well as the development plan for connected and autonomous vehicles and LCVs. 2019 was a historical year marked, as we've already said, by the negotiation of the terms and signing of the merger project between the PSA and FCA groups. In December 2019, the project was examined by the Strategic Committee before being approved by the Supervisory Board. Following the announcement of this coming together project, the Board met on the 25th February 2020 and set up an ad hoc committee in the presence of Carlos Tavares, which presents the progress of the work linked to the negotiations between the 2 groups. The Finance and Audit committee is responsible for the elaboration of the financial information, the efficiency of the internal control systems and risk management, the legal control of the annual accounts and consolidated accounts by the auditors and the independence of the auditors. It also examines the project plans for the medium-term plan, which will then be submitted to the Supervisory Board. The Finance and Audit committee has been associated in the examination of the FCA-PSA merger. The Asia Business Development Committee has had its mission to examine the long-term future of the group in Asia, to envisage the potential evolution, especially in the Asian market, and to propose to the Supervisory Board the major orientations for its development in Asia and China. And this is extremely important because of the size of the market in Asia, the specificities of the Chinese market and the question of competition developing in these markets. The Nomination, Remuneration and Governance Committee prepares the deliberations of the Supervisory Board relative to the nominations of new members of the Managing Board and the Supervisory Board and the related remuneration. It is going to determine a choice criteria, prepare procedure for selection and proposals of appointment and renewal and the replacement of certain members. I would like to remind you here of the nomination of Gilles Schnepp and Thierry de la Tour d'Artaise voted by the General Assembly in April 25, 2019 on the proposal of the Supervisory Board. I've already explained the resignation of Mrs. Kristoffersen, who has decided to dedicate herself to her functions within the total group. On the first of September 2019, the Supervisory Board appointed Michael Lohscheller, Managing Director of the German subsidiary, Opel Automobile GmbH, as the fourth member of the Managing Board following the resignation of Jean-Christophe Quemard on the 31st of August 2019. Michael Lohscheller is responsible for the operational management of Opel Automobile GmbH. We would like to proceed in this general assembly, the renewal of the mandate of the Supervisory Board member Catherine Bradley. Catherine Bradley is President of the Finance and Audit Committee and the Committee of Remuneration, Nominations and Governance. She brings her skills and expertise in the field of finance and governance at the international level. And her contribution is judged essential for the good work of this finance, audit and council. At the proposal of our shareholder, Dongfeng, the Supervisory Board on April 3, 2020 proceeded to the cooption of Mr. Zhang Zutong in replacement of Mr. YOU Zheng, member of the Board of the Board who resigned on the [ 27th of March 2020 ]. The Board would like to express its recognition and gratitude to YOU Zheng for his contribution to the work of the Board and proposes to the shareholders the ratification of the cooption of Mr. Zhang. Mr. Zhang brings to the Board his expertise in governance and new economic models, has had 30 years of experience in the automobile industry. Mr. Zhang cannot be here with us today because of the COVID crisis. This is why he's expressing himself in this video.

Good morning. I am Zhang Zutong. I work for Dongfeng and I'm current member of the party and a Deputy Director of Dongfeng. I started my career in 1991 at Dongfeng. I've been there for almost 30 years. And I must say that I have assumed President of the Board of DPCA in March of this year. Unfortunately, because of the COVID crisis cannot be here. But we sincerely hope that France will find solution to this very soon so that PSA will be able to resume its normal activity. Delighted to represent Dongfeng on the Supervisory Board. And as a member of this Board, I will participate in its governance and I will actively work with President Gallois and the other members of the Board in this very difficult context to ensure the advancement of the work of the Supervisory board and promote the development the PSA Group.

