Vusion S.A. (VU) Earnings Call Transcript & Summary

Well, hello, everyone, and welcome to this Capital Markets Day for SES-imagotag, a global leader in digital solutions for physical retail. To the investors and analysts here in the room in Paris and those who are joining us remotely from around the world, you're all very welcome. We thank you for your time and your interest, and we welcome your participation. I'm Declan Curry, a journalist and broadcaster. I've been reporting on business and the economy in the U.K. and around the world for over 30 years. I'm delighted to be here today as your independent moderator and master of ceremonies. Over the next 4 hours, we will look at the strategy and direction of SES-imagotag, how it got here, where it is now and what the future might hold as it transforms retail. I draw your attention to the disclaimer on the screen behind me. The company's senior leaders will be making future-looking statements and assumptions today. The slides from all the presentations will be available online at a later stage, they will include the full text of this disclaimer. So if you want to read it word for word, then you could look it up online yourself because I'm certainly not reading all of that out. Behind me on the screen now is our agenda for today. SES-imagotag has today published new sales and profit objectives through to the year 2027 and a strategic plan titled VUSION '27, a vision for the future. It builds on the accomplishments and results of the company plan currently in place. In the first set of presentations today, the company will set out its strategy in the context of current market trends. We will hear from the Chairman and Chief Executive. We will also hear some outside perspectives from acknowledged industry leaders, and we will discuss the critical importance of sustainability and the company's ECG commitments. We will then welcome questions from our analysts and investors. If you are in the room here in Paris, we invite you to raise your hand to wait for the microphone to reach you and then to tell us who you are and which organization you represent. Please do not just shout out your questions in the room because you will not be heard by the remote audience without the microphone. Viewers who are watching us remotely wherever you are in the world today, you can submit your questions in writing by using the chat box that is on your screen, and we will answer your questions at the end of the day. There will be 3 separate opportunities for questions from the analysts and investors here in the room, so we invite you to take a full advantage of those. After that first set of presentations about marketing strategy, we'll then move on to Set 2, about technology and product. Again, you will hear from company leaders and from experienced external voices and you will have that second opportunity to ask your questions. After a short break, we will then look in more detail at the new long-term strategic plan and the company's plans for Europe and North America, and then we will have a detailed briefing on the company's financials before, once again, an opportunity for your questions. And then to conclude today, Chairman and Chief Executive, Thierry Gadou, will offer his final reflections. We should all be finished in this room by 1800 hours, by 6:00 today. Those here in Paris are then encouraged to join the company's leaders for informal discussions over cocktails. So let us then get down to business with our first presentation of the day. We are going to look at key milestones, where the company is today, and get an image of the future. Please welcome the Chairman and Chief Executive, Thierry Gadou.

Good afternoon. Good afternoon, everyone. Sorry, may I need to just adjust the microphone. Is that okay? It's not too loud? It's okay like that? Okay. I have plenty of devices, wireless connected devices, in my hand. So we're already in the subject. Thank you for taking the time. I know it's going to be a long time. But once in a while, once every 5 years, it's good to take stock and see -- and look forward. Our company has been around for some time. And we're definitely on the brinks of new beginnings here. I'd like to thank you. I'd like to thank also the members of our Board and Advisory Board, who most -- who are here with us today. I'd like to thank my team. And I'm very happy that today, you will be seeing part of the incredible team that has made this company, that is making this company and that will take it forward. So to start first, '22 is a special year. You know that. It's the 30th anniversary of our company. So the only, I would say, comparison with a startup is that most of our growth is ahead of us. Apart from that, we started the company in 1992, 30 years ago. They were the early times, the pioneering times, the first customers in France and then the IPO in 2006, you know all this. And then the last decade, we multiplied the turnover by 10 in 10 years. And it was essentially structured around 3 plans. So you remember maybe the name some of you, i3, Leapfrog, VUSION '22. i3 has been essentially the start of the internationalization really, so it's been the conquest of Europe. Leapfrog has been the phase for completing our IoT portfolio and acquisitions. So a lot of acquisitions there. We already had a view of where we wanted to go, but we needed to acquire new technologies that's what we did in this leapfrog plan. And then VUSION '22 was the software plan, was about the move to cloud, was about to move to the new services, our vision of the transformation of retail. And obviously, another step in globalization, which was China on one hand and the U.S., obviously, which started. So there, we are now with our new plan. But before looking at the future, let's consider our current reality and maybe take stock of what happened in just the past 5 years. So you see today, this is the company basically around EUR 600 million revenues, which is still focused 75% in Europe. And we have here, Sébastien, the Head of Europe, who will be talking to you earlier. So a big part, but you see North America already 18%. We have our solutions in 35,000 stores. We have 630 employees, and we're present in -- well, we're present in 62 countries, but we're located in 19 countries across 4 continents. We have probably the most incredible customer base, incredible customers, the best-performing retailers in the world. Happy customers, by the way, if you look at our NPS, compared to the tech average. So a great base of customers, and that alone is an incredible asset. We are famous for being the ESL company, right, the ESL Pioneer, the ESL global leader. Actually, it's true, and it's great because it's going to be a massive market. But our -- the scope of our solutions go much beyond including shelf management, in-store fulfillment, real-time shelf monitoring, computer vision, artificial intelligence, data analytics. So this has been really broadening a lot over the past 5 years. And it's been essentially due to the acceleration of our innovation over the VUSION '22 plan, which has been -- really kicked off with the move or the shift to the cloud and the shift to a platform architecture. And then starting from that, a number of products which are value-added products, some of them we're going to talk today. And we basically completed a very important shift of paradigm moving from -- and that's probably the biggest disruptive innovation since the invention of ESL which is the move from ESL to digital shelf system. And what is a digital shelf system? Digital shelf system is a cloud-operated set of integrated, synchronized ESL cameras and sensors, which basically fully digitizes the shelf and, obviously, fuels a number of processes in the store with data, with automation capability. And you see all these different types of processes, it actually feeds. That is something where that shift of [ priority ] to our customers, I ask them, just to make them understand, would you buy today a phone without a camera? And it's about that, what we're talking about. We completely changed the paradigm of how to digitize the shelf. But we'll be talking about that. So the numbers all of you know, but I think it's important to say that the very important shift is, again, to the cloud. So we have now 50 million devices in the cloud. That's 15% only, you could say, of our total installed base, but that's going very fast, and that's obviously the future because it's enabling all the other innovations. The numbers are clear. We've been accelerating growth. We've been accelerating internationalization up to 90% now. I'm nearly ashamed of that when I speak in France, but anyway, it's probably not even representative of the French share in the global GDP. So we still have to go. Anyway, vast, the total ESL footprint installed base has been growing. Our profitability have been growing. I can't really testify that our customer satisfaction have been increasing because we've not been measuring NPS before in 2017. But -- and the people have been -- the team has been doubling. During that, another part of the achievement has been building a global supply chain. And building a global supply chain, I think, means building a strong foundation, a very resilient supply chain. I think it has been massively stress tested over the past 2 years. You've seen the resilience of our supply chain. You've seen the figures literally not move even though we were going through the worst disruption in supply chains and the worst commodity shock. And so this is because we have a very strong supply chain. But you will see the strength of the supply chain in the future because we are ready to scale that supply chain very -- to make it -- not only to scale it, but to make it more and more global and risk-free. I'd like to say also that a number of underlying work that we are doing is really about we're a long-term company and we're building for the future. So we've been always optimizing our processes. We're very happy that actually last week -- and that's not the last announcement, but last week, we had the ISO 14001 certification, which is the environmental certification. We're working very hard for a few years already, and certainly, we'll get it next year about cybersecurity management on ISO 27001. This is a very important, a bit invisible. But when you look for the long term it's quite important. The other thing we're extremely proud here is that last week, actually, again, so you see there are plenty of news today. Last week, we got the platinum rating of the EcoVadis certification, which EcoVadis is a -- we all know EcoVadis. They've been rating us year after year. And this year, we're very happy about the balance of all the ratings we had on environment, on labor and human rights in sustainable procurement. And on ethics, this is top 1% of all the companies rated by EcoVadis, and we are very, very proud. I'm very proud of my team to have achieved that. Finally, just wrapping up the transformation of the past few years, we also walked the talk here about aligning our capital with our business, with our geography. And you see from 2018 to now, we've been basically doing what we said. Early in 2017 and 2018, we said we will stay listed. We will stay -- we will increase the float, we will increase our liquidity, we will increase the space for you, for investors, we will stay a very entrepreneurial company. And here, you see that the second largest shareholder of the company is actually the people of this company. So here, again, we've been extremely sort of, I think, trustworthy in our words. And yet, the best is to come. The amount of problems to solve in retail are huge. The needs of retailers, the needs that are unmet, are considerable. And so most of our growth is ahead of us. That's the good news. Now -- is there a bad news? Well, I don't know if it's a bad news or just less good news, but the fact is our customers struggle. And the fact that physical retail has always been under a little bit of pressure, but I must say there is a certain acuteness on the pressure we're talking about today. So we have a number of structural long-lasting factors weighing on physical retail, obviously, the shift to online, the shift of consumers' behaviors, the store traffic decrease. But of course, there are, on top of that, a number of conjunctural factors, which are exacerbating all these pressures, obviously, inflation, recession looming, here -- actually their price war as the result of both, by the way, energy cost surging, and labor cost or even worse labor shortage. All of this is putting an intense pressure on physical retail. I think that we -- to start with the beginning, those companies have totally changed the scene. Those companies have changed consumers forever. The reason why I'm mentioning that is that those companies have just reset the expectations of user and customer experience. And from now on, the tolerance of consumers for friction is history. So no wonder that the big shift in all our space, in all our sector, is actually the shift to online. This is what's going on. There are ups and downs, but basically, e-commerce is growing at a very steady pace. It's eating over physical. And you see it's not going to stop. It's going to double. The share of online is going to double in the next 5 years. There are differences between categories, but it's going to double. That means an additional $2 trillion of e-commerce of online revenues. Now the question is not whether that's good or bad, right, because for the -- because of the previous slide, it's not going to be stopped, right? The question is, where is this revenue going to go? That's the biggest question that we have to answer. Right now, for sure, part of the answer is that digital is hitting over physical. And you can see, well, the impact of that on store closings, falling retail space, et cetera. And obviously, a number of risks, social risk, associated with that due to the retail employment destruction that is related to the substitution of online versus -- of offline by online. There is another risk here, which is environmental. And I'd like to stress this one because you probably not have heard a lot about that. This is actually from an article we published on the World Economic Forum website recently, raising attention on the toxicity of the current model of e-commerce as it grows. If it continues to be based primarily on central platforms and our direct-to-consumer logistics model, the increase of e-commerce we're talking about is going to require the construction of more than 300 million square meters and a huge emissions of carbon. And that is what's going on right now. Nobody talks about it, but it's going on right now. So this is another risk about what could go on. Finally, obviously, with lowering profitability, well, the other risk is simply that it might be difficult for retailers to have access or to get access to the capital needed to fund their transformation journey. So I don't want to stand too negative here, but as a matter of fact, does that mean that retail is bound to -- physical retail is bound to decline? Are we stuck into that negative circle in which less profitable stores will drive less investments, less investments, poor shopper experience and then less traffic and then, et cetera? Are we stuck in that? Well, you could imagine, we think totally differently. And we think a number of visionary retailers today are showing a very different story, are investing in their stores, are actually betting on their stores, are their primary assets, as their primary even e-commerce asset. And so we believe that it's possible to trigger a much more positive cycle and a much more virtuous circle instead of the one that we sometimes see actually playing out right now -- but at this point, I suggest Declan that it might be useful to gather external perspective, right?

Thierry, Thank you very much. Let us move on to our panel discussion at this point. Yes. Thank you. Ladies and gentlemen, Thierry Gadou. So I'm now going to welcome 3 external voices to the stage. They are Mark Ibbotson; Colin Peacock; and from SES-imagotag, Roy Horgan. Give them a round of applause. Let me give you some introductions as they settle in. Mark Ibbotson, just raise your hands so everybody knows who you are. He's a leader of formidable experience and insight in omnichannel retail. He was a senior operational figure at Walmart for 5 years. Before that, the Chief Operating Officer at the leading U.K. supermarket, Asda. He's now an adviser at McKinsey and to SES-imagotag. Next to him is Colin Peacock, who brings the retailer and suppliers' perspective and also has a wealth of experience. He has 30 years behind them in key operational roles at Procter & Gamble, and continue to be an adviser to that global consumer goods giant. He's also a group coordinator of the ECR Group, which is an industry-wide initiative. Colin, just tell us what the ECR group is?

Well, I'll start with, it stands for efficient consumer response. And some of you might know that started in America in the '80s. And I've led a group since 1999 that focuses on retail operations and improving retail losses. It's made up about 250 retailers and some producers, and we combine academic with the retailers and the producers to create research papers on things that really matter, on-shelf availability, efficiency, self-checkout and losses. So that's what we do.

Those are things that we'll develop in this and later discussions as well. And next to Colin is Roy Horgan, who is the Chief Marketing Officer at SES-imagotag. He was the founder of a company called MarketHub, which is an EPoS data analytics business, which has since been acquired by SES. Roy will hear from you presently. I just want to get some thoughts from Mark and from Colin. Mark, we'll start with you. We saw that Thierry was talking about in his presentation about the current climate and environment in which business operates. These are undoubtedly tough times. But as we know, in tough times, there are also opportunities. You've got your own beside you, I think.

Here we go. I have it here. I think that's a great start. And I think the title of this was The End of The Beginning. I think retailers should really challenge themselves at the moment to seize this opportunity presented with. And I genuinely believe that innovation is the answer to that question. So Thierry talked through the possibilities of the electronic shelf edge label, I'm very excited about it for many reasons. Principally, actioning price changes is laborious and expensive in a supermarket. In a large store, you could have 2.5 people full time solely doing that job, in a small store, 1.5. And it's inaccurate, and it's laborious. So the ultimate winner is the labor cost in the store and the accuracy for the customer. But beyond that, I think where I'm really excited about the future is the connected store. This is the pivotal building block to connect the associate, the customer, the shelf edge and the store itself. And everybody will be able to see everything. It's going to reduce friction for the customer. It's going to make things easier for the associate. And I genuinely believe we will liberate the associate to do higher value tasks, to serve and sell. So I mean, there's no such thing as a silver bullet, but this is as close to it that I've seen for many, many years. And I'm very excited about the deployment and the possibilities of this technology in the future.

In the more immediate circumstances, are we seeing a scenario where high inflation, high food inflation in particular, will make retailers that may not have looked at this type of technology in the past, will make them think -- we've got to improve our efficiency and technology is how we do it? Digitalization is how we get through this period of economic difficulty?

