Ladies and gentlemen, welcome. My name is Gerard van de Aast, the Chair of the Supervisory Board of Signify, and I will be chairing this meeting. Before we start the meeting, I have a few general remarks. In addition to your attendance here in Eindhoven, this meeting can be viewed via the live video webcast available on our website. The webcast will also be available after the meeting. We will use the recording to prepare minutes of the meeting. The meeting will be held in English. We have a translation service available. This means that here in the room, you can also follow the meeting in Dutch using the headphones. In the live webcast, you can choose to follow the meeting in Dutch by clicking on the relevant link. [Foreign language]
You'll be able to follow the meeting in Dutch. The rest of the meeting will be in English. You have a headset in front of you you can use for translation, and also there's a link in the live webcast.
Shareholders to ask questions prior to the meeting. We have not received any questions for this meeting with a request to share with you. As this is an in-person meeting, questions can be asked here in the room and not remotely. If you wish to ask a question, please raise your hand so I can give you the floor, and somebody will come to you with a microphone. Please remain seated. A microphone will be provided to your seat so you can speak and ask the question. When speaking into the microphone, your question can also be followed via the webcast. You can ask your question in either English or Dutch. Please first state your name and, where applicable, the organization you represent. I kindly ask you to keep your question short and concise.
At some point in time, I may need to limit the number of questions or speaking time in order to observe proper meeting order. We will explain the voting procedure when we reach the first voting item. I ask you to please put your phones on silent mode or turn them off and not make any pictures or recording of this meeting. Thank you. With that, I open the meeting of the Annual General Meeting of Shareholders 2025 of Signify NV. I am pleased to present to you behind the table our CEO, Eric Rondolat, our CFO, Željko Kosanović, and our CEO professional, Harsh Chitale . Bram Schot, Chair of the Remuneration Committee, is unable to attend the Annual General Meeting this year.
In his absence, Pamela Knapp, to my left, for you to the right, member of the Remuneration Committee, will assume the role of Chair of the Remuneration Committee for the purposes of today's meeting. The other members of the Supervisory Board are present: Sophie Bechu , Jeroen Drost, and Rita Lane. Behind the table, at the side, you'll see the secretary of this meeting, Michel Germe, and Anna Fredova, deputy secretary. André Wijnsma is present on behalf of the external auditor, Ernst & Young. Our CFO, Željko Kosanović, is nominated to be appointed to the Board of Management today. He will present himself to you as part of the agenda item on his proposed appointment. Before we move to the formal agenda items, I would like to take a moment to acknowledge an important leadership transition as Eric Rondolat will be stepping down from his role as CEO following this meeting.
During his 13-year tenure, Eric has played an instrumental role in shaping Signify, leading the company and indeed the lighting industry through a period of rapid transformation. Eric led the separation from Philips as well as the creation and listing of Signify as an independent company. His strategic vision, deep industry insight and expertise, and his passion for responsible innovation have guided Signify through a dynamic and challenging market environment. Through a bold focus on sustainable innovation, the company has built on its industry leadership position and has become a leader in sustainability with a strategy that leverages this strength to the benefit of our own business and that of our customers. Signify has established itself as the leader of a new era of digital and connected lighting technologies, expanding its reach beyond illumination to capture opportunities in the broader world of IoT.
Having implemented Signify's new operating model in 2024 and delivered the strategy to fully harness the opportunity ahead, the business is in a good position. As we close this important chapter for Signify on behalf of the Supervisory Board, I would like to thank you, Eric, for your great collaboration, years of service, and leadership in the past years. You have made a lasting impact on this organization, and we wish you every success in the future. Thank you. We published a press release this morning about the leadership change. Željko Kosanović has been named acting CEO, and the Supervisory Board expects to announce the next CEO in the coming month. With that, let us now turn to today's agenda. Eric, may I invite you to present your presentation about 2024?
Good afternoon, ladies and gentlemen, and welcome to our 2025 Annual Meeting of Shareholders. Let's start by looking at 2024. Despite headwinds in China and in the professional business, specifically in Europe, we delivered sequential improvements with a particularly strong performance from the consumer business. We delivered a full year sales of EUR 6.1 billion and achieved our guidance for the full year with an adjusted EBITDA margin of 9.9%. We also delivered a healthy free cash flow of 7.1% of sales, which includes a cash out related to the restructuring program and the reduction of our U.S. pension liabilities. Available free cash flow was used to reduce by EUR 440 million our debt. As a result, we have strengthened our balance sheet and reduced interest charges for the coming years. LED-based sales, as you can see on the slides, now represent 93% of our top line.
We continue to see growth in connected and specialty lighting, driven by the underlying demand for energy efficiency and innovative solutions. Our installed base of connected light points reached 144 million at the end of 2024. We continued to advance our innovation, investing 4.3% of sales in research and development, and we did so to drive a future-proof portfolio of sustainable product systems and services. Finally, we launched a share repurchase program for a total of EUR 350 million-EUR 450 million of shares until the end of 2027. This underscores our commitment to create value for shareholders while maintaining financial flexibility to support growth opportunities. Now, let's look at our sustainability progress. In 2024, we completed the fourth year of our Brighter Lives, Better World sustainability program, aiming to double our positive impact on the environment and also on the society.
We made substantial progress and are on track to deliver three of the four commitments. First, we are tracking ahead of our target to reduce emissions across the entire value chain by 40% against the 2019 baseline. Our circular revenues remained ahead of our target of 35%, with a strong contribution from serviceable luminaires. At 33%, we also surpassed our Bright Lives revenue target, driven by the strong performance of professional luminaires and consumer light sources. The percentage of women in leadership positions dropped to 28%, which is below our target. Of course, we are continuing our efforts to increase overall representation through focused hiring practices for diversity across all levels and through retention and engagement actions. Additionally, we were very proud to launch our climate transition plan, which outlines our path to reduce greenhouse gas emissions across the entire value chain by 90% and achieve net zero by 2040.
Finally, Signify has enjoyed some very valuable external recognition, including our eighth consecutive year in the Dow Jones Sustainability World Index, placement in the Corporate Knights Global 100 Most Sustainable Corporations, and a fifth EcoVadis Platinum Medal, which places us in the top 100% of the companies being assessed. Let's now move to our five frontiers strategy. First, we are building a more customer-focused organization and driving process excellence. We are steadily building on our customer net promoter score, which increased to 59 in 2024. We continued to develop a differentiated position in the market. This includes investing in research and development, and as of the end of the year, we have secured 20,250 patents. In addition, we achieved double-digit growth on ultra-efficient technology offerings, B-brands, and private labels.
Signify continued to perform strongly in connected professional systems and services, as you can see, with LED-based sales at 93% and connected lighting reaching 27% of our sales. We reached 33% on Bright Lives revenue from products, systems, and services, which contribute to food availability, safety and security, as well as health and well-being. Enhancements in our direct-to-consumer platforms have improved the customer journey across multiple markets and product segments. Our direct online sales in the consumer channel reached 12.4% of our sales. Generative AI presents significant opportunities for our business in 2024. We deployed multiple cases across customer service, software development, and engineering functions. To ensure Signify continues to be a great place to work, we are investing in our people, creating a diverse and inclusive workplace, as well as deepening our digital and commercial competencies.
