Ladies and gentlemen, dear shareholders, a warm welcome to the new Kering annual general meeting. Thank you for joining us here again this year at LANC or online. As you know, this meeting is a special opportunity and we are absolutely delighted to welcome you here at the company's headquarters.
Joining us today, Jean-François Palus, CEO on my right, Jean-Marc Duplex, who is the chief operating officer and CEO of the jewelry division, Marie-Laure Davus, head of sustainability and corporate affairs, Armelle Prouvost who is our CFO, and Mr. Eric Sona who is the secretary of the board and general counsel and soon the secretary of this assembly as well.
So we will now proceed with the constitution of the board. I will be chairing. The scrutineers will be the duties of scrutineers will be performed by the shareholders who present who hold the largest number of votes. For representing we have Benedict Fuku and for Amundi Mr. Frederick Rosen. With the approval of these scrutineers I suggest Mr. Eric Sona be appointed secretary of this meeting and the general meeting is now open. As in previous years this meeting is filmed, it is recorded and streamed on Kering's website and we are also providing simultaneous subtitles. Without further ado I'm going to give the floor to Eric Sona who's going to review the legal provisions and present the agenda.
Thank you, François. Ladies and gentlemen, dear shareholders, you've been convened to this combined general meeting pursuant to the meeting notice and invitation published in the legal announcements together on April the 20th and May 11th, 2026. The quorum required to hold this meeting has been reached. The meeting is therefore declared duly constituted and may validly deliberate. As always, the final quorum will be confirmed to you before the voting starts. All documents that are required by law were made available to shareholders and were sent to those who requested. So the documents are on the table. I have them with me right here. The social and economic committee received in a timely manner all documents and information submitted to the general meeting and has not raised any objections.
The various reports prepared by the board of directors for this assembly are available on the company's website and they have been included in the notice and the 2025 universal registration document. These two documents are also available on the voting tablets provided to you upon registration. As every year in the interests of today's debates and proceedings, I propose that we do not go through the reading of the full reports. And as every year, Maître Lumier who is a judicial officer is present at this general meeting. He conducted various controls and verifications regarding the proper recording of votes.
This being said, I am now going to take you through the agenda of this combined general meeting. We have a total of 22 ordinary and extraordinary resolutions. All are displayed on the screen behind me. Please note that no shareholder has exercised the right to add items or draft resolutions to the agenda.
Regarding the ordinary resolutions, as for every year we need to approve the accounts and the appropriation of earnings, resolutions one through three. The composition of the board of directors including the renewal of two members and two directors and the appointment of two new directors respectively, resolutions four, five, six and seven. Resolutions on compensation of corporate officers, say on pay, resolutions 8 through 14. The appointment of Ernst and Young as our independent auditors responsible for certifying the financial statements and sustainability disclosures and its alternate audits, resolutions 15-17. And last but not least, the share buyback program, resolution 18.
Moving on to the extraordinary resolutions with the renewal of the authorization to grant free shares to employees and or executive officers, resolution 19. Employee access to the company's capital, resolutions 20 and 21. And coming back to ordinary matters, we have resolution 22, the traditional powers to carry out all legal formalities following this general meeting.
I'm going to now briefly take you through the outline and the agenda for this meeting. We're going to start off with a speech by François-Henri Pinault, the chairman of the board of directors. A speech by Jean-François Palus, our CEO. We will have a presentation of the 2025 annual results by Armelle Prouvost, chief financial officer. We will have an update on sustainability by Marie-Laure Davus, head of sustainability and corporate affairs. Then François-Henri Pinault will give a presentation on governance in his capacity as chairman of the board. Véronique Willard will present on executive compensation. She is the lead director and chair of the compensation committee. Our statutory auditors will present their conclusions, the conclusions of their reports. We will then have our usual Q&A session and we will close with the final vote on resolutions. And that's it for my part, over to you.
Ladies and gentlemen, dear shareholders, as you will recall, we gathered here on September 9th last year, notably in connection with the appointment of Jean-François Palus as the director and chief executive officer of Kering. And it was at my initiative that last year the board decided to separate the roles of chairman of the board and chief executive officer. It was a pivotal moment for the company and it seemed essential to me to reinforce the efficiency of our organization and the balance of responsibilities, thereby entrusting the executive management with action and execution and the board and its chairman with the strategic direction, oversight and long-term vision in accordance with best practices for publicly traded and listed companies.
This clear division of roles gives the board its full meaning and enables it to fully carry out three essential missions. The first is to define the company's broad strategic directions. It requires both a deep understanding of markets and our houses as well as true ability to anticipate future trends. The second mission of the board is to support management by ensuring decisions are properly executed while remaining attentive to early warning signs and providing the necessary experience and perspective. Last but not least, the third mission is to foster an environment based on trust. Indeed, profound transformation can only successfully be carried out if leaders know they can rely on solid and lasting support.
It is precisely to better fulfill these missions that we propose to further strengthen the board's expertise and commitment through the candidates we are submitting for your approval today. Thus, the board is giving Jean-François since last September and his teams all the freedom they need to implement our strategic choices and make necessary adjustments. I can already tell you that the first 9 months we've been working with Jean-François fully confirm the governance decisions we have made.
This trust is naturally based on constant accountability and dialogue. The board has to remain attentive to the consistency of the decisions that are made, their results and management's ability to stay on track. So we need a balance between support, vigilance, accountability and that will make it possible to sustain a transformation of the magnitude of the current changes. In a moment Jean-François will present his road map to you. You will see that it is very ambitious because the situation requires it to be ambitious and because Kering has the resources it needs to complete its ambitions. Above all, it is credible. Credible in its approach, in its timeline, and in the choices it makes, including the most difficult ones.
As you know, Kering has been built since 2013 by prioritizing the international development of each of its houses. More recently with Jean-François, we embarked on a new journey, the construction of a more integrated company, leveraging significant synergies between the houses and capable of both combining entrepreneurial agility with the power and the strength of a global organization.
As you also know, a strategy, no matter how relevant it is, is only as good as its execution. That is why the board will be very demanding and attentive to the results achieved, the commitments made as well as the performance indicators and signals whether positive or not. Gucci will naturally be at the center of our focus given its significance and the importance of its sales for the company. I can tell you that the actions undertaken for Gucci are based on very solid foundations and will enable the brand to return to a path of sustainable growth rapidly. Gucci has always been a very unique house with a very strong creative identity and on several occasions in its history, Gucci has demonstrated its ability to reinvent itself without ever compromising on its values. So it is this capacity for reinvention that the strategy presented by Jean-François is based on today.
Our company is not limited to Gucci. I deeply believe in the potential of all our houses with no exception. They all have significant potential for growth. And beyond our houses, I really believe in the growth relays, the growth drivers we've identified. We will continue to develop them. Drivers such as Kering Eyewear which has already become a leading player in its industry, or our recent partnership in beauty and longevity with L'Oréal which opens very promising and transformative opportunities. I also have full confidence in the huge potential of our jewelry houses. This is why we recently consolidated them into a separate division under the well-informed and seasoned leadership of Jean-Marc Duplex who is going to further accelerate their development.
Our company has already gone through many phases of transformation and each time it has been able to question itself, challenge itself, adjust its course when necessary and always consistently emerged stronger. The company has successfully evolved and adapted in a constantly changing environment. Drawing strength from this history, it is our responsibility to stay on course with clarity and composure in a context marked by a lot of international uncertainty, major geopolitical tensions. I am convinced we shouldn't give in to impatience nor lose sight of our objective. I'm also profoundly convinced that Kering with its beautiful houses, its exceptional talents, its heritage, history, and with you, its shareholders, it holds a unique place in the world of creativity and luxury and will continue to play a leading role. It is in this spirit that I chair this board and that I invite you to support the strategy we are presenting to you today and which Jean-François is driving with great talent and energy. Before giving you the floor, I would like to share a short video with you.
