combined general meeting (behind closed doors) … › m › 78843127fa4e0ae...8 sustained growth...

Combined General Meeting (behind closed doors)June 16, 2020

O P E N I N G O F T H E G E N E R A L M E E T I N G 2 0 2 0

FRANÇOIS-HENRI PINAULTCHAIRMAN AND CHIEF EX ECUT IVE OFF ICER

A G E N D A A N D R E G U L AT O RY I S S U E S

ÉRIC SANDRINGROUP GENERAL COUNSEL

4

CONTENTS

Introduction

Full-year 2019 highlights & financial results analysis

Creating value

Sustainability

Governance & Remuneration

Conclusion

Statutory Auditors’ report

Vote on the resolutions

I N T R O D U C T I O N


6

FULL-YEAR 2019 AND BEGINNING OF 2020 KEY HIGHLIGHTS

Another year of sustained profitable growth in 2019

• Revenue > €15 billion• Record operating margin > 30%

First-quarter of 2020 heavily impacted by COVID-19 and marked by strong disparities

• A very promising start to the year for all our Houses• Performance in our main markets affected by the

rapid spread of COVID-19

7

FULLY MOBILIZED AGAINST COVID-19 PANDEMIC

SUPPORTING OUR EMPLOYEES,OUR CONSUMERS AND SOCIETY

• Making health and safety of employees and clients our top priority

• Manufacturing medical equipment in Italy and France• Masks and overalls in Gucci’s Italian workshop network• Masks in the French workshops of Balenciaga and Yves Saint Laurent

• Importing masks from China for French and British health systems

• Supporting research on Covid-19 with a financial donation to Institut Pasteur

• Supporting innovative projects such as the “3D COVID” project, making bank of 3D printers available to the Public Hospitals of Paris

• Tackling the emergency needs through financial donations to:• the Hubei Red Cross in China • four major hospitals foundations in Italy in Kering’s Houses home regions• the CDC Foundation in the US

• Backing initiatives supporting the fashion industry in the US

• Along with concrete initiatives from our Houses: • Gucci, in support of the World Health Organization, and the Italian Civil

Protection Department• Pomellato and Dodo through a crowdfunding initiative against domestic

violence in Italy

8

SUSTAINED GROWTH TRAJECTORY IN 2019

€3,211m+15.1%

€4,778m+19.6%

30.1% recurringoperating margin

€15,884m+16.2% reported

+13.3% comparable

GROUPREVENUE

GROUP RECURRINGOPERATING INCOME (1)

RECURRING NET INCOME,GROUP SHARE (2)

- 14%EP&L intensity (3)

Full carbon neutralityachieved in 2019

(offsetting, Scopes 1, 2, 3 across all operations and supply chains)

38,068as of Dec. 31, 2019

55% women managerswithin the Group

€1,521m

FREE CASH FLOWFROM OPERATIONS EMPLOYEES SUSTAINABILITY

(1) Following the first-time application of IFRS 16 in 2019, comparative data for 2018 has been restated...(2) Recurring net income, Group share: net income from continuing operations, Group share, excluding non-recurring items. In 2019, this item excludes the non-recurring tax expense

relating to the tax settlement in Italy(3) 2015-2018

FULL-YEAR 2019 HIGHLIGHTS AND FINANCIAL RESULTS ANALYSIS

JEAN-FRANÇOIS PALUSGROUP MANAGING D IRECT OR

19%of revenue

+7%*

33%of revenue

+14%*

6%of revenue

+6%*34%

of revenue

+20%*

8%of revenue

+6%*

North America

Western Europe

Asia Pacific

Japan

RoW

10

ANOTHER YEAR OF SUSTAINED PROFITABLE GROWTH IN 2019

€15,884m+16.2% reported+13.3% comparable

13,665

15,884

2018 2019

+13.3%*

GROUP REVENUE (€m)

* % comparable growth (at constant scope and exchange rates)

€4,778mup 19.6%from 2018 restated (IFRS 16)

GROUP RECURRING OPERATING INCOME (€m)

FCF of €1.5bn after CAPEX of €956m (6.0% of revenue)and one-off cash out

Net financial debt at €2.8bn(excl. lease liabilities)

FCF AND NET DEBT (€m)

ENHANCED OPERATING MARGIN (€m)

11

ANOTHER YEAR OF SUSTAINED PROFITABLE GROWTH IN 2019

Revenue Recurringoperating income

Recurring operating income reported change (%)

Recurring operating income margin (%)

Luxury Houses 15,383 5,042 +19.0% 32.8%

Corporate & other 501 (264) -8.3% n.a.