I think the answer is in the data that you presented earlier. We are seeing a lot of retailers that previously might have put this into the long grass and thought about it in the future are talking to us, trialing with us. So the answer is yes. I think there's 3 things you actually sell all the time. Will the sales go up, will the cost go down and will buy be better at what I do. I think you can answer yes to all 3 of those with this technology. And inflation and the cost base is driving that to a decision point and an execution point.

Roy, actually, if I can bring you in at this point, as Mark mentioned the data, you, of course, know what the data is saying on this. What is it telling us?

Yes. So from a data perspective, I think we're -- as I said, we've reiterated in terms of the challenges that people are seeing. But right now, we're starting to see from a store-to-store basis, profitability half. So that's not sustainable. So you can go with this in a couple of ways. You can either raise your sales and maintain lower net margins. You can obviously increase your gross margins or reduce your cost base. So what we're seeing in terms of retailers that are, I would say, at the early stages of ESL adoption, I think they're obviously reducing their costs. and they're maintaining some of their gross margins because they're able to take prices quicker and deal with the inflationary issues. And what you don't want to have is obviously the basket spend. I mean, it is going down in terms of value. The basket spend is still stable, but the actual -- the gross margin for the basket is lower. So what we're starting to see is retailers that are going further. So we talk about underpinning the IoT technology and then starting to look at IoT plus data, data plus, say, visual analytics and -- or even in-store fulfillment. And then we're starting to see something really interesting. We're starting to see actually they're outperformed. So we think it's around -- you need to be about 15% higher in terms of your gross margin to maintain your profitability right now. But what I'm starting to see some of our retailers, and actually I heard one customer today that is starting to, and they've been customer of ours for 5 years, they're starting to build now stores by data. And what -- that's kind of incredible that they're actually starting to use data in terms of how they build and how they merchandise their stores. And one of the -- I suppose, the pieces of insight from that is that we saw that in this particular store that their stock utilization or demand of products that they are selling every month is up by 8% because they actually have the right products in the right shelf. So data is easy, insights is easy, but actionable data is hard, and that's what we do. And that's what's really benefiting our customers.

And what's fascinating, Mark, about that insight is that actually, when you look at traditional stores, many of them are data poor. They're just not collecting enough information about what customers are doing, what's on the shelf, what the availability is.

Yes. I mean -- in its purest for -- that the product has to be on the shelf. The price has to be right. And we're improving both of those. Availability is a challenge, and you saw that through COVID. You're constantly trying to improve it. So the optimal amount available, you want to be about 96%, 97%. If you're under 95%, we can see a 1% improvement in availability is a 1% improvement in sales. So this is a very, very valuable tool that's driving sales, insight. And it's a great line from Roy, a data-driven store. Act on the facts and the ultimate winner is always the customer. If the customer wins, the shareholder wins.

Colin, what are your thoughts?

Yes. In the constant rounds of meetings we have with retailers, is -- I'll just underline the point about labor. Most retailers are really struggling to find the labor. Either they've taken retirement or they found work with Amazon, who pay probably 3%, 5% more. And so finding labor is really problematic. The inflation -- I just did a study with Walton College, the estimated wage inflation over the next 5 years is 22%. So they're getting more expensive, if you can find them. And so -- our study sort of found that retailers were targeting a 16% improvement in productivity. And this technology, I think, has got a lot of things going for it. So it's got these tailwinds of inflation, which actually leads to requirements to do more price increases and price changes through the year rather than maybe 1 or 2 a year, you'd have to do every day.

And Mark has talked about, from his retail perspective, helping to run the world's biggest name in food retailer. With your supplier perspective, is this also a key, a burning issue for them?

Well -- yes, I've got Procter & Gamble printed on me. So we have the zero moment of truth, the first moment of truth and the second moment of truth. And -- So the first moment of truth is when the consumer looks on the shelf and tries to find it. And frankly, if it's not there, they'll go and find an alternative brand or perhaps go to an alternative store or go online. So this is really critical that the product is there. And right now, the tools by which Procter & Gamble can influence that could be through -- or any other vendor could influence, it could be through the forecasting or through sending people into the stores to ensure the execution is made on time.

Mark, your thought about the digital store? That's a much wider canvas than the day-to-day operational challenges that can be solved.

I think that figure, wherever we believe online penetration gets to. The picking that in the store is the model that's worked beautifully in the U.K. for a long, long time. So the ability to reinvent your core [ estate ] is the most profitable thing a retailer can do. What we do is we connect the consumer, the associate, the picker, the stocker and the customer beautifully. So I think this -- as I said earlier, this is a building block to that connected future. And picking from a store -- stores are great because they are close to people. Proximity is our key point of difference. We are making that a connected experience now. And that lowers the cost, lowers the friction and improve the sales.

Yes, just to build on that, I think that a paper written by Professor Marshall Fisher, maybe 20 years ago, in the paper, he called out a store is both a factory and a theater. And for sure, if the stores are going to differentiate themselves online versus an online offering, they need to build theater, they need to build excitement. And I think you'll see some of that later in a video that will be shown. But it's about the factory. And here is where I think this technology has got some important roles to play in terms of automating those work processes, eliminating them if possible or indeed improving them. So that's where I've seen this technology fitting in very well to the needs of the market to think about stores as a factory and then to improve the factories you would do if you're doing lean engineering.

Roy, is the pitch effectively that every store can be run better?

Yes. And that actually coins a phrase that I love to self-learning store. Every store can learn. Every store -- and that's what gives me hope actually. Every store underperforms and every store can learn. But our job is to effectively bring our retailers on that journey. And the underpinning that is, I think the first things is first is they've made the right decision in terms of the infrastructure, which they have. Now it's our job to bring them through that journey and especially now more than ever.

Okay. Gentlemen, thank you very much. Please join me in thanking Mark Ibbotson, Colin Peacock and Roy Horgan. And as they make their way down from the stage, we invite Thierry Gadou to return to the stage for his next thoughts on the vision for the future.

Yes. Just a quick word to say that at SES-imagotag, we have essentially innovated with our customers. And I must say, Mark, who is on stage has been a very demanding customer in the past. He made us make tremendous progress. And he's been tough to us. He's now apparently happy with what we're doing, but it's been a journey. He's been fantastic. He's one of the greatest manager in retail that I've ever met. So it's great. So anyway, I think we're now picking up on where we were just a few minutes ago. You understand that, yes, we think very differently. We think these virtuous circle is going to be triggered definitely. We think that for all the headwinds and there are headwinds -- there are definitely, they're bright future and that the potential value of physical stores is vastly underestimated. They are underperforming and there are ways of improving that. In fact, everything we do and store digitization in general has never been more at the top of the agenda. You see all the headwinds. We've talked about, everything we do. We've been present -- we're going to present some of that later in more detail, but everything we do is totally relevant. It's totally at really the top of the agenda. And we have been right also to start the journey with ESL. We have been right to think that ESL would be that basic infrastructure that enabling backbone infrastructure of the digital store. I take very often a comparison, like SAP has been basically transforming the complete IT system. And I talked about SAP because they're great partner of SES-imagotag. They have been transforming the whole IT system of companies by transforming it from the bottom up from the back office. And 20 years ago, there were lots of very sexy, best-of-breed solutions for supply chain, for CRM, for everything. Look at where that is now in SAP because transforming has to come from the very best foundation and ESL is the foundation for digitizing the store. So we see, first, a huge market, 10 billion units addressable market. And we see an acceleration of the adoption just because ESL is the perfect enabler of all the processes that need to be optimized in store. And obviously, the future model we see winning for retail is actually hybrid, obviously hybrid, and store centric. In fact, the store that will be at the heart of this hybrid retail is going to be naturally augmented by technology. It's going to be cloud connected. It's going to be monitored in real time. It's going to be data driven. It's going to be frictionless for shoppers and personalized. It's going to be a local center for e-commerce -- a fulfillment center for local e-commerce is going to be a center for local services, returns, repairs, refills. Think about the fight against packaging refills. It's going to be also enabling full transparency of inventory because today in the whole supply chain of CPG and retail, the single point of failure is the store. It's where the accuracy of inventory is the lowest. We're talking about lower than 70%, 60%. That's where the point of failure is. So it's going to enable that digital transparency. It's going to also support local producers and foster local for local economy. And finally, those stores will have much better jobs with people who would be more focused on service and customers and instead of doing jobs that are -- or tasks that are very low value-added and automated. And that might solve another thing we were talking about earlier, which is the fact that retail is going to be able to attract talent again. So I think that incidentally, these stores are going to be much more profitable with higher margins, higher local e-commerce revenue, higher availability, lower costs, lower inventories, lower out of stock, lower waste. And that is not all. I think the store is going to be actually driving benefits for CPGs for consumer goods companies because every improvement in the store transparency in the store data available is actually generating huge savings and Colin was very rightly mentioning that point. And we have a lot of great representatives of CPG today. So we'll see one on stage again in a minute. But anyway, stores are definitely going to stay. They are anyway going to remain the main channel. Technology-enabled stores are going to stay, and that's a very good news for, obviously, retailers because it's their main assets. This is good news for consumers. It's a good news for brands because the ultimate brand experience is in stores. It's a good news for the communities because healthy stores make healthy communities and for the workforce too. So we -- I'd like to come back on these very important things. You remember the question, where is going to go the $2 trillion -- or EUR 2 trillion, not a big difference nowadays, of additional e-commerce. Well, they're going to go in-stores. Believe it or not, they're going to go in-stores. The stores are the future of e-commerce because they are very, very efficient when they are enabled by technology, they're very efficient e-commerce centers. And as a matter of fact, there is such a density that it's an obvious answer. Stores in e-commerce are part of the solution, not part of the problem. Think about where we are today. Think if you need anything right now, you're going to search on Google on your mobile. You're going to make a search, what's going to come up? It's going to be probably an online order that's going to be fulfilled 30 kilometers away, be prepared in 6 minutes and take 4 hours to get there, probably tomorrow. As a matter of fact, anything you want is probably 200 meters away from here, but you don't know it. That's the response. That's why we believe that the digital transformation of physical retail is going to actually make the best and most sustainable e-commerce. You will see e-commerce will come from physical stores. And I'm not the one saying that, actually. One of our biggest customers is actually just putting their stores at the heart of their e-commerce strategy, not only for performance, but also for sustainability. And that's also the case of other retailers like IKEA you see here, and I could go on forever. There are many visionary retailers I said who are showing the way. So the store digitalization case is actually coming up now coming out in a very broad sense. Store digitalization is about obviously making stores much more profitable, it's about consumer experience improvement. It's about enhancing the retailer and brand collaboration and it's about sustainability and positive social impact like we described. That is essentially the agenda of the VUSION '27 plan. Contributing to that good is actually what we aim at doing. So our plan is structured around 5 very simple pillars. The growth and the leadership, which has been always in the DNA of our company, the customer, obviously, the value add, the search for permanent value add, higher value add, particularly in the software, the operational performance and the positive impact. So I'll go very quickly. I'm sure most of you have read the press release today. So no big scoop here, 2.2 billion target. We want to build the largest IoT connected network with a 1 billion connected devices out there. And obviously, that's a significant growth over the next 5 years. Second is customer first. We have a very simple target. I think Mark said earlier on stage, customer happy, shareholders happy. We only have one metric. If we reach that NPS, we need to bother but nothing else. That's going to be -- there is so much needs, we just need to deliver that's great experience in return to our customers. Then, of course, we need to improve our business model and center it like we've been starting to do it 5 years ago, continue to shift to a cloud and vast centric business model. Our ambition is also to be applying the recipes that we recommend to our customers to us. It's not only for the others that you need to digitize your operations. We are a very complex company to manage and to operate, 600 people, 19 countries. This is -- we need to put the company in the cloud. We need to digitize every process, we need to improve that. And we need to continue to build a superior supply chain given the hundreds of billions of devices that we are preparing to manufacture to ship. So that's basically nearly it, except the most important is actually that we want to make sure we have a measured a proven contribution to our customers' net-zero goals, and we want to make our people super happy, right? We'll talk about that in a minute. People is one of the pillars of our company. It cannot be -- our performance past and our performance in the future would not exist if we didn't have a very strong focus on people and on the fact that for us, having motivated and happy people is just the first driver of performance. So I just would like to quickly say a word about that aspect. It's not because it's a kind of obligation to talk about ESG. It's actually much more deeply rooted in our history and our beliefs this thing about sustainability. And frankly, we're a company sometimes a little bit worried about the absence of retail in the climate debate, in the sustainability debate because we think it's so important. So let me start by that. We have a ESG plan, which is structured around 3 pillars. One pillar was launched with our Advisory Board in 2019, it's what we call the road map for positive retail. It's about contributing to retailers' net-zero target. It's about developing ourselves low-carbon IoT devices, and it's about having the positive impact socially that will -- that goes with making better and more sustainable stores. Great place to work. I will have Marianne, our HR, EVP, come on stage in a minute. And long-term stakeholder value, we will talk about that with one of the stars we have today here, Peter Bravek. So I'll just start with this. We are a very purpose-driven company. I know sometimes people laugh because we often come up with that. We are convinced that the physical stores, actually the 20 million stores out there, are a very essential fabric of our economy and our society. And we think that revitalizing that fabric, which, by the way, is very vulnerable, is actually a very meaningful purpose. It can bring a lot of positive impact. And reversely, if it doesn't happen, there can be a very negative and very gloomy scenario ahead of us and probably faster than climate warming. So we believe in that purpose very much, and it's driving us for years, and it's going to drive us because, for sure, it's not the end. We think it's urgent for the world to be realizing retail is the biggest industry, is the biggest, largest employer, private sector employer. It is also responsible for 25% of the global GHG emissions according to the World Business Council for Sustainability Development. So I think that it's not a surprise if it has been now a priority for retailers to really set ambitious sustainability targets. And we're going to help those targets to be achieved. The contribution of retail to sustainability is huge. If you think about the number of things we've already talked about, enabling local and low-carbon e-commerce, fostering local production and consumption models, reducing food waste. Food waste, 5 billion tons of food produced every year, 2 billion tons lost and wasted. 2 billion tons, right? 20% is e-commerce is in the retail part. So we're talking about 400 [million tons]. So we're talking about more than 2 gigatons of our carbon emissions, just that food waste. And it's very easy to reduce with technology in stores. Enabling end-to-end supply chain transparency. Don't forget, store is the single point of failure of the whole supply chain, is where we don't know what happens basically. Then paperless, obviously replacing paper is very significant. And then influencing responsible consumption at the shelf. Well, this is simply because we have all these ways of communicating at the very moment of purchase. I can't go much longer in all these things. We have so much things to say. But what I'm telling you is that there needs to be ambassadors to put that topic at the top of the agenda. And we're doing that. We've been participating in the Sustainable Summit of the World Economic Forum in September. That's where, by the way, the article I was mentioning earlier was coming. Albeit next week at the COP 27 saying, yes, there will not be sustainable cities without sustainable stores. And obviously, there's going to be sessions around that topic at the Davos Annual Summit. So we are absolutely trying to do our role here. But the first 1 we are also doing is actually our net-zero plan -- our own net-zero plan. And you can see here are 2 parts: first, decarbonizing our products, right? You would say, well -- and you would be right to say, look, you're going -- you're going to flood retail with billions of IoT devices, that's carbon. That's carbon at the end of the day, right? So what's the return on this carbon investment because you're going to do that, right? So we've been doing the work very carefully, very seriously with Carbone 4. Everybody in France, know Carbone 4, and it's a visionary leader, RDC and TRACE, tooling the approach, having our Scope 1, 2 and 3 carbon footprint and working on a number of things to remove carbon from our solution. And we are removing carbon, we are removing servers, we're removing access points, we're removing cables, we're removing -- we are refurbishing and giving a second life. We are also working with our VUSION-E program on reducing that. So that's one thing, reducing by 30% -- well, we'll see the numbers later. But anyway, and the other thing is all the drivers that you see is helping retail to decarbonize. We've been doing a certain exercise of measurement in order to give us a target for these next 5 years, which is to reduce by minus 30% to minus 40% our carbon intensity regarding our products, which is already a very ambitious target. We have evaluated at least on part of the levers, the return on carbon. How much carbon we can offset with the one -- every 1 kilo of carbon we're putting out there in the atmosphere, and that is a very high return. So we need to move on. I'd like to talk a little bit about people. People are by far most valuable assets. I've started this journey 10 years ago. It's been essentially about bringing people together from companies, from many countries. And the partner with whom I've been doing that, is Marianne. I will ask her to come on stage. And I've known her before. She was probably my first recruit when I arrived. And so Marianne, maybe you can talk to us a little bit about these ambitious plan.