Thank you. As we wait for the ratification of the direct -- of the general assembly, I'd like to welcome Mr. Zhang. At the beginning of 2020, the Nominations, Remuneration, Governance Committee has also undertaken steps to select candidates for the role of independent members of the Board of Directors, which will follow the signing of the combination agreement. This research for candidates was done with a recruitment company. Now as far as I'm concerned, as I had already indicated, las year at the General Assembly, April 2018, that for reasons of age, which have not improved, by the way, I had announced that I would not go beyond 2 years of my mandate, that is to say until the General Assembly of 2020 rather than fulfill a full mandate of 4 years. However, following the signing of the combination agreement and so as to ensure continuity until the closing of the operation of the merger between the 2 companies, I have agreed, in accordance with the members of the Board, to continue my mandate as President of the Supervisory Board of Peugeot SA until the merger between companies is finalized. I would now like to present the remuneration policy of the Managing Board as defined by the Supervisory Board on the recommendations of the Nomination, Remuneration and Governance Committee presided by Mr. Gilles Schnepp. This policy is based on 5 principles, excuse me, it's based on the growth strategy and development of the group. Secondly, it is aligned with the economic performance and quality of the group. A large share of the remuneration is subject to the performance conditions correlated to the group's performance objectives. These objectives are shared by all of the corporate officers of the group and contribute year after year to the implementation of the group's strategy. Thirdly, it takes into account the group's performance from the societal environmental point of view. The CSR criteria are taken into account in the variable -- annual variable share of long-term remuneration. Fourthly, this is in line with the shareholder interest, given that the remuneration is in significant portion made up of shares, which are conditioned to performance. The remuneration policy finally aims at being competitive with those adopted by other companies in the same sector at the world level so as to motivate and retain our best talent. It is by taking into account these 5 principles that at the Supervisory Board on the recommendations of the Nomination, Remuneration, Governance Committee has defined the fixed remuneration elements variable, annual variable share and a long-term remunerational and exceptional remuneration of the managing Board members. The Supervisory Board salutes the performance achieved by the PSA Group for the sixth year in a row, as pointed out by Carlos Tavares, which has led us to be among the leading -- the head of the automobile industry in the world in terms of operating margin. You know that the group created value recurrently, and this after a distribution to employees, which has been multiplied by a factor of 5.4 between 2013 and 2019. The Supervisory Board also salutes the exemplary solidarity expressed by the President of the Managing Board and the -- the Managing Board and top management. Carlos Tavares took the initiative in April 2020 within the context of the economic crisis, provoked by the health crisis due to the COVID-19 to unilaterally renounce his right to 50,000 performance shares, which were attributed to him by the Supervisory Board on the Feb 25 of this year. It was a personal initiative whose impact is 38% of his long-term remuneration for 2020 and valued at the PSA share price on the day of the decision. This represents 35% of the annual fixed remuneration of the President of the Managing Board. This voluntary action has been accompanied by each of the members of the Managing Board who desire to contribute 25% of their performing shares. The top 100 managers of the company have also expressed their desire to be part of this generous action, reducing their rights to shares attributed within the framework of the LTI 2020 plan to the value of 21% on average. Finally, let me point out the collective effort made during this partial unemployment of the group's teams in the second quarter of 2020. The Supervisory Board decided to renounce 25% of its attendance fees for the period and have the foundation benefit from this. All in all, you need to know that almost EUR 4 million in 335,000 shares were thus contributed to the foundation, the PSA foundation, so as to continue its actions to fight exclusion for lack of mobility. The Supervisory Board salutes Carlos Tavares for this initiative, thanks him and all of the members of the Managing Board, the top management of the group for their solidarity, and I also salute the members of the Supervisory Board for their contribution. Furthermore, in -- within the framework of the merger with FCA, we have decided on 18 -- we have decided on the December 18, 2019 to distribute dividend of EUR 1.1 billion for the fiscal 2019. But because of the health crisis, it has been decided not to pay out this dividend. And now we will give the floor for the reading of the auditor's report.