Kering 15,884 4,778 +19.6% 30.1%

* Restated IFRS 16

NET DEBTFCF FROM OPERATIONS

1,521

2018 reported 2018* 2019

2,9553,551

2019

2,812

2018

1,711

3,9954,778

2018** 2019Group recurring operating income in €m and margin in %

• Sharp increase in EBIT and margin

• Group EBIT margin topping 30% for the first time ever

• Virtuous operating leverage29.2%

30.1%

+90bp

2018* 2019

12

LUXURY HOUSES

In €m2019 2018

Restated Change2018

Reported

Revenue 15,383 13,247 +16.1%* 13,247

Recurring operating incomeMargin (%)Adjusted margin IAS 17 (%)

5,04232.8%32.5%

4,23832.0%

-

+19.0%+0.8pt+0.9pt

4,191-

31.6%

Gross CAPEXAs % of revenue

6524.2%

6104.6%

+6.8%-0.4pt

6104.6%

In €mGucci Saint

LaurentBottega Veneta

OtherHouses

2019 RevenueChange*Comparable change**

9,628+16.2%+13.3%

2,049+17.5%+14.4%

1,168+5.3%+2.2%

2,538+20.3%+17.8%

Recurring operating incomeChange*

3,947+19.8%

562+20.0%

215-14.3%

318+42.1%

Recurring operating margin 41.0% 27.4% 18.4% 12.5%

* vs. 2018 Restated from IFRS 16* * At constant scope and exchange rates

* +13.2% comparable

13

FINANCIAL PERFORMANCE

FY 2019

FY 2018RestatedIFRS 16

FY 2018Reported

Revenue 15,884 13,665 13,665

Gross margin 11,775 10,198 10,198

Recurring operating income 4,778 3,995 3,944

Other non-recurring operating income and expenses

Finance costs, net

Income tax expense

Share in earnings of equity-accounted companies

(168)

(310)

(2,134)

42

(222)

(294)

(859)

12

(222)

(207)

(868)

12

Net income from continuing operations

Net income from discontinued operations

2,208

126

2,631

1,095

2,659

1,095

Net income of consolidated companies

Of which net income, Group share

2,334

2,309

3,726

3,688

3,754

3,715

Net income, Group share, from continuing operations excluding non-recurring items* 3,211 2,790 2,817

Net income, Group share, per share (in euro)

Net income per share from continuing operations,Group share, excluding non-recurring items (in euro)

18.40

25.59

29.28

22.15

29.49

22.36

* In 2019, this item excludes the non-recurring tax expense relating tothe tax settlement in Italy

In €m

1

2

Mainly PUMA contribution,

based on Vara consensus

1

Mainly PUMA contribution:net income

and net capital gain of €1.18bn

2

In €m

FY 2019 NET DEBT BRIDGE

14

CHANGE IN NET FINANCIAL DEBT

161

402

750 46

FCF from operations

1,342

IFRS 16 first application

Net debt at December 31, 2018

Net debt at December 31, 2019

Net interest paid and dividend

received

Repayment of lease liabilities

Net financial investments

and other

2,812

-79

1,711

-1,521

Dividendpaid

Sharerepurchase

15

A SOLID FINANCIAL STRUCTURE

* of FY19 group revenue

SHAREHOLDERS’ EQUITY

NETDEBT

DEBT-TO-EQUITY RATIO

CAPITALEMPLOYED

€10,439m €2,812m 26.9% €13,251m

INVENTORIES RECEIVABLES OPERATING WORKING CAPPAYABLES

€2,959m €996m €3,146m19.8%*

€809m

in %

in € (for the FY in reference)

DIVIDEND PER SHARE

16

2019 DIVIDEND REVISED DOWNWARDS WITHIN THE CONTEXT OF THE COVID-19 OUTBREAK

4.00 4.606.00

10.508.00

2015 2016 2017 2018 2019Proposed to June 16, 2020 AGM

€3.50 per share interim dividend paid on January 16, 2020€4.50 per share balance to be paid on June 25, 2020