Thank you, Thierry, thank you. So that's right. We all joined the company 10 years ago, so it was in 2012. And at that time, it was a company with around 100 people, essentially located in France. And today, 10 years later, we are a fantastic group of more than 600 people, based in 19 countries, in 4 continents, and with an incredible future. And I think we can be very proud of that, and we have done that with an organic growth, but also with 4 big acquisitions, and I think we can be very proud of having all the entrepreneurs and the CEOs of this acquisition today in the room. And I can see Michael here from Germany and also Andreas from Austria, and I can see Scott here from PDi in Taiwan and also the last one is Roy, where is Roy? from U.K.

Ireland.

Ireland, sorry. Ireland, it's not U.K. Well, we have 2 subsidiaries, 1 in Ireland and 1 in London. And so altogether, I think what is fantastic is that this acquisition has also grown a lot. So we have invested in people in that countries. And altogether with the internal growth too, we have now a fantastic international teams, and I insist on that because it's a big asset for the company and for our business in the world. What we can say also is that we have built a common culture, a philosophy of management. And I think we are all here to build this company altogether and -- for the next 5 years. So let's sum up our -- sorry, yes. Yes, we can sum up our, let's say, -- we can sum up our HR policy with these 5 pillars. First, we believe in long-term human capital development, and I think it's very important. We believe that motivation is the first driver of our performance. We offer one of the best place to work, and we value diversity and gender equity inside the company, and I hope you feel it. And thanks to a high quality of social dialogue, I think we can say we build a company altogether. So let's have a look at our current reality. So more than 600 people, you know that already, 19 countries, 4 continents. But altogether, we represent 43 different nationalities. It's a big number. We have, so, international teams. It's a big asset for the company. We have also a nice mix of generation, and it's very important to have this mix of generation to innovate also in our sector. In terms of attrition rate, I think we can be very proud, after this COVID crisis with this incredible employment market to keep a stable and a low attrition rate at 9%. And we have also happy [ people ] with our employee Net Promoter Score, we have a score of 25, and we target much more. We have also another pillar of our HR policy, which is our shareholding program. We share the benefits of the company with 30% of people, and this 30% people represent all the key people and all the managers of the company. And if you look at how it decreased the attrition rate to -- from 9% to 3% of attrition, you can feel how it's powerful also for a long-term development with all our key people and managers. It aligns everyone. It gives a sense of ownership. And we are all focused on the company targets, thanks to that. I insist on that because I know that Thierry and the board members are going to present another new shareholding plan, and I think it's very, very important for us. Last, percentage, we are proud to have 33% of women in a retail tech company. It's a good figure for a retail tech company. But we can do more. We can do much more. And to do more, we have recruited 40% of women this year. We have also 40% of women on our Board of Directors. And I can tell you that they are all behind me and behind the team to make us more diverse, and we have already 29% of women in management position. So I'm sure that next time, we will have much more women on stage like me today, and I'm sure we can do it. So my last slide is a sum up, but I guess we don't have the time to develop that. But what you have to remember is that we have launched in 2017, a lot of programs to, let's say, push the company to an international spirit with a lot of programs. And this year, we have launched other programs to support the next step of the company, especially for the U.S., and it's going to be a huge growth in the U.S., too, and we are going to do it all together. So you have seen our achievement, but we target much more for '27 with 50% of women recruited, 50% in management position and E-NPS up to 50 and an attrition rate low to 7%. Thanks a lot.

Marianne Noel, thank you very much. Thierry Gadou, if I can invite you back to the stage. We're also delighted to welcome for our discussion, Peter Brabeck-Letmathe.

So welcome, Peter. I just had a few words before inviting Peter, but that's fine because those chairs are actually much more comfortable. So it's, the earlier, the better. Yes, I mean, the third pillar is about governance. And very often, it's the most -- it's like not necessarily very focused one actually for us. What it means, governance is ensuring long-term stakeholder value. It goes with the right governance bodies, very independent, very competent governance bodies. It goes with having measurable targets, and it goes with a transparent, very detailed, very serious quality of reporting on these standards. And we wouldn't have, I think, been able to achieve everything I presented earlier without the scrutiny of a number of government bodies and there are 2 essentially, of course, on top of the management of the company. But there are 2. There is the International Advisory Board, which is chaired by Peter, and who are -- some of our representants are here today. So Viviane Reding is with us today. Maybe you can just raise so that everybody sees you, Viviane. So everybody -- and then I think Candace is left for a minute. No, no, Candace is here, sorry. You're supposed to be, okay. And then we have Hélène, yes...

[indiscernible]

Absolutely, yes. So Candace is the Chair of our ESG Nomination Remuneration Committee at the Board, which is that committee here. And Hélène Ploix. Hélène Ploix is important -- what is great about our advisory board, I tell you and our board is very easy. They are so famous, no need to present them, right? So the -- and so -- and then there is, George, he's a great person in China, couldn't come today, but anyway. So Peter, just a word before actually handing over, I just want to say a very personal word because I have the privilege of knowing Peter and having guidance of Peter and of the all the advisory board members. I have a great admiration for one thing in corporate in companies. I've been a consultant. I've been an investor. There is one thing I admire and only one thing, I must say, and that is long-term high performance. All the words count, performance, high and long term. It's very easy to have short-term high performance. It's very difficult to have long-term high performance. So the companies I admire, our companies like L'Oreal or Nestle or Accenture, the company's very high long-term performance. And -- well, I mentioned the company that Peter basically built -- didn't build, but made the largest company in Europe and the largest CPG company. So I just want to thank him again, and it's great to have him on our board and to have him accept to chair our advisory board.

Thierry, thank you for those words. Peter, of course, the -- for more than a decade, the transformative Chief Executive of Nestle, then elevated to the world of Chairman and continue to shape the company's direction and strategy until his retirement from the Board. He's also Vice Chairman of the World Economic Forum and from that position, Peter you advocate a greater action by business to preserve and protect the world's supplies of water and food and to develop a shared value. Of course, as we talk, they are also talking in Egypt at COP 27, the latest global conference on climate change. The UN Secretary General in the very start of the conference said that we were driving on the road to climate hell with our foot still on the accelerator. What's the challenge for business, for the investors in this room when they hear comments like that.

Well, I have 2 reactions to those comments. The first one, I'm very happy that politicians are apparently waking up. Because if you look backwards to the other COPS comps, which we had before, it was the private part, which was already saying to the politicians, Glasgow, if you remember, there were public statements signed by hundreds of CEOs saying, asking politicians, saying, "God sake, take action. This thing is serious." It was a private sector. It was a private enterprise, who was pushing the politicians to take actions. So that they are starting now to say action has to be taken because we are driving against the world, I mean it's a least a sign, they have heard the message. Otherwise, I don't expect very much. I expect a lot of talking, 40,000 people traveling all over the place. It's not necessarily what will diminish the CO2 output. You could have done the same thing perhaps on a team like you are supposed to do it now in our cases. So I think it will be another one of a lot of discussion, promises and nothing really coming out. When the solutions, if you would -- if this would be a business issue, the solutions would be relatively easy, okay? The first thing, and we have said this now for more than 10 years, put a price on carbon and let the free market work, and it will work, very clearly, it will work, okay? So put a mark on carbon. That's it. Even companies like Exxon has demanded this, okay? All the free enterprise, I think we need a price for carbon because you have to understand one thing. As a businessman, if you want to make an investment, you have to justify your investment in economical terms. As an entrepreneur, you are not allowed to make investments which are producing losses because then you are not sustainable. Your business is not sustainable. So you have to have an investment justification, which is based on [indiscernible]. If you put a price to carbon, an investment, which diminish carbons is economically justified. If you don't do it, it's very difficult to justify. The same story goes with the water, okay? How do you want to make investment into water when you get the water free of charge. Okay? So this is the first and fundamental thing. If you want to diminish the carbon output, the first thing, put a higher price on the carbon and then let the market work.

Does business need to do this independently of the political climate. If there's a sense that when the politicians are talking, it's going backwards. Is it for business to drive it forth?

Yes, it is, of course, I mean, we have certainly a very important part. We are not the most important part, but we are a very important part. And we have a responsibility. And I think the presentation today by Thierry was very clear. In today's world to run a company, you cannot do it if you do not have a certain social sensitivity. But if you only have social sensitivity, you cannot run a company either. So I think for everybody, it is quite clear that we have a responsibility towards society because it's a society allows us to be active, okay? We -- perhaps we have forgotten that is not so long to go, before the Berlin Wall was falling, we didn't receive the right to act in more than half of the world, okay? We could not act there. Now then after the wall -- after the fall of the wall, we received the possibility to act, to become active. So the society allows us to be active. And therefore, we have the same responsibility towards the society than we have to our shareholders. One gives you the money in order to be able to act and the other one allows you to act. So the responsibility of a CEO has to go to both sides. And environment is part of the societal responsibility that we have.

But is the investment community playing its part?

I would say there has been a big change in the investment community over the last couple of years. They are still, I would say perhaps today a minority, which is short-term -- quarterly profit all the same, mainly activist which we all know and which we have seen or have been victims from activist attacks. But I would say if you talk today to the big investors, BlackRock, Blackstone or Fidelity or whatever, the big ones, the most part of the discussion goes about what is your environment, what is your ESG commitment? It is public? Is it being audited? Are you transparent? Those questions are now in any shareholder meeting or in any analyst meeting.

And are your promises on ESG accurate? Are they deliverable? Because every company talks about ESG nowadays.

Well, but that's already a good thing, no? At least there's a consciousness, okay?

But some of them don't mean it.

I don't think that somebody is voluntarily putting this fake news out. What can happen is that they are starting to make promises like they're making financial promises, which perhaps they have not sold through whether they can really deliver it. And the second thing is that society is changing the expectations. So when you said that, for example, you're going to reduce, 10 years ago, you're going to reduce the water consumption by 80%. You have been concentrating it reducing water consumption by 80%. You achieved it. But 5 years later, nobody wants to hear about it. You only wants to hear what are you doing about CO2. And once you have the CO2, the next thing, the next meeting is going to be, I don't care about your CO2, which you're doing, but you are still producing the most plastic in the world. So you see the demands are changing also. And therefore, it's not always when you're proposing something, the expectation, sorry, for something different. So this is why the idea about this green washing comes out. But I mean, perhaps like in any part of society, perhaps is one or the other one, who is putting fake targets out, but I don't think so. I think the reality is trying to be as honest as possible because it knows that it's going to back-shoot if you are really not performing up to there.

Thierry, as well as introducing Peter, you also highlighted the other great members of your advisory council, and it's great that they are with us as well today. What do you learn from that from them -- from him?

Well, I think that is a very key question. I think that for -- if I was an investor, I would ask myself what kind of guidance has the CEO of a company, and it's very good -- it's very important to have the very guidance. So obviously, it's fundamental for me to be able to gather advice, not only for me, by the way, but also for the executive team of people who have been incredible achievers in their own domain, either the political domain like Viviane, who has been 3 times EU Commissioner and Vice President of the European Commission; or Peter, who is one of the greatest leaders I know -- business leaders; or Candace; or Hélène as being the first women at the Board of the IMF. So I mean, I'm so lucky to have all this experience helping me to stay focused, avoid the let's say, the being derailed into too much sort of being biased or -- so it's a very important thing to be able to have guidance. 20 minutes of time with somebody like Peter, who's seen every situation in management of the company in every topic is just invaluable.

But do they challenge you?

Yes, enormously, permanently. I feel every time I have especially the board -- at the Advisory Board, I feel totally exhausted for 3 days, I can't recover. So it's like a stress test of many hours, and they're smiling because it was the case of the previous one, actually not so long ago. So you see I can recover. But no, they are permanently saying no to me. No, but in a good way. Again, you need to have enthusiasm and energy drive a company, especially a company that goes fast, that needs to be -- so you need experience and not only experience, but also experience of people who have done so much. I mean we have extreme achievers here, right? Even now...

Well, there is another reason why we are doing it because we are all shareholders.

Yes. Absolutely. That's -- well, you know what -- it's like the price of carbon. It's -- here in this room, whether it's the team, whether it's you, investors, whether it's the board, we're all shareholders. We're actually having the same currency in the pocket. And that's very important. We're aligned. That's very important.

Let's open this up to some questions from the floor. We have some microphones. So for our investors, our analysts and our associates here in the room. [Operator Instructions]. Question for Thierry or Peter, on the first segment that we've had so far, so on the market, the strategy and ESG. [Operator Instructions]

Aurelien Sivignon from ODDO BHF. I will have a first question to you, Thierry. During the presentation, you mentioned a lot inflation, labor cost, data as well as a driver for adoption for the ESL. I would like to -- I was wondering if -- how is evolving the return on investment recently for your solution, meaning if I am a U.S. retailer, how long it will -- how long could be the return on investment to switch from paper to electronic label?