Yes. So let me summarize the different reports produced by statutory auditors for 2019. They issued 3 reports for the ordinary general meeting and 3 for the extraordinary general meeting. Now for the ordinary general meeting, we have the parent company financial statements, the consolidated financial statements and the report on the related party agreement. The report on the parent company financial statements includes no reservation nor any observations. As for the former years, it describes a key point in the audit which relates to the equity securities. The report on the certifying of the accounts is without reservations. It mentions as a technical observation, the first application of the IFRS 16 standard leasing contracts. The key points of the audit are listed and not changed compared to last year. You can read them here. The new related party agreements included in the statutory auditors' report and mentioned here concerning the agreements, in fact, signed with the framework of the CSA binding agreement. They were signed by Groupe Bpifrance, Etablissements Peugeot EPF and FFP and Dongfeng Motor Company. The statutory auditors issued 3 reports that will be submitted to approval in the extraordinary general meeting, and these are resolutions 22, 23, 24. Thank you, President.

Very well. I suggest that we move to the next point in the agenda. We have received a certain number of questions in writing. We will answer most of them in this session. I give the floor to Mr. Blaise, who is the Communication Director for the group, and then Mr. Tavares and myself will answer them.

Yes. So first question from the IPAC group initiative for citizen shareholding. The first question, did the sanitary crisis modify your ambition in the area of electric vehicle production? If yes, in what way? And is the group exposed to financial sanction vis-à-vis the European regulation and the CAFE?

Yes. Now your question is very topical. Let me say that what we have said concerning our electrified vehicles and our plans are respected. You know that between 2020, we have committed ourselves to have 100% of our models electrified. It means that each model will have an electrified version between 2020 and 2025. So here, we are on track to respect that plan. And today, we have no less than 10 vehicles on the market, whether they're full electric or plug-in hybrids. So the development plan for our BEV and PHEV on the 2 platforms, this plan is being unrolled (sic) [rolled out] according to what we expected. So this means that our customers will have the choice between a full electric model or PHEV, that's my first point. Second point, now we can meet a stronger demand for those vehicles. We have taken the capacity measures to be able to do that, so we closely monitor the evolution of the consumer demand. We must say that today, there is a strong demand because of the state incentives on the different markets where we're present. So we keep a close eye on all these developments, and we try and anticipate in terms of capacity, and we are able to meet the demand. To give you an idea today, we have in our dealership network in store, more than 20,000 electrified vehicles available for our customers. So today, we do not have a problem of supplying electrified vehicles. Concerning our production capacity, our mix is 6% of sales for electrified vehicles. As of the second half of the year, we have taken measures to be able to do more if customers need more. And finally, let me answer very clearly the question you have asked, the PSA Group has no risk today of paying penalties to the European Union for any problem in the compliance with the CAFE. Now the production process and our order book makes it possible for us to confirm this, we are very comfortable with the situation today. And let me say that from the commercial point of view, we have an electrified product offer that is the best on the market. We, in fact, have plans. You saw for the electric drive, we are in a position to control the technology, the cost. And you see that our products are available in the network, they're available in our inventories, so anyone can buy an electrified vehicle today from us. And we have no intention of paying penalties. We take measures to anticipate, as much as we can, the upcoming governmental measures. So this is our situation today. Thank you.

Thank you. Next question from [ Vitrost ]. Now the term of the merger, are these going to change to take into account the crisis and the payout amounts? Are they going to be changed in consequence?