Our employee net promoter score reached 29 in 2024, and our focus on internal mobility has enabled 47% of the mid-senior positions to be filled internally. Let's now look briefly at the highlights of where our strategic journey has brought us so far, and you can see that summed up in the following slide. We are the world leader in lighting. We provide high-quality and efficient light sources, luminaire systems, and services. We employ 29,000 people in 70 countries, and we have achieved, as said previously, EUR 6.1 billion sales in 2024 and expanded the number of connected light points by more than 20 million in 2024 to 144 million globally. In the past decade, Signify has led the transition of our industry from conventional to LED. As you can see, in 2012, conventional lighting made up 78% of our sales.
In 2024, 93% was LED, with connected LED and specialty lighting already reaching 34%. In 2024, we introduced a multi-year partnership with Mercedes-AMG PETRONAS Formula One Team. Very specifically, this partnership is building a stronger awareness of the Signify brand, aligning with a leader in performance and innovation, with the ambition to become one of the most sustainable organizations in professional sport. Built on our shared commitment to responsible innovation, the partnership highlights our leadership in advancing sustainability with them and expertise in lighting, which enhances performance and well-being, as well as elevating fans' experiences. One of our first joint initiatives was to install NatureConnect in the team's headquarters. This is the middle photo with the objective to improve the drivers' adaptation to different time zones as they are traveling the world. We will look now at our progress in the first quarter of 2025.
This morning, we reported sales of EUR 1.4 billion, which represents a comparable sales growth of 2. A decline in comparable sales growth of 2.8%. Our operational profitability was 8%, and we delivered a free cash flow of EUR 40 million. Our installed base of connected light points at the end of Q1 increased to 153 million. Additionally, we completed the share repurchases to cover share-based remuneration and continue with share repurchases for capital reduction. Let's now talk to our 2025 outlook. Based on our visibility of the market, we expect low single-digit comparable sales growth, excluding conventional, and a stable adjusted EBITDA margin versus 2024. Additionally, we expect a free cash flow generation of 7%-8% of sales. Now, I would like to share some examples of our connected LED and specialty lighting in action.
In Düsseldorf, as you can see on the slide, our Interact smart lighting system offers precise monitoring and control of every light point. The city can provide light where it is needed most while dimming or reducing its in low-demand areas. The city's goal is to transition 3,000 public light points annually on the way to becoming carbon neutral by 2035. The roads surrounding the very beautiful Italian town of Ventimiglia are hilly, making it difficult to install an electrical infrastructure. Here, our Philips SunStay Solar Lights eliminate the need for underground wiring and provide safe road lighting that is also clean and cost-effective. This is a very good demonstration of how improved road safety can coexist with environmental preservation. Next is about Den Berk Délice, which specializes in growing flavorful tomatoes.
Their previous LED hybrid lighting system had simple on-off controls that could be used based on energy markets or levels of sunlight. Now, with dimmable lighting, the grower has more control over the lighting levels to make precise adjustments to maintain continuity of light for the plants. With a new system from Signify, the grower can increase light levels, maintain higher temperature, and overall speed up the cultivation process for increased productivity. Here is one example of the lighting installation at the Mercedes Formula One Team Steven Vegas Club during the 2024 Grand Prix. As you can see, the team's VIP hospitality venue was transformed with Philips Hue lighting in the garden, with a light cloud installation featuring 3D-printed Printalux luminaires. We also lit the track for this night circuit in collaboration with DZE, ensuring crisp and clear visibility for drivers, spectators, and fans at home.
Finally, the office of the engineering firm Soren Jensen in Aarhus in Denmark is a showcase for sustainable design featuring recycled material and regenerative construction practices. Our 3D-printed luminaires contribute to the building's low carbon footprint. The connected lighting system is powered by Interact and equipped with sensors. This provides access to data insight on energy consumption, space utilization, and maintenance needs, which makes it possible for Soren Jensen to optimize the working environment and office energy efficiency. Finally, I want to draw your attention to the work of the Signify Foundation. You know that it is an independent NGO funded by Signify that enables underserved communities to access the benefits of sustainable lighting solutions. The foundation has just reached a very, very significant milestone of 10 million lives lit, one year ahead of its target.
In the period since 2023, the foundation has delivered 72 projects, including essential work in refugee communities, schools, and healthcare centers. It has also carried out humanitarian relief work in Ukraine, Morocco, Libya, and the Philippines. Through their tireless work aided by Signify employees, the foundation supports organizations working on the ground to bring lighting to the communities who need it the most. To finish, on behalf of the Board of Management and the leadership team, I would like to sincerely thank all our employees and partners for their trust and collaboration. I would also like to thank our customers who continue to put their trust in Signify and, of course, our shareholders for their ongoing confidence and support. Thank you.
Thank you, Eric. Eric's presentation is closely connected to the agenda items on the remuneration report 2024, the annual accounts, and the dividend policy. Therefore, I suggest we first give our presentations on these matters and then jointly discuss the topics of agenda items up and to including item six. In agenda item four, after the explanations from the external auditor Ernst & Young, we will address questions on agenda items one through six. After that, shareholders can vote on the proposals on these agenda items. We will now move on to agenda item two, the remuneration report. Just as in previous years, the remuneration report is included in a separate chapter of the annual report. It explains the remuneration policies for the Board of Management and the Supervisory Board and the implementation of these policies in 2024.
I will now hand over to Pamela Knapp, who is acting as Chair of the Remuneration Committee for today's meeting. She will highlight key elements of our remuneration report 2024. Pamela, over to you.
Thank you, Sierra. Ladies and gentlemen, our current remuneration policy for the Board of Management was introduced last year in 2024. There are no further changes to our remuneration policy for 2025. As such, I would like to focus on the remuneration report and the execution of our policy during the year as detailed in chapter 10 of the 2024 Signify remuneration report. As a part of our ongoing process, we engage with multiple stakeholders for discussions on remuneration and our report. During 2023 and 2024, we invited investors representing a total of 37% of our shareholder base, including proxy advisors, other stakeholders, and our Dutch Works Council to discuss this topic further. Ultimately, meetings were held with shareholders representing 18% of the shareholder base, excluding passive investors.
On behalf of the Remuneration Committee and the Supervisory Board, I would like to thank those stakeholders for the ongoing, very constructive discussions. These meetings are a very important part of our governance processes. On our slide 25, you see here, you can see the structure of our remuneration for the Management Board. It illustrates that salaries as well as target levels for the annual and long-term incentives. As I described earlier, there were no overall structural changes to the remuneration of the Board of Management in 2024, nor is any proposed for the year 2025. Therefore, these target levels for the annual incentive and long-term incentive have remained the same. For 2024, base salaries were increased by 3%, which was in line with the collective and merit increase budgets allocated for CLA employees in the Netherlands, as well as budgets allocated for the broader employee population for 2024.
For 2025, salaries were also increased by 3% in accordance with global salary increase budgets. I would like to have a look now at the details of the incentive plans. The next slide. To refresh our understanding, this slide details the structure of the annual incentive according to our 2024 remuneration policy. It illustrates both the structure and the actual outcomes for 2024. From a structure perspective, 80% of the opportunity was related to financial metrics, while 20% was allocated to team and individual performance as per prior years. We selected as financial performance metrics comparable sales growth and adjusted EBITDA as two key metrics. This was in line with prior years. We replaced the metric for free cash flow with working capital in direct response to feedback received during the stakeholder meetings I described earlier.