It's a good question, and the answer is very simple. It's never been so hard. Today with the inflation, with the labor cost and the labor shortage, again, which might be even worse than the labor cost growing, it's actually much higher. And this is why we anticipate, as you maybe have noticed, a very strong increase, and you will hear from our CEO in the U.S. shortly. So the ROI is quite high now.

[Operator Instructions] Otherwise, we'll move on to the next segment. [Operator Instructions] We are concluding with that segment of questions. Thank you very much. Please join me in saying thank you to Peter and Thierry as well. Thank you. And on a personal note, to Viviane Reding, thank you so much for reducing my mobile phone bill because I know it's your work that has done that across this continent. And when we were in Europe, we appreciate it as well. Things have moved on a little in history since then, but thank you for that particular action. And we move on now, I think, to the technology and products section of the presentation. We're going to hear about R&D strategy, and we hear about that from the group CTO that is Andreas Rössl.

Hello from my side. My name is Andreas Rössl. I'm originally one of the co-founders of Imagotag. And I joined the group in 2014. And since '15 or '16, I don't remember exactly, I'm leading all the engineering efforts of our teams in the group. And I'm happy to be with you today to give you a bit of insight about our technologies and R&D road map. But first of all, I want to give you a bit of insight where our teams are based. As Marianne said, we are quite an international company, a very distributed company. And we have teams and my teams are located in several different sites, here in Paris, in France; in Austria, in Graz or New Graz; all the team which came with the Imagotag acquisition; the team in Ettenheim, in Germany, that's the team which came with the Findbox acquisition; the team in Ireland, Cork, it's another acquisition, so that came with MarketHub. A team -- a recent -- a very recent team we built is in Croatia, in Zagreb, so that's not far away from Austria, so very convenient for me to travel there. Another big team and a very nice team we have in Taiwan, in Tainan. So that's the team and the company of pervasive displays, which has been founded by Scott, who we also will hear in a few minutes. And we have also started to build a team in the U.S., so in Chicago, which will serve our U.S. market and a team which will grow also very fast in the next years. So altogether, we have like 200 people, more than 200 people in the R&D team in the meantime. That's about 30% of our global staff. And this year, we spent around EUR 30 million on R&D, which is about 5% of our group's revenue. So let's talk a bit about our core technologies and our core expertise. You see we are a very, very deep tech company, that's the reason I'm the only one who is allowed to wear a T-shirt on stage. So yes, we have very, very deep knowledge about low-power display, so that all the technology and all the experience, which came with the team in Taiwan with very, very deep knowledge about ultra-low power IoT and edge devices. A lot of knowledge about a very high expertise in connectivity, so all everything around radio and communication protocols. That has always been a key differentiator of SES-imagotag, so always a very key asset of our company. We have very great knowledge and expertise about high scalability cloud. So we have built up that knowledge over several years, in the meantime, we have great know-how and expertise in the computer vision and artificial intelligence space and also great knowledge about big data analytics, which came with the team in Ireland and Roy joining the company. And what we all -- and what all those technology areas we have together is really a common mindset. We always think about ultra-low power, very long lifetime products. Security has been always been in our mindset, high scalability, real-time and interoperability, especially between our own technology areas, but also with external stakeholders to really being compatible and interoperable with third parties. And yes, no surprise. All those technologies are feeding our product portfolio, our VUSION ecosystem, all our products. And yes, that's quite logic and no surprise. What we are also very proud of is our big portfolio of IP assets and patents, so that has always been in our DNA and the DNA of the company to protect all our innovations. And in the meantime, we have more than 110 patent families and more than 500 active patents in our portfolio, covering all our main innovation areas. So we really try to spread and try to protect everything. And we've also very high ambition to double this number within our VUSION 2027 plan. And also important to highlight are the dots on the left, lower bottom, that's our competitors. We really have multiple times of the patent portfolio of our competitors. That's not only our opinion, that's also proven by external analysis. So -- and all those technologies really feed our ambition to make the physical store, a digital asset. We have heard about that already. Stores must become much more data driven, much more automated in future. And that's what -- we all know that will require a lot of IoT technologies. We have to put sensors, IoT devices, connectivity, infrastructure, cameras into the stores to enable additional processes like, Pick-to-Light, Stock-to-Light, Out-of-Stock Detection, Sensing, Temperature Sensing, Humidity Sensing. So that all requires a lot of IoT technologies. And you probably will wonder why those technologies have not scaled until now because it's complex, it's really complex. Apart from our own technology, apart from the ESM technology, a lot of other technologies like robots or Beacons, for example, Beacons was a very high topic a few years ago, a lot of these technologies had problems to scale because massive scale is an issue. We have thousands of stores to cover. There is billions of shoppers every year, billions of SKUs, so that's really a problem for technologies. Then the ultra-low power aspect. These technologies, the products and the IoT devices you put into store, they need to last in the meantime for almost a decade. And -- but still, you need the important processes in the store to rely on those technologies. So they need to be accurate and high reliable. Security. I mentioned before, you probably heard already about that, like METRO Germany was part of an attack last week, they had an outage or almost for a full week. Another retailer in the Nordics has been an attack -- or has been attacked a couple of months ago and had an outage in 600 stores for almost a week. So security with the rise of these IoT technologies really becomes an issue. And last but not least, affordability. All those retail, we know is struggling. It's a challenge. It's a low-margin business. But these investments in IoT are still very CapEx intensive. That's a challenge. And so really, almost the only technology which has scaled until now in retail is electronic shelf labels, that makes us a perfect backbone technology, like Thierry already mentioned, to also put more other technologies into this ecosystem. So what do we do as SES-imagotag to really help our customers with our -- to solve those key problems, it's our product. So we have invented a bunch of devices and sensors, smart labels, which are now really very long lifetime, super miniaturized, even able to go on garments in the meantime, so super slim. We have invented cameras and sensors. My colleague, Michael will talk about our Captana product range in a few minutes. We've invented digital signage products, which go into shelf to help digital marketing. And my colleague, Scott will talk about that in a few minutes as well. And that this all has been really also supported by the great know-how and the great expertise of our team in Taiwan, really helping us to bring all with the latest display technologies into those products. Now talking about VUSION E and our sustainability program. Thierry already mentioned that this is very important for us as a company. And we do not only talk about it, we're really launching a next-generation product line next year. which is improving the power efficiency for -- a few times. But not only improving power efficiency, we will really make a complete crazy innovation in retail. We will have the first product on the market, which has no batteries anymore in the IoT devices. It's really the first and only battery-less solution for ESL on the market. And also, I'm very proud that our -- that this pays off and that we have been awarded with the EcoVadis Platinum sign. On the connectivity side, we continue to invest a lot into connectivity. As mentioned before, that has always been a key asset for us as a company. And those investments in low-power RF, cellular technologies. For example, we're investing a lot in NB-IoT in cellular connected devices Also, we invest a lot in Bluetooth Low Energy in the meantime with our partner, Qualcomm. So all those investments in connectivity will help us to provide a real first retail IoT hub. Now let's talk about cloud. And I'm really happy about that topic so that I can spend a few seconds because we have really been the key innovator of Software-as-a-Service solutions in retail. We have started a few years ago already to invest massively in this topic. And we have already come very far. For example, we've already 1,000 stores under management in our cloud solution -- in our cloud service. That's so far only 30% of our installed base, but it's growing very fast. And we have already 50 million devices under management. Our ambition, as we heard before, it's a 1 billion devices by 2027. But even 50 million devices is already the largest IoT network in retail by far. There is no one even close to that. We are doing more than 3 billion IoT and health checks of our -- IoT health checks to our devices every day, so we permanently pin our labels, if they're still there, if they're still in good help. And we are offering more than 99% of availability on our cloud solution, which is really very -- our customers are really, really, really happy about that. We're not stopping there. We continue to invest on the cloud aspect. We continue to invest in server-less elastic Cloud technologies making sure our backbone is really able to maintain and to manage the billion devices ambition. We continue to invest in AI technologies with our team around Captana with our ESL management team. And we also continue to invest in trading insight technologies and peer analysis with our team in MarketHub in Ireland. So let me stop here for a few seconds. We talked a lot about the challenges about scale before. And I have to borrow a statement of one of my favorite role models, Steve Jobs, who already used a quote in one of his key notes. "People who are really serious about software should make their own hardware." We think in a very similar way. We think that all these challenges in this high scale IoT area can only be solved if we really bring all the intelligence of the hardware into software. And that's why we have invented VUSION OS, which is our retail IoT operating system. And VUSION OS is -- it's part of our operating system, is in the Cloud and part of this VUSION OS is on the device itself. And this technology really helps us to drive and manage millions of devices across the whole store fleets. It helps us to provide to consistency but across generations of hardware, and it really helps us to transfer the intelligence from the hardware into the software and helping us to drive this open ecosystem because we also want to bring this VUSION OS technology to third-party IoT vendors and really make sure that this can help us to push forward these open ecosystem. And yes, in a nutshell, so this is really an open ecosystem. And at the end, you can think of it about like your iOS on the iPhone. This VUSION OS Will help us to permanently bring new features to our customers. It will help us to have the devices always managed and it will help us that those devices are always up to date and managed from our back end. And yes, and here is a good example how VUSION OS helped us already to make a breakthrough in our Infraless product range. Infraless, I think I need to give a bit of context. A few years ago, we have only installed our proprietary access points. and proprietary access points, first of all, it's an additional piece of hardware. It's something the retailers must manage. And it really -- it's always a problem when you really deploy at thousands of stores. There is an ecosystem of Wi-Fi AP vendors. So the big guys like Cisco Meraki, Aruba, and those guys are already in the retailers. So we have created partnerships with all those companies and we have brought our VUSION OS technology into the existing access points, so retailers can really benefit from their existing infrastructures and basically roll out our ESL solution with the press of a button by deploying VUSION OS on their existing hardware. And it also helps us to reduce the carbon footprint because we don't need to do extra cabling, we don't need to do extra installations of access points and that's really, really a great advantage. So -- and I'm also happy to announce that next year, 2023, will be a remarkable year for retail IoT because we are bringing all those technologies together and really bring them in a new platform, which will be the first unified store IoT hub. It will be the first platform, which is based on an open secure standards-based platform, will be the first IoT sustainable platform, which does not rely on battery-powered hardware anymore, and it will also enable to be the first retail media platform and first platform for real-time shelf data. And both topics will be addressed by my colleagues, Michael and Scott, in a minute. And the last thing I wanted to highlight because we are inventing technologies, in those technologies are not only for retail. So we are really thinking about innovation beyond retail, and we have already started to bring our technologies into other areas than retail. For example, health care, office signage, industrial, logistics. We've already started to create a team around that, and we're already doing this year around EUR 10 million of revenue on those non-retail segments. But we've decided to not put that dedicating our VUSION plan, but you will probably hear about those topics in further plans and business updates in the next years, for sure. So thank you from my side, and I'm going to hand over to Michael.

Andreas. Thank you very much. We're now joined to hear more about Captana, which is part of the SES-imagotag Group, its Chief Executive, Michael Unmussig.

Thank you very much. And you probably heard that the name, Michael Unmussig, it's hard to pronounce, that's why most of the colleagues just call me Mu, that's a very international and very useful shortage of the name. So we talk about the transparency of the shelf and talking about Captana. Captana stands for capturing analytics. And the basis is what we would like to deliver is the shelf transparency. So I hope this works. Okay. So what we would like to deliver is we see that the absence of data is one of the biggest challenges for retail. We would like to deliver, we would like to close this gap and say next to promotion, execution data, transactional data, shopper experience and all the things that -- which are already available, we would like to add real-time inventory data and real-time shelf data. This is the missing point and exactly this is what we address. What we see is the missing data leads to a big, big problem for retail, especially when we see that around and that's the basis from the IHLA Institute in the U.S. that Amazon gets 24% of the revenue because the product is not available at the shelf. Could you imagine the growth, how differently would the growth of Amazon would look like if the product would be really available in retail. So it's a big, big impact for retailers and as well for e-commerce. And we see that especially in retail, between 4% and 8% of the not realized revenue is related to an out-of-shelf situation. And we heard this from Mark Ibbotson, 1% of missing availability at the shelf leads to 1% missing revenue. It's a huge, huge impact. If you see that retail is one of the largest or it's the largest industry of the world. But it happens for all of us. If you go and shop and you see every 12 products, 13th product is not available. It's a bad customer journey. It's a bad shopper experience. And exactly, this is what we address. That's what we developed. That's why we developed the real holistic system, comprising the sensors, holistic and easy-to-use cloud platform. We give the data in the hand of the shoppers and we have an instant connection to the leading ERP system, to the leading tech system. And that's simplified because what we hear and see is that one of our largest customer, Monoprix, installed the system by themselves, we showed it this morning in the stores of Monoprix. How does it work? We use the existing ESL bases, we install the camera, you just click it in. And within a few minutes, ESL, morse code, their article #2, the camera. And instantly, the system works. It's just amazing. And that's what we heard from everywhere in the world, it's so easy to use, and it's so easy to solve one of our biggest problems we have since years. And that's not just a story because we're really seeing this everywhere. But what are we doing? We're taking a photo and converting the photo into structured data. More or less, we're converting it in an Excel table. But we make it useful. We built actionable insights for the retailer. And we give this actual insights in the hand of the associates because we have this very easy-to-use app. And it's not just telling a story, I would like to show you some real insights from our customers. So we are currently active in 250 stores. And one of the biggest assets of our group of SES-imagotag is that we have a huge footprint in the market. We are existing since 30 years, and we have a lot of customers in retailers. And already, 82 of the 250 are testing our solution or are with us in active talks. That's pure amazing if you consider that we started this initiative just a year ago. You see there is a foundation in the industry, there's a foundation there. And let me show you some very nice tests we did; not test, that's even a start of a rollout in one of the most famous, I would say, the second largest retailer in Germany. [presentation] Perfect. And I have to say that was the word of Mr. Cunäus. It was not a storyboard we wrote. He's so convinced that he recommended the solution to the whole crew. And the why is very impressive because we started in February, and now in June, it was already 3% improvement of OSA. And he felt it because he had more in the pocket. It ended up at 2% increase in revenue, and that is really impactful. But even more, we heard about the shortage of people, the shortage of employees and store associates. This is how he optimized his working schedules. You see this is the times when he had opened and the times and the hours. And you see the black -- the red areas that's when he have the highest or the most horrible out-of-shelf times, and he optimized his work schedules, and then it ends up in a better and improved store and a higher efficiency here. But it's not just this. We have more than this. We also have a store in France. We heard about Monoprix today. And at Monoprix, we started to implement the solution already last year. Monoprix is in rollout with us. They installed the camera everywhere. For the ones who was with me this morning have seen there are 125 cameras already there. And Monoprix uses this technology ultra efficiency. In the areas where they use Captana, they improved their revenue by 1.9%, but not just this. They use it every day to improve forecasting, replenishment. They use it for their associates. So it really improves their day-to-day work. And this is really impressive because installing 12,000 camera, not by an ISV, not by us, by themselves. They installed it by themselves. They have a huge benefit, return on investment below 1.5 years, significant improvement of the OSA. But last but not least, their customers, their shoppers are more happy, 30 to 40 points more on NPS. That's really impressive. And that shows how impactful this solution can be. So when we summarize this, we see one. Our customers, our shoppers which using this technology can reduce 1 to 3 full-time employees or do not hire them or use the other ones even better. 4x in average improvement on on-shelf availability, 30 to 40 points more loyal people, more net promoter -- or better Net Promoter Score. But last but not least, up to 2% incremental sales increase. Very impressive data. And we talked about -- yes, sometimes in the last year we talked about abundance. What we do is very easy. This is the tipping point. When we talk about ESG, you have the word where you said, what is the best abundance, the best on-shelf availability versus your creating waste. And what we do at this point actually is around 93%. And our technology moves this line and top to 97%. That means we improve the revenue by reducing waste. This is the most effective technology you can currently buy on the market. And we heard a lot, we have 2 -- I think, 2 McKinsey persons here in the room, and it's nice to say that even McKinsey confirmed what we are doing that this technology have the potential to improve the EBITDA by 2% to 4% in in-store labor automation and 1% to 2% in the inventory management. That's just impressive. And we are very confident that we grow fast. Currently, we have 1.5 million SKU monitored all over Europe and starting in [ tiers ]. But we have a huge pipe, huge road map, and that makes us believe that we can grow rapidly with the VUSION '27 plan to over 200 million of monitored SKUs all over the globe, an impressive road map, and it fits or goes in line, what Thierry already said, we are very confident that we are moving from an ESL company to a digital shelf company, where we then say, we need more, and we can do more. And as Andy said, there is a lot of them in the pipe, and we now say the camera only have a 2D view. You only see the product in front of it, but it would be good if we see also what is behind. So we now expand the feature set from a visual computer-vision perspective into a real-time inventory management system. That means we have SKU level-based inventory taking. That means we deliver real-time information, and we are the ones, which makes the CFO most happy because we know exactly what they have on shop. We know exactly what e-commerce needs and the availability also for e-commerce. We've built the whole -- holistic, out-of-the-box real-time digital shelf managing system. Thanks for your attention.