Well, this is a question that has come up in the last few weeks and months. First of all, let me say that we need to appreciate the merger in the long term. We see that everywhere, mobility is moving towards a cleaner mobility at an affordable price, if possible. So the benefits of the merger can be appreciated over a period of 10 years or 20 years. So we have to look at this long term. It has -- we have to be able to transform the companies to make sure they remain sustainable. So the benefits of the merger will be visible over the long term. It's very important to say that. Now when we take the synergy figures we have presented, and if we look at the 10 and 20 years to come beyond the sustainability of the companies, we see that the value creation over that period is huge for the 2 shareholder bases. And if you keep in mind a floor value over 10, 20 years, well, here, the stakes are really huge. So this is something we have to highlight. Concerning your question, well, we have to act as professionals. With the Supervisory Board, we have signed a binding agreement in 2019. It is binding. Now for some, it might be considered as a problem, but it is binding. And today, we are going through a period where things are very volatile, uncertain. Car manufacturers are trying to get out of the COVID-19 crisis with a strong balance sheet. The position of PSA is not at risk. It's a reconstruction phase following the 3 months. What I mean is that we have to protect the professional approach that we have adopted, that the Supervisory Board has adopted. Of course, we know that the merger can generate some concerns for our competitors. That's normal, that's normal because it improve, in fact, the situation of our 2 companies, but we have to be very mature when we look at all the influences that exist. And we have to understand that the merger is not a financial -- a purely financial merger. Not at all. It is a merger that gives a bright future to 2 organizations, 2 entities that have to take up all the upcoming challenges as best they can. So it's a long-term operation. It's a binding agreement. The agreement is based on a balance on which we've worked hard and for a long time. It's a fine relevant balance vis-à-vis the 2 companies, the shareholding base, the countries. So the time today is not to look at things that you raised in your question, no. Our approach today is very professional. Now what we have decided to execute a binding agreement, this is what the management is to do. Now if they -- is to have other elements, we have the boards, the Supervisory Board, the Board of FCA, to look at that. So the answer I can give you today is the answer of the Managing Board, we respect what has been decided within the framework of the dual governance. With President Gallois, we have a governance that respect the prerogatives of each party. And therefore, we execute the agreement that was signed in December 2019, and we consider that the benefit of the agreement is a long-term benefit and it is not strictly financial. And shareholders have to understand that everything they can read here and there might be the result of people trying to make this agreement unstable. We also have to understand this. So this is the answer I can make today.

If I might add a word to comfort what has been said. The Supervisory Board is very much aligned with what Carlos Tavares has just said on behalf of the Managing Board. I can only confirm what he has said, and there is an alignment, as you've just said, between the Managing Board and the Supervisory Board on this question and on the strategic interest of this operation, which cannot be judged on the basis of 1 or 2 years, but it has to be assessed with the years ahead to come in mind.

Still on the subject, what is planned in case the project coming together was to be abandoned? And what would be the financial consequences?

Well, there is a chapter dedicated to this. It's a very technical one, of course, so I prefer not answering that question directly. I would refer you to the reading of the annex of this combination agreement because it's very technical. All of the consequences are described quite clearly and this in the Pages 42 and 44 of the Universal Registration Document 2019 of the PSA group. What's important to understand today that we are putting all of our energy, intelligence to the service of the construction of this agreement. Our objective as Managing Board and Supervisory board is to create value. Throughout this day, we have shown that not only do we have the determination to ensure the long-lasting survival of the company through these recurring results, but that we are also contributing to the major challenges of society. For example, climate warming, you know that all of the management of the company is bringing its credibility to this. In the last 8 years, we have shown that we have a very structuring steps in value creation for our shareholders. And today, the stress is put on the execution of this agreement. It's extremely complex, and this is because of the world in which we live. But we are capable of managing that complexity, we are doing that. And that is what is being stressed rather than trying to determine what would happen if an obstacle was to come up. So I encourage the shareholder to -- I refer him to the reading of this document, which is quite transparent.

Next question, given the present recession in the world economy and that of the automobile markets, in particular, what are the prospects envisaged in terms of a reduction of capacity and the closure of industrial sites and as a result, a reduction in staffing per geographical zone and globally speaking for the PSA-FCA group.

Thank you very much for having asked that question because this is going to give me the opportunity of sharing a deep-felt belief with you because this question obviously refers to the dramatic and stressful consequences of the proposal. I think that this proposal is interesting, first of all, because we have made a commitment to not close any sites -- any production sites because of the merger. But I think that we need to take into account also the major challenges that we are faced with, societal, planet-wise, et cetera. Now to think -- I think it will be the fact that this merger not take place, which would be a very major risk, a major risk for our company. If we were not able to succeed in crossing this step that we've already decided, this step is going to protect us from all of these dramatic events that perhaps underlie your question. I think that it is a great source of pride for me to say today that the PSA-FCA merger is the solution which allows us to best answer all of the stress, the anxiety found in this question. It is through this merger that we have the possibility to face up to the R&D and CapEx expenditures necessary to offer a clean, safe and affordable technology. It is thanks to this value-creating tool that we will be able to create the societal improvements which will enable us to avoid the dramatic events that your question presupposes. So in my -- I would say that this merger is an answer, a solution that moves us away from this possibility that the question raises because the PSA-FCA merger allows us to offer a technical answer through this sharing of efforts through efficiency. And so I think that this value creation for the stakeholders is meaningful. It is also -- and for the protection of the employees, the social organization of these 2 companies enables us to transform the company in a rational and humanly acceptable way. I thank you for the question because it's very relevant. I sincerely believe that the PSA-FCA merger is the best way we have available today to meet the challenges and avoid this issue.

