So, ladies and gentlemen, I hereby open the annual general meeting of shareholders, and I would like to extend a warm welcome to all of you participating virtually. Considering the recent developments surrounding COVID-19, it was decided to hold this year's AGM virtually in order to comply with governmental restrictions. I hope everybody listening to this AGM is safe, at home, and in good health during these unprecedented circumstances. To ensure as much interaction as possible, AkzoNobel offered the possibility to shareholders to submit questions regarding the agenda items prior to the start of the meeting. Our aim is to answer most of these questions during this meeting. Questions that we received in advance will not be answered during this meeting have been answered already on our website. The meeting will be held in English. Also participating in this meeting are the members of the Supervisory Board Mrs.
Sue Clark, Mr. Michiel Jaski , Dr. Pamela Kirby, Mrs. Jolanda Poots-Bijl, Mr. Dick Sluimers, and Mr. Patrick Thomas. Mr. Ben Verwaayen is unfortunately not able to attend today's meeting due to other commitments. Mr. Dick Sluimers, alternate chairman, should my connection get disrupted in any way. Mr. Thierry Vanlancker, our CEO, Mr. Maarten de Vries, our CFO, and Mrs. Isabelle Deschamps, our general counsel and corporate secretary, are also participating in this video conference. Furthermore, Mr. René Clumpkens, civil law notary acting as the independent proxy holder, as well as Mr. Fernand Izeboud, representing our external auditor, PwC, are attending this virtual AGM. Before we start, I would like to recap on the events that took place last year.
AkzoNobel continued to make progress in its transformation as a focused paints and coatings company and remains fully committed to further strengthening its position as a global leader in our industry. The company's Winning together: 15 by 20 strategy with its ambitious targets gathered solid momentum. The focus on value over volume played a key role in driving progress. Significant efforts are being put into strengthening company systems and processes, as well as working on operational excellence in the supply chain organization and reinforcing our customer intimacy. We're mid-journey, although there are clear signs that the organization and focus on both cost savings are starting to have an impact.
The Supervisory Board has been impressed by the progress made, and we have clear hopes that it will continue to be strong progress, and we look with pleasure on the clear improvements we've seen on the profitability during every single quarter of 2019. The Supervisory Board is closely monitoring the ongoing transformation and focus on encouraging management to seek the right balance between delivering short-term results and long-term sustainability. It's reassuring to see that management's strategic priorities address both the underlying challenges and drive the necessary immediate changes. They should deliver the simplification and operational excellence required to build long-term competitiveness. The Supervisory Board is also pleased to see that the company continues to pay close attention to its core principles of safety, integrity, and sustainability, despite the pressures being put on the organization by its transformation and also by the recent difficult trading circumstances in the world.
Unfortunately, as announced recently on March 31st, due to the outbreak of COVID-19, AkzoNobel has to suspend its 2020 financial ambition in response to significant market disruption resulting from the pandemic. The board's management ambitions for the company remain unchanged and very ambitious, but during the crisis, the primary focus will be on the safety of our employees and partners, and thereafter securing product supplies for our customers and mitigating effects from demands and mitigating effects from the crisis on the demand for our products. The results from 2019 and Q1 2020 make us confident that we'll be able to achieve leading performance in the world as it emerged from the pandemic.
In order to return the proceeds from the sale of specialty chemicals to you, our shareholders, the share buyback program to repurchase common shares up to the value of EUR 2.5 billion was completed as promised by the end of 2019, acquiring 31.2 million common shares approximately. On October 23rd, 2019, a new EUR 500 million share buyback program was announced to be completed in the first half of 2020, for which EUR 400 million worth of 0.4 million common shares were acquired in 2019 and 6.2 million common shares year to date. Before we continue, I'd like to explain the voting procedure. Over to you, Isabelle.
From the instructions on the virtual voting, I refer to the manual which was uploaded on our website, including the instructions on how to log in and vote. You may cast your vote on all voting items during the entire meeting. The voting has been open since the start of the meeting. The chairman will clearly indicate when the voting will be closed after the last voting item and provide you with some time to check if you have submitted all your votes. Please submit your votes on all voting items. Shareholders have also been given the opportunity to vote remotely via the ABN AMRO website. René Clumpkens, civil law notary, will cast the votes as the proxy and independent third party for the participating shareholders. For this meeting, the date of March 26, 2020, was set as the record date.
Anyone owning shares on that date was entitled to register to attend, vote, and participate in today's meeting. Please be informed that the voting result of all voting items will be announced at the end of this meeting, showing the number of votes and the percentages on the screen. The voting results will also be published on our website after the meeting. The notice and agenda were published on the AkzoNobel website. This meeting has been properly convened, is held virtually in accordance with the emergency bill on coronavirus-related matters, and is entitled to adopt legally valid resolutions on the agenda items. Thank you, and back to you, Nils.
Thank you, Isabelle. The virtual registration of shareholders closed at 2:00 P.M. A share capital of approximately EUR 68.1 million is represented, so that in total, approximately 136 million votes may be cast. The level of attendance is approximately 71%. So we will now go to the agenda point number two, financial year 2019. And here we have the report of the Board of Management for the year. You'll be able to read and review the annual report for 2019, which was published on March 10th, both in paper as well as on our website. I'll now hand over to our CEO, Thierry Vanlancker, to discuss the company's performance during 2019. Thierry, please.
Thank you, Nils. And also from my side, a very warm welcome to, albeit virtual, to everybody dialing in today. And I sincerely hope that your family and friends are safe as you are yourself. It is probably good to start my presentation by addressing indeed the current situation on COVID-19. It is clear to all of us that the COVID-19 outbreak is having a huge impact on yourself, on us, on the whole world, and of course also on our company. At AkzoNobel, our priority continues to be the health and well-being of our employees, their families, our business partners, and that everybody is safe and well. The company is continuing to take maximum precautions to ensure the safety and the well-being of its employees, while also taking all reasonable steps to sustain business operations and continue serving its customers.
AkzoNobel takes care to fully support and comply with the requirements of all the relevant authorities. In affected countries and regions, employees are working remotely if their jobs allow. So far, we're fortunate that we have very few cases and only mild cases amongst our employees. At the same time, our customers are relying on us to provide products across a whole range of critical industries. For example, our coatings are used on hospital beds and other metal equipment, including oxygen bottles and ventilators, which are currently, unfortunately, in high demand. We are therefore prioritizing our resources in this area to ensure production of these key items can continue. Our sourcing team is working closely around the world with our suppliers to proactively manage our raw material supply. We are monitoring and managing the extent and duration of any local requirements impacting or relating to our physical locations.
The current supply and demand balance and regulatory situations are complex, constantly evolving, and affecting very differently from region and segment. There is currently little reliable visibility on the second quarter. However, we expect, as we announced yesterday, our end market demand to be significantly below in the second quarter, below of any of our previous expectations. As you can imagine, we are closely monitoring the pandemic situation and are taking care that all necessary measures, including steps to rapidly reduce costs and carefully manage cash flows in the short term, are in place. AkzoNobel has a solid cash position and a strong balance sheet, and therefore we see no need at this stage on changing our capital allocation priorities. However, the significant market disruption forces us to pause key parts of our transformation and hence to suspend our 2020 financial ambition.