The remaining 20% of the annual incentive for the Board of Management reflects team and individual metrics that are set at the beginning of the year. These metrics included culture change and people engagement, customer satisfaction, and finally, the implementation of the announced new operating model and delivery of the committed cost reduction program. Now, shifting from the structure to the outcomes of the 2024 annual incentive plan, the details of which are included on this slide. Targets for the annual incentive plan were set at the beginning of 2024 for the full year and were not adjusted during the year despite the ongoing volatility and unpredictability in the global environment. The result was that the 2024 performance year was a mixed performance year.
For the financial component of the annual incentive, as detailed in the top right-hand side of the slide, two out of the three financial metrics, comparable sales growth and working capital, achieved results that were above their salt levels, while the remaining metric, adjusted EBITDA, did not meet their salt levels of performance. This overall resulted in an outcome of 29% on the total financial metrics. For the realization of the financial metrics of the annual incentive for 2024, the Supervisory Board considered whether any adjustments or discretion should be applied. The Supervisory Board concluded not to make any discretionary adjustments to the performance outcomes of any of the metrics, and the 29% reflects the outcome of the financial components of the plan. The second component of the annual incentive plan relates to team and individual measures, as detailed on the bottom right-hand table.
From an individual and team performance measure perspective, the Supervisory Board conducts an assessment at the end of the year relative to the objectives set for this year. The Supervisory Board was pleased with the performance relative to the team and individual components that were achieved during a period of significant internal change. The Supervisory Board, therefore, determined an 80% performance outcome. Equally, the employee NPS, net promoter score, and customer net promoter score both finished the year very strongly. From an employee net promoter score perspective, the Q4 outcome of 34 was two points below the historical best score for NPS. Customer NPS improved over 2024 to a high of 59, reflecting a significant improvement compared to 2023. These improvements in both scores reflected a continued focus on two key stakeholders, employees and customers, during this period of change.
Finally, the implementation of the restructuring, new operating model, and delivery of the committed cost reduction program was done very well. Signify verticalized the business, improved customer NPS, and delivered the cost reduction program, realizing EUR 131 million in 2024 as cost reductions in line with the commitment. Finally, the employee population adopted the changes very positively with a change index measure from the quarterly employee survey, achieving an outcome of 84%, indicating strong alignment, understanding, and adoption of change. The results for the 2024 annual incentive outcome were 45% across all measures, and the final payout per Board of Management member is shown on the left side of this slide. With respect to the long-term incentive grant, which was made in 2022, the performance period was three years as of the beginning of 2022 to the end of 2024, three years. The grant vests on April 28.
As such, at the end of the performance period, an assessment is made relative to the targets set at the beginning of 2022. As with the annual incentive, it is important to note that no changes were made to the targets during the three-year performance period. Additionally, the Supervisory Board did not apply any discretion to the achieved outcomes, nor to the corresponding realizations on these metrics. This then is a result of performance over the three-year period. Regarding the relative TSR, TSR is total shareholder return. TSR achieved by Signify over the period was -38.9%. This positioned Signify as number 14 out of 15 companies in our peer group. As Signify was not at a position of number eight or higher relative to the peer group, the resulting final achievement on this metric was 0%. The other component, free cash flow.
Over the three-year period, an amount of EUR 1.468 billion free cash flow was generated. This represents 7.2% of sales and is below the threshold of 9.6%. The resulting achievement was therefore 0%. The last metric, the ROSI for 2024, ROSI was based on the outcomes in the last year of the plan period, the year 2024, excluding pension liabilities. The ROSI for 2024 was 9.9%. This was again below the threshold of 11%, and the resulting final achievement was therefore 0%. Overall, 0% on the long term. Coming to sustainability. The sustainability objectives for 2024 were based on the intent to double our impact in the areas of climate action, circular economy, brighter lives revenues, and women in leadership positions as per our Brighter Lives, Better World 2025 program. In all areas, significant progress has been made relative to the trajectory to deliver on the ambitions by 2025.
Carbon footprint reductions actions are reflecting a steady decrease of emissions, scope one, two, and three, on track with our 2025 ambitions with 487 million tons of cumulative carbon reduction. Circular revenues surpass the 2025 targets at 35%. Brighter lives revenues have exceeded the ambitions set for 2024 with an outcome of 33%. Women in leadership positions has increased by 11% from 2019 to be 28% in 2024, although this is declined by 1% from 2023. It falls behind the trajectory needed to double the percentage of women in leadership positions by 2025. Over the period of the LTI plan, Signify remained a leader in sustainability and continues to be recognized as such externally. The resulting final achievement of these sustainability measures was 150% outcome.
With this, the total performance across the four measures, the three measures for the financials and the one measure for sustainability, is 37.5% for the 2022 long-term incentive grant. In line with Dutch best practices of corporate governance, the members of our Board of Management hold after tax shares received for at least five years from the date of grant and until the internal ownership guidelines are met. This concludes my remarks on the remuneration report for 2024. Thank you very much for your attention.
Thank you, Pamela. As said earlier, we will respond to questions on this subject on agenda item four. We will now continue with agenda item three, an explanation of the policy in addition to reserves and dividend. I'd like to give the floor to our CFO, Željko Kosanović, for an explanation of the policy on additions to reserves and dividends.
He will also discuss the dividend proposal that is on today's agenda. Željko, could you please brief us on these topics?
Thank you, Chairman, and good afternoon, ladies and gentlemen. Let me start by saying that Signify has continued and will continue to exercise financial discipline in the generation and in the use of cash. As part of our capital allocation policy, we continue to focus on free cash flow generation and maintaining a robust capital structure to support our commitment to an investment-grade credit rating. In line with this approach, Signify strengthened its balance sheet in 2024 by deleveraging by EUR 440 million of debt and reducing $48 million of U.S. pension liabilities in our main U.S.-defined benefit plan. Our dividend policy is to pay an increasing annual dividend per share in cash year on year.
We propose a 2024 dividend of EUR 1.56 per share, EUR 197 million, to be paid in cash in 2025. We will also continue to invest in organic and inorganic growth opportunities in line with our strategic priorities. Furthermore, we have updated our capital allocation policy by outlining our approach to provide additional capital return to shareholders with residual available cash. We have announced a share repurchase program of EUR 350-450 million until the end of 2027, with a first wave of EUR 150 million to be completed in 2025. Now, let's discuss our net debt development in 2024. Our net debt decreased by EUR 151 million to EUR 920 million at year-end 2024, driven by strong cash flow generation.
At year-end 2024, our gross debt was EUR 1 billion 553 million, with main debt instruments including a EUR 600 million bond, which is due in 2027, and term loans of EUR 725 million with maturities in 2025 and 2026. Our cash amounted to EUR 633 million at year-end 2024. We generated EUR 438 million of free cash flow during the year 2024. On top of our cash available, we also have unutilized revolving credit facility of EUR 500 million. This concludes my presentation, and I will now hand over back to our Chair.
Thank you, Željko. Questions on the presentations from Željko will be addressed in the next agenda item, and for that, I will move to agenda item four. I'd like to start with some comments on the annual report 2024. The financial statements have been prepared in accordance with IFRS, as endorsed by the EU.
In addition to the extensive sustainability reporting already in place, this year's annual report also has been prepared in accordance with the CSRD. The sustainability statement provides a solid foundation for future reporting. Ernst & Young has provided limited assurance on the four doubling targets of our Brighter Lives, Better World 2025 program, circular revenues, Brighter Life revenues, women in leadership, and full-chain emissions, and reasonable assurance on the remainder of the CSRD disclosures. The financial statements have been audited by Ernst & Young, who also performed the assurance engagement on the sustainability information. On behalf of Ernst & Young, André Wijnsma is present to provide a brief explanation on the audit performed. As in prior years, we released André Wijnsma from confidentiality for this purpose. This means that he can explain the audit procedures that Ernst & Young performed with Signify.