President, another question on the subject. Given the technological evolutions faced by the automobile sector, and that today, it's no longer the carmakers who dispose the -- of the innovative technology, for example, Google with autonomous driving, is the race to size a good answer for a carmaker?

You know that this race to bigger size has never been an element in our strategy. Our strategy is to win together with efficiency by being agile. And for us, what's important is unit margin. It's an easy way of describing our strategy, but our strategy has never been and never will be a race to bigger size. We believe that, that race entails a number of risks, which very often lead to the failure of such strategies. Our strategy is one whereby we want our company to ensure its long-lasting survival through its competitiveness, and we have seen that the present strategy is not to become #1 in size. Even with the PSA-FCA merger, we still will not be the largest automobile company, far from it. And that is good news because it means that we can continue to fight to become the best, not best because of our size, but best because of the quality of our service, the attractiveness of our products, our ability to integrate societal evolutions in the markets in which we operate. So we are in a qualitative model, and this is why systematically oppose efficiency and efficacy. We are speaking of efficiency, of qualitativeness, the symbiosis with which we work with the stakeholders, and it is in that dimension that we place ourselves. You know that automobile companies have signed structuring agreements that tend to transform them. Let me give you 2 examples. For example, in the field of autonomous cars, FCA is taking some very imaginative and value-creating positions, and I congratulate them on that. On the PSA side, we have made an initiative with Saab for a joint venture, which will be the first European supplier of these batteries in Europe. And so we are looking for innovative initiatives, which could perhaps remove us from the general image that people have of the automobile sector, considering it to be a world of dinosaurs. I believe that the people at PSA are imaginative. They can be innovative. Sometimes they need to be reassured, and they -- and ensure they have confidence in the initiatives that they make. I think that by bringing together the 2 entities, PSA and FCA, we will create a context in which confidence, the capacity for initiative and innovation will be able to express itself freely and that risk-taking will be better accepted so as to perhaps make initiatives which could surprise some of our observers and perhaps move us away from the idea that carmakers are cumbersome entities, which are slow to act, do not take initiative. I think that the PSA Group has taken a number of initiatives, which has perhaps surprised the observers several times on our avant-garde positions. So I do not believe that the automobile industry is fossilizing itself, no. I believe that the automobile industry because it is coming through a Darwinian period, it will become more innovative and bolder.

I'd like to perhaps give you the last of the questions asked by [ Vitros ]. So the remuneration of the members of the Managing Board, shouldn't this be reviewed given the crisis of the automobile sector, and also the restructuring linked to the FCA merger, which will automatically link to layoffs?