Once markets open up and normalize, we intend to resume our positive momentum and drive performance up to the best in our industries with our industry's frontrunners. With such a rapidly changing situation, we would like to pause and recognize our employees for their continued passion and applaud the incredible efforts our people all over the world are putting in, especially the healthcare workers who are selflessly helping others day in, day out through these difficult times. So let's stay safe and look after one another. I would now like to show some of the highlights of 2019 in AkzoNobel, which was a truly transformational year for the company. And I would like to do that by sharing this video. 2019 was all about accelerating our performance towards our goal of winning together 15 by 20. And it was not because we had any help of our markets.
In fact, most of our segments had a relatively weak market environment. It was all about us focusing on value over volume and all of us focusing on cost savings. That made the difference. Behind the scenes, an army of people was working on sustaining the changes we're making in the company. Lots of fundamental work on our precise processes. But it was not only behind the scenes. On the scenes, on M&A, we were very proud we could announce us getting together with the French coatings company Mapaero to strengthen our already leading position in the aerospace coatings and later in the year to announce that we have the intention to acquire Mauvilac, which is the leader of decorative paints in Mauritius. 2019 also had a lot of revamping. Revamping like the EUR 50 million investment in our wood coatings production in High Point, North Carolina.
We are a strong player in the wood coatings business worldwide, and this will bring the manufacturing base for this business up to a world-class level, and talking about revamping, well, it's not a coincidence I'm here at the Night Watch. Operation Night Watch is us bringing together all the technology, the know-how around paint, together with an exciting Rijksmuseum team working on bringing this Dutch icon back to its former glory. 2019 was not only about history. It's also very much about the now. An exciting example is Paint the Future. Us, as a 228-year-old company joining up with startups, scale-ups, and academia to really bring paint out of the box of incremental improvements to really break out and really go into where paint should be going into the future.
On our core values around social fabric and sustainability, we really put it into a program, People. Planet. Paint., streamlined for the company so that we can do good with our paint for the communities, but also continue to do good for the planet, very encouraged by the big steps we took among all the work we did in the company, so hopefully you enjoyed some of the highlights in the video, and it is also, by the way, a great example of social distancing. Walking alone in a big museum is probably way up there as one of the best examples. Let me focus on some of the key financials for 2019 that are shown here on this slide. During 2019, our ROS, our return on sales, excluding unallocated cost, increased from 10.6% to 12% for the full year, driven by lower cost and ongoing margin management.
Free cash flow, excluding the pension top-up payments and pension pre-funding, was up by 179% for the full year. Revenue was flat in 2009, while adjusted operating income was up 24%, and adjusted earnings per share from continuing operations was 62% higher. It is worth to take a moment to reflect on where our strategy came from. In the past, before 2015, AkzoNobel in paints and coatings was at the bottom of the pack when benchmarking profitability versus the peers, as evidenced here by the bold dotted line. We had managed to make our way into the middle of the pack by 2017, although some of our peers were still significantly ahead of us. Our 2020 ambition was as simple as challenging. It was about closing the gap with our leading peers. Clearly, as you see, we've made significant progress. The gap has clearly been narrowing.
There is still a way to go, however. So it remains our firm ambition to catch up with the global leaders in our industry still this year. Our performance improvement accelerated during 2019. If you look at the trends during the second half of the recent years, the ROS, the return on sales, excluding unallocated cost, increased from 9.2% in 2017 to 10.6% in 2018 and 12.5% for 2019 if you look at the second half of the years. And this shows our strong momentum going into this year 2020. As mentioned, unfortunately, the COVID-19 pandemic situation means we need to pause the key parts of our transformation and therefore suspend our 2020 financial ambition in response to this significant market disruption. However, as I said before, our ambition to catch up with the best in our industry remains completely intact.
Our ongoing transformation continued to deliver strong results during 2019, and it moved us again a step closer to being recognized as the reference in the paints and coatings industry globally. We delivered 10% cumulative price increases from 2017 to 2019, which is a really big step up for our organization, and we have now moved towards ongoing margin management. We continue to implement GBS, which is our global business services or our centralized transactional service centers. We've continued to implement GBS with 38 transitions completed in 2019, allowing for further efficiency gains. Our ERP integration, our computer systems integrations around the world, is also steadily moving forward with 16 integrations completed in 2019. Our transformation delivered EUR 80 million of the EUR 200 million euro savings planned for 2019 and 2020.
Although the current COVID situation means we need to pause key parts of our transformation, we are ready to continue as soon as the markets normalize. I am, in that context, very proud to say that we as AkzoNobel received top employer awards in five of our major countries, including Brazil, China, and the U.K., which underlines our ongoing commitment to create a high-performing culture and becoming the reference in our industry. We also saw a significant and very encouraging step up in our employee engagement scores versus what we saw at the beginning of this transformation journey. In 2019, we have returned to the shareholders a total of EUR 6.5 billion from the sale of specialty chemicals, as promised. On top of this, we removed a significant cash headwind by de-risking our major pension plans, resulting in minimal pension top-up payments in the future.
As mentioned earlier, AkzoNobel today has a strong balance sheet and a solid cash position. In terms of our capital allocation priorities, we will first prioritize profitable organic growth in line with our strategy and ambition. Capital intensity is relatively low, with a CapEx or capital expenditure versus revenue around 2.5% per year. As mentioned, our policy is to pay a stable to rising dividend, and that is what we will continue to do. There are plenty of opportunities to conduct strategically aligned and value-creating acquisitions, although the timing remains uncertain, and therefore, we will adopt a modular approach when considering available options to balance financial flexibility and returning cash to shareholders as and when appropriate. Our target leverage ratio is one-two times net debt over EBITDA, and we seek to retain a strong investment-grade credit rating.
Finally, I would like to conclude the presentation with our approach to sustainability. At AkzoNobel, sustainability is one of our few core principles. That also underlines how we function in the communities where we operate, and that is why we take action every day by empowering our people, reducing our impact on the planet, and consistently innovating to deliver sustainable solutions to our customers. It's about focusing on the things that we can truly influence. We made an inventory of the many initiatives we had going globally and streamlined them, therefore, for more impact. We call it People. Planet. Paint. We recently announced the first in a series of challenging sustainability ambitions, which are designed to accelerate our focused paints and coatings company towards zero waste and cut carbon emissions in half by 2030.
We will do this by moving to 100% renewable energy and reducing our energy consumption with 30% as early as 2030. At the same time, we're moving towards having zero non-reusable waste by 2030 and 100% water reusage. We are proud of these ambitions because it takes our leadership to being even further leading versus the rest of our industry, and it strongly underlines our key focus on reducing our footprint. Ambitions related to people and paint in our People. Planet. Paint. will follow in due course, and with that, I'd like to hand it back to you, Nils. Thank you.