-30% vs. the dividend

initially proposed

49.6% 45.3% 40.1% 47.0%31.3%

102.2%

57.1%

37.3%47.8%

35.1%

2015 2016 2017* 2018 2019**

in % of recurring net income, Group share in % of available cash flow

* 2017 data restated for IFRS 5* * 2019 available cash flow excluding one-off tax settlement

DIVIDEND PAYOUT

17

STEADY SHAREHOLDER RETURN

* Target of 50% on average of recurring net income, Group shareand available cash flow

SUSTAINED GROWTH AND FINANCIAL PERFORMANCE

STRONGSHARE PRICE

APPRECIATIONX4

between 2015 and 2019

DIVIDEND GROWTH LINKED TO GROUP

PERFORMANCEPayout target

of 50%*

EXCEPTIONALDISTRIBUTION

IN KINDof PUMA shares≈ €36 per share

as of May 16, 2018

STRONGPUMA SHARE PRICE

APPRECIATION+ c.60% from distribution

until 2019 y/e

SHAREREPURCHASE

PROGRAM€570m betweenOctober 2018and July 2019

300

350

400

450

500

550

600

650

Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20

18

SHARE PRICE PERFORMANCE

Source: Euronext, as of June 5, 2020

(in €)

KERING SHARE PRICE PERFORMANCE VS. CAC40 INDEX (REBASED)SINCE JANUARY 1, 2019

Kering

-8%

CAC 40

-13%

Performance in 2019+26%

Performance in 2019+42%

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

-65%-50%-35%-20%-5%10%25%40%55%

Wee

k 1

Wee

k 2

Wee

k 3

Wee

k 4

Wee

k 5

Wee

k 6

Wee

k 7

Wee

k 8

Wee

k 9

Wee

k 10

Wee

k 11

Wee

k 12

Wee

k 13

% stores closed WW Retail sales Luxury (comp)

19

Q1 2020 REVENUE: HEAVY IMPACT FROM COVID-19

• Extreme monthly variations

• Starting with a strong January (up solid double digits) • A difficult February (Asia Pacific store closures, tourism

decline in the region and Western Europe)• Worsening situation in March (all stores closing gradually in

Europe and America, followed by central logistics and production facilities later in March)

• Comparable revenue decline led by Asia Pacific

AN UNPRECEDENTED QUARTERINCREASING PERCENTAGE OF RETAILNETWORK CLOSED DURING Q1

* At constant scope and exchange rates

€3,203m

-15.4% reported-16.4% comparable*

€3,066m

-16.0% reported-16.9% comparable*

€137mo/w Kering Eyewear €130m

+0.2% reported-1.3% comparable*

CORPORATE & OTHERLUXURY HOUSESGROUP REVENUE

C R E AT I N G VA L U E


21

A UNIQUE GROWTH & PERFORMANCE MODEL

ORGANIC GROWTH& VALUE CREATION

RESPONSIBLE, INNOVATIVE, QUALITYOF EXECUTION

COMPETITIVE ADVANTAGEGROWTH PLATFORM

CREATIVITY

SUSTAINABILITY

LONG-TERMFINANCIAL

PERFORMANCE

2015-2019

REVENUEX2.1

+20% CAGR

RECURRING OPERATING INCOME

x3.1 +33% CAGR

RECURRINGOPERATINGMARGIN

> +10pt

2025 ROADMAP

22

SUSTAINABILITY, PEOPLE AND INNOVATION

WE CAREabout our impact on the planet, on climate change,on natural resources by:

• Reducing our environmental footprint through -40% EP&L, -50% CO2 Science-Based Target

• Preserving our raw materials through 100% traceability and compliance with our Kering Standards, with highest standards in animal welfare

WE COLLABORATEfor the good of our employees, suppliers, clients to:

• Preserve our industry’s heritage• Instill diversity, achieve gender parity at all levels and pay equity• Provide exceptional employment by being the preferred employer in Luxury

and developing progressive policies

WE CREATEinnovations to ensure our planet, our industry and our brands thrive for the long run by:

• Launching disruptive innovations and exploring new solutions towardscircular economy

• Empowering future generations

23

AN ENSEMBLE OF COMPLEMENTARY HOUSES UNITED BY A POWERFUL CULTURE

STEADY GROWTH

RELAUNCH UNDERWAY

• Leverage full brand potential

• Sustaining high level of operating margins

• Substantial FCF generation,normative Capex level

• Offering and distribution optimization

• Brand equity investment

• Gradual recovery of profitability

ENTERING A NEW GROWTH PHASE

• In-depth work on brand equity, product offering, distribution network, supply chain