I now give the floor to André Wijnsma from Ernst & Young. André?
Thank you, Mr. Chairman, and good afternoon, ladies and gentlemen. Indeed, my name is André Wijnsma, and I am the responsible external auditor of Signify since 2021. I'm pleased to provide you with more insights in our audit of the financial statements and the assurance procedures related to the sustainability statement of Signify. In my presentation, I will cover the following elements. First, our approach and the key results of the financial audit, followed by the ESG and CSRD sustainability statements, then the communication with the company and those charged with governance, and last but not least, also some insights in the audit plan 2025.
The scope of the financial audit relates to the consolidated and company-only financial statements, and in addition, we have reviewed whether the director's report, including the remuneration report, complies with Dutch law and is in line with the consolidated financial statements. Let's take a closer look at the audit strategy and the execution of our financial audit. The financial audit is performed by a team of auditors here in the Netherlands, and we make use of component teams in other countries. We involved a lot of experts, I can say, for valuation, pension, IT, cyber, forensics, treasury, tax, accounting, corporate governance, and also remuneration. We also had involvement of an independent quality reviewer from the planning phase of the audit until the completion of the audit, in accordance with regulation for listed companies.
In our role as group auditor, we performed also physical site visits, and I personally visited the U.S., India, and China, where I met with management and also our local audit teams, and I visited factories and warehouses. We organized file reviews and had regular updates with component teams throughout the audit. Almost all audits across the globe are carried out by EY audit teams. With respect to internal audit of Signify, we cooperate and share the results of our audit with each other; however, we do not rely on the work of internal audit. Let's now dive a little bit deeper in the materiality and execution phase of the audit. With respect to the planning materiality in our audit, we used an amount of EUR 24 million based on 4% of adjusted EBITDA, like in prior years.
The threshold for reporting audit differences to the audit committee is EUR 1.2 million. We executed our audit based on this materiality level and our risk assessment, which we have updated throughout the year. We made use of data analytics for journal entry testing and also for various significant accounts, including revenue recognition, receivables, and cash. I would like to highlight the following specific topics which were relevant during the execution of our audit. First of all, some more insights in respect of fraud and non-compliance with laws and regulation. Together with our forensic experts, we have evaluated the setup and implementation of internal controls designed to mitigate fraud risks. During the audit of Signify, we have identified revenues from sales of goods and then specifically related to cut-off recognized at the point in time as a fraud risk.
We have assessed relevant accounting policies and key controls, and we performed detailed testing of significant contracts and cut-off procedures in the last weeks of the financial year and the first weeks of the new financial year. We consider the risk of bribery and corruption as an inherent risk, considering the global footprint of Signify. In this respect, we performed procedures related to agents, distributors, gifts, travel and entertainment, sponsorships, new contracts, export controls, and compliance with sanctions laws, and we tailored our procedures per high-risk country in scope. We also took notice of the incident management system of the company and assessed appropriate follow-up of incidents by management. Overall, we conclude the company has a solid framework in line with its risk profile and global presence, and here I can confirm that no material findings have been identified.
The second topic I want to highlight relates to going concern, and I can be short in this respect. We have assessed management assumption, and we concur with the fact that the annual report is based on the going concern principles. With respect to cyber, I can make the following comments. We gained an understanding of cyber risks based on interviews with key stakeholders and inspected relevant documents. The Supervisory Board and the Management Board receive regular updates on cyber risks and incident management. Overall, we conclude that risks related to cybersecurity are top of mind within the company. The last specific topic I want to inform you about relates to culture and soft controls. Even though we are not experts in this field as auditors, we do take culture and soft controls into account in our audit.
In this respect, the tone at the top is a very important factor for us, considering example behavior, role clarity, transparency, and speak-up. We note that the culture is regularly on the agenda in meetings with the Board of Management and the Audit Committee. We have read internal reports on, for example, people engagement surveys, and we note that adequate follow-up is given in this respect. Further, I would like to mention that our observations during the audit are taken very seriously by the Management Board and the Audit Committee, and we feel free to make relevant comments during our meetings with the company. Now, let's move on to the key audit matters we have identified during our audit.
In 2024, we have identified three key audit matters where revenue recognition and uncertain tax positions are the same as last year, and we performed similar audit procedures with satisfying results. A new key audit matter in 2024 relates to the valuation of goodwill and then specifically for professional business and then the main geographies. This is considering the development of this business during the year. We performed our audit procedures with involvement of specialists and assessed that the disclosure notes comply with the applicable laws and regulation. We concur with the positions taken by management in this respect, and our audit procedures resulted in an unqualified auditor's opinion for both the consolidated and company-only financial statements, and we have assessed that the director's report, including the remuneration report, is in accordance with Dutch law and regulation.
Now, I will share some more insights in the procedures we performed with respect to the non-financial information. The scope of our work we performed is twofold, as also the Chairman mentioned. First, the CSRD sustainability statement based on ESRS standards, and secondly, related to the four selected KPIs in relation to Brighter Lives, Better World, based on own company criteria. Let me start with the last one. The selected four ESG KPIs, which we have audited with reasonable assurance, Mr. Chairman, instead of limited assurance, yeah, with prior years and related to the doubling commitments of the company. For the total GHG emission, we focused our procedures on the use phase, considering the wattages and lifetimes of the sold products, as this has more than 95% of the total scope three impact of Signify.
Again, we have provided an unqualified auditor's opinion with reasonable assurance in accordance with the applicable criteria set by the Supervisory Board. With respect to the sustainability statement, Signify made significant efforts to comply with CSRD and ESRS standards, all based on the outcome of the double materiality assessment, which was conducted thoroughly and in accordance with the ESRS requirements. The outcome of the DMA is reported in the sustainability statement in a transparent manner. We have executed our assurance procedures based on materiality levels per ESRS standard, also considering our risk assessment. For the CSRD information, we have a centralized assurance approach, and we have involved sustainability experts, and one of the experts is in the room here as well. We performed a physical site visit to a factory in Hungary in 2024 in relation to non-financial information.
Based on the procedures performed, we concluded that the information presented is balanced, relevant, suitable, and accurate, and in accordance with the ESRS standards. Also, the impact of climate-related matters is considered in preparing both the financial statements as well as the sustainability statement, specifically related to conventional, which in our view is disclosed transparently. With respect to the sustainability statement, we issued an unqualified limited assurance report on the consolidated sustainability statement and included two emphases of matter: one related to the DMA process, as it is the first year, and the second related to the most significant estimates and judgments. These emphases of matters did not have any impact on our conclusion. Let me give you some more insights in the communication and interaction that we have with the Board of Management and the Audit Committee.
We meet regularly with the Board of Management, and we have very frequent communication with the group finance team members. We have attended all audit committee meetings, including executive sessions with the audit committee, without attendance of management. I have regular contact with the Chair of the Audit Committee in preparation of these audit committee meetings, and in February 2025, we have presented our audit results to the full Supervisory Board. As said earlier, we feel free to make our comments and note that adequate action is given to our recommendations. Now, let's take a moment to share some insights in the audit plan 2025 that we have presented to the audit committee yesterday. Our financial audit plan is in line with our plan for 2024 and based on scoping with a solid coverage.