Thank you, Thierry. We'll now answer the questions that we have received before the meeting on this item. Isabelle, would you please take us through the questions received, please?
Yes, thank you, Nils. The first set of questions consists of four questions and comes from the VBDO.
The first question relates to sustainability benchmarks. Since the announced restructuring program, VBDO noticed that environmental and social performance on external sustainability benchmarks have been more frequently neglected. AkzoNobel's score in the benchmark of the Carbon Disclosure Project, CDP, has dropped from an A- in 2017 to a C in 2018, to the company declining to participate in 2019. Additionally, in 2017, AkzoNobel was industry leader of the chemicals industry in the Dow Jones Sustainability Index. VBDO is aware of the fact that AkzoNobel responds to other benchmarks and ratings such as MSCI and Sustainalytics, but emphasizes that this type of benchmarks and ratings are less transparent for other external shareholders than investors. Has AkzoNobel consulted its shareholders when opting for these benchmarks and ratings, and if not, will this be considered in the near future?
The second question states that the VBDO noticed that AkzoNobel did not disclose any information in the CDP benchmark in 2019. Two years ago, AkzoNobel communicated transparently about the way it was conducting research on the impact of climate change on its direct operations. For example, in 2017, AkzoNobel indicated that floods may have serious consequences on its production, processes, warehouses, raw materials, and buildings. In more detail, floods in Thailand and Australia already had financial consequences for AkzoNobel's production facilities, and water scarcity could pose a potential problem for the company's growth opportunities in China and India. VBDO is curious about why AkzoNobel, bearing the consequences in mind, has not included an overview of the physical risks of climate change externally and in its annual report.
Is AkzoNobel, in 2020, willing to share more information to its shareholders related to climate adaptation, and would consider starting participating again in CDP in 2020? Furthermore, VBDO is pleased to read that AkzoNobel refers to the UNGP and communicates on how it addresses labor conditions in the supply chain through risk assessments. Besides that, AkzoNobel requests suppliers that do not meet the company's expectation to perform a reassessment for improvement of the labor conditions. AkzoNobel interacts with its suppliers through the EcoVadis supplier benchmark, a widely used methodology by the sector. As the methodology and results are not publicly available and accessible for external stakeholders, VBDO would like to learn more about the interaction with EcoVadis with suppliers.
Would AkzoNobel, perhaps in collaboration with the sector, be willing to provide more transparency on the outcomes, challenges, and lessons learned from working with supplier benchmarks such as EcoVadis? In the final question, VBDO applauds AkzoNobel's many initiatives on the topic of diversity and inclusion. AkzoNobel has mapped the diversity profile for both the Supervisory Board and the Executive Committee. It surprises VBDO that AkzoNobel has not yet communicated a comprehensive diversity and inclusion policy related to different levels, senior management, and our workforce of the organization, and for all marginalized groups. VBDO considers it important that companies reflect the societies in which they operate. Is AkzoNobel in 2020 willing to expand the diversity policy of the boards to a comprehensive diversity policy for the entire organization? Thierry, could you respond to these four questions, please?
Definitely, Isabelle, thank you.
Thanks to the VBDO for raising these questions. I would like to emphasize that we at AkzoNobel are a sustainability leader in the paints and coatings industry, and that our aim is very much to remain the reference in the industry, also in this field. This is why we've launched our new People. Planet. Paint. program. Therefore, I react on the word neglect that was used in the very beginning because we really focused on doing things, making an impact versus just talking about it and filling out numerous benchmarks that are out there. We have recently, in March 2020, announced the first in a series of challenging sustainability ambitions, ambitions that are designed to accelerate the newly focused paints and coatings company towards zero waste and cut carbon emissions in half by 2030.
Our new ambitions, therefore, related to people and paint will follow in due course. So let me address your subsequent questions as they came out. On the Carbon Disclosure Project specifically, we did indeed not participate for the similar reasons as our decisions to no longer actively participate in the Dow Jones Sustainability Index. We as AkzoNobel were one amongst a handful of leaders in those indexes who all decided to step out because it was really not serviced the purpose anymore for the leaders in the field versus the followers. On the one hand, we saw the administrative burden on our organizations as increasing specifically on topics that were really not relevant for our businesses, and that was combined, on the other hand, with very limited continuous improvement feedback.
In addition, we looked at ratings most used by our key stakeholders who we interviewed, which made us decide to focus on sustainability and MSCI. So yes, we reached out to some of our most important stakeholders when we made that shift. On our selected rating agencies, we have either stayed top-ranking or have improved our score, so the focus on the sustainability is definitely more than ever intact. In response to the second question, we continue to monitor risks and opportunities related to climate change and the transition towards a circular economy, as recommended by the Task Force for Climate-Related Financial Disclosures, or the TCFD. We partnered with industry peers at the World Business Council for Sustainable Development, the WBCSD, to develop guidelines for the before-mentioned TCFD implementation as they relate to our sector.
To clarify our adoption of these recommendations, we provide an index table of the TCFD recommendations on our website. We are very well aware that climate change may have a future impact on our business, as it may lead to more frequent and extreme weather events resulting in supply chain disruptions and changing market dynamics. In addition, it could also result in global price on carbon and increased prices for raw materials. I would like to point out that we in AkzoNobel have already spent several years taking steps to address this, for example, by adopting an internal carbon price for large investment decisions, introducing sustainable portfolio management to develop low-carbon and more circular solutions, and making the circular economy a key element of our Paint the Future startup challenges.
Coming back to the question regarding the EcoVadis supplier benchmark, AkzoNobel has been a member of the Together for Sustainability, the TfS, for six years to proactively manage the sustainability performance and risk management of our suppliers. Through this program, suppliers are assessed on the overall score in their EcoVadis online assessment as well as their score on labor and human rights. We have set thresholds for both assessments for suppliers to meet our expectations, and those suppliers not meeting our expectations are requested to improve through annual reassessments, and if they continuously fail to meet our expectations, suppliers cannot reach the status of preferred supplier to AkzoNobel. In an attempt to provide more transparency to our stakeholders, we have improved our reporting in 2019 already.
Instead of only reporting the number of suppliers assessed through this method, we now also provide the percentage of suppliers meeting our expectations and the percentage of the suppliers who are under development. In 2020, we aimed to accelerate our program by continuing to request improvements for the suppliers under development and inviting additional suppliers to take part in the assessment. To further improve the transparency on the results of the EcoVadis assessments, we are committed to put effort in requesting EcoVadis to provide more transparency on their data and assessments to external stakeholders. Let me then address the question on our diversity policy. It's good for you to be informed that we are developing an increasingly engaged, diverse, and capable workforce to deliver our strategy.