• Investments required in short term

• Significant operating leverage in medium term

• Untapped markets, expanded distribution networks, broadened product offering

• Opex & Capex investments

• Margins to increase in short / medium term

SCALING UP

LOGISTICS AND SUPPLY CHAIN

ON TRACK WITH GROWTH PLATFORM DEVELOPMENT

INFORMATION SYSTEMS

DIGITAL EMPOWERMENT

GROWTHPLATFORM

COMMUNICATIONSECOMMERCE & CLIENT SERVICESCRM & DATAAI & INNOVATION

HR

SALES & CLIENTS

SUPPLY CHAI N

DISTRIBUT I ON

E-COMMERCEINTERNALISATION

FINANCE

MA

ST

ER

DA

TA

MA

NA

GE

ME

NT

BU

SIN

ES

S IN

TE

LL

IGE

NC

E

E R P

24

PROCESSES& EQUIPMENT

MORESCALABLEFOOTPRINT

NEW OPERATING

MODEL

STRONGCASH FLOW GENERATION

• Optimize Working Capital

• Pursue Group investments withCapex-to-sales ratioat c.6%

• Continued optimization of ROCE

25

FINANCIAL PRIORITIES

BALANCEDCAPITALALLOCATION

• Consistent dividend policy

• Ability to seize M&A opportunities

• Agile in returning additional cashto shareholders

SUSTAINORGANIC GROWTH…

• Creative brands resonating with customers

• Further market share gains

• Unleash potentialof our Houses according to their maturity level

… AT SOLID PROFITABILITY LEVEL

• Invest for growth: products, stores,client experience and engagement, talents, digital and omnichannel capabilities, communications

• Operating leverage thanks to optimizationof cost base relativeto scale

Agility to meet instant requests

Balancing scale and

personalization

Seamless experience across channels and geographies

26

KERING IS WELL POSITIONED TO LEVERAGE THE NEW LUXURY ENVIRONMENT

A GLOBAL LUXURY GROUP WITH EXCEPTIONAL HOUSESDEVELOPING GROWTH PLATFORM TO SUPPORT OPERATIONS AND IMPROVE EFFICIENCY

WITH SUSTAINABILITY AT THE HEART OF ITS STRATEGY

YOUNG AND GLOBAL CONSUMERS

INCREASED DEMAND FOR TRANSPARENCY

Leadingsustainability commitments

NUMEROUS TOUCHPOINTS

NEW TECHNOLOGIES

OMNICHANNELAS A MUST

A DEMAND-DRIVEN SUPPLY CHAIN

S U S TA I N A B I L I T Y

MARIE-CLAIRE DAVEUCHIEF SUST AINABIL IT Y OFF ICER & HEAD OF INT ERNAT IONAL INST IT UT IONAL AFFAIRS

29

WE CARE FOR OUR IMPACT ON THE PLANET, ON CLIMATE CHANGE, AND ON NATURAL RESOURCES

Reducing our environmental footprint• 14% reduction of the overall environmental impacts in

environmental profit & loss account intensity between 2015and 2018;

• 77% reduction of the GHG emissions linked to our stores and implantations in intensity and 36% reduction of our emissions between 2015 and 2018;

• Carbon neutrality achieved as of 2018 (scope 1 to 3).

Preserving our raw materials• 88% traceability for key raw materials in 2018;• 100% responsible gold purchase for watches & jewelry;• 68% alignment with our Kering social, environmental and animal

welfare standards across our supply chains in 2018.

Protecting biodiversity• First corporate partnership with IPBES, the Intergovernmental

Platform on Biodiversity and Ecosystem Services;• Co-publication with the Cambridge Institute for Sustainability

Leadership (CISL) and Biodiversify of a report on biodiversity strategies.

30

WE COLLABORATE WITH PEOPLE ACROSS OUR BUSINESS ECOSYSTEM INCLUDING SUPPLIERS, EMPLOYEES & CLIENTS

Instill gender parity & diversity• Gender parity and salary equality: 55% women managers

within the Group;• Appointment of heads of diversity inclusion and talent at

Kering and Gucci.

Provide exceptional employment• Global parental policy, including 14 weeks baby leave;• Exemplary working conditions for all our supply chains; • 13,000 audits of suppliers between 2015 and 2019.

