Good morning, everybody. For those of you who do not know me yet, I am Ian Meakins, the Chairman of the Board of Directors for Rexel. Very happy to welcome you to the shareholders' meeting of this company. I am with Patrick Bérard, CEO, Laurent Delabarre, our CFO, François Henrot, Vice or Deputy President, and Senior Independent Director of the Board of Directors, Sébastien Thierry, Secretary General, and Secretary of the Board of Directors. I declare the meeting open. First of all, we have to constitute the offices of the shareholders' meeting. In my capacity of Chairman of the Board of Directors, I will be the chairman of this assembly. The two shareholders, the fund Rexel Actionnariat Classique France, represented by Mr. Jacques Roger, and the fund Rexel Actionnariat Classique International, represented by Peter Aman, they are both present, and they have accepted, have been appointed as tellers.
Sébastien Thierry will perform as a secretary. The offices KPMG SA and PricewaterhouseCoopers auditors to the accounts of the company are here. The attendance sheet makes it possible to see that we have reached the quorum, which is one fifth of the shares, carrying the right of vote for the ordinary part of the shareholders assembly, and we have also reached the quorum of one quarter of the shares carrying the right of vote for the extraordinary part. Consequently, I declare the assembly in order and able to have a debate. With that, to give the floor to Patrick Bérard, the CEO, and he will give you a few more explanations.
Thank you, Ian. Good morning. I think your French is almost perfect. You need a little more practice for the next two years, and that is it. Good morning to everybody.
I would like to specify that all the documents scheduled by the law have been filed with the shareholders' meetings bureau. Those documents are made available to the shareholders at the head office and have been put online on the Rexel internet site within the statutory deadline. We will not read the following report, the management report by the Board of Directors on the corporate business. The management report includes the report on corporate governance. Secondly, we will not read in full the Board of Directors' report concerning the free allocation of shares and the Board of Directors' report concerning the resolution project. We will give the floor to the statutory auditors in order for them to present their report, and will be available for your questions.
I would like to recall that the shareholders' meeting has been summoned in order to discuss the agenda that is in the summoned notice published in the BALO, the French official notice bulletin, and it has been sent to you. This agenda is in the summons notice that has been given to you at the entrance. I think that we should now open officially the meeting. Before, I would like to present the management team. I wanted the executive committee to be a committee including, on an equal footing, functional directors and operational directors. This executive committee is very operational, makes it possible to implement very quickly our strategy that I am going to talk about in a little while. First of all, let me introduce Laurent Delabarre, our CFO, and he is going to talk about the group's results.
Sébastien Thierry is our Secretary General and the Secretary of our Board of Directors. He's a link between the senior management and the group shareholders. Frank Waldmann has been our Human Resource Director since the end of 2016. He is responsible for human resources and responsible for attracting new talents. I would like also to introduce for the first time a newcomer, Nathalie Wright, who has recently taken up her duties as Digital Officer. Our four directors are related to the corporate culture of our different countries. Jeff Baker has become the U.S. General Manager for all our business. Eric Gauthier is the Asia-Pacific Region General Director. Joakim Forsmark is the Nordic Country General Director. John Hogan is responsible for Ireland and the United Kingdom. The roadmap that we have implemented all throughout 2017 corresponds to the roadmap presented in February 2017 during the investors day.
In a rapidly changing world, our priority was to simplify our organization, to streamline it in order to make Rexel more flexible, more agile. Our organization has been streamlined and is now leaner. The decision-making process is shorter. I'm not going to come back on the Strategic plan. With this slide, I would like to recall the main pillars of this roadmap. The first pillar is about stepping up our organic growth, thanks to more customers, more product references in order to improve our market shares and our profitability. We want to use three drivers, three facilitators. First of all, the scalable and comprehensive use of our customer space. Secondly, the process to step up digitization in our corporation. Thirdly, put our teams in line with our key indicators. The second pillar concerns our choices as far as investment in financial structure is concerned.
Our main measures concern a more active and proactive management of our portfolio in order to focus on our priority areas, the choice of our investment, and of course, going on with our de-leveraging process. The third pillar aims in improving our operational performance, financial performance, and continuing with the improvement of our client services, particularly in the United States, in Germany, Australia, and the United Kingdom as well. Concerning all those topics, I'm very proud to be able to tell you that we have made a lot of progress during 2017. Indeed, we have renewed with organic growth, which has increased for the past year and a half, and even in 2018, if we include the first quarter of 2018. We have improved our profitability, as we can show with our gross margin, which has increased by 16 basis points and has reached 24.4% in 2017.
This improvement is all the more outstanding as our four main American competitors posted losses between, or decreases in their gross margin between 30 and 130 basis points. We have also increased the number of employees. Our footprint in digitization has increased. Our number of employees dedicated to digitization is 68. We also have recently announced the appointment of Nathalie Wright as IT and Digitization Officer and member of the executive committee. It's a key position in the digital transformation of Rexel. Moreover, half of our investments, 56%, in fact. 56% of our investments are, as of now, dedicated to IT and digitization. This strategy is quite visible in our figures. The digital sales represent or account for EUR 1.9 billion. That is to say, 14% of the group sales, and have increased by 13% versus the previous year. We have now five countries posting digital sales above 30%.
Finally, we have improved our client service. For instance, with an increase in our inventories, two days inventories. We have also invested in our logistic platforms in a certain number of countries. For instance, the Nordic countries, Switzerland, and the Netherlands. Moreover, we have redefined our assortment of agencies in a certain number of countries, European countries as well as in the USA. We have also introduced a certain number of performance indicators, like the Net Promoter Score, which have been progressively rolled out within the group. We have also made a lot of progress concerning the third pillar of our strategy. That is to say, in order to improve our operations in our key countries. We would like to share with you the main achievements that have been made in the best European countries. Let's start with France, our domestic market.