We believe it is also important that our management teams reflect the diversity of our overall workforce because inclusive and diverse teams are better able to understand customer needs and innovate to meet their requirements. We report on the number of female executives, which was 18% for our organization in 2019, and where my management team agrees that is not good enough as a number. In addition, we established a diversity and inclusion sounding board last year, providing thought leadership and recommendations on significant D&I diversity and inclusion issues and ensures our D&I priorities. As part of our commitment to foster an inclusive and respectful work environment, we also launched training to increase awareness around unconscious bias in the workplace. We revitalized our efforts around facilitating diversity and inclusion networks, focusing on women in the workplace and the lesbian, gay, bisexual, transgender, and intersex community.
We have also become a member of the Workplace Pride organization. In order to create a strong and diverse, high-performing team around the company, we implemented the global recruitment guideline for an inclusive and unbiased hiring practice of internal and external candidates. This year, we also rolled out the global mentoring platform, which is a virtual place for mentors and mentees to connect and build professional relationships to advance talent in our organization. As a final remark, in addition to our annual reporting in our website, we publish more extensive diversity metrics such as age, function, and management level by gender. I can assure you that for myself personally, for the Supervisory Board and for the Executive Committee, the sustainability on People, Planet, Paint, and Diversity Inclusion are top of our agenda. Thank you, and back to you, Isabelle.
Thank you, Thierry.
We have also received the following two questions from Eumedion. AkzoNobel's external accountant has marked the transformation regarding the execution of the Winning together: 15 by 20 strategy as a key audit matter, in its opinion. It notes that inherently, transformation processes have the potential to lead to a disruption of the organization, processes, and culture. The specific and ambitious external target on 15% ROS by 2020 inherently increases pressure on management to achieve such targets and, as such, contributes to the risk of management override of internal controls risk, which is a presumed audit risk in our audit. Could the board of management, as well as the supervisory board, reflect on this remark? Do they recognize this risk? If yes, what mitigating measures have they taken to manage the signaled risks? Could the external accountant clarify whether he appreciates these additional measures?
In its second question, Eumedion notes that the key audit matters have been defined by the professional organization of accountants NBA as specific points of attention that, according to the external auditor, were most important during the audit and that have a high informative value from a user's perspective. In view of the importance of these key audit matters, we expect the Supervisory Board or its Audit Committee to reflect on the manner in which these matters were addressed by the board of management and by the Supervisory Board in its annual report. Would the Supervisory Board or its Audit Committee be willing to do this in the next annual report? And then over to you, Nils, please.
Well, thank you very much.
And I think this is a very, very good question because needless to say, when you give people bonus targets and incentives, you are trying, as a board, to encourage the management team and that not only the top management team, but the whole management team of the company and the employees to go towards these targets. But as I said at the beginning, we are, as a Supervisory Board, closely monitoring the ongoing transformation, and we are encouraging management to seek the right balance between delivering short-term results and the long-term sustainability. This is a main job of the Supervisory Board, and we do spend a lot of time at the board meetings discussing this and evaluating this. We find it reassuring, as I said at the opening, to see that management's strategic priorities address both the underlying challenges and drive the necessary immediate changes.
And we believe that that should deliver the simplification and operational excellence required to build long-term competitiveness. We're pleased to see that the company continues to pay really close attention to the core principles of safety, integrity, and sustainability. We also spent sufficient and substantial amounts of time on this in the Supervisory Board meeting. And we feel convinced that that's what management is driving, in spite, of course, of the pressures being put on the organization by transformation, but also, as I said at the opening, by the tough marketing conditions we have been facing over the last years, and that definitely have not become less challenging in the last month. So, Thierry, I think you should comment on this too because it really reflects the teamwork between the Supervisory Board and the Management Board.
Absolutely. Absolutely, Nils.
And just want to add on that, that the Winning Together 15 by 20 transformation is all about creating a high-performing culture for AkzoNobel for the long term. So, therefore, this is not about delivering something in the short term. It has to be a long-term, achievable, and sustainable performance in line with the industry's front runners. So this is by no means a short-term exercise. And that is why, from the very beginning, we put a lot of emphasis on the organizational health because you cannot do it with just a top 100 who's motivated. You have to do it with a top 33,000 that goes along on the journey. And that's also why we want to keep the complete integrity on our core principles, but also by not cutting any corners. This is really about rebuilding a 228-year-old house like AkzoNobel.
So our strategy is all about laying the foundations for the future. And the fact, or some proof points, why it's not around just the short term is, for example, that we are spending quite some effort and investment in the new ERP computer systems. If this was just for a short-term sprint, we would not do this. It's a significant, complicated investment, but that is where the company has to be for the long term. The fact that we paused our 15 by 20 ambitions in view of COVID-19 is another point where we were looking at how can we balance the medium-long-term health of the company with just not just only going for a short-term result. And this is why we have indicated that 2020 is not an end point. In fact, it is a stop.
It's a significant milestone along the way for future room of improvement, even beyond 2020, what we see as a potential in the company. And Fernand from PwC, it would probably be good if you share your views on how you see us operating and how you see us moving towards those goals from your external auditor's perspective.
Sure. So thank you for your question. As you may recall, last year during the AGM, it was noted by a shareholder that the 15 by 20 strategy creates an ambitious target. And we, as PwC, the independent auditors, were requested whether we would take that into account in our audit. And yes, we did. And indeed, we think it is a key area of the audit. Now, as you can read in our report, the transformation affects the company in multiple ways that are relevant to our audit.
So first of all, there were the changes inherent to a transformation in systems, processes, and controls, which we needed to understand and adapt our audit to in all locations, addressing, in many cases, both the old and the new situation in the same year. Secondly, we identified that there were ambitious targets accompanying the transformation, which, again, inherently contribute to the risk of management override of control. We specifically considered the 15% return on sales target by 2020. And thirdly, the changes, including the cost savings, impact the assessment of the recoverability of assets such as deferred taxes and goodwill. And we performed work at group level and instructed and supervised our component teams to ensure that we addressed all three of these aspects appropriately worldwide.
The progress of the transformation in 2019, resulting in these three impact areas for our audit, caused us to identify this as a key audit matter. Throughout the year, we discussed our risk assessment, planned approach, and our findings, both at the interim and at completion, with the board of management and the audit committee and the supervisory board at length, so from the procedures performed, as we have also stated in our opinion, we did not have material findings, so thank you, and over to you, Chairman.
Well, thank you very much, Fernand. In reply to the second question from Eumedion, the external auditor communicates the key audit matters to the supervisory board as a matter of routine. In addition, the audit committee regularly discusses and reviews key audit matters and how these are being addressed during its meetings throughout the year.
These meetings are both with the management as with the external auditor and internal auditors as well. After each audit committee meeting, Byron Grote, who is a chairman of the audit committee, updates the supervisory board on the most important items that were discussed, including the key audit matters. We will review to see whether this is appropriate to provide further, whether it's appropriate to provide further information on the discussions on the key audit matters in our next annual report. But we definitely do tend to these issues on a very frequent basis. Isabelle, did we receive any further questions related to this agenda item?