Based on our knowledge today, we expect revenue recognition and valuation of goodwill for professional main geographies to be key audit matters. The exposure of uncertain tax positions is not expected to be a key audit matter any longer in 2025. We will update our risk assessment during the year, and if relevant, we can identify new key audit matters based on potential new insights. Two other important topics for the 2025 audit relate to the implementation of the statement of risk management in Dutch de VOR and the transition to the new auditor starting from 2026 in this year and early next year. We present our audit plan regarding non-financial information in July 2025 during the audit committee of Q2. Finally, I want to draw your attention to academic integrity.
I have previously discussed the progress of our investigation with the chair of the audit committee in preparation for this AGM. Our investigation is thorough and expected to be completed in due course. I will share the relevant findings of the investigation and the EY's follow-up there too with the audit committee so the audit committee can assess our response in relation to Signify's audit. Dear shareholders, I would like to state to you that I always act with the highest integrity standards in my role as external auditor. I thank you for this opportunity and your attention. Mr. Chairman, I would like to hand over back to you.
Thank you, André. Ladies and gentlemen, we now come to your questions on the topics mentioned before under the agenda items one to six. Who may I give the floor? I see a couple of hands.
Somebody will come to you with a microphone. Please state your name and the organization you represent. Hello, good afternoon.
My name is Peter Fortuyn. I'm representing the Dutch Association of Investors for Sustainable Development. We are happy to be here. My first topic is biodiversity. Signify shows commitment to this, although it is not material, but still you show commitment. For example, you state in your annual report that for suppliers, seven priority commodities are identified, and for your own operations, six potential risk sites are identified. Okay. Your Brighter Lives, Better World program is to be renewed or maybe under a new name. We don't know. Is Signify willing to commit to include biodiversity targets in the new program and also to be a bit more specific on the topics that I mentioned that you mentioned yourself?
Giving some more specific targets on those, let's say, seven priority commodities from the suppliers. The second topic is living wage. For your own operations, you defined with wage indicator, you give a nice report on that, but we are focusing then on suppliers. This is a bit harder, obviously. You mentioned in your annual report that you are willing to start with direct engagement to suppliers regarding wages. It is also reported that there are some improvements in wages for suppliers. Our question is, are you willing to disclose how you manage those direct engagements that you intend to do? The other part is what you mentioned in the annual report is, let's say, the local minimum wage for suppliers I am talking about.
Could you then raise that to living wage in your communication to suppliers and, for example, put it in your supplier sustainability declaration? Finally, on CSRD, you have indeed in your 2023 report, double material assessment well performed. That looks okay. Now you have the European Commission and the Omnibus report to make it a bit less harsh for the companies. What is your vision at Signify on that? You performed a significant effort in this direction. That is one part of the question. The second part is, what is your vision towards the future concerning CSRD? How can you maintain your leading position there?
Thank you. Eric, could I direct those questions to you?
Yes, Chairman. Three questions. Let's take them one by one. The question on bio-diversity.
As you have rightly said, we conducted our double materiality impact, and it came with the conclusion that it was not material for us, linked to the fact that our activities and our sites are not generating a negative impact above the threshold when it comes to biodiversity in general. Yet we decided to report on it. In the new program that we have been discussing these weeks, we imagine that there will be indicators and targets when it comes to nature in general and potentially biodiversity. That is in the making, and the new program will be probably communicated in the second half of the year for probably another five-year period, but we will see what it is when it comes. The second subject is a very complicated subject, as you know.
As far as fair wages are concerned, this is something that we apply very strictly and also with our suppliers. It is clearly today in our supplier sustainability declaration, it fully aligns with the Responsible Business Alliance Code of Conduct. At the end of the day, we're referring here to amounts and conditions that are legally binding. It is much easier for us to talk to suppliers and audit them on the basis of something which exists and which is supported by the law. This is what we do: talking to our suppliers, making sure that they sign the declaration, and auditing them. When it comes to living wages, we believe that it's difficult for us alone to go to suppliers and have them to follow. In essence, we are fully aligned with living wages, and we're even participating and collaborating with others.
There is an initiative which is called the LBA Living Wage Task Force, which is aiming at synchronizing our efforts with other members in order to go with a common front. I will not tell you that we have the recipe today on how to apply to our suppliers living wages if we are alone. We are very strict on fair wages and still participating in two initiatives in order to try to see if we can go to living wages. Third question, CSRD. CSRD has been a lot of work, a lot of hard work, and we believe that it's a work which is having value. We also are happy with the Omnibus because we think that whenever this was implemented, it has a few complex processes, and we think that we can simplify.
The Omnibus is aiming at simplifying, and we are very aligned with this. I think we can still simplify and have an overall CSRD which would be quite comprehensive, complete, and able to judge companies that are doing the right thing. What we believe is also very important for us is that whatever is decided does not exclude companies that are also operating on the European territory. I think there should be a simplified version but applied to all companies. We have been voicing this quite strongly to the European Commission because it is, for us, a very important element. Now, the commitment to sustainability is not only CSRD; it's also that.
I mean, you've heard André talk about what we've done with Better Lives, Better World, and then extending it with CSRD, and this is a commitment that is very strong and embedded in what we do and in our strategy.
Thank you, Eric. There is a question over there.
My impression was that you pointed to someone else.
I actually did, but we will get to her in a minute.
Jumping the queue, is that no problem for you?
If you don't feel too bad about it, it's okay.
I don't feel overly guilty, and I'm almost inclined to quote Mr. Wijnsma, whom I've just heard saying, and I quote, "We feel free to make relevant comments." So I shall also hope that you find my comments relevant. I have, by the way, that's also specifically to you, Mr. Chairman, a question on the share buyback program.
Would you wish me to address that question under agenda item 11?
No, that's fine.
Fine that if I do it now. All right. First of all, of course, I'm Armand Kersten, VEB, Vereniging van Effectenbezitters . First, you will not be surprised that we were very surprised when we got the news of Mr. Rondolat's resignation. I quote at Financieele Dagblad, 20 February, "The mouth is full." I think a translation of that in English, if there were one, "Enough is enough." I find it difficult, first of all, to reconcile that with the fact that Mr. Rondolat was reappointed for a full term only last year. I also find it surprising in view of what I read on page 139 of the remuneration report, from which I only quote, and I will really confine it to what I'm going to read now.
The Supervisory Board acknowledged the continued volatility and challenging year and assessed the individual and team performance in the context of the year. The Supervisory Board assessed performance as good. As a result, the Supervisory Board has determined the realized performance on this measure reflected 80%. Now, of course, I know the explanation that has been given that since certain metric targets were not exactly hit, etc., etc. But quoting again, Financieele Dagblad, "The mouth is full." Can I still take it, although this may be something that you will not make any pronouncements today, that Mr. Rondolat is perfectly entitled to the one-off severance payment of one-time base? This on Mr. Rondolat's surprising resignation. Then a point on more fit the financials.
In view of the situation in America now, tariffs that have been announced on the EU and China, and given that Signify generates 30-35% of its revenue from the U.S., do you believe that it will be able to increase prices to offset any potential U.S. tariffs? By how much would prices need to increase to mitigate U.S. tariffs, assuming current proposed tariffs? Do the U.S. tariffs and/or resulting recession risk change the financial outlook? A second financial question is, in March, Germany, which accounts for 6% of Signify's revenue, unveiled a massive EUR 500 billion infrastructure investment plan aimed at revitalizing its economy. Do you believe that this major economic stimulus will benefit Signify? An example is, of course, outdoor lighting. I have a question I think, Mr.