Let me, first of all, say that the judgment that the Supervisory Board has of the remuneration level of the members of the Managing Board is, in fact, positive because if we look at the remuneration, it is in line with the performance of the company and the situation in international companies as well. The remuneration of the managing Board members is proportionate. Now coming back to some of what Carlos Tavares has said about the vision of your question regarding the merger, which would be entailing restructuring, layoffs, et cetera. This is not how the Supervisory Board envisages this merger. The Supervisory Board feels that the merger is positive for its employees and for the companies. I would say that this is an element which could lead to the recognition of the quality of the operation, which has then led by our Board, and so I think it's -- we should look at this in the opposite way, see it as something extremely positive rather than negative and penalizing. And Carlos Tavares has been very elegant about this. As far as the crisis, the crisis that we are experiencing, I'm not going to repeat what I said earlier. And I would like to point out and repeat that the effort made by the PSA leaders was both voluntary and significant. I said that Carlos Tavares, for example, has accepted a reduction, which covers 35% of his fixed remuneration and 38% of his 2020 LTI plan. And this is an effort that has been accompanied by 20 -- by the members of the Managing Board to a level of 25% and the 100 top managers of the company to the level of 21%. And this, beyond any requests that had been made by various bodies like the FEP that had proposed more limited reductions in remuneration. So there has been a significant movement which recognizes the impact of the crisis and more particularly, the need for the leaders and managers to show solidarity with those who have suffered in this period. I would like to add that this initiative -- I mentioned this, that also the Supervisory Board participated in this solidarity initiative, and I pay tribute to that as well. But the initiative by the top management of the company and the Supervisory Board is fully in line with the other solidarity measures carried out by the company. Remember, 700,000 masks which were donated, and I know where these masks went. We can speak of the manufacturing of 10,000 respirators in 50 days to support Air Liquide, other manufacturing in the United Kingdom for respirators, in the -- in Spain with Bionics in the U.K., it was with Smiths Medical. Other actions were carried out in France, Brazil Spain, Germany and Poland, the making available of free-of-charge hundreds of vehicles to facilitate the mobility of health care workers. I think this underlines the company's societal commitment, and I'd like to pay a tribute to it again. This completes the efforts made by the managing team and the top 100 managers of the company in terms of their remuneration. So as far as this point is concerned, I think what the PSA management has done is truly honorable. And once again, I'd like to express our gratitude and recognition for this. I would like to point out that a questionnaire was received from the forum for responsible investment. We answered them in writing in detail on the group's Internet site under the general assembly chapter. So I thank you for having asked these questions even if this year's general assembly configuration does not facilitate things. I would like to thank all of you for the interest you show in the PSA Group. And at this point, I would like to have Grégoire Olivier, the Secretary General of the group and of the General Assembly to present the resolutions and the vote results. Grégoire?