Ladies and gentlemen. Greetings. I would first like to thank you for your presence today and for the trust of course you are placing in us. I would also like to thank François-Henri Pinault and the members of the board of directors for their support over the past 8 and a half months that have just passed. And I would like to thank the teams everywhere in the world for their engagement. They are highly demanding and they're doing high quality work on a daily basis.
So you entrusted me with Kering's operational responsibility 8 and a half months ago. I spent a lot of time in the field, in the workshops, in our stores, with our partners to understand how the group works in reality. My conclusion is that Kering has outstanding assets in hand. An iconic house, many iconic houses, unique know-how, and extremely high quality professionals. And it's on that basis that we are moving forward. And what makes me particularly optimistic about the transformation we have now engaged in, because in these 8 and a half months we have taken some pretty strong decisions.
First, we have reorganized ourselves to make our management model more empowering, more effective, faster. The group is now articulated around four core businesses: Fashion and leather goods, jewelry, eyewear, and what we have chosen to call Kering Next, which is preparing for the growth drivers of tomorrow. All of this is based on a cross-functional platform, a group-wide platform structured around five priorities: Industry, customer, sustainable development, technology as well as the support functions. Of course, the executive committee now meets on a much more regular basis with a dual strategic and operational oversight and is highly demanding in terms of execution. That has changed the way in which we work. Decisions are now taken faster, responsibilities are better defined and the follow-up and monitoring is much more rigorous.
And beyond the organization, we have also made progress on seven further priorities culminating in the construction of our strategic plan. First, debt. We have significantly reduced it in 2025 by around 2.5 billion euros last year and even more this year. Armelle, I'm sure we'll be telling you more about this. I truly believe it was essential. This gives us additional leeway to act, to invest, to prepare for the future in the right conditions. We really did not want debt to hinder our transformation. And I believe that that is no longer the case.
Another key priority, our retail network. After an initial phase of rationalization on third-party retail conducted at the time, we are now continuing the optimization of our own network. At the end of 2025, the total was 1,719 points of sale, down 75 over one year. In 2026, we shall be amplifying the movement with at least 100 additional closures. Each closure comes with a plan to refocus business on stronger points of sale with better locations and the ability to offer a high quality experience much more consistent with the standards of the luxury sector. This is why in parallel we are investing in our retail network with a renovation plan that should affect up to two-thirds of our boutiques by 2030.
As for inventory, we have initiated a significant plan in order to reduce it by around 1 billion euros over 12 months. And more importantly, we are transforming our processes. We are implementing integrated planning tools based on improved coordination between teams and stronger forecast capacities thanks to the power of AI. Our target is to produce more accurately, earlier and with less complexity. I believe that is a key performance lever but also a lever for desirability. Reducing volumes also means protecting product value.
We have also initiated a reorganization of our pricing structure, architecture, pricing and product architecture. The offering is being simplified with collections that are more legible and a clearer hierarchy between iconic, seasonal and essential products. This allows us to better express the identity of our houses, to strengthen consistency and to improve full price sales. In parallel, fundamental work is being conducted on quality, materials, manufacturing, features, durability because in the world of luxury, legitimacy is built essentially on product excellence. I truly believe that. We have also chosen to work on marketing efficiency. We started by rebalancing our investments towards high performance media. The idea is not to reduce the resources because of course this is essential in a highly competitive environment but to use the resources in a more precisely targeted way. These actions should generate the equivalent of around 1 percentage point of operating profit which will be reinvested in our houses to sustain their growth and development.
And finally, we have created the conditions as said for Gucci's rebirth. But more about that in a moment. All of these actions create the foundations of the new strategy we presented in Florence last month to the financial community and part of the press. This strategy which I shall be describing is the result of collective work I must say so conducted with all of the group's teams. It allowed us externally to clarify our vision and I'm reassured to see that it was deemed both credible and ambitious. That's the balance we were seeking to strike in house. Importantly, it allowed us to align all of the team around clear, consistent and very concrete principles.
Our first priority is therefore to restore profitable and sustainable growth and this will be essentially driven by our houses. Houses that are singular and complementary and which now have a road map allowing them to build on their strength.
Gucci first of all. Gucci is engaged as you know in an in-depth transformation. It now has a new management team, a more agile organization and the essential work will be continuing. This will take a simplification of the brand's offering with a reduction of around 20% of SKUs. Also refocusing on the fundamental codes of the house, relaunching creative momentum and strengthening quality levels to ensure a flawless product experience. But more importantly, we have returned to the essence of the house, what makes it unique, instantly recognizable, and culturally relevant. The first reactions to the La Famiglia and La Prima collections are very encouraging, notably from the most influential customers which helps to boost desirability and set the tone. Likewise, analysis that we have conducted in women's fashion confirm the momentum and for the first time for a number of years the Gucci show was number one in terms of media impact. The cruise show in New York 10 days ago also confirmed Gucci's ability to echo and to be at the heart of people's conversations.
All of that has led us to set powerful ambitions for Gucci. For instance, generating a billion euros in additional revenue from leather goods by 2030 with a more distinctive and iconic offering. So basically the rebound will take time but it will be sustainable because it is based and grounded on very strong fundamentals.
Saint Laurent, a house as you know very well with a very powerful identity and a recognized authority in the world of fashion. Our priority is to amplify what makes it unique first by enriching its expression. A day wear collection that is more developed, more men's wear and leather goods positioned on higher, high-end segments. And in parallel, we're creating the conditions to double the volume of business in Asia by 2030 by making it more relevant locally and by increasing its visibility with a particular focus on China in order for Saint Laurent to really talk to China and be fully recognized on that market.
Bottega Veneta will continue to ramp up in the world of deep luxury, deeply rooted luxury based on discretion, excellent craftsmanship and scarcity deliberately. Our priority is to strengthen this positioning by affirming the iconic codes, the famous intrecciato, the woven leather that is part of Bottega's soul. We're also gradually expanding the universe beyond leather goods with more fashion both for women and men. And the momentum should allow us to double non-leather revenues by 2030.
Balenciaga. Balenciaga is playing a key role in our ability to talk to younger generations. It's a house that has a unique ability to influence culture and set the trends. Our aim is to transform that influence into sustainable growth. First by strengthening our key categories notably leather goods where there have been some fine processes and the women's wear offering which we wish to double by 2030. All of this by continuing to build on the potential of men's wear. And finally the brand also has high development potential in many geographical areas beyond Asia where it has proven extremely resilient.
Alexander McQueen, we're going back to basics to the sartorial roots, strong in women's wear and key like tailoring and occasion wear. We are simplifying the offering, rationalizing the network and strengthening the execution discipline with a clear priority: return to profitability.
Brioni is standing out in the world of ultra luxury based on unique expertise, tailoring and the art of tailoring. At the heart of the model, the personalization platform called Maestria, which is a key lever to generate value and loyalty. The house has a level of integration that is outstanding with 660 craftsmen and manufacturing that is done entirely in-house on formal wear. It's on that basis that it is gradually expanding its world while preserving the standards of excellence and exclusivity. Brioni also aims to become the reference within the group in the world of sartorial know-how alongside fashion and leather goods.
We're also developing additional growth levers. Jewelry is a first key lever. It is both resilient, highly emotional and still largely underexploited within the group. We have of course a solid foundation with houses such as Boucheron, Pomellato and Qeelin, but also significant development potential within our fashion houses including Gucci. With Kering Jewelry, the revenue should be doubling medium-term and the gradual integration of Italian manufacturer Rosi Fiorentino. Our ambition is to create a truly integrating platform that goes beyond the scattered initiatives from one house to another.
Kering Eyewear is a second structural pillar that is already a great success of Swami and it only took around 10 years. But beyond the current performance it's the potential that is important. We now have a true platform that can boost growth based on innovation, product quality, strictly controlled retail and we should be able to continue to grow revenues which reached 1.6 billion euros last year in under 10 years. It's also a great playground for new usages at the crossroads of luxury and technology notably around smart eyewear which opens up very promising prospects for the future.