Empowering future generations & preserve our industry’s heritage• Sustainability curriculums at educational institutes such as

the IFM-Kering sustainability chair; • Suppliers’ platform, with training on Kering Standards;• Craftsmanship and artisanal training programs.

31

WE CREATE INNOVATIONS TO ENSURE OUR PLANET, OUR INDUSTRY AND OURBRANDS THRIVE FOR THE LONG-RUN BY LAUNCHING DISRUPTIVE INNOVATIONS

• Co-founding partner of the Fashion-Plug and Play accelerator;

• Partnership with Plug and Play extended to China withK Generation Award;

• 3,800 sustainable fabrics in the Materials Innovation Lab library;

• Sustainable Innovation Lab (SIL) for watches & jewelry established in January 2020;

• 119 startups identified through conferences, Fashion for Good, our innovation labs, the K Generation Award and Kering innovation team.

AND ALSO…

32

Only Luxury group to be included in the CDP climate change A-list every year for 3 years

Most sustainable company across the Luxury and fashion industries for 3 years in Corporate Knights Global 100 ranking

Integrated report dedicated website

1.5 degree trajectory

Internal guidelines on green fashion shows

G O V E R N A N C E

SOPHIE L’HÉLIASLEAD INDEPEND ENT D IRECT OR

34

BOARD OF DIRECTORS BEFORE AGM

François-Henri PinaultChairman and CEO

Jean-François PalusGroup Managing Director

Sophie L’HéliasLead Independent

Director

Yseulys CostesIndependent

Director

Jean-Pierre DenisIndependent

Director

Ginevra ElkannIndependent

Director

Claire LacazeDirector

representing employees

Baudouin ProtNon-Independent

Director

Daniela RiccardiIndependent

Director

Sapna SoodIndependent

Director

Financière Pinault Represented by

Héloïse Temple-BoyerNon-Independent

Director

Term of office expires: 2020 Annual General MeetingSeeking reappointment, subject to shareholder approval

35

4 SPECIALIZED COMMITTEES

• Sapna Sood(Chair)

• Jean-François Palus

• François-Henri Pinault

• Daniela Riccardi

• Sophie L’Hélias(Chair)

• Financière Pinault, representedby Héloïse Temple-Boyer

• Yseulys Costes

• Jean-Pierre Denis

• Ginevra Elkann

• Claire Lacaze

• Jean-Pierre Denis(Chairman)

• Sophie L’Hélias

• Yseulys Costes

• Financière Pinault, representedby Héloïse Temple-Boyer

• Financière Pinault, representedby Héloïse Temple-Boyer (Chair)

• Yseulys Costes

• Sapna Sood

• Baudouin Prot

• Ginevra Elkann

BOARD OF DIRECTORS9 meetings in 2019 - Attendance rate: 94%

Degree of independence: 75% Degree of independence: 80% Degree of independence: 60% Degree of independence: 50%

SUSTAINABILITY COMMITTEE

REMUNERATION COMMITTEE

APPOINTMENTS AND GOVERNANCE

COMMITTEE

13 Committee meetings in 2019 - Attendance rate: 86%

AUDITCOMMITTEE

36

ASSESSMENT OF THE BOARD OF DIRECTORS

• Very positive view of how the Board and its Committees operate

• Quality of the discussions during meetings and high level of freedom of expression

• Satisfaction about the creation of the role ofLead Independent Director

• Positive assessment of the strategy meeting, both for the quality of the information provided and for the opportunity they create to interact with management

• Improvement avenues, such as further increasing the diversity of expertise among Board member

ANALYSIS AND REFLECTIONON THE COMPOSITION OF THE BOARD

• Expansion of the expertise

• Better understanding of the markets

• Diversity of experiences

• Rejuvenation

37

PROPOSAL FOR THE APPOINTMENT OF NEW DIRECTORS

JEAN LIUIndependent DirectorPresident of DiDi ChuxingAge: 41Chinese national

Jean Liu will bring to the Board her extensive expertise in new technologies as well as herdeep knowledge of the Chinese market

TIDJANE THIAMIndependent DirectorFormer Chief Executive of Credit Suisse Group AG (July 2015 - February 2020)Age: 57French and Ivorian national

Tidjane Thiam will bring to the Board his in-depth financial expertise as well as his knowledge of global markets

EMMA WATSONNon-Independent DirectorActor and activistAge: 30British national

Emma Watson will bring to the Board her commitment to sustainable development andwomen’s issues