We have regained market shares during the second half of 2017 with several action plans, like the compensation indicators of our sales force, in line with some new criteria like digital adoption or the acquisition of new customers. We have also initiated our Energy Connect offer, which is really successful and makes it possible for our customers to monitor all the facilities with different protocols with one single application. We have also changed our operations in several markets. In England, we have merged our banners, our brands, from five to two. Now we have Rexel UK and Denmans. This has made it possible to renegotiate our purchasing terms with our suppliers and also made it possible to protect our margins in a challenging environment.
In the Netherlands, we have refurbished our model with a new management, a refurbishment of our offerings plans, optimization of our network of agencies, then enhanced digital offerings. We can see the results very rapidly with an increase in sales and an increase in the number of customers. We have increased our transformation program in the United States through four main actions. First of all, we have improved the quality of our agencies with the renovation of 48 counters or corners, and we have also opened typical counters like Platt counters. With a few investments, we have been able to improve our supply and offerings, and we have posted a rapid return on our investment. We'll continue with this strategy in 2018. We also invest our sales forces in training.
We have hired 320 additional commercial or sales employees, which have made it possible to post very sizable market share gains locally. Moreover, we continue to focus on the development of our multi-channel supply or offering with the progression of our digital sales by 29% versus 2016. We also have made progress concerning our service to customers, particularly by improving the availability of our products with an increase in 10% in our inventories and the recruitment or hiring of 90 employees dedicated to logistics. More recently, we have decided to change the organization in the United States and adopt a multi-brand strategy on a regional basis, but I'll come back to that later. We have invested in a network of agencies in the United States, and we are beginning to reap the profits from that.
In 2017, we have opened 17 new agencies and 18 new Platt counters in our Gexpro brand or banners. The return on investment should increase progressively in 2017. Those openings have made it possible to generate EUR 24 million of sales with an impact on adjusted EBITDA of EUR 2 million in 2018. The 2017 initiatives should generate EUR 62 million in sales and generate EUR 1.5 million in adjusted EBITDA. We confirm that those investments should reach a break-even point within the next 12 or 18 months, and this at a level which is very close to the country margin between 24 and 30 months. For 2018, we think that we should open a certain number of new agencies and counters similar to 2017. Those initiatives should generate 2% of additional sales in 2018.
We think that we will improve our regional approach for all our brands like Rexel, CNI, Platt, and Gexpro. This new organization in eight different regions should make it possible to reach more clients and step up the decision-making process, as well as promoting the collaboration between the different teams and different brands or banners. Those reorganization objectives aim particularly to step up the sales growth with our present active clients. Also, it should make it possible to increase the number of references sold and make it possible to improve our digital footprint and connect our customers, to have more connected customers. This will make it possible to have a unique opportunity to change each customer into a multi-banner account and to optimize the organization of our network. This new organization will make it possible to step up the rollout of our digital offering.
One digital account will make it possible to have access to all our banners, to all our brands. I would like to give the floor to Laurent Delabarre, who is going to present the financial results.
Merci, Patrick. Thank you, Patrick. Good morning, ladies and gentlemen, dear shareholders. Let me first start my presentation of the past year's performance by reminding the three key elements that bear testimony to the fact that Rexel in 2017, reached all its annual objectives as announced at the beginning of the year. First, as you can see, top left, sales amounted to EUR 13.3 billion, a 3.5% increase on a same-day basis. This improvement is fully in line with what we were expecting since we indicated that the sales of the year should improve by 1%-4%. Second, in the middle column, our adjusted EBITDA, that is to say our adjusted operating result, was of EUR 580 million, and it represented 4.4% of our sales. Our adjusted EBITDA thus is improving by 6.1%. This improvement is in line with our objective to grow between 5% and 10%.
Third objective, our indebtedness ratio is 2.5 times end of 2017. It is also in line with our commitment to lower this indebtedness under three times. On this new slide, I show the detailed evolution of the 2017 sales figure compared to 2016. Our sales in 2016 amounted to EUR 13.2 billion. They included the sales in Southeast Asia, whose activities were disposed of during 2017. Furthermore, we also had to suffer from an unfavorable exchange effect corresponding to 1.2% because essentially of a decrease in the sterling pound and American dollar against the EUR. Consequently, our 2016 sales, comparable to, and in terms of currencies and for the same scope, amounted to EUR 12.9 billion. Organically, our sales improved by 2.9% with same-day basis, including a negative calendar effect of 0.6%.
It means that for comparable data and same-day basis, the growth is of 3.5%, the one I mentioned on the previous slide. Our 2017 sales amounted to EUR 13.3 billion as a total. Let's review the analysis for our three major geographical areas. As for the development of our sales, comparable data, same-day basis, that amounted to 3.5%. Let's start with Europe. As indicated on the top right, Europe represented 55% of group sales in 2017. It was a driving force for the growth of the group, and sales improved by 4.2%, same thing, comparable data in same-day basis. France, which is representing more than 1/3 of our sales in Europe, grew by 5.5% for the whole year. We fully benefited from the market recovery, notably residential market, and we gained market shares during the second half year.
Apart from the U.K., where we posed a 2.9% decrease in 2017 in a rather difficult environment, the other European countries overall behaved in a correct way, as we can see in the Nordic countries. The improvement was of 6.5% for these countries, and Germany increased by 3.9%. Let's cross the Atlantic and review North America. This region represented 35% of our sales in 2017. The two countries, the U.S. and Canada, started benefiting from the recovery in the gas and oil industry. This market segment is improved by 12% in 2017 after a decrease of 41% in between 2014 and 2016. The U.S. also benefited from the contribution of agencies opening, as presented by Patrick. Sales, same thing, comparable data and same-day basis, thus improved by 2.4% for these two countries. Finally, Asia-Pacific represented 10% of the group's sales in 2017. Their situation also improved.