Yes, we did. Thank you, Nils. We want to thank the VEB for a number of questions that have been submitted. First of all, the questions that related to the financial year 2019 will be answered during this agenda item.
But due to the number of questions we received, we'll refer to our website for answers to questions related to Q1 2020 results and our ambitions going forward. Firstly, we received a number of questions around our pricing strategy. What are the current pricing actions, pricing actions moving forward, and pricing in light of COVID-19, including impact on volumes and differences for businesses or segments? Thierry, could you comment on these questions, please?
Yes, thank you, Isabelle, and thank you also to the VEB for the question. It is indeed correct that in the years 2018 and 2019, we saw a rather unprecedented across-the-board increase in raw material costs.
Therefore, I actually applaud my organization for having been able to offset those costs with a pretty hefty total of 10% price increases, price mix increases for our whole portfolio globally, which is, I would say, seen by many outside observers as an unbelievable achievement by the company. We've also indicated in the end of 2019 that we had achieved offsetting these gigantic raw material inflation pressures and that we were going to what we call margin management. That means managing our market pricing for our products in line with what the raw material input costs are doing and trying to maintain the margin difference, which then returns in paying your costs and, in the end, your profit. This resulted in this first quarter 2020 in a price mix for the company still being up 2% for now. So that is a continuing ongoing positive trend.
As I indicated, the company will now focus on margin management. So if the raw material input costs were to go down, we will manage it in a way that we continue to have our variable margin still intact for the company. Now, we just published yesterday a pretty detailed chart that you can find on our webcast for the analyst webcast, rather, on our Q1 2020 that has a lot of detail, and a replay of that analyst webcast is available on our website if there is an interest, so I think, in that sense, we're kind of moving from the price price, as we called it, to margin management, which is, I think, also safeguard for the cycle we might be entering in as of now. Were there any other questions, Isabelle, from the VEB?
Yes, we have some more questions from the VEB relating to AkzoNobel's working capital. So if I could ask Maarten de Vries to elaborate on the reason for higher working capital in recent periods, improvement areas, guidance going forward, and the balance between margin improvement at the expense of cash flow, please.
Yeah, thank you, Isabelle, and good afternoon, everybody. Just let me start with saying that if you look at our working capital at the end of 2019, we were actually top-ranked in terms of working capital performance if you compare that with our peers.
But then again, yes, if you look at our payables specifically, we've seen lower payables by the end of the year compared to 2018, which were driven by a couple of factors: the lower volumes, also raw materials coming down, having an effect, as well as a mixed effect, specifically the Chinese mix, where we have traditionally higher payment terms. And meanwhile, we are also improving our payment processes to pay more on time. Saying that, nevertheless, there are always further opportunities to improve working capital. We've also indicated that during the investor day in February, and specifically during this time, of course, given the COVID-19 challenges, there is a lot of focus on cash management and working capital. And to give an example, we've really moved, given the current challenges, to a weekly demand and supply cycle.
So I would say there is really a healthy balance between cash management, working capital management, as well as margin management and margin management. Thierry was talking about this earlier. With that, Isabelle, any further questions?
Yes, I note here another question from the VEB. And it says that AkzoNobel ended 2019 with a relatively low leverage ratio of 0.7. So Maarten, can I ask you again to comment on the current market dynamics and the company valuation and whether it provides some M&A opportunities?
Yeah, in effect, so thanks for the question. And in fact, Thierry mentioned that already earlier, we ended 2019 with a very solid balance sheet, leverage ratio indeed of 0.7 and a net debt of EUR 0.8 billion plus a strong cash position. So we are, in fact, privileged to go with such a balance sheet into this crisis.
We've also clearly indicated in our capital allocation priorities that we will move to a leverage ratio between one and two while still retaining a strong investment grade credit rating. Now, M&A is part of our capital allocation priorities, but clearly they need to be strategically aligned and value-creating. And of course, we will stay very disciplined in terms of looking at M&A opportunities, although, as Thierry also mentioned earlier, timing might be even more uncertain given the current market circumstances. With that, I think back to you, Isabelle.
Thank you, Maarten. There is one last question from the VEB on this agenda item, and it's related to the appointment of Thierry Vanlancker as non-executive board member of Sika AG.
The VEB wonders whether this may send the wrong signal at this point in time to AkzoNobel employees and shareholders while the company is in the middle of a major transformation, and perhaps, Nils, would you be able to answer this question?
Yes, I think it's the advantages and disadvantages to management members having external board commitments. I think one of the advantages is that it gives sometimes a broader perspective and some valuable experiences and a feel for what goes on in other companies that can be useful in managing AkzoNobel. I think it's up to the board of or the supervisory board and the management team together to establish the right balance here. In general, in the Netherlands, the recommended maximum number of external board seats are two, and Thierry had one during 2019.
In our evaluation, this was no problem or didn't have any negative impact on the amount of work performed for AkzoNobel. Did we receive any additional questions to this point?
No, we have not received any other question on this agenda item. Thank you.
No further questions. So then we move to agenda point item 3A, and this is concerning the adoption of the 2019 financial statements on the company. On the agenda, this agenda item, we received questions from VEB addressed to our external auditor, PwC. Isabelle, could you please read out the question?
Yes, thank you, Nils. The first question from the VEB addressed to PwC relates to the extension of the audit procedures during the planning phase as a result of the transformation processes.
What was the reason for PwC to include the transformation as a key audit matter this year and not already last year? Secondly, in what respect did the audit evidence obtained and audit procedures performed differ from the procedures for the 2018 audit? Thirdly, PwC mentions having addressed the risk of management override of controls. In what specific way were the possible risks of AkzoNobel to achieve its ROS target addressed by PwC in its procedures, and what procedures were performed to address the risk of fraud? Lastly, PwC selected 14 components that were subject to specific risk-focused audit procedures. This is an increase versus prior years. What components were selected for this year's audit based on what criteria and what explains the increase? And back to you, Nils.
Yeah, thank you. I think I'll pass the word straight on to Fernand as representing our external auditor, PwC.
Could you briefly comment on the controls performed by PwC during 2019 and to address the questions raised by VEB, please?
Sure, absolutely. So good afternoon again, ladies and gentlemen. My name is Fernand Izeboud of PwC, and I'm happy to present our independent auditor's report on the 2019 financial statements. This is an important moment for me, as you are one of the most important user groups of our audit report as shareholders. Thank you also for the questions raised by you in advance of the meeting, and I will address them as part of my overall comments on our audit. So as you will have noticed, on February 12, we issued two reports, one on the financial statements and the second one on the selected non-financial indicators in the sustainability statements.
Both reports are unqualified, meaning that the financial statements are not materially misstated, and we have not found material misstatements in the sustainability KPIs that we looked at. So I've signed both reports on behalf of PwC with my personal name. And this is to emphasize that I feel personally responsible to the users of our audit opinion to deliver a high-quality audit. Both reports are included in AkzoNobel's annual report, and you can read them on your own. And therefore, I would like to use this opportunity today to help you be comfortable that we have performed a robust and independent audit and assurance process. So 2019 was my first year leading the AkzoNobel audit of PwC. As such, I've personally invested significant time getting to know the company and to familiarize myself with the audit and the audit team.