The future, Kering Next, is what is going to bring together growth drivers of tomorrow. Our ambition is not to diversify just for the sake of diversification. It is to identify segments where the group has true potential and where we can generate value in a sustainable manner. We have included Jonvi 1735 of course an old house which has a unique heritage. It's the oldest house in the group, but we want to develop it as a reference within the group in tableware and as a key player in experience-based luxury. Beauty is another promising business line. The strategic partnership with L'Oréal allows us to grow very strongly in that field by combining the power of a global leader with the potential of our brands. We're also exploring long-term opportunities in other segments such as wellness and longevity. And with House of Wonders, we now have a tool that can serve to accelerate the development of emerging brands by giving them access to the group's capacities while preserving their identity. We are still highly selective and that is what has driven us to take a minority stake in Icicle which is a true nugget among luxury and fashion Chinese houses.
The strategy we have presented also in order to return to growth has a consideration for new geographies. China will of course remain a key market for our industry. But it's a market which is entering a new phase, a phase that is more demanding, more selective with a more local anchorage. Growth will be more qualitative, less driven by an expanding retail network and more by brand desirability and their relevance to local culture. In parallel, we have identified markets which have a very strong potential in house. We call them the six-pack: India, Southeast Asia, Brazil, Mexico, the Middle East around the Emirates and Saudi and Africa essentially Nigeria. These are high growth markets driven by the expansion of new customer bases, often younger and by favorable local dynamics. Taken together, they are already a significant growth driver. But success will not come naturally. These are heterogeneous, highly demanding markets which require a highly structured approach. And that is what we shall be working on group-wide.
I've just told you about the tools that will help us to restore growth. But there is a second need. We need to improve efficiency. That is why we are constructing cross-functional platforms that are group-wide: industry, customer, technology, sustainable development and support functions. And this should allow us to avoid loss of value. In industry, we're fortunate enough to have a European ecosystem of outstanding know-how which is at the heart of our product quality. But that ecosystem is driven in a fragmented manner house by house. We are therefore going to be implementing a much more integrated steering of all of this to allow us to adjust volumes much more precisely, to use our capacities much better and to reduce inefficiency. We can already say that we're now able to go much faster between the design of a product and its marketing without losing our precision and accuracy in parallel.
We are also deeply changing our supply model. We're transitioning from multiple suppliers to a logic of most favored partner. A favored partner is a partner with which we work in the long run. We are highly demanding with them but we also provide visibility and mutual commitments. That is what allows us both to secure their know-how, to elevate quality levels and to improve efficiency. And this should lead us to one percentage point of improvement of Kering's operating margin in the coming years. It's a first landmark for our new industrial director and I'm sure that we will be able to do even better.
There's going to be a change of scale through a program we've called Core which is our customer knowledge platform. It consolidates proprietary data from our houses and enriches them with external sources to build a much more integrated vision of customer preferences and behaviors and to guide our decisions from the product to the activation and allocation. So to take the example of the client pilot program launched at Gucci, the value generated by the use of intelligent data and artificial intelligence has nearly doubled with approximately twice as many sales resulting from targeted in-store initiatives, twice as many customers making purchases following outreach. In particular strong traction in mid-tier and entry-level segments.
And more broadly in terms of technology we're going to integrate more systematically data and AI in our processes. This will allow us to better anticipate demand, optimize product allocation and better manage overall operations. It will also allow us to simulate scenarios to adjust decisions more quickly and reduce organizational complexity.
Finally, on sustainable development, Marie-Laure, it's been one of Kering's strengths for many years. I will give the floor to you Marie-Laure in a moment, but just a quick word on the subject. I'd like to say a word about the transmission of knowledge. Last month we launched the Academia dell'Eccellenza which will enable us to train the talents of the future in key business areas, leather goods, jewelry, craftsmanship. And the academia relies on a network of schools in Italy which is really the heart of our industrial ecosystem and will allow us to train several hundreds of people every year. This is a truly necessary investment for the future.
And as you well understand now the key for the future is execution. We therefore must demonstrate our ability to deliver. We will run this transformation with the board's oversight using specific metrics: growth, operating margin, return on capital employed as well as brand desirability. In the medium term, we aim to gradually outperform the market in terms of growth. We expect to more than double our operating margin rate compared to 2025 in percentage terms and increase our return on capital employed to over 20%. At the same time, we will maintain strict discipline in terms of capital allocation and we will keep investments under control representing anywhere between 5 and 6% of sales. Last but not least, we will demonstrate consistency towards you with an annual dividend payout ratio of around 50% of the net current income group share. So those indicators all point into the same direction. Our ambition is to build quality controlled growth which will create long-term value. Yes, the 2025 performance did not meet this ambition, but Q1 26 has showed encouraging signs. We know that transformation of this magnitude will take time. I'm confident our strategy was developed on the ground by our teams and this is generally how you can build the greatest successes. Thank you very much for your attention.
Thank you, Jean-François. And I'll give the floor to Armelle Prouvost, the company's chief financial officer, who's going to present the 2025 results.
Thank you François. Thank you Jean-François. Ladies and gentlemen, dear shareholders, I'm going to present the 2025 results before we review the preliminary figures for 2026. As you know, following the strategic partnership we launched with L'Oréal in connection with the sale of Kering Beauty, which was finalized first half of 2026, Kering Beauty's operations have been deconsolidated from the 2025 financial statements in accordance with IFRS 5. Subsequently, all 2025 figures exclude Kering Beauty. The 2024 income statement has also been restated on this basis to allow for appropriate comparison. The key figures for fiscal year 2025 are presented on this slide. Sales for 2025 amounted to 14.7 billion and recurring operating income at 1.6 billion which represents a current operating margin of 11.1%. The company's free operating cash flow stands at 4.4 billion or 2.3 billion if we exclude the positive impact of real estate transactions. The company's net debt was reduced to 8 billion at the end of December 2025. We will come back to this in a moment.
So in many respects, those results mark a low point for the company. But let's be clear. These figures establish the starting point from which we are now driving our turnaround and they demonstrate the financial discipline that underpins our strategy. Revenue for 2025 declined by 10% on a comparable basis and 13% on a reported basis compared to 24 with a stronger euro. It is important to highlight the sequential improvement we have achieved in the first half with the final quarter showing a clear acceleration to minus 3%. This indicates that our actions are starting to pay off with our customers which is a first encouraging sign.
Our geographic footprint remains balanced although we have observed some adjustments in the mix over the year. Asia Pacific down two percentage points to 29% while North America and Western Europe have increased by one digit point each. Japan and the rest of the world maintain stable shares. Recurring operating income is 1.6 billion down on a year-over-year basis. The current operating margin of 11.1% certainly reflects the pressure on revenue but it also reflects the operational discipline implemented now over the past several quarters. Rigorous cost management, clear arbitrations, targeted investments. Our discipline provides a sound financial foundation upon which our turnaround is built.
As a result, we achieved 925 million euros in savings in 2025, reducing our operating expense by 9%. These are not just cuts, but they're actually effective reallocations of resources aimed at increasing the company's efficiency while preserving its creativity and restoring our ability to invest in our houses. We accelerated the store network. Fewer stores but in better and more strategic locations.
I would now like to take a look at the performance of our houses. Gucci's revenue in 2025 amounts to 6 billion down 19% on a comparable basis. Direct to consumer sales accounted for 92% of revenue with a sequential improvement in Q4 primarily driven by North America and Asia Pacific as well as a number of new product launches. The launch of La Famiglia collection along with related activations has begun to put Gucci back into the spotlight. Recurring operating income reached 966 million euros representing a margin of approximately 16% driven by strict cost control and network optimization with 32 stores closed.
Saint Laurent posted revenue of 2.6 billion euros in 2025 down 6% on a like-for-like basis with sales continuing to improve in Western Europe, Japan as well as North America. The momentum is strong in leather goods, women ready-to-wear as well as footwear. Recurring operating income is 529 million. That's a robust margin of 20% thanks to efficiency gains and very targeted investments in strategic locations and stores.