On the one hand, the Pacific area, including Australia and New Zealand, grew by 3.2%, comparable data and same-day basis. The Asian area improved by 3.7%, again, comparable data and same-day basis, thanks to the good industrial market positioning in China. Let us review the consolidated P&L. I already talked about the first line of sales, EUR 13.3 billion. The commercial margin of the year reached EUR 3.2 billion, i.e., 24.4% of sales, improving by 16 base points compared to 2016. This improvement at the group level is the result of an improvement in North America and in Europe, whereas the commercial margin withdrew in Asia-Pacific. Our operational cost, including amortization, remained nearly the same as a percentage of sales and represent 20% of sales. Thus, our Adjusted EBITDA margin improved by 13 base points to 4.4% of sales.
In value, this Adjusted EBITDA amounted to nearly EUR 580.1 million in 2017, improving by 6.1%, fully in line with the initially communicated objective that was between 5%-10%. If we continue analyzing the consolidated P&L, it leads us to the net result. The published EBITDA reaching EUR 594.1 million is slightly below the EUR 550 million previously commented upon, as it take account, as for each year, the non-recurrent result linked to the changes in copper price. The line other charges and income is representing a net charge of EUR 253 million compared to EUR 124 million in 2016. Most of this charge is coming from restructuring amounting to EUR 59.3 million , a loss of EUR 68.7 million following the disposal of our activity in Southeast Asia, and depreciation of intangible assets, goodwill, EUR 43.7 million , centrally in Germany, Finland and New Zealand.
Thus, operational result is posting EUR 322.3 million compared to EUR 397 million in 2016. Financial charges amounted to EUR 149.9 million in 2017 compared to EUR 146.3 million in 2016. Restated with non-recurring charges linked to refinancing operations, the financial result posed EUR 116.2 million, an improvement by EUR 13.8 million. It is important to mention that over the past four years, thanks to the refinancing operations enabling us to benefit from good market conditions, Rexel decreased the effective average interest rates on its gross debt of 5.4% in 2013 to 3.2% in 2017. Taxes represented EUR 71.5 million, and they reflect the decrease of our results before taxes. The net results for 2017 amounts to EUR 104.9 million restated with exceptional elements. The recurring net result amounts to EUR 291.2 million in 2017, increasing by 16.4%.
As you know, your group has an economic model that structurally is generating a lot of cash flow. In 2017, as is mentioned in the table, we generated EUR 384.3 million of net cash flow before interest and taxes. A decrease compared to 2016 because of the deterioration in our WCR that can be explained, and as Patrick said, by the increase in stock level by two days, in order to have a better availability of products and to support the needs of agencies that were recently opened in the U.S. Overall, our debt amounts to roughly EUR 2 billion, decreasing by EUR 131 million thanks to a favorable exchange effect on debt. This slide enables us to analyze the maturity of this debt and to highlight the fact that we have no short-term constraints, since the next maturity for bond redemption is in 2023. Our average maturity reach now 4.5 years.
We have been very active in 2017 with the refinancing of two bonds. First of all, our U.S. dollar bond was redeemed, and we issued a EUR bond worth of EUR 300 million, maturity 2024. End of November, we also refinanced a EUR 500 million bond with an extended maturity to 2025, and at a very attractive rate of 2.125%. Finally, end of January 2018, we renegotiated the conditions for our senior credit or debt, reducing the amount to EUR 850 million against EUR 982 million, and thus optimized our refinancing cost. We still have a lot of cash with EUR 1.3 billion end of December 2017, including the senior debt that has not been used. Now, we leave the consolidated account of Group Rexel to comment upon the social accounts of Rexel SA. Operating income amounted to EUR 2.1 million in 2017. They correspond to billing of services to subsidiaries.
Operating charges amounted to EUR 25.6 million. They include notably a non-recurrent charge for the issuing fees of the bond loan amounting to EUR 9.3 million in 2017, compared to EUR 7.5 million in 2016. The financial result corresponding to a net charge of EUR 46.8 million compared to a net income of EUR 241.7 million in 2016. The difference can be explained by the absence of no payment on dividend installment from our subsidiaries, whereas in 2016, we had a payment of EUR 298 million. Indeed, the decision to take the EUR 0.42 dividends paid by Rexel SA from the issuance premium of 2017 and not on the carried forward amount is explaining this non-payment. Corporate tax represented EUR 86 million. With Tax Integration Convention, Rexel is paying the tax paid by the group.
Each French subsidiary is paying the taxes on the companies calculated on its first results, the possible tax savings can be, or are taken by Rexel SA, the mother company of the integrated group. Consequently, the net result of Rexel SA in 2017 was a profit of EUR 14.3 million. Good transition before commenting upon the performance of the first quarter of 2018. I will finish the financial review of 2017 with the proposal of the dividend for the past fiscal year. This will be paid, if you approve, of course, on the 6th of July next. The amount submitted to your approval is a EUR 0.42, increasing by EUR 0.02 compared to last year. It is perfectly in line with our policy that is to distribute at least 40% of the recurring net result.
On the right-hand side table, you can check that the distribution rate on the net recurring result for 2017 is 44%. This dividend will be fully paid in cash. It will avoid any dilutive effect for you, our shareholders. In terms of yield, it represents 3.2% compared to the closing rate of the 27th of May 2018, of EUR 12.94. This closes the presentation of the 2017 accounts. I will now briefly introduce our performance for the first quarter of 2018, which were made public on the 27th of April last. The analysis of the results of the first quarter show an organic development of our sales and by a decrease in our profitability. The sales figure reached EUR 3.2 billion, a decrease of 4.2% compared to last year.