R E M U N E R AT I O N

ÉRIC SANDRINSECRET ARY OF T HE BOARD OF D IRECT ORS

Gross amounts (in euros)François-Henri PinaultChairman and CEO

2019 2018

Amounts awardedfor the year

Amounts paidduring the year



Fixed remuneration 1,200,000 1,200,000 1,200,000 1,200,000

Annual variable remuneration 947,088 1,944,000 1,944,000 1,944,000

Multi-annual variable remuneration

9,870,405

2015 Plan: 11,153 KMUs awarded at €167 per unit, corresponding to a value of €1,862,551 at the dateof the award. Exercized at €885 per unit

2016 Plan: 9,526 KMUs awarded at €166 per unit, corresponding to a value of €1,581,316 at the dateof the award. Exercized at €988 per unit 9,411,688

Exceptional remuneration



8,761,500

4,940,000

Directors’ fees (Kering) 67,006 66,704 66,704 67,121

Directors’ fees (subsidiaries) - - - 14,527

Benefits in kind 10,933 10,933 16,421 16,421

Total 2,225,027 17,573,325 3,227,125 21,873,974

39

REMUNERATION OF THE CHAIRMAN AND CEO IN 2019ex-post vote

Gross amounts (in euros)Jean-François PalusGroup Managing Director

2019 2018





Fixed remuneration 1, 223,045 1,223,045 1,221,296 1,221,296

Annual variable remuneration 816,699 1,685,818 1,685,818 1,597,998

Multi-annual variable remuneration

8,635,830

2015 Plan: 9,758 KMUs awarded at €167 per unit, corresponding to a value of €1,629,586 at the date of the award. Exercized at €885 per unit

2016 Plan: 8,448 KMUs awarded at €166 per unit, corresponding to a value of €1,402,368 at the date of the award. Exercized at €988 per unit 8,346,624

Exceptional remuneration

2018 Plan: 3,000 KMUs awarded at €581 per unit, corresponding to a value of €1,743,000 at the date of the award. Exercized at €988 per unit 2,964,000

Directors’ fees (Kering) 71,901 66,704 66,704 60,412

Directors’ fees (subsidiaries) 120,000 125,000 125,000 128,333

Benefits in kind 1,089,975 1,089,975 1,089,975 1,089,975

Total 3,321,620 15,501,166 4,188,793 12,733,844

40

REMUNERATION OF THE GROUP MANAGING DIRECTOR IN 2019ex-post vote

41

2020 REMUNERATION POLICY OF THE CHAIRMAN & CEOAND THE GROUP MANAGING DIRECTOR

ex-ante vote

23%Fixed remuneration

27%Rémunérationvariable annuelle= 120 % de la remuneration fixe

50%Multi-annual variable

remuneration (LTI)= 100% of the fixed

remuneration for year Y+ annual variable

remuneration due for Y-1

CHAIRMAN & CEO


remuneration (LTI)80% of the fixed

remuneration for the year Y + annual variable

remuneration due for Y-1


28%Annual variable remuneration= 100% of the fixed remuneration

GROUP MANAGING DIRECTOR

Initially proposed by the Board of Directors at its meeting on February 11, 2020



remuneration (LTI)= 100% of the fixed

remuneration for year Y (€1,200,000)

+ effective annual variable remuneration for Y-1

CHAIRMAN & CEO


remuneration (LTI)80% of the fixed

remuneration for the year Y (€1,200,000)

+ effective annual variable remuneration for Y-1


GROUP MANAGING DIRECTOR

Revised within the context of the Covid-19 outbreak (decided by the Board of Directors on April 21, 2020)

COMPONENTS AND STRUCTURE OFTHE TOTAL REMUNERATION ALLOCATED TO DIRECTORS

42

2020 REMUNERATION POLICY OF MEMBERS OF THE BOARD OF DIRECTORSex-ante vote

TOTAL REMUNERATION ALLOCATED TO DIRECTORS

Unchanged since 2017 : €877,000• despite the expected increase in the number of members on the Board of Directors following

2020 AGM

* The remuneration allocated to the Lead Independent Director is subject to the achievement of objectives defined in advance by the Board of Directors. For 2020, the objectives arethe following: • promote and maintain a good relationship between the Board and its shareholders and investors; • participate in the assessment of the Board and its members; • ensure that information is provided to non-executive Directors and facilitate communication among them by organizing meetings or discussions outside Board and Committee meetings, where

necessary; • ensure the effective implementation of mechanisms to prevent and resolve potential conflicts of interest.