Finally, Bottega Veneta posted a 3% increase on a like-for-like basis with revenue of 1.7 billion euros. The house posted strong performance in its own stores which accounted for 86% of total sales. Annual recurring operating income reached 267 million up 5% representing a margin of 15.6% driven by an improved gross margin and investment in communication, marketing and store network to sustain the brand's strong momentum.
The revenue of other houses was down 6% on a like-for-like basis with contrasted performance. Balenciaga showed sequential improvements with positive direct to consumer sales in the fourth quarter in Asia Pacific and a good momentum in North America. Alexander McQueen is still under pressure with an ongoing restructuring plan which includes 21 store closures in 2025. Brioni another solid year with Q4 showing strong double digit growth.
Last but not least, jewelry houses are confirming their excellent momentum. Boucheron posted exceptional results with particularly strong performance in Japan and Asia Pacific. Pomellato and Qeelin are also growing. Jewelry remains one of the company's most dynamic growth drivers supported by ongoing investments and selective network expansion in particular for Boucheron. The recurring operating income for other houses posts a loss of 112 million euros weighed by flat performance of Balenciaga and losses at Alexander McQueen in spite of the restructuring program.
Last but not least, Kering Eyewear generated sales of nearly 1.6 billion. That's a 3% increase on a like-for-like basis driven by sustained growth in Western Europe. And the optical category operating income reached 252 million representing a solid margin of 15.8% which is slightly below last year's level due to higher tariffs and continued strategic investments in Maui Jim to support its international development.
Please allow me to briefly review the other items on our income statement. Other non-recurring operating income and expenses total 584 million consisting primarily of real estate losses, impairments and restructuring charges as well as a fine from the European Commission. Net financial expenses total 594 million which is a slight improvement with net debt costs flat at 328 million and an average coupon rate unchanged at 3%. Corporate tax amounted to 354 million which is significantly less with an effective rate of 36% primarily impacted by losses in the UK Alexander McQueen and the reclassification of Kering Beauty as discontinued operations. Finally, net income attributable to the group from continuing operations excluding non-recurring items amounted to 532 million.
Operating free cash flow excluding real estate transactions amounted to 2.3 billion down 35% compared to 2024. Operating investments excluding real estate transactions totaled 800 million down nearly 30% or 5.4% of sales focused on the transformation of our store network and highly selective developments. Net debt continued to drop, confirming the company's deleveraging.
Thanks to disciplined capital allocation, strong cash generation, and real estate refinancing transactions, the company's net debt was reduced by 2.5 billion, standing today at 8 billion at year end, representing a leverage ratio of 3.4. In the first half of 2026, Kering transaction and other real estate refinancing deals significantly accelerated the company's deleveraging resulting in a strengthened balance sheet.
Let's now quickly move on to the balance sheet. Assets held for sale were reclassified for a total of 5.2 billion including 3.7 billion net related to Kering Beauty which was disposed to L'Oréal and the completion was announced on March 31st and 1.3 billion for the Via Monte Napoleone building the transaction which was announced April 1st. The net debt to equity ratio improved to 51% compared to 67% last year benefiting from real estate refinancing transactions. Inventories dropped by 8% while the operating working capital requirements increased to 17.7% compared to 16.9% a year before. Reducing inventories is still a priority with confirmed continued decline through 2026.
Let's now turn to the initial performance highlights for 2026. During the Q1 revenue presentation, we introduced a new segmentation of our businesses aligned with our strategic priorities and organized around four operating segments: Kering Fashion and Leather Goods including Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen and Brioni. Kering Jewelry including Boucheron, Pomellato, Dodo and Qeelin. Kering Eyewear. And Corporate and Other including corporate services and Jonvi 1735. Gucci is also the subject of a separate communication given its weight in revenue and our commitment to transparency in the context of the current transformations.
Q1 26 has showed encouraging signs with group revenue of 6 billion which is stable on a like-for-like basis compared to the same period in 2025 in spite of a complex and uncertain environment. The six-point currency effect explains the decline in reported figures. Performance across various segments remains contrasted but all are showing sequential improvements compared to the quarter before. The fashion leather goods segment declined by 3% with Saint Laurent and Balenciaga boosting growth while Gucci continued its recovery. Kering Jewelry is confirming its role as a driver of sustained growth particularly supported by Boucheron. Kering Eyewear grew by 7% and Corporate and Other by 10%.
Regional trends are improving with the exception of Western Europe and the Middle East which were unfortunately affected by the conflict which has had a one-digit point impact on performance. The Middle East has of course been the subject of increased vigilance since February. The safety of our teams there has always been a priority and the network is fully operational. Elsewhere, North America stands out with strong acceleration. Asia Pacific improving sequentially and Japan which continues to grow thanks to jewelry.
The quarter is also marked by significant progress in the company's strategic execution and balance sheet strengthening and as you noted the creation of Kering Jewelry, the gradual integration of Rosi Fiorentino one of the largest independent luxury jewelry manufacturers, the closing of the partnership with L'Oréal in beauty and the new real estate refinancing transactions. Meanwhile, the company continued to optimize its network and strengthen discipline regarding investments and costs.
In this very uncertain geopolitical and macroeconomic environments, we remain focused on both agility, discipline, and excellence in execution. Based on the brand strategies presented by Jean-François earlier, in 2026, our goal is to resume growth and improve margins. The chart you're seeing illustrates the performance of Kering's share price over the past 12 months. Rest assured, all teams are fully committed to improving the company's performance to make sure that this is reflected in the company's stock price. We're confident in our reconquering plan presented April 16 to sustainably reposition the company as a leading challenger in the industry.
The board of directors is proposing a dividend of 3 euros per share as well as a special dividend of 1 euro per share related to the sale of Kering Beauty to L'Oréal. Both dividends are subject to your approval today. Shareholder remuneration is one of our top priorities in terms of capital allocation. Our ambition is to resume a dividend growth trajectory starting in 2026 in line with the expected improvements in our performance. Thank you for your attention.
Thank you. Now over to Marie-Laure who's going to tell us about our new road map in the world of sustainable development.
Thank you. Dear shareholders, greetings to all. 2025
2025 was a crucial year in the field of sustainable development too. This year marks the end of a chapter that opened 10 years ago, that of our strategy based on fashioning the luxury of tomorrow, and has now entered a new phase. New steps that are even more ambitious, where sustainable development, by strengthening the desirability of our brands and risk control, becomes increasingly and more than ever a powerful performance and value creation lever for our houses and a key element in the reconquering strategy of our group. Kering is now recognized as a leader in sustainable development, and based on what we have already built and driven by the vision of our new CEO, we are now creating new momentum. Our ambition is to go even further, even stronger for our customers, for our houses, and for our shareholders, to continue to create flawless, innovative luxury that is therefore more desirable.
Over the past few years, we've rolled out an exemplary and ambitious road map in the face of increased regulatory pressure. We have integrated the latest scientific advances and we have taken account of our customers' expectations. We have fine-tuned our targets, our actions to allow our houses to be on the cutting edge. Our environmental and social commitments are reflected in concrete and measurable initiatives based on data and aligned with international scientific references and benchmarks. We have transformed our model by integrating sustainable development into the key functions of the group and more importantly within our houses.
We have gathered many international and national accolades which have continued to encourage us. The impact of our action is essentially environmental. In 2025, we reduced our global emissions of greenhouse gases by 34% across scopes 1, 2, and 3. Since 2021, we have stuck to our commitment to animal welfare. The use of animal fur has now been entirely banned. We have also strengthened traceability within our value chains. Our rate of traceability is now 97% for our key ingredients.
And we're also contributing actively to the regeneration of vulnerable ecosystems through the creation of a regenerative fund for nature alongside Conservation International, a project that covers more than a million hectares in many countries. Our impact is also social. We have strengthened the social standards of our suppliers and those of our employees through a parenthood policy that guarantees the same rights worldwide. We provide training to our employees about the challenges of sustainable development, but also our future employees with the institute led or the London College of Fashion or the University of Shino in China.