This is due to a negative exchange effect, -6%, essentially due to the depreciation of the American dollar and Canadian dollar to the euro, a scope impact of -0.8% further to our disposal of our activity in Southeast Asia, and a calendar effect of -1.1%. The organic growth, same-day basis, shows an increase of 3.9%. If now we analyze this 3.9% organic level, same-day basis for the whole group, it is broken down as follows for the three geographical areas. In Europe, organic growth, same-day basis, was of 2.8%. France still being very positive, thanks to the residential and industrial markets. North America, it was of 3.5%, thanks to the U.S. and Canada, both improving. In the U.S., more specifically, we gained 9,000 new customers, and the opening of agencies contribute to 1.3% to the organic growth of this country for the first quarter of this year.
In Asia Pacific, growth is strongly progressing, +12.9%, thanks to Australia and China, that continues to benefit from a strong industrial request. As for Adjusted EBITDA or our adjusted operational result, it is posting EUR 127 million first quarter 2018, a decrease of 4.8% compared to last year. The commercial margin was stable, 25.1% of sales. The Adjusted EBITDA margin is at 4% of sales, decreasing by 32 basis points compared to the first quarter of 2017. This decrease can be essentially explained by the continuation of our investment in human and digital resources in a quarter that is traditionally weaker in sales, and also thanks to special situation in some countries, such as Norway and the U.K., where we recorded a decrease in activity impacting our margin.
These figures for the first quarter 2018 are in line with our forecast and include very good results in key countries such as France and the U.S., where our margin are improving thanks to our price policy and thanks to the consolidation of our suppliers. More specifically, we are very proud to say that our regionalization strategy in the U.S., and implemented since the beginning of the year, is bearing fruit, and we are now recording the first positive effect. On this next slide, you have the P&L for the first quarter of 2018. You see our sales amounting to EUR 3.2 billion, top of the table, a decrease of 4.2% compared to the first quarter 2017. Our published EBITDA of EUR 125.4 million is decreasing by 13.4% compared to the first quarter 2017. The line other products and charges, posting EUR 7.4 million, is corresponding to restructuring expenses.
The operating result of EUR 113.6 million is showing a decrease of 12.7%. I have to detail the net financial charges item with a charge that decreases by EUR 33.6 million for Q1 2017 to EUR 24.9 million for Q1 2018, thanks to the two refinancing of bonds carried out in 2017 and the renegotiation of January 2018 for our senior debt contract. The average interest rate on our gross debt was reduced by 33 basis points compared to the previous year and is now posting 2.9%. Our annual financial charges should decrease by at least EUR 5 million for the full year 2018 and post EUR 110 million. A decrease also in our taxes, thanks to the tax reform in the U.S. Our tax rate, apart from exceptional elements, should be improved by two points for full year and reach 33%. Our net recurring result for Q1 2018 is stable.
One last slide before I give the floor to remind our objectives for the whole current year. Patrick Bérard presented them earlier on when he indicated that they were fully part and included in the three strategic priorities for the midterm. For 2018, same perimeter and same-day exchange rate, we are aiming at an improvement in sales and below 5%, an increase of Adjusted EBITDA of at least 5% and below 10%, and a continuation for the improvement of our indebtedness ratio. I will conclude by indicating our performance of the first quarter enable us on the 27th of April last, as today, to confirm these objectives for the whole 2018. Thank you for your attention. I give the floor to Patrick Bérard, who is going to talk about our corporate responsibility.
[Foreign language] Laurent.
Thank you, Laurent. After having discussed the strategy and its implementation, after having presented the 2017 results and the results for the first quarter of 2018, a few words about corporate responsibility. In 2017, and in continuation in 2018, our ambition is to have a consistency between the Rexel strategy and the sustainable development objectives. We want Rexel to become a company which creates value for all the stakeholders in the energy environment. As of 2015, Rexel's sustainable development policy has been based on three pillars. First of all, Rexel proposes on the market solutions that makes it possible to improve the management of energy everywhere in the world. Second pillar, Rexel, as a distributor, is positioned in the middle of the value chain and therefore plays a key part in promoting sustainable development with its customers as well as its suppliers.
The third pillar, within our own operations, we try to improve our social performance and environmental performance. The first pillar aims at promoting the adoption of energy efficiency and renewable energy. We want our own clients to adopt renewable energy and also our final users. The second pillar aims at improving the environmental and social performance of our suppliers, and our final customers. The third pillar, concerning our own operations, aims at involving all our employees in protecting the environment. On each of those pillars, in order to measure our performance, we would like to recall the objective that had been set the group by 2020. First of all, to multiply by two sales of energy efficiency solutions versus 2011. Secondly, to assess at 80% of our direct sales purchasing volume, our purchasing as far as sustainable development is concerned.
Thirdly, to reduce by 30% our greenhouse gas emissions versus 2017. As of 2017, we have already reached two of our objective. We have multiplied by two the sales of energy efficiency solutions versus 2011. We have also reached 35% of emission reduction in CO2 in our operations since 2010. Last, and finally, we have assessed new CSR criteria for our suppliers, representing 47% of our direct purchasing volume in EUR. Those results are very positive, and we want to go further this year as far as our commitments are concerned. Beyond those very positive results, corporate responsibility is particularly embodied by our commitment and the commitment of all our employees in all our organizations. We have rules and procedures in order to assess the operation good conduct.
For instance, we have a guide of ethics or an ethical charter, and also we have launched an information campaign, an awareness campaign on security. First of all, we have developed and enhanced our employees' dedication, and we have the Rexel Foundation. Rexel would like to support and involve its employees on the basis of five commitments. Rexel is developing the skills of all its group leaders and group employees, particularly concerning digital skills and the new leadership skills in order to take up the challenges in our environment. We want also to promote working in teams. Rexel has promoted diversity and onboarding of new employees. For instance, during the Women's Day, Rexel has enhanced and promoted the employees' experience in the group and has published a video which has been shared internally and externally and very welcomed.