Michael, thank you very much. You remain with us on the stage, so please take one of the comfortable chair. I'm going to invite back to the stage to join our discussions, Colin Peacock and Mark Ibbotson. Let's welcome back, Mark and Colin. We have met before. Of course, Colin, at the ECR Group, has decades of experience at Procter & Gamble. Mark Ibbotson, retail strategist, his background is Walmart, ASDA, now at McKinsey. And Michael has just been presenting. Mark, give us the sort of the external point of view, what you've seen in this segment so far. And you talked earlier about the digital store. Is this closer to the image that you had in your head?

I think it augments it. I think anything you can do to simplify the task in store. If you take a traditional supercenter in North America is 100,000 square feet -- sorry, 180,000 square feet sales area, walking that on a daily basis is laborious, tedious, tiring. So if you can direct people, work with purpose by exception where the opportunity lies, you will improve availability. You will improve associate satisfaction as well because I am actually going to do some of that but a chance to win. And don't underestimate that in retail at the moment. You start to liberate your associates to do higher-value tasks. So I think it is a big part of the connections and improving availability -- and Michael gave the figures. If your availability is below 95%, it's a straight 1 for 1. So if you go from 89% to 95%, it's 6% on sales. It then starts that the lower diminishing returns kicks in, but this is a significant number for retailers struggling for volume, struggling to improve their overall satisfaction. And the more you pick in store, the better the availability; the more you improve the velocity of fresh foods, the better the quality. So monitoring availability, improving availability, there is no downside, and it is part of this overall connection and simplification of the operation.

Colin, this is sort of the key point really. The presentation so far have been saying, do you have problems with product availability, we can help you with that. You have problems with stockouts or merchandising, we can help you with that. But how big is that problem? Does it actually require this solution that's being offered? Or is this a solution that's just on the search of a problem?

Well, it's a real problem, I can tell you that. Many industry studies have pointed out that the average out-of-stock rate is 8%, and that turns into extra sales and profit for retailers and for the CPGs. So it's a big problem in -- companies, well, Nestlé and other companies, Procter & Gamble, they would resource this problem as setting in people to audits, to count, check, to fill the shelves, depending on which markets we have. In the U.S.A., I think still 20%, 25% of all the volume is direct-to-store deliveries. Again, this visibility creates a robust opportunity to improve the productivity of those because you know you're visiting a store that has a problem.

And as far as it being a solution, there was also a cost to a lack of data.

Yes. Well, is there a cost of lack of data? What do you mean by that? Just so that you...

I think absolutely. Walking around a store is a tough job. You're in -- people ask you questions. You get sidetracked. You are inaccurate. I have -- this is a problem that we have always had. We've had more people thrown at it. Those people are difficult to recruit, difficult to retain and are more expensive than they've ever been. So if you can do a better job with less resource, direct people to where the problem is without them having to mine it themselves, it is very valuable. I think in the presentation, Michael was saying 1 or 2 people less in the headcount. You can do the math on that. That's significant. I'd venture it's probably more than that. I'd venture a lot of supervisors, a lot of management, this is their core part of their day. And if we can liberate them to do it more accurately in less time, we can either harvest the hours and return it to the shareholder, or we can give them a higher-value task to do, but simple, repeatable, sustainable.

Michael?

Perhaps I'll jump in here. Just Monoprix saved some 100 store around 40,000 hours per year. But it was interesting to talk with you, and what was -- the outcome is that the management talks every day about this problem. There is one thing which we can measure. That's 40,000 hours, but it's also the management attention. This problem gets during all the day, and Mark said before, it was -- it's a topic for my last 30 years. And I'm very proud to say it could be that this technology solves these problems forever. So that's the -- perhaps also an answer on.

I think it makes the data less arguable. I mean that's one of the problems we have with the existing data on out-of-stocks. It's quite arguable. Well, how do you come up with our algorithm? How do you know that statistically, that's a confident prediction based on the POS data? So having a picture is there. But this technology does give you, as a CPG, one other huge advantage, which is actually understanding your planogram compliance. Very often, that was a very, very difficult measure to get hold of. But because of the ESLs and because of the cameras, you really get a sense of whether the planogram you agreed with the buyer is actually being implemented. So that's the first moment of truth. So that's a real breakthrough.

Michael?

What we've also seen is when we talk now about saving time and the absence of data is also that we're just starting with the e-commerce in a store. It's not that it's on a product basis. But could you imagine you need to pick products in a store, and it's just not available? You have a purchase list. Your wife did a purchase list, and the store can't find the product. That's not a nice shopper journey. So it doesn't solve only the problem of being that a product is not available that you have to refill and replenish it. You create a bad shopper experience. And that's why it's so important to work with companies like SAP, forecasting and replenishment companies and e-commerce companies like Salesforce together to make a great experience, to make a 360-degree experience if you're in a store or in e-commerce. And that's another point which we solved with this technology.

Colin, we know that for suppliers and for retailers, particularly in difficult economic times like today, that promotions are of immense competitive importance. Is there a role for technology like this in that?

Well, for sure, measuring compliance of promotions, whether they're actually put on display at the right time, whether they're empty during it and then what percentage of stores actually supported it is critical because you can then optimize your TV or your media investment. So this would create another way of being able to measure some of that promotional investment.

Just -- sorry, go ahead.

Just one last word. KPMG announced yesterday, a very great report that said the CPG is investing 200 billion in revenue growth and trade promotion activities, but the efficiency is at 30% to 40%. Could you imagine how many billions -- Peter Brabeck just said, we need a basis. We need something to count, to calculate a business case. It's already there. That means we're talking about 140 billion of inefficiency, which we now can address with a clear CapEx and OpEx model and a clear plan how to solve it.

Those stores that you showed us where it's already in use, how big were they? The question that's in my mind is, how scalable is this? Is this still something that's niche for an operator or a retailer with a handful of very nice, very clearly defined stores? Or can it be rolled out for the big time?

I think the answer is we are used to roll out IoT technologies in 30 years. The camera is part of our overall IoT ecosystem. Yes, we can roll it out everywhere. And as you can see in Monoprix or in this store, even we, as a technology provider, was not involved in the rollout because the retailer does it by their own. So yes, it's scalable. And as Thierry said, we have an impressive supply chain, and the cameras are producing this supply.

But just to bring it back to the themes that we talked about as we were previously up here around labor. I think for many retailers, having cameras producing alerts that send people to the back room every 5 minutes is probably not going to be sustainable for some of the large organized retailers. And so how you integrate the camera information and the data into your inventory replenishment processes and perhaps autocorrecting those gaps where you see some phantom inventory. I think that's the breakthrough, and so -- where cameras become part of a bigger system around inventory replenishment. I know Mark, do you have experience with that?

I don't see any problem with that. I think the Monoprix I visited in Paris was a complex large store across 2 floors. They changed the associates' lives. They found it simpler. They found their days working. And don't underestimate what it means to achieve something in the store that an associate can feel good about making a difference, and that's what I came away with from the store. So in a big complex store, there are many department managers. If you're giving them accurate data in a timely fashion, it will scale regardless of the size.

So that's the point, right, Mark? That's why it needs to be integrated in [ absolutely ].

Absolute -- 100%. Yes, you're going to -- this will -- this is part of your day-to-day way of working.

You can't send them full [indiscernible].

Not at all.

Thank you all very much. Just to say to our audience, we will welcome your questions from our investors and our analysts in about 10 minutes or so. But for now, please join me in thanking Colin, Mark and also Michael. Gentlemen, thank you very much. We now look forward -- look further into the future with a presentation on the next big digital media is the store, and we get that guidance in the company of Scott Soong.

My name is Scott Soong. I'm one of the founders of Pervasive Displays. It's really an honor to be here with everyone. Thank you. So I'm here to talk to you about Engage and what I am very passionate about, which is basically how do we make the physical store the next big digital media? So what if I were to tell you that retailers are overlooking millions of revenue, high-margin revenue every day? And you know what, the key to capturing this revenue is through the people that are walking through the store and the data they generate. So I was reading the U.S. -- the Q2 2022 U.S. Census. And it said that 85% of all shopping dollars are actually still spent in the physical store. And that 85% of that dollar -- 85% of that revenue of that, 82% of all the decisions are actually made at the shelf. So what is very evident is that you have to get the right message to the right shoppers at the right time, at the right place. Decisions happen at the shelf. And so what you have is brands and retailers spending millions of dollars trying to move this upside -- this funnel here, trying to move consumers to help them become aware of the brands and the product to give them reasons to buy, and they do it through basically touch points that are all throughout the Internet, right? When you go on the Internet, you watch connected TV, you're on your phone, you're on your social media, those are all touch points out there that are trying to convince you that you should go buy. Yet when you walk into the physical store, what triggers do you have, right? So if you think about that, broader advertising as a whole, and think about the global advertising spend, it's $866 billion. That's a huge number. And if you look at this chart that we showed to the upper right-hand corner, this little -- this pink line here, it says that basically digital, as a medium, is eating advertising. It's taking over television, newspaper, you name it. It's digital. And why? Because digital offers the solution to the evolving shopper journey, right? The demographic is changing. People are starting their shopper journey in all over the place. Only through the digital medium can you deliver target reach, transparency control. You get a lot of data on how people are behaving, right? And then everything is automated, and then you can learn more about the shopper. And so if you think about it and if you've heard the news of late, a lot of retailers are becoming retail media. And they're taking the cue from Amazon, and they're saying, "Hey, you know what, we could benefit from selling our data, too." And what they're seeing -- these retail medias are seeing is that basically Apple, Google, they're saying, "Look, we're going to take away the cookie. You can't share third-party data anymore." And so the retailers say, we got information. We have POS system data. We have loyalty data, and we're going to sell that information to digital. And a few of the large retailers that have large websites like Walmart and Kroger said, "Look, we're also going to try to make money from our website traffic." But if you look at the overall traffic of retailers as compared to that of Amazon, it's noncomparable. And so beyond selling data, what else is possible? What's next? So I argue basically that the next thing in retail media is about the footfall, right? It's about tapping into the potential of the audience. So if you were to put your ad tech hat on now, you're no longer retailers. You're ad tech media. And in the U.S., for example, there's -- on average, daily, there's 30 million shoppers that are walking through the stores. And if you're an ad tech executive, wow, that's 30 million missed opportunities, right? And what does that mean in terms of dollars and cents? Well, in the ad tech world, you measure everything in terms of CPM impressions per 1,000. And that $20 CPM is basically for Netflix, right? Amazon Prime, $80. So if you were just to do the simple math, so 30 million times $20 CPM is about $600,000 per day. And there's how many days in a year? And how many products in the store? It's a huge number. So we think and we're working on basically creating new digital touch points that are in the store, where people shop, and at the shelf, right, delivering that moment of truth that Colin talked about. And how we do that? Basically, we run all the campaigns digitally, automatically. We enable interactions at the shelf. We monitor all that information, and we generate a lot of information, and we keep that information also, and then we help the retailers monetize on that. So I'm going to take it one level down, okay? So this is how we do it. So high level, displays and sensing at the shelf, that we manage everything in the cloud, and then we analyze that data for maximum impact. It sounds like what everybody is saying. And the way I think about it is that SES has a lot of Lego pieces. That is all about optimization of operation. And we're just saying, "Look, let's make that a different Lego set. Let's reuse that Lego set and use it to optimize profitability from revenue-generating on retail media." And we do so through basically ESL tags. We have the rail that has insight sensor -- in-aisle sensors, large screens that we drive, everything from the cloud using V Cloud publisher. We leverage the Captana camera, and then we used the system in Captana and Pulse, which is MarketHub to analyze the information and give it in a meaningful way back to the retailers. So the journey actually started a long time ago. We started with ad shelf, right, the ads were we gave basically retailer the opportunity to engage our customers at the shelf through flashing, through QR code, NFC. And then that enables sponsored content and more information that's meaningful to shopper at their -- in a personalized way. And then we introduced 4 color e-paper display, so what we call Engage tags. And these basically not only do they do promotion to provide promotional information, they actually can show very rich, very familiar pictures of brands and their products that you're used to seeing all throughout the different touch points. And coming back to the most recent solution in terms of the digital endcap, and this is what we're launching at NRF, right, is this digital endcap. And the idea, again, is to display and sense, manage in the cloud and analyze. And here is a recent -- is it moving? Okay. Here's a recent example of that, basically up in Finland with a well-known brand. So -- and those little boxes were actual products. There are 4 packs and 6 packs of Red Bull. So we're talking about providing the medium, but also what's important is the message. And together, the message in the medium delivers the impact, okay? And what we have in the pink down here is basically the levels of uplift that we delivered throughout the different types of content-medium combinations. And we've had an opportunity basically with our friends at Monoprix and at EUROSPAR really to test out the concepts, and here, I will walk you through it. On the left, it basically was a generic content that we said, "Look, how do we move our consumers from a lower-costing line to a higher-costing line?" So we were upselling basically, just through generic content. So we got 17% uplift on that. With the Garnier basically, what we did was we said, "Well, what if we just add promotion and then generic content, right?" Content that said, "Look, Garnier, great product, a little bit of promotion." And we got 29%. We move to the next one, where it wasn't a video, but it was -- again, just it's triggering the ideas and concept or the concepts that the awareness, the consideration, we're recreating that at the shelf. So just by showing that Dorito plus that promotion says to the shopper, "Hey, I wanted to try Dorito. Now it's on sale, maybe I'll buy it." And that triggered an amazing 61% uplift. And lastly, we put everything all together, right? So this is a really -- Revitalift is not cheap. It's not a bag of Doritos, right? Okay. So it's branded. It's got -- its benefit -- the content is benefit-oriented. It's got -- because the message that you can see on the Internet on TV, right, through the various different touch points, and it really is an amazing result. So what's key here is that the medium, basically, at the retailer and the messaging by the brands, it requires collaboration between the 2 to make sure that there is an uplift and there's real tangible impact. And so where do we go from here, right? So let me kind of talk to the left here. Engage really for the retailers is about driving new revenue -- new revenue streams at -- via retail media. And we do that through digital touch points and everything automated, monitoring real-time, which is not easy, and that they never had before. But we think there's an even larger play in working together with the CPG brands. Basically, we want their ad dollars to work harder for them, right? We had talked -- for example, Colin and I talked about campaign compliance, folks printing advertising, but it never gets implemented, and then you hire a third party to sit there and check boxes and do variations. We have Captana now. We have reports that gets generated from the cloud, all that basically deliver on transparency. And if there's no product on the shelf, why do you want to promote, right? You can take that dollar back, right? And then more importantly, this is the part I'm really excited about, which is A/B testing and getting insight. We now -- we're going to be introducing new sensors that are anonymous, that are safe, that gives brands and retailers insight into how many walk -- how many people walk by, do they stop, what was their draw time, right, a lot of granular information that you do not have previously in the aisle. So to sum up, this is a quote from basically a copywriter who is talking about brand. And it's really true brands or stories unfolding across all customers' touch points. And what Engage is about is delivering that digital touch point at the shelf in the store, okay? And we want to do it digitally to measure and monetize foot traffic, and we believe that this is going to be a significant revenue stream basically for the retailers. And for the brands, it's a win-win, really cost-effective targeting. So when they spend their money, it's really going to deliver that uplift. Thank you very much.