The transformation of the luxury and fashion model requires collective action, and Kering has played a major part in creating and launching sectoral initiatives such as The Fashion Pact or more recently the Watch and Jewelry Initiative 2030, which was co-founded with Cartier. And finally, we consider innovation is an essential lever for the sustainable transformation of our model by collaborating with more than 225 startups, by contributing to create innovation hubs dedicated to materials and jewelry, to identify, to test and deploy revolutionary solutions with a clearing generation awards through which we can support in China, in Japan and now in the Middle East and North Africa the best local startups and the most promising young talents. And finally, we explore new models through investments made through Kering Ventures.
Our houses themselves are increasingly creative. A few examples. Boucheron, for instance, reinvented the jewelry case with new boxes based on just two natural materials, namely aluminum and wool felt, which reduces their weight by 75% while getting rid of plastic altogether. Gucci is supporting farmers in their transition towards more sustainable practices with a number of dedicated projects on key raw materials such as wool, cotton and silk to increase the share of regenerative materials in their collections. Bottega Veneta is continuing to explore innovative materials with woven mycelium, which is a mycelium drawn from a very low impact process combining sustainable innovation and craftsmanship. Mycelium is a mushroom. Brioni reopened its school in Penne, Abruzzo, to secure the transmission of its outstanding know-how.
So what is the way ahead? Thanks to Luca, we have a very clear purpose: accelerate our transformation by further integrating social and environmental concerns in the group strategy and therefore in our decisions. Our desire is to boost the group's performance and the desirability of our brands and their products. Indeed, customers are increasingly demanding in terms of transparency and impact. And luxury must deliver on that by being absolutely flawless. And by integrating sustainable development, we optimize our operations and strengthen the resilience of our value chains in an international environment that is unstable and complex.
In order to increase our performance, we have selected three strategic priorities for the coming years. First, strengthen the efficiency and accuracy of our production. Luca mentioned this earlier. We are accelerating our transition towards a demand-driven production in order to have volumes that reflect sales, to preserve the exclusiveness of our products and also to reduce our environmental impact. In order to achieve this, we use digital tools with highly advanced data processing in the field. We are creating a KPI that measures efficiency between production and sales. We are developing an architecture of the collections with greater discipline, factoring in eco-design from the early onset of product design.
Second priority: investments in talent, in know-how, in the value chain because luxury is first and foremost a business driven by men and women. We shall continue to strengthen our social standards and we shall focus on craftsmen, creative talent and sales teams, notably by developing training initiatives. I won't go into details because Luca has already told you about the Kering Sustainability Academy which will be opening at the end of the summer and that will be based in Milan. We also wish to work with preferred partners, namely strategic long-term partners within our supplier ecosystem. They will be selected based on highly demanding criteria based at group level in terms of excellence and know-how but also in full compliance with the best environmental and social standards.
Third priority: materials and models of the future. We are accelerating the use of alternative materials, even more desirable, that are either bio-sourced or regenerative while strengthening traceability and responsible supply. We're also developing high added value services involved in the circular economy: repair, certified resale or digital product passport stocks, the so-called DPPs. These priorities come with very clear and measurable targets. We have confirmed our ambition. We wish to reach net zero by 2050 with an intermediary step of a reduction of 50% of our emissions by 2033. We are aiming for 30% of regenerative materials by 2035. We can therefore reduce our dependency to leather by around 30%. This can be measured in square meters of leather per million euros of sales.
And finally, we are committed to reach 100% traceability and alignment of our raw materials with the Kering standards and to have a positive impact on the priority water ways in line with science-based targets for nature. As you will have understood, we are determined. We are even more strongly determined and committed to playing an important part to move forward the sustainable development agenda within the luxury and fashion sectors. With our teams across all of our houses and in close collaboration with our partners, we are continuing to face the challenges of sustainable development through creativity, pragmatism, and a sense of urgency. And this often paves the way to new solutions.
I would like to very warmly thank all of the teams who have worked hard on a day-to-day basis. Their pioneering spirit continues to guide our action, our ambitious action to create the luxury of tomorrow. Sustainable development is more than ever an important lever for performance and resilience. It's indispensable if one is to create exceptional products that make people dream. It increases trust and desirability. It creates value for our customers, for our group, and for its shareholders. Our action plan is an essential contribution to reconquering our road map. Being committed to a more sustainable luxury is respecting the heritage of our houses, building on the future, nourishing true luxury and investing in next luxury. Thank you for your attention. And now back to Luca.
Thank you for this brilliant presentation. Dear shareholders, let me now tell you about the composition of the board of directors, which as you know is a crucial part of our new governance based on the separation of the functions of chairman of the board and chief executive officer. Governance in place as you know since September 15th. The board of directors is of course fully mobilized to support this new transformation phase. A phase that requires constant rigor, consistency in action and also the robustness of the work conducted by our board of directors.
So the quality of the board is crucial. Over the years and with your support we have set up a very robust board of directors with a lot of expertise, a diversity of expertise and the extreme quality that is there. It is deeply committed, deeply engaged and collectively works in the best interests of the group. The setup goes far beyond standards that could be expected from a controlled group and reflects our will to lead by example. The great value of this council is due to its hard work and to the interactions between directors themselves and the management team. So in 2025 the board met 13 times, not to mention the committee meetings of which there were around 20.
The board took part in the structural initiatives of last year and notably the reconquering road map. We worked very actively to define the priorities, to define the targets and to support top management in the execution of the strategy. At the same time, we provided attentive follow-up of the group's performance of all of its houses and with a focus on the main levers: sales momentum, execution discipline, financial discipline and piloting of investments. It's work that takes place in an international environment traversed by uncertainty on the commercial, political, geopolitical side and we're of course closely monitoring the situation particularly when there are impacts for the group. Our discussions with top management are regular, transparent, very fruitful and everyone is working for the group's success.
The four committees of the board fully contributed to the momentum: the audit committee, the appointments and governance committee, the remuneration committee and the sustainable development committee. Each of these committees worked in depth on the issues under their remit to allow the board to take well-structured decisions in these various fields. Our action is of course an essential foundation for the quality of our governance. Two of these committees, the compensation and benefits and the appointments and governance committees are led by two independent directors, Madame and Monsieur Se, whose term of office is to be renewed today. Their experience and quality of their contribution are essential to this and I would like to thank them very warmly.
Vanich is the pivotal director. She chairs the comp and ben committee and plays a very important part in the dialogue with institutional investors. She contributes what they have said to the board and this truly helps to enlighten our decisions through the fine understanding of the medium and long-term expectations of our main investors. She also discusses with other directors on a regular basis which of course improves the quality of our exchanges and the decision-making process. As for Se, who's in charge of the appointments and governance committee, he of course took part in the work which led to the change in governance and the recruitment of Luca as a group CEO. His experience in boards of major listed global groups and his knowledge of governance and his outstanding career as a business leader is extremely valuable.
Three of our directors will be leaving the board after this general meeting, whose term of office is reaching an end, and Monsieur who's decided to resign for personal reasons. I would like to thank them very warmly for the work they have put into the board. So I would like to thank them on behalf of the group and in my own name. Yona Deisog, who contributed an in-depth knowledge of the world of luxury and told us about artificial intelligence, digital strategy. And I would also like to say a few words about Je, who was for almost 18 years a director of the group. He supported us. He's extremely rigorous and demanding, particularly as chair of the audit committee. He was also a pioneer in terms of commitment to sustainable development which very early on became a part of our strategy. His personal investment at the service of Kering was for our group, for my family and for myself personally extremely valuable and we are hugely grateful to him and would like to thank him very warmly today.