The percentage of women which have been promoted to manager positions have in 2017 been at the same level as their male colleagues. Our integration rate or onboarding rate over one year has made progress and has increased by 5% in 2017 at a level of 82%. The human resources teams have monitored the management of performance. In France, in the U.K., in Sweden, and in Finland, 70% of the total number of employees have benefited from this new compensation arrangement, performance-based compensation of the sales forces. Many other countries in the group will initiate the same project in 2018. Rexel has, on the 24th of May, initiated a new investigation concerning the group employees' commitment. The results will make it possible to each operational team to set up concrete action plan in order to enhance the team's dedication level.
In 2017, 75% of the group employees had benefited from a training session, so an 8% increase versus 2017. The number of training hours for each employee is also increasing sharply, plus 17% versus 2017. Rexel has also promoted digital training via its internal university, Rexel Academy. This concerns training experiences, including face-to-face training and digital training concerning product training, sales, management, and digital skills like CRM, web shop, and office automation. Now, concerning the employees' career, Rexel continues to highlight mobilities and internal promotion, plus 10% of the employees in 2017. It makes it possible for our group to retain and develop employees' talents and anticipate on our organization needs. Concerning another topic, the Rexel Foundation has been created in 2013 under the aegis of the Fondation de France, and has multiplied initiatives in order to disseminate energy progress.
Energy efficiency and energy progress are at the very core of our business at Rexel. With the creation of this foundation, the group wanted to put its know-how and expertise at the service of the fight against energy precariousness and promote access for all to energy efficiency solutions. Since its creation, the Rexel Foundation has been able to help 150,000 people via more than 60 project. In 2017, 12 new project have been promoted by associations, social companies or corporations, and universities. The foundation is a great driver in order to monitor our societal commitment and involve our employees in order to develop strategic partnership and step up our social innovation. To illustrate this, I would like to show a video in English. It's about the EcoBlock project, which has been supported by the Rexel Foundation since 2016.
This is a very innovative project, which has been designed with the help of the Berkeley University, Stanford University, NASA, the California region, and a selection of U.S. and European enterprises. The objective is to completely renovate a housing block in Oakland, in California, for an underprivileged neighborhood. The aim is to have a high return on investment. This project is going to be rolled out on a large scale in California, then on the territory of the United States, then in other countries in Europe and Asia.
Making it clear that the challenges of upgrading urban areas and addressing the threat of global warming go hand in hand.
Applying green construction techniques at the urban block scale is one solution. That's what we're prototyping here at the EcoBlock in Oakland, California. We've put together a remarkable team of partners to tackle the problem.
This first prototype will retrofit 30 homes in a lower to middle income neighborhood. By sharing infrastructure and sharing resources, we can drive greater energy and water efficiencies.
Retrofitting existing neighborhoods with the latest tools and technologies is essential to greening our cities. The EcoBlock offers a systematic design platform that can be adapted to any city in the world.
Behind the EcoBlock concept are well-established retrofit strategies to reduce energy use, greenhouse gas emissions, and water consumption. Costs will be offset by long-term savings, while retrofitting will increase comfort and offer security against the effects of climate change. Installing solar panels on roofs will turn the block into an urban solar farm. The energy will be stored communally and distributed to homes and electrical vehicles via a DC microgrid managed by smart controls. EV charging stations will be installed around the block, enabling the community to share EVs, e-bikes, and e-scooters. The energy efficiency gains will reduce electricity consumption by over 80% and lower carbon emissions close to zero, a valuable feat given that residential buildings and private fossil fuel cars emit over 50% of U.S. greenhouse gases. Rainwater will be collected, purified, and used for washing machines and new low-flush toilets.
Efficient shower heads and taps will be installed, and gray water will be used for gardens, decreasing water usage by at least 50%. Eventually, black water from toilets will be recycled for irrigation, further maximizing water efficiency. New permeable sidewalks and pavement will solve storm water problems and recharge the groundwater.
Key to the success of this project is engaging the community residents. The city of Oakland is proud to partner with them in this experiment in urban sustainability.
The EcoBlock is a new model for creating resilient and sustainable cities in California. EcoBlocks can provide local investment in green jobs and green infrastructure, revitalize our urban communities, and help low to middle income families improve their lives.
The EcoBlock confirms California's commitment to concrete, scalable solutions to climate change. Our goal is to build a model that can be replicated and scaled across California, across the United States, and around the world.
Keen interest from Europe, Africa, and Asia confirms the promise of greening cities by means of community-scale EcoBlock retrofitting.
Now, this is a good example of our involvement and our dedication on a long-term basis with partnerships in order to promote energy efficiency in all its components. In 2017, our commitment and our performance concerning sustainable development continue to be recognized in line with the previous years. We have made commitment in a worldwide initiative, for instance, the United Nations Global Compact and the CDP, Carbon Disclosure Project. It has been recognized by the rating agencies, extra financial rating agencies, and by the responsible investment indexes like FTSE4Good stocks, DJSI, Vigeo and Ethibel. Also, it has been recognized by our customers through the EcoVadis score of 71 out of 100. It's the highest gold level. This recognition is a reward for our performance as far as sustainable development and corporate responsibility is concerned.
I would like to thank you. I would like to give the floor to François Henrot, who is going to talk about corporate governance.
My colleagues from the board have made a bet I will be as long as last year, but I'm going to try and have them lose their bet, because in fact, most of the items I was supposed to talk about are perfectly unchanged compared to last year. I'm going to just refer to last year presentation. Maybe you were not there last year. Concerning the composition of the board of directors in 2017, the board has decided on the 10th of February to co-opt Agnès Touraine. Please, Agnès, stand up in order for the directors to be able to see you.