So Scott, thank you. You're remaining on the stage with us, Andreas, and Michael are also coming back up, if I could invite both of you. Please take one of the comfortable chairs over there. And this is our second opportunity now for the analysts and investors in the room to ask their questions, questions on the technology and product presentations that we've had. If you're watching us remotely by the way, please continue to ask your questions using the chat box on your screen. We'll do all the written questions at the end of the day. So as before, questions in the room, raise your hand. Just keep your hand up until we get the microphone to you, please. Thank you.

I'm Stéphanie Brunelle from Financière d'Uzès. How is it possible to have a batteryless device?

It's a trade secret. No, we invested over many years in this technology, and we are basically -- yes, I think since this presentation will be public, I think I cannot really answer how it's been done, but you will hear much more about that very soon. It will be public in stores very soon.

Thank you. Thank you for your question. One over here. Go ahead.

Arnaud d'Aligny from Lombard Odier Investment Financial. Two questions, maybe one on the market for Thierry and then another one on the products. So the first one on the market is -- you talked about the market opportunity and the digitalization of retail. But could you comment on your vision on the competitive landscape? Obviously, you're a market leader. Some people have tried ESL and failed. But how do you see your current competitive landscape and how it may evolve over time?

Yes. So we have a kind of a moving competitive landscape because since we are -- you remember, it's a little bit -- I think the comparison with SAP, we're kind of digitizing the store bottom up from the ESL infrastructure. So I would say compared to our ESL competitors, I'd say the big difference is simple. The software is way ahead. There is no comparison in terms of the software and the cloud platform. And the breadth or the scope of the solutions we have is also much larger. So we do digitize stores, really. We don't sell ESL. that's a big difference. Now compared to the other parts of the landscape -- because obviously, we're entering the computer vision, we're entering the other things, a little bit like, if you remember, SAP entered the CRM, entered the supply chain, basically now they own it all. At the end, I think compared to these players, the new IoT comers coming from the software, they will discover, I think, why somebody was saying earlier on stage, the IoT world is a world completely new of very deep, intimate integration of software and hardware. Without a very strong experience in IoT, you can come with software. You'll just sort of scratch the surface of the problem, never get there. And that is why so many very good ideas have never scaled. They just are not sort of fit for the problem of scalability, of absence of energy. That is the reality of mass retail. So that's it. I think from the ESL, we're far ahead in terms of scope and software, thanks to the 5 years we've just gone through. And for the other players who are coming in also from other space, the fact of not having this infrastructure of ESL is going to be very limiting quickly for them. And for all the other retail tech, we are not competitors. We are partners.

Okay. Thank you.

And maybe just one on products and technologies. Do you feel like you have today all you need in terms of technologies and products? Or do you need -- are there some specific bricks that you're still missing and potentially you're looking to develop internally or through acquisitions?

Maybe I'll take this one, too. But now just very briefly, in the past, we have been always very pragmatic about completing our portfolio of technologies when it's a great time to market. So we might be continuing to do that. Definitely, there are very interesting things happening in artificial intelligence, in data analytics. Very interesting things will be -- and that's the strength of SES. We're a listed company. We are able to afford interesting opportunities. Why not? But we've done it in the past. Frankly, we've done it in the past, 4 times. They're all here, by the way. But yes, that's how it might happen. Certainly, we're not the kind of company who says we have it all and we never need acquisitions.

Okay. Thank you. Last one.

I'm [ Hubert Maquet ]. I'm an investor in SES for about the 5 past years. Michael, there was a figure that was released this morning, which was something like the cost of visiting physically the stores for CPG's brands was about 5% of revenues. Is that a figure you can confirm? Or is it -- is that the magnitude or not?

Visiting a store means you control your revenue growth and trade promotion measures. So that cost for your visit, the cost in the average, depending on the region between EUR 60 and EUR 80 per visit. Of course, it's always depending to the vendor. If you're a large vendor like Nestlé, like Mondelez, it's -- you can see it's a different scope of revenue which you want to, but definitely, you need to monitor your trade promotion spend. And I said, KPMG just announced it's 200 billion, with efficiency of 30% to 40%. So there is, on one side, cost, and on the other side, just improve the efficiency of what you're doing from both sides.

Okay. So maybe Colin can complete that. I mean how many people in Procter & Gamble paid to visit stores, what...

We're just getting a microphone to you, Colin.

Yes. It's -- for both CPGs, there would be a considerable expense. Possibly, I'd say the 5% number is higher than I could imagine. Again, it depends on which part of the world, but you would see a lot of vendors providing support in countries like Mexico or China where the vendors provide a lot of resources to fill the shelves and to check the shelves. So -- and yes, the cost can be as high as you say, depending on which markets, and can be a bit lower.

Okay. Thank you very much. Thank you for your questions. Thank you for -- I'm sorry, we have one more, do we?

I have. Sorry. To complete the question, so...

Briefly, please.

Yes, yes, very briefly. It's very straightforward. What type -- I mean what percentage of savings you could, let's say, sales to the CPGs to that respect? And can you sell the Captana service as a software as a service?

So 2 answers. We will show next year on the EuroShop, which is the largest retail tech show, together with SAP and partners, a solution where we strongly optimize the route to the customer. What it means? Sometimes, you have the sales force on the street, and we can say a big beverage company here in France have 200 people, just 1 company on the street to control and serve the customers. But what they do, they have cars, and it's 200 people. They create CO2 footprint. That's one thing. Through optimizing the stores because we are the customers' eyes and as well the CPG eyes, we can reduce the number of salespeople on the street and, therefore, reduce cost and CO2 emissions. And that's important when we see this, that it's a holistic approach, not an isolated one. And holistic means we need to see, do we have availability, how is it part of the overall supply chain. And that's what we show together with SAP at the next show in end of February. Why is that so important? If you see, overall, it's a huge challenge. For example, I mentioned the report from KPMG, retailers do, in the average, 3% -- have an average 3% EBITDA margin. The CPGs in the average 18%, so an out-of-shelf situation and wrong planograms harms both sides. On the one side, if you have not that much, it's really impactful. But on the other side, if you earn a lot, it harms your balance sheet. So what we do is we need to come out of this isolated approach to a broader holistic approach. And that's what we show together with SAP because supply chain, planogram compliance, all that goes in line with a significant improvement. And this is not easy to quantify on a single number. That's a real change in the organization. And I would not say it's a change if there's a strong improvement in your organization and the overall flow of how you manage such an organization. So the impact, what Colin said 5%, I would also add -- I would definitely add 3% or 4% more in a strong improvement. And yes, it's a SaaS solution. And yes, as Scott said, the data are valuable, and we need to see how and with whom we manage this data.

Thank you very much. Thank you for all your questions. There will be another opportunity to ask questions towards the end of the day. We're going to take a break now for 15 minutes. So let's resume our discussions at 4:45. Thank you. [Break]

So welcome back, everyone. If you can find your seats here in the main room in Paris. Those of you -- I know the cakes are delicious, but please do join us. Ladies and gentlemen, this way, please. Thank you very much. So the final set of presentations, we're going to take a look at the detailed financials. We've got another opportunity for your questions. I know there were quite a few hands at the back of the room for questions at the end of the last session. Please do remember the question that you wanted to ask as there will be time for it before the conclusion of events at around 6:00. But we're now going to look forward to the new long-term strategic plan for the company, and I invite Thierry Gadou to tell us more about this.

Sorry, it's me again. So we have a little bit of time to catch up. So I'll go faster. So about the rest. So the rest, we're going to talk about 2 main regions, the 2 regions that represent 90% of our revenue in '27, so Europe and North America. And we'll talk about financials with Thierry. I'll just make a brief introduction. But first, I wanted to pick up on the last presentation. Just to remind you about basically this. It's the last thing about influencing customers at the shelf, just realize what -- in fact, what we are building, which we're building, and again, I know, Scott as well mentioned that, but is the most pervasive display-connected networks in the world in history. And you see how it compares or how it will compare in 27, although this, I think, is conservative. But this will compare with the rest. So it's very important that also these displays are very well positioned at the moment of purchase, every one of them. So just to finish on that. Anyway, going forward on the market, I think my colleagues are going to be explaining how. So I'll just -- this is just to summarize essentially what we're going, EUR 2.2 million (sic) [ EUR 2.2 billion ], a lot of growth in Europe, again, a ramp-up in North America, I would say, catch up in North America, but always at the speed of America when it starts. It could start late, like some technologies, but when it starts, it goes really fast, and it's representing more than half of our growth in the next 5 years. And then the rest of the world, which is focusing -- it's growing fast, too. 25% per annum, you should not be thinking it's more. It's a little bit slower than North America. This is America. But it's growing, and we will focus on selected countries, very selected countries here in North America, Middle East and Asia. And then, of course, also focusing on only the very top accounts in those countries. We will leverage our regional hubs there. So I suggest we move on to Sébastien for a word about our domestic market. And I will just say just a word about Sébastien. Sébastien is the youngest of all of us, and he's yet the one that has spent the longest time in the company. So he really built it.