Chairman, is directed to the company rather than to the auditor, but it may be that the auditor will also wish to say something on it. I read on page 2033 of the report that the opinion has been made by EY Accountants BV. I also read that on the slides. If I quote from the explanatory notes to your previous annual agenda, it stated, "Signify's current auditor, Ernst & Young Accountants LLP, will remain in function until the conclusion of the audit for the financial year 2025." My question is, who is the auditor? Perhaps somewhat alongside that particular question, have we, as the annual meeting, and it's us to whom the Dutch code allocates the power to appoint the auditor, have we missed something? I do not recall that we have appointed Ernst & Young—sorry, EY Accountants BV—as your accountant.
Finally, I had a question, and you said I could ask it now on the share buyback program. That question is, Signify announced a new buyback of EUR 350 million to EUR 450 million over 2027, with EUR 150 million in 2025. Now, the ability of Signify's free cash flow generation to support both the dividends, dividend which will be at around EUR 200 million, and the buyback, you can question that. Can you reassure investors on that? Thank you very much.
Thank you. Let me address a couple of these questions, and on tariffs and on the share buyback, I would like to refer to our CFO, who can deal with those two topics. Your first question on the package of Mr. Rondolat. Mr. Rondolat's employment contract is online. You can read what Mr. Rondolat is entitled to.
That is not, at this moment in time, we are not able to express it in absolute value because some of the programs that Mr. Rondolat will be entitled to have to mature, and that will happen over the next period. All is being done in total transparency, and as I said, Mr. Rondolat's contract is available online. Your question about Germany. We are very interested. I think it is fair to say it is a bit early days. The German incoming government, the government is not even installed yet, to my knowledge, has announced significant investment intentions, among others in defense, among others also in infrastructure. I think we clearly would hope to benefit from that going forward. Right now, it lacks any detail or any specification other than and beyond what I just said.
On the auditor, I think last year we—I mean, Ernst & Young is the auditor for 2025, PwC is the auditor for 2026. That is what the meeting of shareholders voted for last year, to my recollection. You mentioned some minor detail maybe on an entity of Ernst & Young. I will refer to Andrei to answer that question. We go to Željko for tariffs and share buyback.
Yes, thank you, Mr. Chairman. Indeed, we changed our legal structure into a BV, and I think there was also attention for it in the media, in the Financial Times, in the Dutch Financial Times. As per July 1, we have changed the fact that we were an LLP based in the U.K. to a Dutch BV.
The reason for that actually is because the LLP structure gave some complications with respect to the impact of Brexit. EY Accountants BV is the auditor of the company, and we included a separate paragraph also in the engagement letter of 2024 to make sure that indeed the BV is the entity of the auditor.
I hope that is sufficient for you. Let me refer the questions on tariffs and share buyback to Željko. Željko.
Yes. Thank you for your question. Regarding the impact of tariffs, that's obviously a topic on which we've been working for quite some time. Actually, we've been applying proactive measures to de-risk the exposure to the China import into the U.S. market many years ago, and we've been doing that very successfully.
As we've seen, of course, the development over the last months, we've been preparing different options to be ready to adapt depending on the evolution. As you know, it has been quite a fluid topic. I think what is important to mention is from the perspective of the exposure itself, the imports from China represent less than 20% of what we import into the U.S. markets. We have, of course, a large portion of our import which is coming from Mexico and Canada and which are, for the vast majority, U.S.MCA compliant, meaning that, as per what we know today, not impacted by the tariff. We have other countries of sourcing, Europe, Asia, which are now being part of the under the application of the tariff. Here, we've looked at it very, very thoroughly.
A few things that we are applying and we have different mitigation measures that we are able to execute. First and foremost, we have focused and we have a very clearly defined plan to focus to manage the second quarter to be able to do that successfully with all the elements we know. There we have taken different measures that allow us to do so. In parallel, to be prepared to apply more structural measures for the second half of the year to adapt to and to be able to further de-risk the sourcing from China. This is something that we have been doing very thoroughly. I think we have more than 75 specific projects, transfer projects with defined timelines, leveraging also on the partnership with suppliers that we have, mostly in Asia.
We have a lot of mechanisms and options and levers that allow us to adapt and, in particular, to mitigate and to adapt the sourcing mix in view of the element that we know today. In addition to that, of course, for the part where the tariffs are implemented and applicable, we are, of course, and we have announced in the months of March and in the months of April, price increases, which is also what we've seen happening in the market.
All in all, we've taken all those elements into account, reviewed them very thoroughly, and they are in line and enabling us to confirm the parameters of top line and profitability guidance that we have reconfirmed this morning when we presented our results, taking into account the effect of the tariff as we know them and taking into account also the effect of all the measures that we have implemented and that we are implementing for the second half of the year. This is regarding the tariffs. Maybe to complement on the question on Germany, today we do not see direct effect of the stimulus that have been announced.
However, it's fair to say because Germany, for us, in particular, in the professional business, has been a market where we've seen a very, very soft and headwinds over the last year and continued in the first part of 2025. There is fair to expect that this should contribute to the sentiment. Now, it's very difficult and too early to say what would be the effect on the concrete, let's say, reigniting of the investment cycle. Let's say this is giving a little bit more hope on the momentum of the market demand in Germany to improve, but with still a question mark on when this will happen. We remain overall very prudent on Germany, but on Europe in general for the professional business regarding 2025.
Now, moving to the question on share buyback, specifically for 2025, we have reconfirmed our expectation, our guidance of a free cash flow generation of 7%-8%. As I presented earlier, looking at the different parameters of a balanced capital allocation policy that we have realigned at the beginning of the year, if you do the math with the payment of the dividends, the share buyback program, and the needs for our investing in our organic investment requirement, which are mostly OpEx, right? We are very CapEx light. We still have headroom, actually, that would be available if needed be to be redeployed in investment organically or inorganically.
To your question, I think we are today with the elements we have and the outlook that we have in terms of free cash flow generation, comfortable to complement and to further pursue the implementation of the share buyback program of EUR 150 million for 2025.
Thank you, Željko. Moving on, before jumping, the queue ones is okay, but not twice.
Yes, hello. My name is Diana Trif. I work at Robeco, and today I speak on behalf of a group of institutional investors, including Robeco and Triodos. Before moving to my question, I would like to thank Signify for the ongoing dialogue we have had so far. It has been very constructive, and we look forward to continuing it going forward. Now, moving to my remaining question, I did also have a question on tariffs, but the response provided earlier clarified.
It is related to your AGM agenda. We believe that the sustainability statements should also be submitted to a vote at the annual meeting, similar to the procedure for the financial statements. We therefore encourage you to submit the sustainability statements for a vote at the next AGM. I was wondering if you could reflect on this and elaborate on your thoughts.
Thank you for your question, and also thanks that you are mentioning the constructive dialogue that is going on between the company and yourselves. There have been multiple of these interactions, and we benefit from those as well. Thank you all from our end. As it comes to putting up the sustainability report for a vote, we have no intention at this moment to do that. That is also what we have shared with you.
If it ever were to become mandatory, of course, that changes it. It might that we change our view and opinion through an ongoing dialogue with parties like yourselves. For now, that is not something we are planning to do. Are there any further questions? Hold on. Wait until the microphone comes, otherwise people on the webcast can't hear the question. That's fine.