Agnès Touraine is the chairman of the Institut Français des Administrateurs, the French Directors Institute, which trains director in good practices principles. She has a great deal of past experience in listed companies, board of directors. She has replaced Marianne Culver, who will take up a high-level position in a major U.K. company. On the 15th of 2017, the board has decided to co-opt Marcus Alexanderson. Marcus, who's an associate in Cevian Capital, first shareholder of your company, holding more than 15% of the Rexel capital in replacement of Pier Luigi Sigismondi, who has taken a position in an Asian corporation, which is incompatible with his position on the board. Patrick Bérard has been appointed a director on the 23rd of May 2017, last year. Julien Bonnel has been appointed on the 17th of November 2017 as the director representing employees.
He has been appointed by the most representative employees organization in the French associate, that is to say, CFDT. Julien has been in the Rexel company for many years. He has held many operational positions, head of agency, head of the group strategy. He has a great deal of experience on the ground and in the corporate office. He is a great deal of knowledge as chairman of a regional business line, a regional branch. Marcus Alexanderson has been co-opted, and his co-optation has been ratified, and his term of office has been renewed, as well as Herna Verhagen's term of office, which has also been renewed, and Maria Richter's term of office.
They have to be subject to your vote by anticipation for Maria Richter in application of Article 14 (2) of the Articles of Association of the company, according to which the members of the board have to be renewed for 25% every year. It has to be renewed entirely every four years. The board is composed of 11 members. Ian Meakins, non-executive chairman. François Henrot, myself, deputy chairman. Herna Verhagen, independent director. Fritz Froehlich, independent director. Maria Richter, independent director. Marcus Alexanderson, non-independent director, but very useful and appreciated, highly appreciated. Agnès Touraine, independent director. Thomas Farrell, independent director. Herna Verhagen, independent director. Patrick Bérard, non-independent director. He is the CEO of the company. Julien Bonnel, employees representative and independent director. The board of director includes eight independent members, 80% of the board of directors.
Four women, that is to say, 40% of the members in line with the legislation. Seven foreign directors. Which makes of your company the most international board of directors, and it deserves to be reported. It is a specificity of Rexel to be very international and to have a large diversity of directors on its board. It reflects the worldwide business of the company, and it brings us a diversity of experience, origin, and corporate culture, which is very valuable to the company. As far as the organization is concerned, the board decided in July 2017 on recommendation of the nomination committee to divide, to separate this committee in two separate committees. In view of the numerous constraints, high number of constraints concerning the compensation policy, two committees are going to replace the former nomination and compensation committee.
One is going to be the committee for compensation and the other the committee for nomination. Two women have been appointed to the chairmanship of those companies, Agnès Touraine and Herna Verhagen for the nomination committee. Now concerning the attendance fees, the overall amount has been unchanged since 2014. That is to say, EUR 1,315,000 in spite of the fact that the number of directors has increased. We have decided that this amount would be unchanged as long as we have not increased further our revenues and sales. The statistical data of this table have been based on comparable data. The allocation of these fees also is unchanged compared to last year. A fixed part, which is the same for everybody, and a performance-based part according to the various responsibilities of the members of the board for the chairmanship of the commission or the vice-chairmanship of a commission.
You can see on this board that the chairman does not receive any attendance fee, and the CEO is not eligible for any attendance fee as a director since he is employee. Julien Bonnel is eligible for the allocation of attendance fee and the same conditions of the other members, but he has chosen to transfer all his attendance fees to an organization that he has designated. Now let's come to the compensation policy determined by Rexel on a global basis, and then we will look at each corporate officer's compensation. The compensation policy has been unchanged versus last year. It is based on the performance and results of the company. Half of the employees are eligible to performance-based compensation, and some of them are eligible for a group shareholding policy. Now, the situation is difficult in North America. There is a tension concerning the salaries.
We have to see to it that the salaries or the compensation is competitive. The environment in the U.S. is very competitive for the level of compensation, we try to attract new talents, obviously, and in particular for our business line, which is a service business and distribution business. Talents of our employees, male and female employees, is a major component of our competitivity. Rexel also has adopted a very active policy concerning the employee shareholding scheme since 2007. Shareholding schemes have been proposed on a regular basis to the group employee, and five plans have been proposed since 2007. A sixth is going to be proposed in the future. 18% of the eligible employees are at present group shareholders, 77% for France, a little bit higher percentage, but it is not enough according to us yet.
On the 31st of December 2017, the number of shares held by the employees or former employees of the group in the framework of the employee shareholding schemes represent only 0.6% of the shareholding capital and voting rights of Rexel. It's quite low. Now you have generated profits. The question which is asked, unfortunately without a microphone, and it cannot be heard by the interpreter. Sorry, sir. We'll come back to our performance and our proposals for the sixth shareholding scheme for the employees. Now let's come to the Compensation policy for the directors and for the managers. It has not been changed compared to last year.
It has been established by the board on the recommendation of the compensation committee chaired by Agnès Touraine, referring to the recommendation of the AFEP-MEDEF code, determining in a comprehensive way the various components of this compensation in order to attract and retain talents. We, of course, use analysis and assessments made by specialized firms in order to do some benchmarking with comparable companies. And we have since renewed our governance, and Patrick has been newly appointed to the senior management. We have proposed to the assembly, because you and the framework of the French laws, you have to approve the compensation given to the managers of the company. We have proposed a compensation, the most part being subject to performance conditions. More than three-quarters of the target compensation for Patrick Bérard, the CEO, is subject to performance conditions.