In the transition from my predecessor, I went through an introduction program, met a wide range of people within AkzoNobel, including the board of management, the supervisory board, and people at various levels below them. I personally visited a number of the sites, both office and production sites, in the Netherlands and internationally. During my visits, in addition to meeting with the local PwC teams, I met with local management to get a sense of the differences between the local operations and what it's like to be on the ground and to supervise the quality of the local PwC team's work. As well as interacting with the AkzoNobel Financial Reporting Group, my team and I meet regularly with AkzoNobel compliance and internal audit functions. During the year, we've had robust discussions with the audit committee and the board.
There's active engagement, and our insights are respected and taken seriously. Within my team, I've also spent time working together with our specialists from various disciplines such as valuations, tax, IT, pensions, and sustainability to agree on the scope, understand the results of their work, and to become aware of developments that could affect the business and financial reporting. These specialists are an integral part of the audit team. So this entire context has supported me in overseeing the audit and to satisfy myself that we're collectively doing what is needed. I will now take you through a number of the key elements from our audit, as you have also seen in our report. So first of all, materiality. Materiality determines the scope and depth of our audit work. It's the precision of our work.
It's determined on the basis of what is relevant to stakeholders, and generally, that would be net income, and that's what we've done. So we've set our materiality level at approximately 5% of total profit before tax, and that resulted for 2019 at EUR 39 million. That's about EUR 6 million lower than in 2018, and that reflects that in the prior year in 2018, the results also included a nine-month period result for the specialty chemicals discontinued operations, which are no longer included, obviously, in the 2019 accounts. So with materiality set, we can then look at scope. So my teams, the PwC teams, conducted audit work at 51 components in 18 countries, and that includes involvement of over 150 people around the world from our offices and more than 69,000 audit hours. So it's a large audit.
We included components in scope based on significance to the group, significant risks particular to those components, or that are otherwise considered significant for other reasons. All of that aiming to achieve appropriate coverage on a total level, on a financial line item level of the consolidated financial statements. We conducted site reviews, so actual local visits in eight countries: the United States, Brazil, Germany, France, India, Poland, South Africa, and the Netherlands. So if you add that all up, our audit coverage amounted to 65% of consolidated revenue, 73% of consolidated total assets, and 67% of consolidated profit before tax.
On a central level and a group team here in the Netherlands, we performed central audit procedures on areas that are also managed centrally to a large extent by AkzoNobel itself, such as impairment testing of goodwill, valuation of post-retirement benefit obligations and provisions, valuation of deferred tax assets and uncertain tax positions, and also the provisions relating to environmental, sundry, and legal matters. We looked at share-based payments, treasury, and IT. So quite a lot of work done centrally. For the remaining components not in scope, we did perform, among others, some procedures over the monitoring controls performed by the business units and other central functions at AkzoNobel itself. To address the specific question from the VEB on the change in components in scope compared to 2018, like I mentioned, in 2018, the specialty chemicals business was also included in our scope. That was one component.
With that going away and with reduced materiality, we had to rescope, and for 2019, we decided to select several additional components to achieve the appropriate coverage and to address the decrease in materiality. You've asked about specific risk. That's not as exciting as it sounds. It generally relates to, for example, individual significance to financial statement line items or specific changes in the business that may make a component more interesting for that year, such as, for example, caused by the transformation, so moving on to key audit matters, well, like I said, those are matters that, in our professional judgment, were of most significance in the audit of the financial statements. We've communicated these key audit matters to the supervisory board, and please understand that these are not a comprehensive reflection of all matters identified by our audit and that are discussed with the supervisory board.
That's much more broad, but that would make our report very long if we discuss all of those. This year, we've identified three key audit matters, which I will comment upon briefly. The first one is the transformation to deliver towards the Winning together: 15 by 20 strategy, and for this one, I refer back to my response to the question from Eumedion in the previous agenda item, which also covers the first two questions asked by VEB. VEB also asked to elaborate on our approach to address the risk of management override of controls, which I will address here at this time, so as in all of our audits, we address this risk, including whether there's a risk of management bias relating to the financial statements that may represent a risk of material misstatement due to fraud.
Now, as mentioned, we specifically looked at the external target set by the 15 by 20 strategy, which is ambitious, and we looked at that both at group level and the translation thereof to the components. The audit procedures to respond to this risk include, among others, that we evaluated the design and the implementation of internal controls that mitigate fraud risks, retrospective review of prior year's estimates for the testing of management estimates. We used data analytics to identify unexpected journal entries, and we incorporated elements of unpredictability in our audit. For example, as mentioned before, new components in scope that weren't in scope in prior years. We also performed additional substantive testing, for example, on data migration. This risk, as said, was considered both at group and at component level.
We also increased the level of communication with our component teams on this matter and made sure that they did the right thing in their audit. The remaining two key audit matters you will recognize from 2018, and we believe they're still valid in 2019. One of them is the valuation of post-retirement benefit provisions. There are two very large pension plans, the ICI Pension Fund and the AkzoNobel Pension Scheme , both in the U.K., which account for over 80% of the pension obligations and plan assets. We used our own actuaries to evaluate the actuarial assumptions and to challenge management and the company's external pension experts on the most important ones. The final key audit matter related to the evaluation of deferred tax assets and uncertain tax positions.
Now, an international group like AkzoNobel operates in many tax jurisdictions, and we used our own tax experts in the audit of the recoverability of the deferred tax assets, which by definition is a very judgmental area, and in the evaluation of the uncertain tax positions and the related provisions. So that concludes the key audit matters. Finally, we've concluded that the information in the directors' report, which is the information other than the financial statements in the annual accounts, is consistent with the financial statements and does not contain material misstatements based on the knowledge obtained in our audit work. So this concludes my comments. We value the relationship with you as shareholders. And on behalf of PwC, thank you for your trust. Please stay safe and take care. Thank you very much for your attention, and back to Nils.
Thank you, Fernand. Isabelle, did we receive any follow-up questions to this point?
Nils, we haven't received any further questions on this agenda item.
Okay. Let me just remind you that you can, it's already been said by Isabelle, but please remind you that you can cast your votes at any time during the entire meeting to any point on the agenda. I will now continue on item 3B on the agenda. This is a discussion of the dividend policy. The dividend policy of the company is to pay a stable to rising dividend. The dividend will be paid in cash. A final dividend of €1.49 per share after consolidation is proposed, which together with the interim dividend previously paid out will be equal to a total 2019 dividend of €1.00 per share last year. As mentioned by Mr. Vanlancker earlier, AkzoNobel has a solid cash position and a strong balance sheet, and we don't see any reason at this stage to change our capital allocation priorities.
We have received no questions for this agenda item. Is that correct, Isabelle?