Thank you. Armand Kersten, VEB again. First of all, I totally second the idea that the sustainability report ought to be submitted to the agenda of the general meeting. I find it somewhat disappointing that you are not yet proposing to do so, although I appreciate the fact that you don't. With all due respect, Mr. Chairman, I beg to differ with you on the fact that changing the identity of the auditor is a minor detail.
Even if it were a minor detail, might I then ask the company, so far as you are aware as a company, have the management board, whatever you call it, but basically appointed the new auditor? Has the fact that the identity of the auditor changed resulted in a reappointment or a renewal of the contract there is with the auditor, the company has with the auditor, and has that contract been concluded by the management board? I hope, of course, that you already guess that the underlying idea behind my question is, if I'm not mistaken, the Dutch corporate code is perfectly clear on who appoints the auditor, and that is the general meeting of shareholders. Thank you.
I also refer for this detail to André. André, could you please react to that?
Indeed, it has been adjusted for in the engagement letter, which we also pre-discussed with the audit committee and which has been signed indeed by the chair of the audit committee and the management board. To us, nothing changed in that sense. We are still the same auditor, even though, let's say, our legal entity changed from an LLP to a BV. We have the same structure, we have the same leadership, and we are the same firm. Thank you.
Thank you, André, for that further explanation. Are there any further questions? I don't see any questions. Let us now explain the voting procedures after which you can vote on the agenda items just discussed. Michel, can you please guide us through the formal announcements and explain the voting procedure?
Yeah. I will begin with some formal points on the voting.
At the start of the meeting was present or represented a capital of 97,570,887 shares entitled to the same number of votes. In view of the number of issued shares that can be voted on as at the record date, that means that 77.96% of the issued shares, shared capital entitled to be voted on, is either present or represented at this meeting. Prior to the meeting, shareholders could exercise their voting rights by giving a proxy to the independent notary. These votes were received by civil law notary Cindy Smid at Zuidbroek Notarissen. She's present at this meeting, has confirmed, and she shall cast the votes in accordance with the instructions that she received. The votes that she received will be taken into account in the electronic voting during this meeting and will be jointly reflected in the voting results.
As a final point, the Board of Management and the Supervisory Board did not receive any agenda proposals from shareholders. Let me now explain the voting procedure. Would you now please take your voting devices and you can enter the voting card with the chip facing you. When the vote opens, which is not now, but when it opens, you will see that a green light will light up in the upper left corner of the device. If you do not see a green light, please raise your hand so that we can assist you. You can leave the card in the device during the meeting. To cast your vote, press either one, two, or three. If you want to vote for, press one. If you want to vote against, press two. If you want to abstain, press three.
When you have made your choice, the light will turn off and your vote has been cast. If you wish to change your vote, press the red C button on the device and enter your new choice. Your last choice will be recorded. After the vote closes, the voting results will be shown here on the screen. I will then state the rounded percentages of the votes that were cast in favor of the proposal. The voting results will be published on the company's website after the meeting and will be included in the minutes of the meeting. That concludes my remarks. Back to you, Gerard.
Thank you, Michel. We will now start the voting. First, you need some assistance. Somebody is coming to help you. The green light is not coming on yet. The voting is not open.
The green light will only come on when I open the voting. If in a minute I do that and the green light still is not on, please raise your hand again. By the way, you can see that we have a very multidisciplinary and active Supervisory Board, so no issue. Back to the order of the agenda. The first proposal you can vote on is agenda item number two, an advisory vote on the remuneration report 2024. The voting can start. You can now cast your vote on agenda item two by selecting the vote of your choice. As said, one is for, two is against, and three is abstain. If your voting device does not work properly, please raise your hand so we can assist you. All works. Are we all done? Ladies and gentlemen, the voting on agenda item two is now closed.
The screen will show the result. As you can see, 96.85% voted for the proposal, which means that the required majority for this proposal was met. I thus conclude that the remuneration report 2024 is approved. We will now go to the next voting item. The proposal on which you can vote is now from agenda item four, the proposal to adopt the financial statements for the financial year 2024. The procedure is the same. On the display of your voting device, you will see three choices. Please, would you now cast your vote on the proposal to adopt the financial statements by selecting the number of your choice? One is for, two is against, three is abstain. Are we all done? I close the voting.
As you can see, 100% rounded up has voted for the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is accepted and the financial statements for 2024 are adopted. I will now move to the next voting item. The proposal on which you can vote is from agenda item five, the proposal to adopt a cash dividend of EUR 1.56 per ordinary share from the 2024 net income. Please, if you now can cast your vote on the dividend proposal by selecting the number of your choice. One is for, two is against, and three is abstain. Are we all done? I close the voting. As you can see, 99.8% voted for the proposal, which means that the required majority for this proposal was reached.
I thus conclude that the proposal is accepted and the proposed dividend is adopted. We will then go to voting on agenda item six. This regards two voting points, and it is the discharge of the members of the Board of Management and the members of the Supervisory Board. Is there anybody that wants to make a comment about these two voting points or has questions on this matter? None. The proposal that you can vote on is from agenda item 6A. The proposal is to discharge the members of the Board of Management in respect of their duties as performed in 2024. Please, would you now vote on this proposal? All done. I close the voting. As you can see, 98.23% voted for the proposal, which means that the required majority for this proposal was reached.
I thus conclude that the proposal is adopted and that the members of the Board of Management are granted discharge. We then move to the second vote under this agenda item, which is agenda item 6B, a proposal to discharge the members of the Supervisory Board in respect of their duties performed in 2024. Please cast your vote on this proposal. All completed. I close the voting. As you can see, 98.24% voted for the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is adopted and that the members of the Supervisory Board are also granted discharge. We will now go to agenda item seven, which is the composition of the Board of Management. On the agenda is the proposal to appoint Željko Kosanović as a member of the Board of Management.
Željko joined Signify in 2017 as the CFO of Signify's digital solutions division and was the company's group controller since 2021. Željko was appointed acting CFO with effect from April 1, 2024, replacing the former CFO who stepped down from the Board of Management on that date. With effect from October 25, 2024, Željko was appointed as CFO. The Supervisory Board has nominated and recommends the appointment of Željko Kosanović to the Board of Management as he has consistently demonstrated the financial and leadership competencies required for the role during his time as acting CFO. The proposed appointment is for a period is for a term of four years. Željko, could you please introduce yourself?
Thank you very much, Mr. Chairman.
Ladies and gentlemen, dear shareholders and members of the board, it's a real privilege and a real honor to be here today and to be considered for a position on the Board of Management of Signify. I want to start by thanking the Supervisory Board for their nomination and for the trust they've placed in me. Throughout my 32-year professional career, for 24 years with Schneider Electric and the last eight years as part of Signify, I've had the opportunity to hold various leadership positions across finance, M&A, organizational transformation, business development, and general management. I also had in this journey the opportunity to live and work in several countries across the Middle East, South America, Asia, and Europe.
What has always driven me and is guiding me every day is a deep passion for growth and growth in the broader sense of it, growing the business, growing people, and also growing the positive impact I can make and I can help the teams I am part of to make in the short term and in the longer term. Of course, passion for growing myself in the process. This passion for growth also comes with a deep passion for operational excellence and for creating value sustainably for all stakeholders. I've had the privilege to be part of Signify for eight years now, and I've been also honored, as Chairman just said, to serve as the group CFO for the past year. I take immense pride in being part of this company.