We try to recognize both the short-term performance through a bonus, and also we try to recognize the mid-term performance with our share distributing schemes. All the information concerning the corporate officers' compensation can be found in a very detailed way in the registered document 2017, particularly part three, page 87 to page 117. You can look at the document, which is at the entrance of this room. The chairman of the board receives a compensation, which is recommended by the AFEP-MEDEF code. We can regret that, particularly for those of us who have an Anglo-Saxon corporate culture. In the Anglo-Saxon countries, this requirement to have only a fixed compensation for the chairman of the board does not exist. However, this is the French recommendation made by the AFEP-MEDEF code, so we have to comply with that.
For the CEO, he receives a fixed part and a performance-based variable part, and also performance-based shares, and he has also a defined benefit retirement scheme. There will not be a golden parachute given by Rexel to the former CEOs. It's possible to grant an exceptional or non-recurring compensation, but for the time being, this is not scheduled. The fixed part of the CEO has been set on the proposal of the compensation committee at a level which is based on the average compensation on the market. And you can see that it's quite low, or at least it's not abnormal. It's quite in line with the average amount, and it's set for the whole duration of the terms of reference, according to the recommendation of the agencies giving recommendation to the institutional investors.
There is a target annual performance-based compensation based on the percentage of the fixed part, which is 120%. The maximum of the bonus is 120%. The target variable part is subject to performance-based conditions. Three-quarters is weighted according to those performances, according to three financial objectives, which are also weighted. The increase of sales in volume, one-third, EBITDA in volume, one-third, and the working capital requirements for another third part. The 25% remaining are based on the individual performances. It is more qualitative, but it can be measured by metrics that are set by the board of directors each year. The 75% weighted part are related to financial objectives like the working capital requirements. If the performances are clearly above the targets and objectives that have been set by the board, it can exceed 100%.
For instance, if the objectives have been exceeded, and have exceeded more than twice the threshold that had been set by the board, the bonus can, at the maximum, reach 137% of the target if all the performance objectives have been exceeded by more than 100%. The individual objective, however, cannot be exceeded because they are more of a qualitative nature. On the whole, the maximum target bonus is 137.5% of the target. That is to say, that the bonus cannot exceed, for the CEO, more than 165% of its fixed compensation. The third component, performance shares. There is a specific constraint that is imposed to the CEO. The CEO has to keep at least 20% of the securities that he has acquired with the performance share schemes until the end of his term of reference.
100% of the shares that has been granted to him are, of course, subject to performance and attendance conditions. Concerning the defined benefit retirement scheme for the CEO, nothing has been changed. I've already told you so last year. The board has decided to keep the same retirement scheme for the CEO during his term of reference, but with some additional performance conditions. The gross annual retirement has been assessed at EUR 172,000 per year. This has been decided on 31st of December 2017. It is quite in line with the average retirement that is granted by comparable companies in France.
We can now show you figures to illustrate what I've just said. For the chairman of the board of directors, EUR 500,000, which is the average, the top part of the average I'd say, but the board said that what is required from Ian Meakins, what he's doing does justify this top level of compensation for being a chairman of this company. Patrick Bérard has a fixed amount of EUR 650,000, a target bonus of 120% of that, EUR 780,000. The whole of the target compensation is EUR 1,430,000. The maximum compensation is of 165% of the fixed compensation, and there are also performance shares being allocated, representing Patrick Bérard's bonus is here, 2017. Target bonus in euro was EUR 780,000. He exceeded his objectives in terms of development of sales figures, since this development in mass during 2017 was multiplied threefold.
The target bonus is of 120% of the fixed compensation. For this fiscal year, it is representing EUR 973,000. [inaudible] for advantages in kind, that's a car. A compensation of EUR 1,629,882, 100,000 maximum bonus shares valued at EUR 1,275,000. The total of his compensation is thus representing EUR 2,904,802. As a piece of information, because this is just having a kind of historic interest, some information about the compensation of Catherine Guillouard, she was Deputy CEO. She left the company on the 20th of February 2017 because of a disagreement about the implementation of the scheme that the board deemed necessary. The performance scheme that was to be sped up. pro rata temporis fixed compensation for 2017 was of EUR 70,833. Target bonus, EUR 63,750, 90% of the fixed compensation.
As a percentage of target, which is a little bit over 100%, because she benefited for the two months work in 2017, she benefited from the over-performance of the management team in 2017. She received EUR 18,269 for advantage in kind, a bit more than what Patrick Bérard, CEO has, she has access to a collective system for midterm savings that was replacing what we were calling the pensions for Article 83, is representing EUR 28,905. She received, given the EUR 1,627,000, that was her termination subsidies, and it was applied in pursuant to the resolution voted the past year. Same thing that was applied to Rudy Provoost. When she left, she received EUR 1,014,570. What is the most important aspect of my presentation today is about the performance share schemes that we want you to rule on for the next three years.
It is the sixth scheme for staff shareholding that a company is rolling out, the board would like that it is as attractive as possible, so that the largest possible number of staff be shareholders and have an interest that would be aligned to that of shareholders. The envelope for this staff shareholding scheme is corresponding to a cap of 1.4% of social capital for a period of 26 months. This envelope, 1.4%, as I said, and this period of time, 26 months, are identical to those planned for by Resolution 18, approved by the general meeting held on the 25th of May 2016. The board of directors do not want to increase the overall quantity of securities. It is still set and capped at 1.4% of social capital. The board is proposing two modifications to the policy for performance shares granting.
All these performance shares granted to the corporate offices of the group, to Patrick Bérard, to the members of the executive committee, to the managers of region, clusters, and countries, is and will still, as was in the past, submitted to performance and presence conditions. The board thought it was necessary and is proposing to give access to performance shares to a new category of possible beneficiaries. The security is being granted only under conditions of presence and not performance. Who are these people? It is a population of roughly 200 people, operational managers and executives, having key role in the implementation and in the right implementation of the company's policy, we want to associate these people to the stock success of the company. Given the decision-making powers, their actions cannot directly influence the growth of sales figures, profitability, or even WCR.