Thank you, Chairman. Now the general meeting is taking in a closed session, so the shareholders have voted ahead of time. So I will present the resolutions and the result of the voting. First resolution, the Managing Board presents to your approval, the company financial statement showing a profit of EUR 1,588,315,385. This resolution was adopted by 99.98% of votes. Second resolution, the Managing Board presents to your approval the consolidated financial statements showing a positive net income group share of EUR 3,201,000,000. The result of the vote, 99.98% of the votes. Third resolution, appropriation of net profit for the year 27 (sic) [ 2019 ] to retain earnings, EUR 8.7 million. The Managing Board, which had closed the account for 2019 had, in fact, proposed to pay a dividend amounting to EUR 1.1 million. Following the COVID-19 and the state recommendations to French-listed companies not to pay dividends, the Managing Board decided to propose to the shareholders to not pay dividends on an exceptional basis to save cash for the company. This resolution was adopted at 99.99% of votes. Fourth resolution proposes to ratify the cooptation of Mr. Zheng, in fact, as new member of the Supervisory Board. In fact, Mr. Zheng will replace Mr. An Tie Cheng, who has resigned in September 2019 for the remaining term of office. The result is 76.88%. Resolution 5 is the renewal of the appointment of a member of the Supervisory Board, Mrs. Catherine Bradley, for a period of 4 years. The result of the vote, 96.32%. Resolution 6 is the approval for the compensation policy of Mr. Carlos Tavares, Chairman of the Managing Board. The components of the compensation policy are detailed in the universal registration document. This resolution was approved by 77.95% of votes. Resolution 7 is the approval of the compensation policy of the members of the Managing Board other than the Chairman. The components of their compensation are also detailed in the registration document. This resolution was adopted at 78.23% of votes. Resolution #8 is the approval for 2020 of the compensation policy of the Chairman of the Supervisory Board. The components of the compensation are present here. The result of the vote, 99.8%. Resolution 9 is the approval of the compensation policy applicable to the members of the Supervisory Board. The components are shown on the screen. This resolution was adopted by 99.44% of votes. Resolution 10 is the approval of the report on the compensation paid to company officers of Peugeot S.A. as presented in the report on Corporate Governance 2019. This new resolution is the result of new obligation introduced by the Pact Law. It was adopted at 98.67%. Resolution #11 is the approval of the compensation and benefits due or awarded for 2019 to the President of the Managing Board, Mr. Tavares. All the information concerning this compensation for the Chairman and other members of the Managing Board can be found in Chapter 3 of the registration document and in the notice of the meeting. This resolution was adopted by 79.23% of votes. Resolution 12, approval of the compensation and benefits due awarded for 2019 to Mr. Olivier Bourges. The voting result is 86.43%. Resolution 13, the approval of the compensation policy for Mr. Michael Lohscheller. The result of the vote is 79.89%. Resolution 14 is the approval of the compensation policy for Maxime Picat. The result is 86.43%. Resolution 15 is the approval of the compensation benefits for Mr. Jean-Christophe Quémard. This resolution was adopted by 85.76% of votes. Resolution 16 is the approval of the compensation due awarded in 2019 to Mr. Gallois, President of the Supervisory Board. Let me remind you that Mr. Gallois has renounced the compensation awarded to him for 2019, as in the former years. This resolution was adopted by 99.9% of votes. Resolution 17 is the approval of the related party agreement between the Peugeot Family Group and Peugeot S.A. This agreement is signed in the context of the agreement with Fiat on the merger project. And this resolution was adopted by 99.25% of votes. Resolution 18 is the approval of the related party agreement between the shareholder BPI and Peugeot S.A., also in the context of the agreement with Fiat on the merger project. This resolution was adopted by 99.25% of votes. Resolution 19 is the approval of the related party agreement between Dongfeng and Peugeot S.A. This resolution was adopted by 99.23% of votes. Resolution 20 is related to the negotiation process of the binding agreement with FCA. In that context, the Managing Board proposes to, in fact, not to create a special negotiation group, in fact, because the appointments of employees at the Managing -- on the Board, this will be negotiated at the level of the 2 companies, adoption by 99.02% of votes. Resolution 21, renewal of the authorization granted to the Managing Board to allow the company to trade in its own share up to the limit of 10% of the share capital. Here, the voting result is 97.85% of votes. And now let me present the resolutions to be presented to the Extraordinary General Meeting. Resolution 22, authorization to be granted to the Managing Board to allocate performance shares to employees and corporate officers of the company or related companies. This resolution was adopted by 98.22% of votes. Resolution 23 is the delegation to the member -- Managing Board, the possibility of issuing equity warrants on the company's securities while the takeover bid is in progress. This resolution was adopted by 68.96% of votes. Resolution 24 is a delegation of authority granted to the Managing Board to carry out share capital increases reserved for employees within the limit of 2% of the share capital. This resolution was adopted by 99.89% of votes. Resolution 25 relates to the amendment to the provision of Article 10 I B of the bylaws of Peugeot S.A. The modification is to make the rules, in fact, in line with the Pact Law. This law, in fact, plans an additional employee representative to be appointed in the Supervisory Board. The adoption is by 99.20% of the votes. Resolution 26 is an amendment of the bylaws relating to the terms of payment of dividends. After the approval, it will be possible to pay dividends in shares. The voting result is 99.99% in favor. Resolution 27. This is the ratification of the decision of the Supervisory Board and the change of address of the company's registered office from Rueil-Malmaison to the technical center of Vélizy, Route de Gisy, 78140 Vélizy-Villacoublay. This resolution adopted by 99% of votes -- 99.99%. The last resolution is, in fact, powers to carry out formality. This resolution is adopted by 99.99% of votes. Thank you.

Thank you, Grégoire Olivier. All items of the agenda have been covered. So at this stage, I would like to thank you all for your participation in this general meeting, which is in a way exceptional. I can't say extraordinary, so let me say exceptional. And I now declare that the meeting is closed at 10 past noon. Thank you all. [Statements in English on this transcript were spoken by an interpreter present on the live call.]