Good afternoon, ladies and gentlemen. Allow me to welcome you to the 2023 GM. This is the second general meeting that I will chair as Chairman of the Board and CEO of Vallourec, and I take great pleasure in doing this. I'd like to thank you for your attendance and for the confidence that you display. Next to me are Pierre Vareille, who is Vice Chairman of the Board and Lead Director, Sascha Bibert, who is our CFO, and Sarah Dib, the Secretary General. Sascha Bibert, the Group CFO, will speak in English. Headsets are available if you wish to listen to the simultaneous interpretation from French into English. The company's Statutory Auditors, Alexandra Saastamoinen, who represents KPMG, and Emmanuel Grolin, who represents Deloitte, are in attendance following the invitation to attend that has been sent to them.
Eric Le Marec, who is a judicial officer, is also in attendance. I would like to ask two members, who represent the largest number of votes, to set up the bureau's tellers, Pierre Vareille and FCPE Vallourec, represented by Théophile Chardigny . Sarah Dib is appointed as the secretary of the GM by the bureau. Sarah will tell us about the legal formalities that were carried out in order to hold this annual general meeting.
This general meeting is held following the first invitation to attend. The invitations to attend were sent out in compliance with the laws in force. All of the documents required were put at the shareholders' disposal in due time. I would like to confirm that the legal documents required to hold the GM are available here. They are at your disposal.
[Foreign language]
The quorum required for the ordinary GM is at least 20% of the company's shares with a voting right. The quorum is 25% for the extraordinary portion of the GM. On the attendance sheet, we have a temporary quorum of 64.8%, above 1/4 of the shares with a voting right. Therefore, the GM can duly be held both in terms of its ordinary and extraordinary portions. We did not receive any questions in writing, nor any draft resolutions or additional items to be put on the agenda. There are representatives of the press in attendance, as well as guests and a judicial officer to recognize that the GM is duly taking place, and that the voting process is in compliance with the law. Following the agenda, I suggest you take a look at the invitation to attend and the brochure that was sent to you. There you have the draft resolutions and the various reports of the board of directors.
Thank you, Sarah. We have an introduction film before I move on to the agenda. Video, please. I hereby open the meeting. The meeting will take place as follows: Following a general introduction, I shall deliver regarding the group situation, Sascha Bibert will take the floor to share the financial results of 2022 with you. I will come back to share our vision and our strategy to continue the deployment of the New Vallourec plan to accelerate Vallourec's transformation, and I will also speak about the 2023 outlook. Pierre Vareille, in his capacity as Chairman of the Nominations and Governance Committee and Chairman of the Compensation Committee, will speak about the information pertaining to the group's governance and the compensation of the corporate officers. The statutory auditors will share the conclusions of their reports with you. We will answer your questions, and finally, following the Q&A session, the resolutions will be submitted to your votes.
[Foreign language]
Dear shareholders, I'm pleased to see you once again after a year spent at Vallourec. The group's project, New Vallourec, presented in May 2022, is currently being implemented. In a year's time, I've been able to get to know the group. I've been able to see the many strengths of the Vallourec Group. The very close relationship with its customers, fully committed and extremely competent employees, market-leading products, and innovation and R&D capabilities that are considered as the benchmark in this sector. As I said, our roadmap is clear. We are building a profitable group, regardless of market conditions. To this end, we're focusing on value over volume, as well as on our operational performance, in order to sustainably strengthen our profitability in our core business.
[Foreign language]
This will enable us to restore the profit margins needed for future investments, in particular in innovation, R&D, and opening new markets outside fossil fuels, so we can become a key player in the decarbonized economy by 2050. In one year, the Group's transformation, thanks to the deployment of the New Vallourec plan, has shown tangible results. I would like to take this opportunity to thank all the employees of the Vallourec Group for the results of the past year, for the commitment to future results. Let's take a look at the Group situation. First of all, let me review our safety and quality indicators, which are top priorities for the Vallourec Group. This is especially true for our employees in our plants, whose work requires constant attention and vigilance. I would like to thank them for their strong commitment. What about safety at Vallourec in 2022?
[Foreign language]
Our total recordable incident rate, TRIR, is down again compared to 2021, 1.48 in 2022 versus 1.65 in 2021. The lost time incident rate, LTIR, which measures the average number of incidents that result in an employee being unable to work for at least one day in a given period, is also down slightly in 2022, 0.89 in 2022 versus 1.11 in 2021. These results are the best in the last 10 years, as shown in this graph. However, they were affected by a fatality at our pipe plant in China in September 2022. This tragic incident occurred after a long period of travel restrictions in China and led to a temporary halt in operations. It lasted until thorough investigations were conducted and immediate action was taken.