So good afternoon. Good afternoon, everyone, and thank you, Thierry, for your kind words. So let me frame a bit Europe. So 5 years ago, we had no -- all the sales, meaning 100% of the sales we were doing on-prem. Today, 90% of the sales that we're doing and the store that we're installing are cloud and SaaS platform. And other figures, 5 years ago, we were nowhere in strategic markets like U.K., Ireland or eventually Germany or the DACH region. Today, we are deploying in 3 of the largest German retailers. We are present in the U.K. We have our own subsidiary. We are present with 16 banners. We have 300 stores already, and this is going to be a growing market. I'm going to present in this presentation quickly, which are our 4 pillars to grow in Europe. Can it return? Okay. So the first pillar is obviously taking advantage of our installed base. We have a huge installed base, and I'm going to present and I'm going to tell you how we will get advantage of this strong installed base. Our second pillar is to add value to this customer base because we have a significant one. And definitely, we're going to add value, and my colleagues present the brilliant solutions that we have. And obviously, we will add value to all these customers. The third one, the third pillar is accelerating our growth in strategic markets. So as I mentioned, U.K., Ireland but also the DACH region, in Germany in particular. And last but not least, the fourth pillar is the new verticals, and I'll come back to that. So let me tell you who we are in Europe. So we are a managed team of 180 people, very talented people. We are present in 12 branches, 12 offices. We are present in and covering Europe. We have 30,000 stores equipped at the moment and much more to come. And we're going to end this year with EUR 0.5 billion turnover. So thanks to a wide number of banners and customers, and we are very proud that 80% of the top 10 customers in Europe have selected SES-imagotag. And we have a very strong footprint in these customers. So now let me, I would say, come back on the first pillar. The first pillar is upgrading our customer base. So if we look today, and Andy has been explaining, I would say, the SaaS platform and how this SaaS platform is engaging the customers for enjoying a full journey of digital solutions. Today, we're already convinced 5,000 stores. There is 25,000 stores more to convince, and we are on the way, and these stores will be migrated within the next 5 years. And of course, they will enjoy all the new solutions that we have been presenting. So now let me take, I would say, an example to illustrate my second pillar, which is enriching the value at our existing customers. And the good example -- I could have picked a lot of examples, but I used to take Monoprix because some of you visited Monoprix this morning, and you could see, I would say, the functionalities and how Captana is helping and more presented it in details. But I could have taken, of course, Edeka and many of them because we have, in Europe, already more than 50 pilots running with this technology in the retailers that I mentioned. And obviously, Monoprix is enjoying all this technology, and this is what we're going to do on the 25,000 and the 30 and the 5,000 remaining stores that we have. So now this leads me to my second pillar, which is accelerating in the -- in some strategic markets -- my third strategy pillar, sorry, to accelerate in some strategic markets. So if we take the example and I could have picked up, of course, Germany or the [indiscernible] region, but I pick up the U.K. Island for many, many reasons. The first one is because now we present in 16 banners and 300 stores already. But because all the new pilots that we are engaging and we are engaging a lot of pilots with the Tier 1 and the Tier 2. And all of them started with the digital shelving approach, meaning with the combination of Captana and our ESL solution. And on top of that, what we do is that we are -- and you could see here some banners, which are nonfood banners, Why? Because we have started in many new verticals, and this is my fourth pillar. We already started. And this is an example. I'm sure you recognize this chain. This can lead is deploying our solution. This is the largest rollout so far in the ESL industry and very proud that leader selected at SES-imagotag. And obviously, this is pushing the market definitely the hard discounters, we know they are discounters are very sharp, but they're investing in our solution and they are investing in this kind of solution because they realize the benefit this is having for the stores and their employees. Last but not least, there's many new verticals which are developing. So DIY is a good example. Why? Because DIY is facing a lot of challenges. Myself, when I go in a DIY store, I have a lot of difficulties to find screws. And basically, we help because we can, of course, guide the customers, get the shoppers to the right product, help to serve better the customers. And this is why we are starting with most of the European leaders in this vertical. And definitely, we are very proud of it. And this is an example of what you could see in Europe, and we have the combination of Captana and all. Another example of new verticals, this is home furniture. This one comes from Germany as well. This is one of the leading chains. This is Us DBL. So this is a merger between DB, which is a German DIY of furniture on furniture retailer and use, which was used to be in the Nordics. This company has merged and this is an example. We have deployed already 1,200 stores. And basically, they have 3,000 stores, and there's much more to come because we also started with a lot of their competitors because they want to enjoy the same journey, guide the customers to the right product and reach the content at the shelf and also have a better shopper experience. Another example is travel retail. Some of you might have come by plane. If you stop by [indiscernible], you should have seen our ESL. Otherwise, I invite you to stop by and have a look. But there's going to be a lot of new opportunities, why because we are equipping and deploying the solution to many other airports and travel retail is a huge vertical, which is also popping up. Sephora, we announced I would say, in the past year actually that were migrating, and this is also part of one of our program, which is customer for life, meaning customers that have been selected SES-imagotag years ago. And today, it has been replacing or, I would say, their solution with the new generation. And Sephora starts to deploy the solution in new countries. And obviously, there's going to be of course, some new stores coming up across Europe with Sephora, but many of their competition is also now implementing the solutions. Apparel and sportswear actually, it's public, so I can mention the name. So you see that this banner. This banner is a very famous one. It's [indiscernible] already started. They started in Belgium. And actually, [indiscernible] is a very interesting one. Only the catalog is 1,700 stores. So I'll let you imagine what the potential of this market, and there is a lot more to come because we already started and engage with many of their competition and actually brands who want to enrich the content and bridge the online and the offline. Last but not least, gas station. Gas station becomes convenient stores. So here is an example. If you go in Portugal for holidays, one of my favorite country, they have implemented this gas station is a fully automated store. And actually, we are very proud to be part of it we have been selected, and there is a lot of their competition, which are also implementing this solution. Why? Because with Captana, we can monitor in real time. In this kind of environment, you have one person for doing everything meaning to serve the customers, make sure the store is repeated correctly. And definitely, we help, and we help serving better the customers. Another type of vertical that we are opening anybody for the ballet, but we live it. And actually, there is a great opportunity. This is again a good example of bridging the airline and off-line business by enriching, connecting and having the capability to get access to better information. So as a conclusion, so we have, as you can see, we want to reach more than EUR 1 billion. We have the four pillars. And definitely, what we are doing is that through these pillars, we are engaging a full transformation of the European retail, Hence, we aim to be the #1 geography for the group. But I know that my American colleagues are quite ambitious, I would say. And definitely, even though we aim to be -- to remain the first geography for the group, we know that we're going to have a quite strong competition, and I love racing. I love competition. And definitely, I know it's going to be a good one. So thanks and I leave the word to Philippe for the America.

Best. Thank you very much. So that was the view of Europe. We know switch continents to get the view North America, and that will be with the Chief Executives of the Americas, Philippe Bottine.

Hello. So my name is Philippe. I'm responsible for the American market, North America more specifically. And so based in the U.S., in California. Actually, I started my career in the investment community a few years ago. So I was not a seasoned investment professional you guys are. But I was doing DC work in San Francisco, so investing in early-stage start-up companies. And one thing that I learned when I was doing this work is that what matters in companies are people, technology and the ability to scale. And when I joined SES now 13 years ago, that's exactly what I saw in the company. We had an amazing team, an amazing product and an ability to grow the company to where it is today. At 13 years in the future, today, when I listen to everything I've heard today, it feels like yesterday, we have an amazing team, again, amazing products. I mean you've heard the technology sessions. They were absolutely amazing. And the ability to scale and the scale option ahead of us is, I mean, gigantic. And especially in North America, I'm going to be talking to you about the scale up we're going to be doing there, which was impressive in the past 5 years, but it's going to be even more impressive in the years to come. So technology. Here we are. Okay. So a quick snapshot of -- for SES America. We have about 50 people today, growing the team to about 100 next year, spread over four main offices. We're going to have so Chicago, Montreal and Mexico City, and we're also opening Dallas in Texas, very soon. We operate 4,000 stores around -- across the geography. And the revenue growth has been interesting. I mean we started with insignificant revenue a few years ago. and we're expecting to close slightly above EUR 100 million, which is a good milestone, but we have slightly higher ambitions right. Our client base. So this is a slide -- every single logo on this slide, we could spend an hour, if not more, to talk about the customer story, the customer journey. What I like about it is every single client, every single logo is a 5- to 10-year, if not more relationship. We've built these relationships from 0 from the ground up and we have very tight and very strategic relationships with all of them. And so we're very proud of all the logos we have there represent some of the biggest clients in the world, also some smaller ones. And they also represent the diversity of verticals that we target, whether it's grocery or mattresses or gas stations or furniture stores. So it's a significant achievement. One specific customer, I wanted to highlight when talking about 10-year relationships is Walmart because they were the first logo on the purchase page, but there are a one of our most promising and largest customer, well, simply because they are the #1 retailer in the world by far. But the journey with Walmart interestingly started 10 years ago, in 2012. And it started in Argentina at a time where the market dynamics was driven by inflation. So there were questions earlier about inflation, if I remember well. That's what drove adoption in that country 10 years ago. And then the relationship grew to the other international markets of Walmart. So we developed Mexico, we rolled out Chile, we rolled out Walmart Canada more recently. And earlier this year, we also expanded into Costa Rica. We'll keep on expanding in Mexico, and we announced the start of our partnership within Walmart U.S., which is the big opportunity with Walmart. And so we're currently in the process of piloting new technology, deploying new features and innovations and expanding the partnerships to many more stores, so it's an exciting partnership. How we win in the U.S. is really about three main parts of our selling and our unique selling position. Number one is our technology leadership. We are 100% cloud connected. This is nonnegotiable. It has to be cloud. It has to be infraless, like Andreas will also talking. This is a key part of the differentiation and value proposition. And everything is vast and recurring revenue-centric talking about in-store fulfillment, on-shelf availability and retail media is top of mind for all those retailers. The second is beyond the technology leadership, it's also about service capabilities. You have to be -- going to make it simple. You have to be American to service American. So the service capabilities have to be localized, regionalized and very tailored to the local needs. And so we spent a lot of time and effort making sure that the service capability was top notch and really paying off. And third, a very partner-heavy ecosystem. We never go to market alone. We always go to market with our partners, whether they are technology, software, merchandising, et cetera. So this is a very key and fundamental part of the go-to-market strategy. Talking about the market a little bit. So far, we estimate that the total U.S. market is about 3 billion devices, like 3.2 billion devices. And as of this year, our penetration has been below 2%, so we have still a lot of room to grow, and we're expecting the market penetration to go -- to reach about 30% by 2027, which is an expected 1 billion connected devices. It's a big growth and how the market is broken down is -- and so we're looking at the market segmentation along two different axis. The number one is on the far right, we look at it from a vertical standpoint, so mass market, which is essentially Walmart and Target, but in reality, it's really Walmart. It represents about 22% of the global total U.S. market. Then grocery and C stores are the next big opportunity with 20%, SMBs 16, DIY, essentially Home Depot and Lowe's and Ace Hardware because they are a very consolidated market, represents 12%. Drug is also very consolidated because it -- it falls under Walgreens, CVS and Rite Aid 12%. And another important vertical is discount. So Sebastian was talking about our success with Lidl in Europe, as an example. In the U.S., discount stores are the Dollar Trees and the Dollar General, which are very big and very fast-growing companies that have also tremendous potential. When we look at the segmentation from a client size perspective, the top 30 clients represents about 2/3 of the market, so 2.2 billion tax. We go to market direct for those clients. We also go to market direct on the next tier of clients, which goes all the way to the top retailers. They represent another 0.5 billion device opportunity. And then the SMB is the last missing piece of for which our go-to-market is a channel strategy. What it means from a revenue growth perspective is -- so I mentioned that we closed 2022, where we're going to be closing 2022 at about 100. The expected top line growth is going to be about 10x, between EUR 0.9 billion and EUR 1 billion in sales. And the most significant market drivers behind this growth is, well, number one, of course, pricing and promotional velocity. I mean this is a phenomenon happening across the world. In-store fulfillment. So this is really about what Thierry was talking about when he was talking about the e-commerce growth. Stores are being leveraged are being transformed as warehouses in order to support the growth of online commerce. And so this is really becoming top of mind in terms of business cases. Third is what Michael Unmussig was talking about with our Captana road map. So supply chain optimization is absolutely fundamental. We're still at the beginning of this journey, but it's fast-growing opportunity. And the last but not least is the one Scott was talking about on retail media because there is a shift of online advertising shift of advertising spend, which is happening between what -- there is a shift of online spend towards in-store spend, which is ahead of us. And that's also going to represent a tremendous market driver.

Thank you very much, Philippe. We will thank you for your presentation, and we now invite to the stage the Chief Financial Officer of the company, Thierry Lemaitre.

Hello, everyone. I really wanted to thank you. I really praise you for waiting 3 hours and a half to the financials, which I'm pretty sure you are interested in. So thanks for your efforts. So let's get started. So first, that's the main KPIs we charter into really friendly ambition for 2027, starting with the sales, EUR 2.2 billion in 2027, underpinning a 30% CAGR revenue growth over the next 5 years. The last, of course, which is a very key target for us. It's EUR 150 million, 30% of the revenue. So that's a major increase, almost doubling the performance versus to that. Of course, all this is driven by a very significant increase in volume. So we want to reach approximately [ EUR 1.15 billion ] at the end of the year 2027 and 90% of them being [indiscernible] to approximately EUR 1 billion. And of course, it means that when you make a very simple calculation approximately EUR 0.6 VAS revenues per [indiscernible] per year, which is quite significant performance that. And of course, all this growth, all this profitable growth also translates into a very significant improvement of the EBITDA, 22% margin at the end of the year 2027. If we have a look at the revenue on the per region, so that's what Thierry already presented very strong growth driver in the North America 50% revenue growth per year, 50% of the total revenue growth over the next 5 years. Nonetheless, Europe is still remaining the largest region with a very significant growth, 20% per year. So that's also in which is very strong. And of course, the rest of the world, which is also primary approximately 10% of the revenues in the year 2027. All this, as I was saying, is driven essentially by a growth in volume, and we want to reach EUR 1.15 billion [indiscernible] at the end of the year 2027 and 90% of it, so EUR 1 billion being edited. And if you just take one second to see the chart, you see that we have increased the number of years sold by [indiscernible] EUR 200 million over the last 5 years, we want to increase this feature by EUR 800 million. It just means that we're going to quadruple the growth over the next five years versus the five previous years. So that's a very significant achievement that we want to deliver. And of course, it has an important impressive growth rate that we're going to experience. Another way to see the revenue is to split it between the VAS and the ESL. And here again, the performance is quite impressive. It means that we're going to have a growth on the VAS revenues, which is approximately 47% per year on an average and 23% per year on the ESL. It means that the VAS revenue is now ready to represent approximately 30% of the revenues, so that's a massive achievement. And of course, as you will see, it has a positive impact on the EBITDA margin. The VAS revenues, I think it's important to make a deep dive on that because that's the main driver for the profitability enhancement at the company level. So we want to reach EUR 0.60 VAS revenues per cell per year. That is doubling the figure compared to the 0.3 that we currently have in 2022. That's a very good performance. That's even quite very ambitious. We still believe that it is nonetheless achievable because we already have some customers it's delivering EUR 1 VAS revenue per year sell per year. So the purpose is to be able to increase the payment level of EUR 0.3 to EUR 0.6, what does it mean? It means that roughly, we're going to get approximately 90% of the talk that would be cloud connected. So we'll get a fee -- a recurrent fee from the cloud access. And on top of that, on all the other products, we have a penetration of approximately 20%. So let's see that 20% of the ties will have access to all the service or all the service will be 20% penetrated on the flat connected ESL base. Where will this revenue come from? Well, mainly from Captana, a bit more than 1/3 to the EUR 650 million, a bit less than 1/3 coming from IoT and cloud [indiscernible], essentially in store fulfillment and everything like that, 10% coming from professional services and others and the remaining coming from Engage and Analytics. How does it all translate into the P&L? So you already know we want to deliver EUR 2.2 billion revenues, 22% EBITDA margin to EUR 480 million. We also want to stabilize the [indiscernible] approximately 10% of the revenue. So that's consistent with the guidance that we gave for the year 2023, but we want to significantly increase the VCM as a percentage of the revenues, almost 10 points more than in 2022. So moving from 22% to 32%. And the way to achieve that is essentially a sense to the higher penetration of the VAS revenues, which show much better profitability than the sales, so topping this proportion of the revenues into the total mix of revenues. We also consider that given the volumes that we are going to manufacture, we should have some scale effect on the cost of the ESL, and we are also certainly going to enjoy a much more favorable contest the overall ESM market because we know that, for instance, we come back to a situation where there is more production capacities, less shortages. And therefore, we see that the costs are already slightly decreasing at the end of this year. So we should also benefit from a much more positive environment than for the last 3 years. Okay. On the cash flow side this time. So what we want to achieve is to have a free cash flow to sales ratio exceeding 10%. So a bit more than 10% of the revenues flowing down directly to cash. How do we achieve that? Well, we start from an EBITDA margin of 22%. We expect to get a CapEx level of approximately 5% to 7%, most of it being the capitalized R&D and the change in the working capital or the working capital requirements, that's going to be approximately 10% to 15% of the revenue growth when you consider that you've got 30% revenue growth per year. It. Means that we're going to use approximately 3% to 5% of the revenues in the cash flow, the change in working capital. So roughly 10%, 10% plus free cash flow generation based on the revenues. Now the financial structure, how do we want to operate in the coming years? Well, first of all, we want to have a financial structure that would be essentially based on promoted on the back of a very robust financials, very robust profitability and cash flow generation. But if we were to have some additional financing needs in order to fund some growth opportunities, growth operations, we will favor debt versus equity definitely, meaning that debt, as we are going to grow, we can contemplate different period of debt, and we want to diversify the sources of financing, not only bullet not only in Europe, we are happy to consider something from the U.S. as well and doing some financing not only in bullet amortizable. We've got a clear limit. We don't want to see the 2x leverage. And we will be happy to propose to the shareholders' approval, first dividend payment in 2024 based on 2023 results that would be the beginning of a new era where we will have the possibility to pay dividends based on back on the cash flow generation that we will generate every year. So that's it for the financial presentation and I leave the floor to Thierry.