That is correct, Nils.
That is correct. So then I'll go straight to the next item on the agenda, which is item 3C. It's almost the same, but it's the profit allocation and adoption of the dividend proposal. As explained, for the financial year 2019, a dividend of €1.90 per common share is proposed. We paid in November 2019 an interim dividend of €0.41. So when this resolution is hopefully adopted, the remaining final dividend is €1.49 per share, and it'll be paid in cash on May 7th, 2020, under the terms published by AkzoNobel. We, in the supervisory board, recommend the adoption of this proposal and proposed final dividend for 2019. And we also did not have any questions received on this agenda item. So again, you can vote anytime you'd like during the meeting. For 2019.
And I'll now hand over to the Chairman of the Remuneration Committee, Mr. Dick Sluimers, for a short presentation of the remuneration report for 2019. In accordance with Dutch legislation, the remuneration report 2019 needs to be submitted to the AGM of shareholders for an advisory vote. The remuneration report of 2019 is available in the annual report 2019. But Dick, could you please take us through the report?
Yes, thank you, Nils. In my role of Chairman of the Remuneration Committee, I'm pleased to address the AGM today. The first slide that is presented to you summarizes the main elements of remuneration for the Board of Management, Mr. Thierry Vanlancker and Mr. Maarten de Vries in 2019. Their compensation terms follow the remuneration policy, which is noted in the annual report. As the report breaks down the remuneration that both executives received last year, I propose to give you an overview of it rather than spend time on details. In summary, the executive annual salaries rose by 2.75% in 2019 and will increase by 2.75% in 2020 as well. Those increases are in line with the collective wage increases that our Dutch employees received who are covered by a collective labor agreement. The remainder of their compensation packages largely comprises of performance-related components.
These incentives incentivize the achievement of stretching financial and strategic targets, which are assessed over a one-year and over a three-year period. The executive STI bonuses are based on a company performance alongside their individual contributions, which we measure over one year. The ROS and OCF targets that the board has set at the start of 2019 were stretching. Although we have much to be proud of, financial performance was not as strong as our OCF and ROS metrics were, and consequently, both payout bonuses were somewhat below target for both executives. The LTI incentivizes company performance over a period of three years. The plan promotes the creation of shareholder value as it assesses share price performance via a relative TSR metric and a profit performance via ROI. As Mr.
de Vries was not present in the company during 2016, he did not receive any shares last year, arising from the 2016 to 2018 performance cycle, which vested in 2019. Mr. Vanlancker joined the company on October the 1st, 2016. As individual hired on or after October the 1st, must wait to the following year to receive their share grant. He did not receive any conditional shares in 2016. And as a result, no shares were vested in 2019 for either board member. The company did provide conditional shares to them in 2019. These shares will only be released to them in 2022 if the plans respect the three years, relative TSR, and ROI targets are achieved and will be subject to a further two-year holding period. You will note that the matching share plan has been suspended.
This follows the agreement at a general meeting in 2018 to introduce a one-off performance incentive plan in support of the company's 15 by 20 growth ambition. Members of the supervisory board receive a fixed remuneration based on the roles and responsibilities. In accordance with the Code, members are not remunerated in shares. Travel expenses and facilities are borne by the company and reviewed by the audit committee. Implementation of the remuneration policy for the supervisory board in 2019 resulted in the payout, as you can see on the screen. That's it, and thank you, and back to you, Nils.
Thank you, Dick. There were no questions received for this agenda item. And that means that we can go on for the next agenda item, 4A, which is a discharge from liability of the members of the board of management in office for 2019 for the performance of their duties during 2019. So agenda item 4B concerns the discharge from liability of the members of the supervisory board in office for 2019, also for performance of their duties during 2019. We did not have any questions received for these agenda items. We'll proceed with the next item on the agenda, item 5A, and that is the reappointment of Dr. Pamela Kirby. We are delighted that Dr. Kirby was appointed as a member of the supervisory board in 2016, and she's been a member of the Nomination Committee and remuneration committee since she was appointed.
She has an extensive background and strong record in international commercial and strategic management across pharmaceutical, chemical services, and other publicly listed enterprises. Dr. Kirby provides a positive contribution to the supervisory board of AkzoNobel, and we would, as the supervisory board, very much like to see that continued. We did not have any questions received on this agenda item either. Furthermore, Mr. Ben Verwaayen is retiring as a member of our supervisory board today after eight years. It was decided to reduce the number of members of the supervisory board to eight members. I will come back to Ben's excellent contribution to the supervisory board work at the end of this meeting. Now I'll proceed with the agenda item 6A concerning the amendment of the remuneration policy for the board of management and agenda item 6B concerning the amendment of the remuneration policy for the supervisory board.
And I'll hand over again to the chairman of the remuneration committee, Mr. Dick Sluimers, for a short comment on this. Over to you, Dick.
Thank you, Nils. Under the Shareholders Rights Directive, two remuneration policies must be in place for the Board of Management and the Supervisory Board. These policies should be approved by the general meeting at least every four years in full. In addition, each amendment is subject to the approval by the general meeting. The remuneration policy for the Board of Management has been approved by the AGM in 2005 in full and since amended, most recently in 2018. The remuneration policy for the Supervisory Board was approved by the AGM in 2014. Since both policies were not approved in full in the past four years, we are putting both policies up for your approval today with only some minor adjustments to bring the policies in line with the SRD II requirement.
The slides you see now on your screen summarize the main elements of the remuneration policy for the board of management. The supervisory board has concluded that the remuneration policy for the board of management is still in line with the objectives of the company. In drafting this remuneration policy, the supervisory board has considered the interest of our stakeholders, the experience with an evaluation of the remuneration policy that was first approved by the AGM in 2005, the principles and structures which are continued in this policy, feedback on this policy and its implementation received from shareholder consultations, the principles and best practices of the Dutch Corporate Governance Code 2016 and the revised EU directive to encourage long-term shareholder engagement, the so-called SRD II. With these considerations, the supervisory board is of the opinion that it has secured the required public support for this remuneration policy.
For the implementation in 2020, the supervisory board has decided that, first, the one-off performance incentive plan remains in place to be concluded this year. This follows your agreement in the general meeting of 2018 to introduce a one-off performance incentive plan in support of the company's 15 by 20 profit growth ambition. The final metrics for the STI in 2020 will continue to be ROS and OCF as they remain relevant and aligned with the company's strategy. The LTI incentivizes company performance over a period of three financial years upon vesting an additional two-year holding period applies. The plan promotes the creation of shareholder value, and it assesses share price performance via a relative TSR metric and profit performance via ROI.
In response to the significant market disruption taking place around the globe due to COVID-19, we will discuss at the appropriate time if and to what extent we could address the plans. If that would mean a change of the plans, we will consult shareholders. The second slide, yes, the second slide summarizes the main elements of the remuneration policy for the supervisory board. The supervisory board has concluded that this policy, approved by the AGM in 2014, is in line with the objectives of the company, and in view of the supervisory board, the remuneration it provides is balanced and adequate and will therefore remain unchanged. A review of the remuneration policy for the board of management and the remuneration policy for the supervisory board will be carried out in 2020, and I will update you on the proposed remuneration policy for 2021 at the next general meeting.