[Foreign language]
This incident also marked the beginning of an in-depth analysis of security management in all of our Chinese facilities with external consultants. The results have also been affected by the recovery and the strong increase in volumes in North and South America, which required the hiring of new, less experienced employees, in spite of many training plans. We have set ambitious new safety targets for 2023. To achieve them, we will improve our safety management processes through new initiatives, and we will strengthen the role of field management in this area. In addition to achieving our numerical targets, our ambition is to reinvigorate our safety culture and benchmark ourselves against the best in the oil and gas industry.
[Foreign language]
In terms of quality indicators, they are improving, with a further reduction in the number of complaints per month of more than 10% between 2021 and 2022, in a context of increased production. In addition to improving our numerous inspection processes and enhancing the control of our production processes, Lean and Six Sigma approaches continue to bear fruit. The integration of digital and data management is playing an increasing role in improving our process control. We collect more than 1,000 data points for each pipe, each tube we produce. In addition to these two crucial issues, the safety of our employees and quality, Vallourec is preparing for the future, and my ambition is to make Vallourec an increasingly responsible company and a leading player in a low-carbon economy. This means, first and foremost, working very hard ourselves to continually improve our corporate social responsibility scores....
[Foreign language]
Thanks to our involvement and high standards, our efforts have allowed us to reach performance levels we can be proud of. I will not go over all the numbers here. I'll just mention a few. From a social and societal point of view, gender diversity is a very important subject. At Vallourec, we consider that a company with gender parity performs better. In 2022, the percentage of women among our managers remained stable compared to 2021, at 24%. As part of our Women at Vallourec program, one of our three top objectives is to have the same percentage of women at all levels. We also aim to ensure the conditions for success for all, and to guarantee equal pay for equal or comparable work in the same country.
[Foreign language]
On the environmental front, 100% of our sites are ISO 14001 certified, one of the internationally recognized standards. Water is at the heart of our production processes, and we're continually seeking to reduce and optimize its use, notably by installing meters on our sites to detect and reduce leaks. In 2022, 9% of our water needs were filled by rainwater. Furthermore, we also pay attention to the impact of our activities on biodiversity. For example, in Brazil, where we have 165,000 hectares of farming land for the production of vegetal coal, 40% of this area has been preserved in its natural state. In 2022, we carried out several studies to monitor the flora and fauna there. Regarding resources used, in 2022, 97.3% of our waste was recovered through our circular economy initiatives.
[Foreign language]
We also work with our suppliers to reduce the use of packaging. In addition, as steel is an infinitely recyclable material, 49% of the steel we produced in 2021 was from recycled scrap, and this rate increased in 2022 to reach 53%. Energy now. The group uses 87% low carbon energy, of which 40% renewable electricity. Today, for 1 ton of Vallourec pipes, the carbon footprint is 1.796 tons of CO2 equivalent, while the industry average is 2 tons. In a few minutes, I will present the group's ambitions in terms of decarbonization. This performance I just mentioned has earned us awards and recognition from our customers and from the best non-financial rating agencies.
[Foreign language]
Between 2021 and 2022, Vallourec maintained its 'AA' rating from MSCI and improved its results on the CDP Water and Forestry questionnaires, as well as that of EcoVadis, with a platinum rating in 2022, placing us among the 1% of the most mature companies from a CSR point of view. Vallourec has been a member of the UN Global Compact since 2010, supporting its 10 guiding principles and contributing to achieving the Sustainable Development Goals by 2030. Like I said, Vallourec is also a player in the decarbonization of the economy, has committed to reducing its CO2 emissions, CO2e emission scopes one two, and three, by 25% by 2025, compared to 2017. This trajectory and the associated action plan have been validated by the SBTi with a level aligned with the Paris Agreement.
[Foreign language]
The main actions are the continuation of the energy savings program, the elimination of methane in the vegetal coal pyrolysis process in Brazil, the purchase of green electricity with, among other things, the use of solar panels, the optimization of our supply chain, and the development of our new energy offer in non-fossil fuels. In 2022, we have already exceeded our 2025 target with a 34% reduction compared to 2017. This is partly due to a volume effect, but mainly to the various actions mentioned above. The transfer of our activities from Germany to Brazil will further accelerate this reduction in CO2e emissions by relying on greener energy that's still produced from vegetal coal, allowing a 30% reduction in emissions on the volumes transferred. Given this very good trajectory to 2025, we have set new targets for 2030 and 2035.