Minus special portions for: • The remuneration of the Chairs of

the Audit, Remuneration, and Appointments and Governance Committees (€23,000 each)

• The Lead Independent Director (€50,000 for 2020)*

Coefficient: 1 by Board Membership, increased by 0.5 per Committee

Coefficient: • 1 per presence at each meeting

of the Board• 0.5 for each attendance of a

Committee meeting

40% FIXED 60% VARIABLE

€877,000

C O N C L U S I O N


S TAT U TO RY A U D I T O R S ’ R E P O RT

FRÉDÉRIC MOULINST AT UT ORY AUDIT OR DELOIT T E

45

CONTENTS

Statutory Auditors’ Reports to the Ordinary General Meeting

• Statutory Auditors’ Report on the financial statements of the Company

• Statutory Auditors’ Report on the consolidated financial statements

• Statutory Auditors’ Special Report on regulated-party agreements

Statutory Auditors’ Report to the Extraordinary General Meeting

• Statutory Auditors’ Special Report on the authorization to grant free shares, existing or to be issued

46

Ordinary General MeetingREPORTS ON THE COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

• Financial statements approved by the Board of Directors on February 11, 2020 based on information available at that date concerning the COVID-19 health crisis in China

• Since this date, communication by your Board of Directors on events that have occurred and information known after the closing date concerning the impacts of the crisis relating to the COVID-19 epidemic

• in Q1 2020 financial information published on April 21, 2020, and

• in the Risk Factors and Outlook sections of the Universal Registration Document published onMarch 26, 2020 and the first update published on April 30, 2020

CONTEXT OF THE ACCOUNTS CLOSING

47

Ordinary General MeetingREPORTS ON THE COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

Company financial statements(First resolution)

Consolidated financial statements(Second resolution)

References Pages 401 - 404 of the Universal Registration Document Pages 376 - 381 of the Universal Registration Document

Purpose of ourengagement

Certification that the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at December 31, 2019 and of the results of its operations for the year then ended in accordance with French accounting principles

Certification that the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as of December 31, 2019 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union

Key audit matters • Valuation of long- term investments • Tax risks and valuation of related liabilities• Impairment tests on goodwill and intangible assets with

indefinite lives• Valuation of inventories• First-time application of IFRS 16, Leases, as of

January 1, 2019 (also the subject of a technical emphasis of matter in the first part of our report)

Specific verifications No matters to report on the management report, on the information relating to corporate governance and on the benefits of corporate officers and commitments made in their favor

No matters to report on the information presented in the Group management report

Unmodified opinion on the Company and consolidated financial statements

48

Ordinary General MeetingADDITIONAL REPORT

• The Special Report presents the support agreement for services provided by Artémis SAS, approved in previous years and with continuing effect during the year;

• We were not advised of any new agreements authorized during the year subject to the approval of the Shareholders’ Meeting.

STATUTORY AUDITORS’ SPECIAL REPORT ONREGULATED-PARTY AGREEMENTS

(pages 405 - 406 of the Universal Registration Document)

49

Extraordinary General MeetingSPECIAL REPORT

• Proposed authorization for the Board of Directors to make free grants of ordinary shares to employees and executive corporate officers of the Company, with waiver of pre-emptive subscription rights

(17 th resolution)

STATUTORY AUDITORS’ SPECIAL REPORT ON THE AUTHORIZATIONTO GRANT FREE SHARES, EXISTING OR TO BE ISSUED

We have no matters to report on the information presented in the Board of Directors’ report

V O T E O N T H E R E S O L U T I O N S

51

APPROVAL OF THE 2019 FINANCIAL STATEMENTS, APPROPRIATION OF NET INCOME AND SETTING OF THE DIVIDEND (Resolutions 1 to 3)

(ordinary resolut ions)

• Approval of the parent company financial statements for the year ended December 31, 2019(1st resolution)

• Approval of the consolidated financial statements for the year ended December 31, 2019(2nd resolution)

• Appropriation of net income for 2019

• Distribution of cash dividend of €8 (*) per share(*) corresponding to an interim dividend of €3.50 per share paid on January 16, 2020,

and a final dividend of €4.50

• Payment date: June 25, 2020

(3rd resolution)