Finally, we propose the appointment of Mrs. Maren Shin and Mr. Laurent Plman, who are two highly experienced executives in the luxury industry. They both share experience in the luxury industry and in managing prestigious brands. Maren spent more than 35 years at Chanel where she led the haute couture division for nearly 10 years. She held roles in marketing, talents development and transmission of know-how and expertise. Laurent Plman leads the Mandarin Oriental Group, a leading player in the luxury hotel industry. He has built his career with major companies including Christian Dior, P&G and Unilever. He brings to the board of directors more than 30 years of experience in both luxury, beauty and consumer goods. So those appointments reflect our continued commitment to provide Kering with the governance structure that is best suited to its challenges. I hope they will receive your support. Dear shareholders, thank you for your attention. I would like to invite Maren to the podium for a few introductory remarks.
Ladies and gentlemen, dear shareholders, I'm very happy and deeply honored to stand before you today. As François-Henri said, for over 35 years, I have held a number of operational, strategic, leadership roles, namely at Chanel, one of the leading houses in the luxury industry. My initial training as a doctor of pharmacy and then later a degree in business management and marketing led me to join the fragrance and beauty division where I initially held international roles in marketing and product development. This first experience provided me with fundamental values which helped me throughout my entire career: standards, rigor and a constant focus on quality.
I then took the role of the head of international training with the mission of supporting sales teams to develop their expertise and improve the quality of customer relationships through innovative training programs and programs that are truly adapted to the needs of the industry. In 2011, I joined the fashion division to establish the European fashion training school. This was a truly strategic initiative within an integrated distribution network. Sales teams represent the house but also convey the messages of the house and play a vital role in the customer's experience. Between 2017 and the end of 2025, I was responsible for haute couture as well as the haute couture and ready-to-wear affiliates. With this role, I was able to be involved in the entire value chain from design all the way to collections to their development and marketing, including the transmission of know-how, craftsmanship and ongoing celebration of excellence in this world. Creativity, exclusivity, excellence, desire, storytelling, and economic considerations all combine to offer a unique and lasting experience.
So 35 years of passion, constant learning and discovery and even today I remain driven by a true sense of curiosity, a wish to understand and ongoing passion. So if you approve my appointment to the board of directors, I will be committed to provide my expertise in crafts, their developments and their transmission, my understanding of creative processes as well as the challenges of excellence, my expertise and knowledge of expectations of a demanding international clientele as well as my vision of the luxury industry which is going through profound change with new dynamics and codes that are constantly being redefined. Thank you so much for your attention.
Thank you Maren. I would now like to invite Laurent Plman to introduce himself.
Mr. Chairman, Mr. CEO, ladies and gentlemen, dear shareholders, hello. I'm very pleased to be here with you today. My name is Laurent Plman, CEO of the Mandarin Oriental Luxury Hotel Group. I'm very pleased to share some of my experience with you. For over 35 years, my career has been guided by a single passion, brands, and a single ambition, which is to develop and build strong brands with a global growth strategy to create exceptional experiences, enhance desirability, and perhaps most importantly to support men and women, artists, artisans, creators, managers, professionals who bring them to life.
I started my career with Unilever where I spent over 25 years working in marketing and then in general management roles both in Europe and in Asia. So that's where I became familiar with consumer goods sectors across different categories such as detergents, ice cream, especially a day like today it would make sense to have some ice cream, industries where global competition is very fierce. I then joined LVMH to lead all of its fragrance and cosmetic operations in Russia as well as Dior Couture's business. Then I went back to Unilever to manage a strategic acquisition and lead its global hair care category. Then I took the management of Kao's beauty division in New York. More recently, I spent over four years at the head of LVMH's largest beauty business as CEO of Parfums Christian Dior.
Today I continue my career in the luxury industry but on the experiential side, leading the transformation and global expansion plan of Mandarin Oriental which is a leading player and rapidly growing luxury hospitality company with 46 properties to date, with the ambition to double our business in the medium term. And I live in Hong Kong which is a location that really broadens my global perspective. Luxury and new technologies in Hong Kong. I also act as France's foreign trade advisor. I'm also a director of Hair Clinic Group which is a holding company of Hair Clinic, a Danish startup company specializing in hair care. Last but not least, as a graduate of INSEAD, I'm deeply committed to this very prestigious business school and I'm serving on the board of directors of its foundation. As a matter of fact, their mission is to support academic excellence, create ties with the business world and ensure social inclusivity and diversity in its recruitment.
I'm deeply honored to join, if you give me the opportunity to do so, the board of directors of Kering Group whose brands are renowned around the world. I hope I can give you my international and contemporary expertise shaped by more than 30 years in the luxury industry, consumer goods and service brands. I wish to offer the board my experience in the development and brand transformation, combining respect for heritage, desirability, innovation as well as the culture of excellence and execution. My career also allowed me to develop a deep understanding of luxury clients, their evolving expectations regarding creativity, service, the search for meaning and experience. I would like to extend my warmest thanks to both François-Henri and Luca for their trust and I hope dear shareholders I can also count on yours. Thank you.
Thank you. Over to Veronica who is now going to present the compensation of corporate officers.
Thank you. Good afternoon, ladies and gentlemen and dear shareholders. It is my responsibility to present to you the work of the board of directors and the compensation committee which I have the honor of chairing regarding the compensation of corporate officers on which you are asked to vote. The past year marked an important milestone which was characterized by the implementation of a new governance. 2026 is a year of strategic transition with the implementation of the reconquering plan. In this context, you are asked to vote on seven resolutions covering both fiscal year 25 and the policies applicable to 2026.
Resolution 8 concerns information regarding the compensation of corporate officers for 2025 as presented in the company's universal registration document. Resolutions 9, 10, and 11 concern the compensation of executive officers for 2025, which is a year which covers two periods of governance. With regard to the chairman and chief executive officer, his compensation has been prorated through September 14th. It includes a fixed part of €845,000 and an annual variable component of €448,000. In addition, there is a payment of €2.3 million under a previous multi-year plan which will be fully settled in 2026.
For the chief executive officer who took office on September the 15th, compensation for this period amounts to €651,000 in fixed pay and €1,210,000 in variable pay reflecting the full achievement of the objectives assigned. These objectives enabled transformative changes for the company with the establishment of a new organizational structure with two sectors of excellence, industry and client, the establishment of a jewelry business and the reinforcement of Gucci's governance around a new management team. Meanwhile, major decisions were made to reinforce the company's strategic and financial flexibility and in-depth work with teams and partners allowed us to develop a new strategic road map which was presented back in April.
Finally, this appointment was accompanied by the payment of a specific compensation package of €20 million, 75% in cash and 25% in performance shares intended to compensate the new CEO for potential lost earnings resulting from his resignation from his previous employer. With regard to the chairman of the board of directors, his prorated fixed annual compensation amounts to €27,000 excluding any other form of compensation related to this position. He also received a partial payment of the performance shares that had been granted to him in 2022.
I would now like to move on to the compensation policy for 2026. The structure applicable to the CEO remains unchanged and again is largely based on the company's performance with nearly 90% of compensation being variable. It includes a fixed component of €2.2 million, an annual variable cash component ranging from 0 to €6.6 million depending on results, and a long-term variable component in the form of performance shares. So this structure reflects a fairly simple logic. We want to make compensation a direct lever for strategy execution.
The annual variable component is 60% based on financial targets, revenue and EBIT, with a performance threshold below which no compensation is paid for this specific component. The remaining 40% is based on strategic priorities: the implementation of the industry and client divisions as well as the jewelry division, enhanced desirability of the houses and equal pay between men and women. Long-term compensation is assessed over a three-year period and combines financial criteria, stock market criteria, including TSR, which measures the total shareholder return, as well as strategic criteria related to the company's climate trajectory and diversification of the nature of its business. This is supplemented by benefits in kind and by the mechanisms governing the termination of employment which remain unchanged.
With regard to the chairman of the board, the policy remains unchanged with fixed annual compensation of €700,000 gross which constitutes its only and sole component. Finally, directors' compensation also remains stable with a total budget of €1.4 million, 60% of which is contingent upon attendance. Ladies and gentlemen, dear shareholders, the proposals before you reflect a consistent approach. We want to closely align compensation with performance and the creation of sustainable value for the company. The aim is to establish a framework that is both clear, demanding, and motivating to support the company's ambitions. Thank you for your attention.