[Foreign language]
We're committed to reducing the carbon intensity of our pipes by 35%, from 1.97 tons of CO2e in 2021 to 1.3 tons of CO2e per ton of tubes in 2035. This company-wide objective reflects the group's determination to contribute to the decarbonization of the economy by 2050. To take this even further, I have decided to set up a robust governance organized around five strategic pillars: climate, environment, safety, people, and compliance. Each pillar is sponsored by a member of the executive committee. There is a follow-up on a quarterly basis made by the executive committee and the CSR committee of the board of directors. The audit committee is also responsible for monitoring the development of non-financial information and its consistency with financial information. This organization will allow us to consolidate our lead in terms of non-financial performance.
[Foreign language]
Let's now turn to our sales dynamics. We can congratulate ourselves on a very good commercial dynamic in 2022. I'm thinking in particular of the long-term agreement with Petrobras, the supply of 110,000 tons of premium OCTG products, associated accessories, and specialized physical and digital services, including 18-inch weldless pipe that will soon be made in Brazil. Orders from LLOG Exploration Offshore for the supply of 25,000 tons of line pipe as part of its development in the deepwater Salamanca area of the Gulf of Mexico, which represents a real technological challenge requiring Vallourec's expertise.
[Foreign language]
A third major order under the 10-year framework agreement signed in 2020 with ExxonMobil Guyana, the supply of 35,000 tons of line pipe, including 2,000 tons of our advanced X80 steel grade, which represents a technological breakthrough for developments in the deepest waters. Now I'll turn the floor over to Sascha Bibert, who will present the 2022 results.
Thank you, Philippe, and good afternoon, dear shareholders. Welcome, ladies and gentlemen. After our chairman and CEO has outlined key achievements of our non-financial performance, let me now share with you our financial performance highlights. Overall, 2022 was a year of noticeable progress and improvement, particularly the start of the New Vallourec Plan initiatives, which Philippe will outline to you shortly. The execution of these initiatives are ongoing and will also positively impact our 2023 results to come. However, 2022 was also the year which was severely impacted by the landslide at our Pau Branco mine in Brazil, leading to substantially lower profits from this business compared to prior expectations. When taking office a bit more than a year ago, we also committed to strengthening the dialogue with our shareholders and the capital markets in general.
This commitment referred to the intensity of our financial communication, also to our external reporting. In Q4 2022, we have subsequently introduced a new segment reporting, which we are now using not only for the full year results, equally for every quarterly results communication. Prior, we had two main segments, according to IFRS 8, namely Seamless Tubes and Specialty Products, acknowledging that the overriding portion of revenues and profits were reported in Seamless Tubes, including the results of our mine. Following changes in our business and the way we steer the group under Philippe's leadership, we now have two main new segments called Tubes, and Mine & Forest . In addition, we continue to have a holding and a consolidation segment.
This segmentation allows for a much better analysis of the origin of performance, with each segment being supported by several key performance indicators, including tonnage, revenues, and EBITDA. For the Tubes segment, we additionally report revenues according to a segmental split, as well as by geography. Before applying this new segmentation, I want to first summarize the results of 2022 from a Group's perspective. Revenues and the operating profit, EBITDA, are up strongly year-over-year, the latter to EUR 715 million. While this increase was supported by about 10% higher volumes, the key contributor to this positive development were higher tube prices, including the application of a new pricing policy that Philippe introduced, and which progressively supported results during the year.
Those higher prices, in particular in the second half of the year, more than offset higher costs, which we experienced throughout the year. The free cash flow of 2022 was negative at EUR 216 million, severely impacted by the buildup of working capital, especially inventory, in anticipation of more business to come. We were also pleased to announce that in the fourth quarter, the free cash flow turned positive, thereby reducing the net debt, which peaked in the third quarter. When analyzing our free cash flow, please note that next to a working capital increase and a lower than expected contribution from the mine, it was also impacted by restructuring and non-recurring items cash out, in total, EUR 141 million in 2022. I'm leaving the group level and sharing with you the results of our Tubes segment.
During 2022, we increased the volume in tons by 10% and additionally increased the price per ton by 40%, leading to revenues up 54% year-over-year to EUR 4.6 billion. This is a perfect illustration of our new mindset, which we call value over volume. This mindset recognizes that our primary financial objective is to maximize profitability, rather than purely utilizing the full capacity of our plans without giving sufficient recognition to the value created by accepting and executing orders. The next slide on our Tubes segment gives further credibility to this new mindset. We have been able to increase the EBITDA per ton in every quarter to EUR 554 per ton in the fourth quarter. Similarly, the EBITDA margin has increased more than fourfold, resulting in an EBITDA for the full year of EUR 638 million.