We thought that these performance shares granted to such a population should be submitted to a condition of presence, but not of performance. This envelope of performance shares non-submitted to performance conditions, which is a bit paradoxical, but that is why I wanted to explain it, is of course set. It cannot represent more than 20% of the overall envelope, which itself is capped to 1.4% of the social capital. It is also capped in terms of number of securities, because it can go over 500 shares per eligible person and per scheme.
If these resolutions are passed and voted, this resolution should allow us to recognize, compensate, motivate a larger population of new beneficiaries to operational people that I was mentioning earlier on, and could also enable the development of the scheme's attractiveness for the regular beneficiaries as it substitute, not replacing, but it substitute part of their performance shares submitted to performance conditions. 500 shares per beneficiary would be granted under a conditions of presence. This will not be allowed to managing managers whose shares are totally submitted to performance conditions. This performance criteria, and I would like to remind them, are not theoretical. They are not complacent ones, really. Evidence of that is that for the previous schemes, the effective acquisition rates of our shares were never over 35% of the possible theoretical amount for 2013, 36% and 31% for the two schemes of 2014, i.e.
transition scheme and key managers scheme. On average, what we call the vesting rate, i.e. the effective rate for share allocation to beneficiaries in the previous schemes did not exceed a third of the theoretical total voted by shareholders. Why so? Because unfortunately, the performance of the share during that period, 2013, 2014, 2015, and 2016, not very good, to say the least. The board has full confidence in Patrick Bérard and in the management team to redress the situation. Since they took their positions, the share price already started increasing. The performance conditions that could be implemented for the 2018 plan are annual average of the growth rate of EBITDA, 30% of the weighting. The annual average of the sales growth rate, 30%. The average of free cash flow ratio before interest and taxes, or EBITDA, 20%.
Relative performance of the Rexel shares compared to the SBF 120 index, 20%. All these performance conditions, of course, being assessed for a period of three years. The granting or the allocation of shares could be effective only after a minimum acquisition period of three years, and on the presence conditions throughout this period. I want to remind that specific limits are applied to corporate officers in order to create a balance within the population of beneficiaries. The number of securities allocated to corporate officers cannot exceed 10% of the overall envelope, 0.14% of social capital. The value of securities cannot exceed 100% of the fixed and target variable compensation of a corporate officer for a given tax year, and are also submitted to a specific obligation of minimal preservation of 20% of securities till they terminate their position.
This is the important part for resolution 17 submitted to your approval, i.e. the sixth scheme for allocation of performance share. I now give the floor to Madame Valérie Besson, Statutory Auditor. Ladies and gentlemen, shareholders, good morning. I have got pleasure on behalf of all the auditors, PricewaterhouseCoopers and KPMG, to introduce the reports that we issued for you. These reports are part of all the documents that have been made available to you. For the 2017 fiscal year, we drafted seven reports on consolidated and annual accounts, reports on regulated convention and commitment, and four other reports on the planned operations and capital. I will now review the main items of our reports on consolidated and annual accounts. I want to remind you that our work is to obtain reasonable assurance that these accounts show no significant abnormalities.
Our reports are on page 295-298 of the reference document for annual accounts, and 271-274 of the reference documents for the consolidated accounts. In compliance to new regulations, we, for the first time, in our report, detail the key audit items that we deemed the most sensitive for the retained hypothesis and assumptions. As for the consolidated accounts, this is the assessment of the recoverable value of goodwill and other intangible assets having indefinite lifespan and discounts to suppliers. As for the annual accounts, it is the assessment of the participatory securities. The audit committee and the board of directors of your company were regularly informed of our works. As a conclusion, and linked to the first and second resolution of your assembly, we unreservedly certify the annual account and consolidated accounts of the groups for the 2017 fiscal year.
I now come to the special report on regulated conventions and commitments being mentioned on pages 120 and 122, reference documents. We have been informed of a new convention to be submitted to your ruling. Conventions or regulated convention and commitment that have already been approved and that were continued for the past fiscal year are of two sorts. A commitment for Madame Catherine Guillouard, Deputy CEO till February 2017. That was for the midterm savings account and of compensation owed because of a termination of her positions. Finally, the commitment for your CEO, Mr. Patrick Bérard, because of the additional pension scheme with defined benefit , was not executed during the past year closed on the 31st of December 2017.
I now finish with our four reports on capital operations. The first one is on the sixth resolution of your extraordinary general meeting. This resolution aims at delegating to the board of directors for a period of 18 months, all powers to cancel within the limit of 10% of the capital of the company per period of 24 months, the shares bought for the implementation of a purchase authorization of the company's shares. We have no observations to make on the causes and conditions of a capital reduction plan. Our second report is on the authorization to grant free shares existing or to be issued. This is resolution number 17 and 18. These resolutions aim at authorizing your board of directors for a period of 26 months to grant free shares to the staff members and to official corporate offices of your companies and our affiliated companies. We have no observation to make on the modalities about the planned operations.
Our third report is on the issuance of ordinary shares and various securities of the company reserved to the beneficiaries of a company scheme. This is resolution number 19. We have no observation to make on the modalities to determine the issuance price of securities. Yet the final conditions under which the issuance was made is not being set, so we cannot make and disclose an opinion on these, and consequently, on the proposal to cancel the subscription preferential right. Our last report is on the issuance of ordinary shares and securities of the company to some categories of beneficiaries. This is resolution number 20. We have no observation to make on the modalities for price setting for the issuance of securities to be issued.
The final conditions under which the issuance could be carried out are not set, thus we cannot have any opinion on the latter and consequently on the proposal to cancel the preferential subscription right. Ladies and gentlemen, shareholders, this closes the presentations of our reports for the fiscal year 2017. I thank you for your attention.
Thank you, Madame Besson