Thank you very much. Now over to Mrs. Benedict Mara, auditor at the Deloitte firm, who is going to tell us about the conclusions of the college of auditors.
Thank you Mr. Chair. Greetings to all shareholders on behalf of PricewaterhouseCoopers and their delight. I have great pleasure in reporting on our proceedings for fiscal year 2025. I shall not read out everything in detail but shall tell you about the key highlights. We have issued reports about the verification of Kering SA's annual accounts and the consolidated group results at December 31st 2025. Our mission is to provide reasonable assurance that the accounts are sincere, that they do not include significant errors, that they apply accounting principles, that they comply with all applicable legislation.
We audited the group's main subsidiaries everywhere in the world. Our due diligence was adapted to Kering's organization, to its specific features, to the risks identified based on criteria that are both quantitative and qualitative. This was conducted both on the accounts and on the internal control processes. And we covered current operations as well as exceptional events in the year 2025, for instance with the change of scope and strategic partnerships with L'Oréal and the disposal of Girard-Perregaux, the refinancing of real estate assets. Two points were judged particularly significant and required attention. First, the loss of value tests made on spreads of acquisition and brands which account for a large part, almost 30% of the consolidated balance sheet. The second one was for the depreciation in the evaluation of inventories which features in the balance sheet in the amount of €1.4 billion.
As for the accounts, the annual accounts of Kering SA, we particularly noted the evaluation of equity in the assets of the balance sheets for a net value of 15 billion euros. We examined the main judgments underlying the evaluation, checked that the information was adequate. We also strove to examine the management report presented to the board of directors, notably with the financial and accounting information about compensation and benefits for the corporate officers and those that regard corporate governance. We had regular discussions both with the audit committee and the board itself and therefore we had been given all necessary resources to conduct our mission and we issued an unreserved certification both for the annual accounts of the mother company and that of the group.
So again for the ordinary part of this meeting we issued another report about the regulated agreements that feature in the universal registration document. No new such agreement has been signaled. So there is just that for the provision of services provided by Artémis to the benefit of the group in the amount of €5 million for the year 2025. And finally for the resolutions about the company's share capital, we issued three reports which feature page 72, 73 and 74 in the convening documents you received. These concern the authorizations or delegations of confidence to be granted to the board of directors to conduct a number of operations that have effects on the share capital and benefit the group staff. We have no further observations.
Although this falls under the conditions that the law wants and in order to allow you to appreciate the waiver of your preferential subscription right. We also issued a certification report for information about sustainability. Our work consisted in providing limited assurances about three specific points. First, the compliance of the process implemented by the group to determine information in the field of sustainable development in line with the SRS reporting sustainability reporting European standards, the compliance of these standards in the publication of the information in the management report and the respect for publication duties of information. Based on our verifications, we have identified no significant errors, omissions or inconsistencies. That is, ladies and gentlemen, my report. Thank you for your attention.
Thank you ladies and gentlemen. Before we move on to the question and answer session, I would like to thank the Kering team who prepared this annual meeting. I would like to thank our auditors at Deloitte who have worked with us with great professionalism and rigor for more than 30 years and who surely there will be a vote on their replacement at the end of this annual meeting. So before we move on to the Q&A, yes indeed we're now going to move on to the Q&A session. Before we begin, let me state that we have received a number of written questions, questions in writing. One from the FIR, the Fund for Responsible Investment, which sent a number of questions about environmental, social, and governance topics to which we answered in writing. And our written answer was uploaded to the company's website. Prior to this meeting, we have also received two questions in writing from individual investors about the difficulties these individuals have encountered due to construction in a real estate asset which will be housing one of the group's Maisons. So although these persons are shareholders, these are questions about their own personal situation and therefore do not fall under the scope of this general assembly. Of course, we understand their concern and we have made sure that persons in charge had indeed made contact with these individuals who are shareholders in order to provide the best possible support in the pretty serious situation in which they are and notably in their discussions with the company that is currently still the owner of the property and in charge of construction. All of that said, before we open up this session, the only persons who can ask questions are shareholders themselves. To make the debate easier, of course, try to be brief, but please state your name and the number of shares that you hold. You may now ask your questions. Simply raise your hand to ask for the microphone.
Thank you. I just hold one share. I am deeply honored to be taking part in my first general meeting of Kering and it's a great honor to be talking to you directly, Mr. Pinault, Mr. De Meo. I have a couple of brief questions. The first one about the partnership with L'Oréal. Will that partnership change over time? And then my second question is about the share price which is still very low. It is obviously undervalued. Do you intend to conduct share buybacks under resolution 18 to support the share price? And then this is not really a question. It's a request. Can I take a selfie with you later on? With Mr. Pinault and Mr. De Meo later on.
Should I answer the final question? Certainly. With great pleasure. Perhaps Luca can answer your first question and I'll answer the other one about the share buybacks.
Well, in fact, we are in a phase where we are kicking off operations for the brands that are part of the agreement scope. As you know, we talked about that before. There's an opportunity created by the deal to expand our collaboration to a neighboring category which is quite significant, namely wellness and longevity. So we're going to need to start to activate the project. Things are going pretty well. They're one of the best if not the best partner in that field and we have a lot of dreams in common and I want things to happen.
For the share buyback, our priority in executing the reconquering plan has always been very pragmatic. We may again consider resorting to that when the conditions are met. And what about the photograph? I don't know.
Hello. Individual shareholder. I bought my first Kering shares in French Francs in the previous century. The company was called Pinault-Printemps or Pinault-Printemps-Redoute. Yesterday, the share closed at €250.40 plus 4.44%. €354.20, €60.16. Those were the extremes of the year. In March 2022, Avestia the magazine said that last year Apple launched a division by four of its share capital. A few weeks ago, Alphabet said it was dividing it by 20. Amazon is considering the same operation for May. A survey by Bank of America on splits made since 1980 shows that the divided shares beat the index, the S&P 500. In May 2022, Benoît, chairman of Kering, said that it would be desirable to reduce the average age of shareholders. With a share at €160, that's a high individual share price. I think that for €250, I will keep my shares, but not buy any new ones. Do you think you could divide the shares, split the shares to boost the share price? Yes, I bought my own shares in Francs obviously, so you're not the only one.
Thank you sir for your question which is rather technical. We do not intend to split the shares in the medium or short term because when you split the share price and make it more affordable in a sense, but you're talking about essentially American tech giants which have reached huge valuations, but splitting the shares creates more dynamics, obviously a better circulation. In this particular case, nothing seems to indicate it's interesting. What you're saying is interesting but nothing seems to indicate that there's a problem of liquidity of the share. Trading of the share has not really very much varied. There's a lot of trading. All of that is rather requires a lot of technicalities, notably in conducting general meetings and so on. And as France and Luca just explained, the priority for us is the reconquering plan and all of our energy will be dedicated to that quite obviously. When the share price, well I never bought share prices in French Francs although I was already born in those days, but the share price was much higher and at the time we had thought about splitting it but €250 at the current share price is really not encouraging us to do that.
Greeting. I hold one share. I have three short questions. First, could you give us an estimate of the number of job cuts that are going to happen with the closure of around 100 doors? Just an estimate perhaps, I mean globally, not just in France because of course you have doors all over. Second, I was very fortunate to attend your capital market day, that was fantastic, and to talk with investors who were somewhat disappointed. Of course they were very much impressed by a lot of things but they were expecting Mrs. Valentini that she would explain her concept for Gucci doors because when you renew, renovate a point of sale with a new concept, it often boosts revenues. So perhaps you could tell me a little bit more about the Gucci store concept, when will it be revealed? And then my third question, first of all, congratulations to choose Mr. Plman who is at the helm of a fantastic company where I in fact myself organized an event once. Should we expect a Gucci hotel or a Balenciaga hotel because many brands are thinking about expressing their spirit in hospitality. It is very much the trend at the moment.