52

EVOLUTION OF THE COMPOSITION OF THE BOARD OF DIRECTORS (Resolutions 4 to 9)(ordinary resolut ions)

• Reappointment of Jean-Pierre Denis as a Director(4 th resolution)

• Reappointment of Ginevra Elkann as a Director(5 th resolution)

• Reappointment of Sophie L’Hélias as a Director(6 th resolution)

• Appointment of Jean Liu as a Director(7 th resolution)

• Appointment of Tidjane Thiam as a Director(8 th resolution)

• Appointment of Emma Watson as a Director(9 th resolution)

53

SAY ON PAY (Resolutions 10 to 14)(ordinary resolut ions)

• Approval of the information referred to in Article L. 225-37-3, I of the French Commercial Code relating to remuneration paid during or awarded for the year ended December 31, 2019 to corporate officers in respect of their duties as Directors(10 th resolution)

• Approval of the fixed, variable and exceptional components of total remuneration and benefits in kind paid during or awarded for the year ended December 31, 2019 to François-Henri Pinault, Chairman and Chief Executive Officer(11 th resolution)

• Approval of the fixed, variable and exceptional components of total remuneration and benefits in kind paid during or awarded for the year ended December 31, 2019 to Jean-François Palus, Group Managing Director(12 th resolution)

• Approval of the remuneration policy for executive corporate officers(13 th resolution)

• Approval of the remuneration policy for corporate officers in respect of their duties as Directors(14 th resolution)

54

RENEWAL OF THE TERMS OF OFFICE OF STATUTORY AUDITOR (Resolution 15)(ordinary resolut ion)

• Renewal of the terms of office of Deloitte & Associés as principal Statutory Auditor and BEAS as substitute Statutory Auditor(15 th resolution)

55

STOCK REPURCHASE PROGRAM (Resolution 16)(ordinary resolut ion)

• Authorization to be given to the Board of Directors to purchase, retain or transferthe Company’s shares(16 th resolution)

Authorization Resolution number Period of authorization Characteristics

Treasury sharescancellation

Outstanding(April 2019)

18 months(October 2020)

Maximum purchase price: € 580

Maximum of 10% of the share capital

16th resolution As of June 16, 2020

18 months(December 2021)

Maximum purchase price: € 600

Maximum of 10% of the share capital

56

GRANT OF EXISTING SHARES AND/OR SHARES TO BE ISSUED TO EMPLOYEESAND/OR EXECUTIVE CORPORATE OFFICERS (Resolution 17)

(extraordinary resolut ion)

• Authorization for the Board of Directors to make free grants of ordinary shares of the Company (existing or to be issued), subject, where applicable, to performance conditions, to beneficiaries or certain categories of beneficiaries among the employees and executive corporate officers of the Company and affiliated companies, entailing the waiver by shareholders of their pre-emptive subscription rights(17 th resolution)

57

AMENDMENTS TO THE ARTICLES OF ASSOCIATION (Resolutions 18 to 22)(ext raordinary resolut ions)

• Modification of the minimum number of shares that each Director is required to own and amendment of Article 10 of the Company’s Articles of Association (“Company management - Board of Directors”) to comply with the provisions of the PACTE Law relating to Directors representing employees(18 th resolution)

• Amendment of Article 11 of the Company’s Articles of Association (“Tasks and powers of the Board of Directors”) to reflect the new provisions of Article L. 225-35 of the French Commercial Code(19 th resolution)

• Amendment of Article 13 of the Company’s Articles of Association (“Deliberations of the Board of Directors - Minutes”) to reflect the provisions of French law no. 2019-744 of July 19, 2019 relating to certain decisions that can be made by the Board of Directors via written consultation(20 th resolution)

• Deletion of Article 18 of the Company’s Articles of Association (“Non-voting Directors”)(21st resolution)

• Amendment of Article 17 of the Company’s Articles of Association (“Compensation of the Directors,the Chairman, the Managing Director, the Assistant Managing Directors and the officers of the Board of Directors”) to comply with the provisions of the PACTE Law relating to the remuneration of Directors, and deletion of references to non-voting Directors(22nd resolution)

58

POWERS FOR FORMALITIES (Resolution 23)(ordinary resolut ion)

• Powers for formalities(23rd resolution)

combined general meeting (behind closed doors) … › m › 78843127fa4e0ae...8 sustained growth...

Documents