Thierry, thank you. You remain with us. We invite Thierry Gadou to return to the stage as well. And this is the third and the final opportunity and for you to ask your questions. of the Chief Executive and of the Chief Financial Officer. So as before, if you have a question, then please raise your hand, wait for them keep your hand up until the microphone gets to you, then tell us who you are and what organization you represent and then go ahead with your question. Those who have been watching us remotely from wherever it is that they are working, have also been submitting their questions the chatbox.

So why don't we take some of those written questions, first of all. Raquel, can you have that. You are the superintendent of the written questions. Please go ahead.

Thank you for that one. So the first question comes from Johannes Ries of Apus Capital. And this question is as regards to ESG, what are you doing with the used ESLs?

So the used DSLs are collected. They are as much as possible refurbished. And this is what we call our second life program and remarket it basically. There are a number of components, especially the PCB and everything that can be easily reused except it requires to have thought this from the beginning in a way that makes it possible. Most of our competitors and especially the low-cost competitors have ESL that are unrefurbishable. And that's going to be intolerable for their customers very soon because you can't sufficiently repair them dismantle every piece given the way it's structured. So you need to think about repairability at the beginning of the design. So we basically refurbish -- the things that are not refurbishable will be basically not wasted, but a number of materials can be recycled, but that's not refurbishing, that's recycling. And then the rest would be obviously handed to waste management companies. But the objective is really to have a second life for in the future, literally all the ESLs and reduced by a factor of, let's say, to the carbon footprint of IoT, which is something I described earlier.

Okay. Thank you very much. We'll take a question in the room if we have it. So I hand just here. Just keep your hand up so until we get the microphone to you when it reaches you just us who you are and which organization you represent.

Remi Grenu from Berenberg. One question probably about the previous part of the presentation, technology, I mean, in terms of competitive advantage, if you have to choose one or two differentiating factors about SES-imagotag compared to competition, which one would it be? And then maybe a second question more the financials there.

Let me interrupt, we'll take the first question. And we'll come back to you for the second.

Yes, one or two differentiating factors. If I had to summarize Andrea's presentation. Well, first, I would say, technology. But just to make it a little more specific, I would summarize Andrea's presentation by, let's say, a few words, which are high-scale, ultra-low-power IoT management. Every word counts, so high-scale ultralow-power IoT management, I think there is only one company in the world for that, with SES-imagotag tech, we are the best.

And you had a question on financials.

Yes. It was about revenues you want to generate on a per tax basis from VAS. I mean I understand that part of that is driven by increased penetration of new services like Capital. But do you feel like you have a way to increase like-for-like price that you are charging your customers because it seems that the solution is creating quite a lot of value added for retailers. So how do you think about that.

You mean increasing the prices?

Yes, on the software part.

No. I think the business plan that we are making do not consider any price increase on the VAS solution it's just additional penetration of the [indiscernible] solution across the customer base, which is increasing the vast preseller year revenues.

Okay. So you can get to the EUR 1 per tax just by increasing the penetration of cloud and the capital solution.

Yes, there is no assumption that you're going to increase the tariff even rather the opposite in some cases because we consider that the more we're going to penetrate sometimes we'll have to do some discounts. So the increase that you see is not done on the back of price increases, not on the VAS solutions definitely not.

Thank you for your question. Is your hand up or you're just there is another, I'm being guided towards some more written questions. Yes, go ahead.

So we have a question from Thomas Ingermann from UBS, what portion -- which portion of your sales might be recurring in 2027?

That's a good question. Actually, you see we've got 2 parts of the business. And the two parts, ESL and VAS, they both embed some recurring revenues. First of all, on the ESL because we know that we are replacing the ESL on a recurring basis. So we are generating recurring basis revenues on the that's approximately 20% of the revenues of the ESL, which are recurring. And every year, and on top of that, we've got also the VAS revenues, most of it being recurring. So all in all, that's approximately 40% of the revenues of the group, which is considered to be recurring.

Do we have more. We probably also have a hand in the room. Let's see who the microphone chooses to select. Here you go.

[indiscernible] from Berenberg. I have a question about the that you have in terms of penetration across the different countries. My colleague and I, we come from London and in England, the penetration is really low. Can you give us more information about what's moving the needle here? And also, can you say that inflation is pulling forward some discussions with your clients in terms of adoption?

Sorry, the last part of the question was ...

Inflation, the current inflationary environment. Is it pulling forward some negotiations and potential new contracts that you might have?

Well, yes, the -- I think the discrepancies in penetration is due to many historical factors. I think it was -- there were a number of things like regulations. Obviously, labor cost has been a major sort of factor in driving the need for automation. Inflation is a factor, obviously, labor cost, labor scarcity. So the -- and also, I think a number of markets have been very profitable retail markets. And when you don't have the pressure of moving, it is sometimes easier not to do a number of investments because -- and you think about U.K. has been a very retail market 10 years ago, it was very much more profitable. It's half the profit now. But it's -- I think there were not a lot of pressure on retailers to all these efficiencies. And you could imagine U.S. is a different explanation. The U.S. is also very low penetration. Those are great opportunities for us because those are just -- they are going to catch up. They're going to catch up because now all the factors, profitability under pressure, labor cost increasing, tolerance from consumers on price errors decreasing very fast, especially with inflation, all these things are just putting immense pressure. So yes, we see -- I mean, Sebastian has explained, and Philippe has explained, those two markets, we see very adoption and the conversations we have, don't only refer to inflation. Obviously, inflation is an additional pain pushing for that. So we see fast adoption in those markets.

Is Brexit a factor?

Well, Brexit is influencing in a way because it's creating an even greater shortage of labor and especially in retail, there is nobody to work in stores I think [ Colin ] or Mark could confirm that. And that is partly related to Brexit.

There was someone -- here we go.

Aurelien Sivignon from ODDO BHF. I have three questions on financial. First, on revenues -- so first, on revenues, so Walmart, as I know, represent roughly EUR 500 million level in North America. So does your revenue target until '27 include a full rollout with Walmart in North America?

Of course, it does not. So no, in this plan, there is -- you said it was a financial question. It sounds like more a business question. So in this plan, in '27, there is -- no customer is supposed to be above 20% of our revenue.

Next question, more financial. Let's think at the group level in terms of revenue, how should we consider the growth from '23 to '27? Will it be linear on that?

You want the excel file. Yes, it's -- it will depend on factors. I wouldn't say it's really backloaded. I would say it's roughly supposed to be linear, but if we haven't given all the details because right now, we're giving a growth ambition and not necessarily detailed guidance. Well, '23 has already detailed guidance, so the guidance for '24. So it should be roughly linear, but I think we don't want to go details today.

Last question for you, Thierry. On the OpEx side, I think your target is 12% of the total revenue by '27, which is pretty close to the level of to the 12% that you have now. So why there is no further operational leverage on the OpEx.

Well, actually, we are currently at 12% in 2022. We said that we wanted to move to close to 10% in 2023 and to stabilize to 10% by the end of the year 2027. So if there is an improvement versus the current situation, but then we consider that we're going to stabilize there just because when you see the tremendous growth that we're going to generate, there are very large customers that you're currently addressing, we definitely need to have some people on the ground in order to be able to show this growth. So we don't want to jeopardize the growth by putting additional pressure on the OpEx. If we can do better, that would be nice. But currently, we are very satisfied with the level of beat 10% of the revenues.

Could you give me a favor, could you pass it forward to the gentleman in front in front of you? There we go in the red tie. Go ahead.

Hywel Franklin at Mirabaud Asset Management. Can you just conceptually talk to us about where the natural cap would be for VAS?

Sorry, I didn't get the question. I realized I'm getting old actually...

So VAS as a proportion of sales.

Okay. Yes, it's gradual. I think there is one slide that shows that this one that -- our estimation, you see, of -- in '27 is based on a penetration assumption of 20% of our installed base at that time for any other product than the ESL cloud management. So 90% cloud penetration, but the rest is 20% of every product. So you could say certainly VAS can go further, much further. And as the market will be maturing, the ESL might be sort of slowing down in terms of rate of growth, but the penetration of value-added solutions is going to continue to increase, obviously. So I think that's a good answer on the fact that there is probably an ever increasing percentage here.

Thank you very much. Thank you for your question. How are we doing with the written questions? Do we have any more? Let's take some more of those. So Raquel, as I introduced you, is our Investor Relations, might be useful.

So our next question comes from Johan Bjork of [ SBL Monaco. ] And his question is, "what share of your customer relationships are exclusive?"

It's a very statistical question. The question is how much is exclusive by contract? Or how much is exclusive in fact? I would say a very large proportion of our this are exclusive, a majority de facto, we are the only player. Now have a complete exclusivity, contractualized, secured for the future with retailers is sometimes a little bit different to have completely signed, but it's a matter of fact. It's a very close and strategic relationship that we have with our partners in many, many cases, it is exclusive, de facto, not necessarily contractualized. Now I would say that it goes more and more exclusive over time. And this is very important to understand. The VAS is essentially a hardware business of ESL. And so you can see more in our legacy base large, especially the independent retailer franchise retailers where you have every store independently deciding there is a little bit of cohabitation of different players, obviously, in those kind of players. But the more it goes, the more retailers choose the software platform the overall IoT platform. And then the more it goes on exclusive relationship, de facto.

Okay. Thank you very much. Do we have any more in the room? Hands up for any remaining questions from our audience here in the room in Paris. I'm not seeing any hands. We're done with the written questions as well. During the course of today -- by all means.

Haven't given your Excel file yet.

Did you hear them start serving the cocktails? Is this the -- we've only got a couple of minutes anyway. During the course of today and listening to all the presentations and absorbing all the information. As a business journalist, the question that popped into my head was what are you? Are you a retail company? Are you a technology company? Are you a data gathering company, are your data analysis company because I've heard all four today.

It's a very interesting question because if you look at our history, and I think it's very important to who we are. We were not a technology company. Originally, we have been started by a retailer, the founder, my predecessor of this company really was -- grew up in stores, in supermarkets, changing paper tickets on Sunday. And I think it gives us a very strong culture of we are about putting technology in service of something that's real, that's retail. I often -- I've been a consultant in life, and I've seen many sectors, and I've always -- people always think more seriously about industry than about retail. I'm very wondering -- always wondering because I think retail is a much more come industry, to be fair. When you look at a factory, now we work with factories and we don't talk too much about that. When you look in a factory, you have a number of workers, but they're all trade workers, they're all people who have tools, who have trainings where employees, but in a store, 95% of people getting in, they don't care about your processes or whatever they are customers. They are making a mass of your shelves and everything they're leaving and they're checking out, they're complaining. There are thousands hundreds of thousand stores. It's a very complex business. So it needs technology. So we are a technology company, but we are really a technology company that started from the retail, from the ground so it gives us a certain view of -- every time we think about technology having to be not a scientific breakthrough, but it has to be scalable. It has to be robust. It has to be cheap, it has to be helping people who don't have time, we don't have necessarily a big background. So that's the first part of your question, we are a technology company.

And it's got to work.

And it's got to work, absolutely, without -- with low maintenance. Otherwise, you don't get at all in those big stores, especially where the big. Now the rest is the fact that we data. It's a fact. IoT is about what. IoT -- my definition of IoT is before the customer was talking about the project with IoT, the project is talking about the customer. This is the whole change, the whole revolution. So intrinsically, we create data. And of course, we're not stupid. We want to make sense of the data and so we are growing our expertise in using the data, making sense of it. And this is a way where we endless -- it's an endless journey. We will have to increase our expertise in data we acquired the company already this year, we are going to probably do the same, we continue. So you see technology in service of operations, a very sector retail, then technology is essentially IoT, IoT creates that data. So we are permanently on the move. Nobody knows who we are. Maybe we don't know who we are. But this is why it's important we have a great team always reinventing ourselves. But there is something that is stable. We want to make retailers very profitable again.

And in terms of concluding thoughts, what should this audience take away from today?

I think three things. I think the digitization of physical retail is a very big story. It's a very big sector and it's just the beginning. It's a big story. It's going to change the world. It's a big sector, which has an important impact on our lives. So yes, first thing is the digitization of retail is going to be big in the next decade. Second, I think we're very well-positioned because we're not a newcomer that just had an idea and just opportunistically trying to find solutions. We've been after that for a long time. We've been showing our persistence. And I think we're well-positioned because -- was a bit rapid earlier, but we have great technology. We have an incredible team. We have incredible customers, a global footprint and a fantastic momentum. So we're well-positioned. And I think third, we're confident that we're going to create stakeholder value because we're creating value for our customers. For sure, we're creating a lot of value for people as shareholders of the company and we're creating a whole value, hopefully, for all the shareholders. And so yes, that's the three things. It's difficult to summarize for hours. I'd say, at least if we -- if you remember, this that would be great. And I want to -- my concluding would be to thank, again, all our shareholders, of course, and one who is not present today, but has been a very supportive, very patient, very long term, extremely valuable and it's a shareholder and part and is still -- and he is going to be a long-term partner for us. I want to thank all my teams. They are great. And I think one of the other maybe take away from this meeting is not alone, and you can see how well-surrounded I am. And this is really something and maybe the thing I'm most proud of. And yes, and I want to thank all the Board members who are spending a lot of time who are there today on stage and Mark and Colin and all of you. Thank you very much.

Thank you. And thank you to all of you for being here today. Just a reminder that the replay and the slides will be available on the website and cocktails for those of you who are in the room in Paris. I know have been served until 07:30. Thank you very much.