I wonder if he's been to answer. Hello. Three things. On jobs, I'll let you do the math. If you look at the number of employees each store has, you can multiply by the reduction in the number of stores which we have very clearly stated including during the capital markets day. So it's around 25% of doors globally. We have also said that this year we would reach 100 closures. It was 75 last year. So, I'll let you do the math with a caveat. In retail, we have around 25-30% turnover a year. So, it's a pretty fast-moving environment. People change brands, people change jobs, people change sectors. The big challenge for us, of course naturally, there are 25-30% of the sort of natural attrition. So there could actually be zero impact on jobs. But the big challenge is to retain the best, those who are the most loyal and to put them in remaining points of sale that are high performance. So what we're trying to do is to of course keep the impact in terms of job cuts to a minimum. And so it's not really a concern for us.
As for the Gucci store concept, I don't think there's very much to explain. I think you just need to see them. And I would say that the good news, as I was saying in my introduction, is that as part of the reconquering plan there is of course a kind of re-engineering of retail but also a lot of money has been put into renewing the stores. At least two-thirds of the stores will be renovated and I believe that at Gucci it would probably be even more. Sometimes it's just refurbishment. Sometimes the store moves location or sometimes they're entirely new stores. What I really want to do is that of course the concept that we're discussing with Francesca, with Delma, with others, these stores need to express the brand's values first and foremost to elevate the level of quality perceived as we're determined to reposition Gucci in the place it deserves. And interestingly, we're going to be very much focusing on defining the store layout in order to accommodate all of the new business segments we're trying to grow and that are in the plan. And one example, if we do jewelry at Gucci, very clearly there's a huge opportunity to have parts of the store dedicated to the jewelry. You need to have secure doors. You need to have a reserved area and so on. So, we're going to be very much focusing on ramping up on an upmarket move. There are a lot of stores that have a pretty outdated identity. And then the actual layout, the actual features of the store are important to maximize profitability per square meter.
The hospitality, sometimes brands say ah why don't we do this or that. Gucci, so very clearly now that we have Mr. Plman on board. He's probably going to have a, he's obviously much more competent than I am. We might discuss that. There might be possibilities for cooperation. I believe it's a sector that of course it's trendy at the moment, but it's a real job. It's a different job. It's not necessarily more profitable than other product categories. It depends how you do things. But we don't want all of the additional business to be dilutive. We want it to be accretive. There's no actual French word for that, but and I believe that we don't want to be followers or me-too's. I think a lot of players have already embarked on that in the luxury sector. But if I were to prioritize something, I would probably dedicate the energy of our managers, of our team on categories that are very high growth. Hence our commitment to longevity and wellness and jewelry where we have a very strong foundation. All we need to do is to put our foot down on the accelerator. Thank you.
Okay, we're going to take question number five.
Hello, Spanish shareholder.
I have 30 stocks. Mine is 32%.
You have many more than I do, so you have all my sympathy. Thank you so much for the presentation, especially the company's strategy was very interesting and very clear. I'm a bit surprised for two reasons and I'd like to hear you on those. You talked about India in the six-pack. During the Hermès General Assembly, India was considered as a non-priority market for tariffs because of the tariffs, very high tariffs for luxury product imports and major distribution retail difficulties. What places Kering in a better position? And if you're successful, that would be good. But I'd like to understand how. And likewise in Africa and Nigeria, LVMH has an African strategy which is focused on spirits and luxury articles, prestigious articles with an entry ticket which is much lower than jewelry and haute couture, about €50 for a bottle of champagne, which is typically the kind of products you don't have in your portfolio. So, I think it's a good idea to go there. The question is how? It's not very clear since your presentation.
Thank you for your question. Luca, would you like to pick up the question?
Well, this is a strategic discussion. I don't know if this is the right place to do so and I don't know if we really have enough time to dive into the details. I think that exploring these growing markets is interesting and I think it reflects our interpretation and how we see luxury in the 15 to 20 years. We think luxury is going to emerge in different categories and in new geographies. So I think this move illustrates the fact that we at Kering want to be as prepared as possible for the future world of luxury and those countries, this country, with its population and also looking at where money trends are around the planet. I think it's in our interest to operate in those countries. I think we're very modest, very humble in our approach. There will be a discovery phase, a learning curve. But if you take India, there are 100 millionaires that appear every day and they want to consume. I'm not sure the product mix, product categories there will be the same as in the western world or as in China, which is a much more mature market. Our objective is to serve customers who have a high purchasing power no matter where they live around the globe. And I think that this is really what the team must be working on. We will do so in the months to come and hopefully during the next general assembly I can be more precise, more accurate as to what we intend to do. At this point I don't really want to share information especially with our competitors if I may.
Luca, I'm going to add one thing. You mentioned distribution which is difficult in India and it is complex indeed due to the configuration of large cities. Very wealthy customers in India travel. About 15 to 20 years ago Mexico was a very difficult market for the luxury industry, yet we opened stores there. Initially they were not very profitable. Mexicans were traveling a lot and they would purchase in North America. Today our store network is doing quite well in Mexico. So there are countries where we've been operating for a number of years, South Africa, Brazil, India for that matter, and where Gucci has been quite successful so far. Even again if the market is quite modest, customers travel. They go to London, they buy in Paris, they buy in London, they travel to other geographies. Therefore we must invest. We have to precisely measure what the growth potential is. I'm quite convinced that these countries, these geographies are accelerating, especially due to the tech industry. We're seeing a new population. They travel less than Indian millionaires and so I think there are different opportunities, different options to distribute in India including e-commerce. So we have to investigate those markets very closely. They are emerging markets for some of them but they really have long-term potential especially when it comes to the fact that they travel.
Thank you, Shamark. Let's take question number six, please.
Hello, I'm a young shareholder. I have one share which I acquired about a month ago. I was very impressed especially by the subtitles. Very good work. I would be unable to do it. And as a matter of fact, I would actually like to meet that person just to understand how it works. I think it would be good if we could have a shareholder club to visit some of the company's sites. As a matter of fact, I've never been in this location. I think it would also be great if some of us could attend shows, fashion shows, the Gucci fashion show. I'd love to attend. I'd like to meet new people. Why not? And I would love to take a picture with you.
Thank you for your question. This site is open during the... I believe it is in September. Would you like to take the question?
We always wish to have a dialogue with all shareholders and we do have visits. Quite recently we organized the visit of the Ateliers de Sèvres which is where Busnel is headquartered. It's Plasmon Dome. We have our fine jewelry workshops and it is a place where we host visits of our prestigious customers. I think it would be a bit more complicated to have you on the fashion shows but you can attend the fashion shows online. In terms of communication, we communicate with our shareholders in multiple ways, mainly digital. As a matter of fact, I encourage you to read the latest letter sent to shareholders. It's digital and therefore contains a lot of content. You have access to all kinds of information. And the website, our website also provides all kinds of information. There is a phone number, 01 45 64 65 64 or
[email protected]. Actually kering.com. So you have multiple opportunities to interact with the company. At this point, we have no plans to create a shareholders club but this is a point which has been raised in the past. So we'll look into it. We have someone who is also in charge of financial communication, a new person and we discussed this and as you know the company likes to innovate. So there will be new visits, there will be additional events and during those events there are opportunities for everyone to interact. So we will organize many more of those but no shareholders club due date. Question eight please on the right side. Vanessa.
Thank you so much, Vanessa Ruiz Hernandez. I'm a Spanish national and Colombian, Colombian Spanish. I came a bit like many foreign students to France with a hope to maybe join a company like Kering. I completed my master's degree. Unfortunately, I was not able to get an internship. I have some experience now and I would like to apply and who knows maybe find a job. My question is the following. What are the profiles you are seeking to hire? What does it take to join Kering? And my last question is I would also love to have a picture.
Luca or I... One share, it's Luca. Two shares, the question's for me. But maybe you could take the question.