I would like to end by thanking you for your support. Back to you, Nils.
Thank you very much, Dick and Isabelle. Just to check if there are any questions to this point.
Yes, we have some questions from the VEB on this point, and the VEB submitted the following questions. Is the supervisory board considering using its discretionary power to reduce variable pay components for 2020? And secondly, will the 2020 performance incentive plan remain in place with a target unchanged at 15% despite a bandwidth in the annual report of 14.5%-15.5% and ROI below 25%? Dick, would you mind responding to these questions, please?
Yes, thank you, Isabelle, and thank you, VEB. I think this is very much one of the two very relevant questions. As I said before, in response to the significant market disruption taking place around the globe due to the outbreak of the COVID-19 pandemic, we will discuss at the appropriate time whether or to what extent we should address the variable incentive plans. That means STI, LTI, and PIP. If that would mean a change to the plans, we will consult shareholders. Furthermore, our 2020 share grants were made early in the year and are based on a share price that had not yet been impacted by the COVID-19 crisis. The 2020 performance incentive plan is indeed an exceptional one-off plan to incentivize improvement of the company's return on sales with a target award of 15%.
In response to the significant market disruption taking place around the globe, the decision was made to pause key parts of the transformation and suspend our 2020 financial ambition. However, our intent to become a top performer in world industry remains intact. As I also said, as part of the remuneration policy, we will discuss at the appropriate time whether or to what extent we should address this incentive plan, PIP. If that would make a change in the plan, we will consult shareholders. Back to you, Nils.
Thank you for this again, Dick. Isabelle, did we receive any follow-up questions on this point?
No, we have not received any follow-up questions on this point.
Okay, then we'll continue with agenda item 7 , the proposal to amend the articles of association of the company. It's proposed to amend the articles of association in connection with recent changes in Dutch legislation following implementation of the Act on the Conversion of Bearer Shares and the Dutch provisions implementing the Shareholders' Rights Directive II, as further explained in the notes to the agenda and the documentation published on our website. The resolution to amend the articles of association, including the grant, includes the granting of an authorization to each member of the board of management and employee of the De Brauw Blackstone Westbroek N.V. to execute the deed of amendment to the articles of association. We didn't have any questions received for this agenda item. So I will go on to agenda item eight, consists of two voting items which are proposed to the shareholders each year.
The extension of the authorization of the board of management to issue and grant subscription rights to shares up to a maximum of 10% of the total number of shares outstanding today, April 23rd, 2020, and the extension of the authorization of the board of management to restrict or exclude the preemptive rights allowed by shares to shareholders by virtue of law in respect of the issue of shares of the granting of subscription rights in conformity with the agenda item 8A , but only regarding share issue pursuant to a decision of the board of management. The authorizations are both granted for a period of 18 months and in accordance with the notes to the agenda of the meeting. We did not have any questions received to this agenda item either.
I will continue with agenda item nine, which includes a proposal concerning the authorization of the Board of Management for a period of 18 months starting on April 23rd today, or in case of a shorter period until the day the authorization is again extended by the general meeting of shareholders to acquire common shares in the company's share capital at any time during this period. The number of common shares to be acquired is limited to the maximum number of shares in the company's share capital as permitted by law of association by the articles of association, and the company may hold its own share capital at any given moment. The maximum number of shares that the company will hold in its own share capital at any time shall not exceed 10% of its issued share capital.
Common shares may be acquired through the stock exchange, stock market, or otherwise at a price between the par value and the Euronext Amsterdam N.V. price on the day of purchase, plus 10% on condition that the price is no higher than the opening price on the day of purchase. The proposal to allow the company to acquire shares also at a price of 10% in excess of the opening price has been inspired by the desire to be more flexible in case price fluctuations occur during the day. The lower limit of the par value has been included in the proposal as the law stipulates that besides an upper limit, also a lower limit is required. We didn't get any question received or get any questions for this agenda item.
So I will go on to the final item on the agenda today, agenda item 10, which concerns the proposal to reduce the issued share capital of the company by canceling common shares held or to be acquired by the company in its own share capital. The cancellation may be executed in one or more tranches. The number of common shares held by the company, which shall be canceled whether or not in a tranche, shall be determined by the Board of Management, but shall not exceed the maximum number of shares that may be acquired in accordance with the authorization referred to under agenda item nine, that was what you just had. Cancellation may not be effected earlier than two months after a resolution to cancel shares is adopted and publicly announced. This will apply for each tranche.
No questions were received for this item on the agenda. And that brings us to the final agenda point, which is the closing. Did we, Isabelle, receive any follow-up questions on certain items on the agenda?
No, Nils, I've just checked and we have not received any further questions.
No further questions. Thank you very much, and I now would kindly ask you to check whether you've submitted your votes on all voting items, and we'll take a little break or a little longer minute for you to check your votes. Okay, so the voting for all voting items have been closed and the votes are being counted. I'd like to take the opportunity to say a few words to Mr. Ben Verwaayen, who is retiring as member of the supervisory board today after eight years. Unfortunately, Ben was, as I said at the opening, not able to join today's meeting, but we would like to thank Ben for his excellent contribution and full dedication to the supervisory board.
He's been in the remuneration board and the nomination committee, and he's brought his invaluable experience to all committees and the board itself, including during a period of great change and great stress for the company. We wish him all the best for the future, and I'm sure he will do very well, and we have a friend we can consult in need, so we wish him all the best. I would also like to thank you for attending the meeting and your understanding that during the COVID-19 crisis, we had to do it this way. Hopefully, next week or next year, we can meet physically again. Then we can have a look at the numbers of the voting. We'll bring them to the screen.
So we'll have three screens here, but we can see that all of the agenda items on this screen have been approved with a large majority, and that's great. So let's take the next screen. So also five to seven items have been approved with a clear majority, and that brings us to the last screen. And also here we have a clear majority in favor of approving the resolutions that have been proposed. So with that, we can conclude that we have had all proposals adopted at the meeting. So I would like to ask the Corporate Secretary to record the voting results, and we will also publish the voting result on our website.
Before I close today's meeting, I would like to thank the management team and all employees of the company for doing such a great job in ensuring that our great company continues working under the difficult circumstances we're facing in the world right now. A great job is being done. We are practicing social distancing as we shall and should, and this gives us a lot of challenges and our employees a lot of both physical but also emotional challenges. It's a difficult time to manage the company right now, but they are doing a fantastic job, and I want to thank all of you for that. And with that, I will close the meeting. Again, thank you, shareholders, for watching what went on on the webcast, for posting questions, and we look forward to seeing you all at the next annual general meeting in 2021.
Stay safe, stay healthy, and well, have a good summer. Thank you.