I am very deeply connected to the purpose of Signify and the values of Signify on a professional level, but also on a personal level. If appointed, I am fully committed to bringing all my energy, all my passion, all my experience and capabilities to help drive Signify's success in the next phase of the company's journey and also to help unleash the fantastic value creation potential ahead of us for all the stakeholders. Thank you for your attention, for your trust, and for your consideration.
Thank you, Željko. Are there any questions about the proposed appointment of Željko Kosanović? No questions. Thank you. We will then move on to the voting on this item. The proposal on which you can vote is from agenda item seven, the proposal to appoint Željko Kosanović as a member of the Board of Management.
Please, would you cast your vote on this proposal by selecting the number of your choice? One is for, two is against, and three is abstain. I open the voting. Are we all done? I then close the voting, and the result is 99.6% for the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is adopted and that Željko Kosanović is appointed as a member of the board of management. Željko, congratulations. This then concludes agenda item seven. We move on to agenda item eight, which is the composition of the supervisory board. On the agenda is the proposal to reappoint myself as a member of the supervisory board. As this agenda item concerns my own reappointment, I would like to ask Pamela to temporarily take over the chair role for this part of the meeting.
I will do so. It is the agenda item eight, composition of the Supervisory Board. Can we see the text? Thank you. The proposal is to reappoint Gerard van de Aast as member of the Supervisory Board. The one is for, the two is against, and three is abstain. Please vote. The voting is closed. We see that 85.54% are for the nomination reappointment, and therefore this reappointment is decided. Congratulations, Gerard.
Thank you. This then concludes agenda item eight. Next on the agenda is the proposal to appoint PricewaterhouseCoopers Accountants, NV, PwC, as said, as the company assurance provider for terms of three years starting January 1, 2026, with a possible extension after the initial period. Under the CSRD, companies are required to appoint a separate assurance provider for their sustainability reporting.
As part of the extensive tender process led by the audit committee, PwC was selected and subsequently appointed by the general meeting on May 14, 2024, as the company's external auditor for the financial years 2026 through 2028. The Supervisory Board now proposes to appoint PwC as the company assurance provider for sustainability reporting for the same period. Are there any questions regarding this proposal? One question here in the front.
Thank you, Armand Kersten, VEB . Again, perhaps at the risk of you accusing me not to make a relevant comment, you absolutely correctly state that CSRD requires separately the appointment of the auditor for the assurance. That is entirely correct. There is, however, an important snag in our particular circumstances, and that is that, as you may well know, in the Netherlands, CSRD has as yet not been implemented.
Now, we might all feel that that's a scandal in and of itself, but that's rather something for the Dutch government. The situation we have is that there is, under Dutch company law, no provision giving the power to appoint the assurance provider to any of the company organs. The conclusion of that is, and this is supported by legal opinion in various legal articles, for example, one from Professor Heijink, who is probably the best-known Dutch lawyer on the matter of the implementation of anything having to do with the annual accounts. There is no competition for this general meeting to appoint this assurance provider. The annual meeting has no power, no other company organ has. My worry is that if we were to vote on this issue, there might be an issue that the vote is null and void. Thank you.
You are correct that CSRD is still a bit in undecided territory, let me call it that way. One also can be practical, and I think it is better safe than sorry. I do not see, I understand your formal explanation, if CSRD were to be mandatory and when it gets out of this somewhat unknown territory, it might be well suited what we do here today. We have taken a more pragmatic view, and I think it is worthwhile to have the AGM give the AGM the opportunity to cast their vote on this matter. Are there any further questions on this? We will then move on to vote on this item. The proposal on which you can vote is from the agenda item nine, the proposal to appoint PricewaterhouseCoopers as the company assurance provider for the terms of three years starting on January 2026.
Would you please cast your vote on this proposal, selecting the number of your choice? One is for, two is against, three is abstain. I open the voting. I close the voting. 100% has voted for the proposal, which means that the required majority for this proposal was reached. This is a clear result. We can take comfort from that. I thus conclude that the proposal is adopted. This concludes agenda item nine. We move on to agenda item ten. This regards an authorization to the Board of Management to issue shares or grant rights to acquire shares, and to restrict or exclude preemptive rights, both under the conditions stated in the notes to the agenda. This agenda item comprises two voting items that will be voted on separately. The authorizations are requested for a period of 18 months, effective as of today.
These authorizations are customary with listed companies. The requested authorizations are for a single 10% of the issued share capital. The Board of Management regards this to be sufficient to efficiently finance the company. Each of these resolutions by the Board of Management requires approval from the Supervisory Board. Are there questions about this agenda item? No questions. Thank you. We will then move on to the voting. The proposal on which you now can vote concerns agenda item 10-A, proposal to authorize the Board of Management to issue shares or grant rights to acquire shares. Please, if you can, cast your vote on this proposal by selecting the number of your choice. One is for, two is against, and three is abstain. I open the voting. I close the voting.
As you can see, 99.21% has voted in favor of the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is adopted and the authorization is granted. We will now proceed to the second voting point of this agenda item. The proposal on which you can vote is from agenda item 10B, a proposal to authorize the Board of Management to restrict or exclude preemptive rights. Please cast your vote on this proposal by selecting the number of your choice. One is for, two is against, and three is abstain. I close the voting, and 86.68% has favored in favor of the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is adopted and the authorization granted.
That brings us to agenda item 11, authorization of the Board of Management to acquire shares in a company. Agenda item 11 pertains to the authorization of the Board of Management to acquire shares in a company under the conditions stated in the notes to the agenda. The authorization is requested for a period of 18 months and is limited to 10% of the issued share capital as of today, plus an additional 10% of the issued capital in connection with the execution of share repurchases for capital reduction purposes. As a management decision, a management decision to acquire shares requires the approval from the Supervisory Board. This requested authorization is also customary with listed companies. Are there any questions on this proposal? No questions. Thank you. We will then move on to the voting.
The proposal on which you can now vote is from agenda item 11, proposal to authorize the Board of Management to acquire shares in a company. I open the voting. One is for, two is against, three is abstain. I close the voting. As you can see, 86.41% voted for the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is adopted and the authorization is granted. We will then move on to agenda item 12, cancellation of shares. This agenda item proposes to cancel shares under the conditions set forth in the notes to the agenda. It concerns the cancellation of shares that the company holds or acquires under the authorization of the previous agenda item, to the extent that these shares are not used for equity-based remuneration or to fulfill other company obligations.
The number of shares that will be canceled shall be determined by the Board of Management within the limitations of the proposed resolution. This too is a customary authorization with listed companies. Are there any questions on this proposal? No questions. We move on to the voting. The proposal on which you now can vote is from agenda item 12, proposal to cancel shares in one or more tranches as to be determined by the Board of Management. Please cast your vote by selecting the number one as for, two against, and three abstain. I open the voting. I close the voting. As you can see, 99.22% voted for the proposal, which means that the required majority for this proposal was reached. I thus conclude that the proposal is adopted. We will now move on to the final agenda item, any other business or additional questions.
This agenda item is for any final questions. Is there anyone to whom I may give the floor? No one. I see no further questions. Thank you again, Eric, on behalf of all of us here. I wish you continued success and fulfillment in the journey ahead. With that, I close the Annual General Meeting of Shareholders 2025. I would like to thank you all for your participation in today's annual general meeting, and let me now invite you all to drinks in the welcome area of the Lighting Application Center, which is through those open doors in the back. Thank you and have a safe journey home, and hopefully see you all again next year. Thank you.