Now to our second segment, Mine & Forest. This business was particularly impacted by the landslide that occurred in January 2022, affecting our Brazilian iron ore mine. A consequence of this landslide, we had to temporarily take the mine offline, and were only able to partially restart operations in May using alternative waste piles. This incident severely reduced volumes to 4 million tons, less than 50% of the potential production of 8.7 million tons. The iron ore price was also lower compared to the prior year, and revenues went down 48%, partially compensated by an improved quality of the iron ore mined. Costs partially even increased, as we had to spend more for the externalization of the waste, and the EBITDA decreased by 68% to EUR 113 million.
Back to the group level, with a focus on the profit and loss statement. Looking at the drivers, we can see that both revenues and EBITDA improved due to much- improved prices. Those prices more than offset the effects of cost inflation, which we experienced throughout the year. The operating profit was furthermore supported by a strong cost discipline, with the sales and administrative costs as a percentage of revenues declining steadily throughout the year. Below EBITDA, the net financial expenses were lower, thanks to the improved leverage following the financial restructuring. After a tax expense of EUR 113 million, the net income was negative at minus EUR 366 million for the full year; however, it turned positive in the isolated fourth quarter. On the balance sheet, and specifically on liquidity.
During the first three quarters of the year, we invested into working capital, next to being impacted by a relatively low cash effective EBITDA, among others, due to the mine incident, all leading to a negative free cash flow and therefore a reduction in liquidity. This changed substantially in the fourth quarter as the free cash flow turned positive. In addition, we increased liquidity further by adding an ABL, i.e., an asset-backed lending facility, to our liquidity instruments. Subsequently, liquidity increased to more than EUR 1.2 billion. For our debt and liquidity instruments, we do not face any maturities before 2026. Our overall positive development was also recognized by the rating agency, Standard & Poor's, who upgraded our rating twice, lastly in March 2023, to BB-, with a positive outlook. Now I hand back to our Chairman and CEO.
Merci, Sascha.
[Foreign language]
Thank you, Sascha. As the figures commented on by Sascha show, 2022 was a turning point for the Vallourec Group. I can assure you that Vallourec employees are exemplary in executing the New Vallourec plan. What used to be done in years is now done in months, what used to be done in months is now done in weeks, and what used to be done in weeks is now done in days. The management of the group has been profoundly transformed and is based on a new organization with an experienced and solid management team organized around three regions, North America, South America, and the Eastern Hemisphere. This organization has enabled doing away with 3 hierarchical levels for greater efficiency and agility. First, let's review the objective of our New Vallourec plan announced in May 2022.
[Foreign language]
New Vallourec aims to make Vallourec a profitable company, whatever the circumstances of the oil and gas market, and to close the performance gap with its best competitors. To achieve these objectives, the group relies on three pillars, and 2022 has already seen significant progress on each of them. First, an industrial pillar with a process of closing our German sites and the ramping up of our Brazilian sites to absorb the additional workload due to the transfer of oil and gas activity. In parallel, the continuation of initiatives to structurally reduce our inventories. A commercial pillar, secondly, which aims to give priority to value or volume by positioning the group on its most profitable markets.
[Foreign language]
Third, an organization pillar with the implementation of a redefined HR policy aimed at strengthening the performance culture at every level of the company, a substantial reduction in overheads through simplification of the organization, and the discontinuation of non-strategic projects, and departure plans in France, Germany, and Brazil. With a New Vallourec plan, we will, from 2024, have a new simplified industrial footprint adapted to the expectations of our customers and the location of our markets. Our industrial presence will focus on three geographical areas, with production capacity sized to fully utilize the most value-creating manufacturing units, heat treatment, and premium threading. This new industrial footprint will enable the group to free up resources to prepare its future in a low-carbon economy. In 2022, we structured our approach to markets linked to the energy transition. We launched Vallourec New Energies, our panel of solutions for decarbonized energy.
[Foreign language]
We believe that the best way to position ourselves in these markets is to rely on our original business, advanced metallurgy, and our VAM connections, launched in 1965, which have become essential for oil and gas projects. Thanks to our expertise, we help define new standards for applications such as hydrogen, CO2 transport and storage, and geothermal energy. Similarly, we're positioning ourselves in the promising technology of additive manufacturing, known as WAAM, Wire Arc Additive Manufacturing , for which we're combining our expertise in metallurgy and nondestructive testing. Our new unit in the north of France will include 6 industrial robots and aims to provide customers with more agility in their supply chain by providing a catalog of large metal parts produced in small quantities, on demand, and close to the place of use. This method reduces lead times and inventory.
[Foreign language]
Layer-by-layer metal deposition contributes to making complex parts and allows a great freedom of shape while limiting the quantity of material used, and thus, the environmental impact. These advantages are used in a variety of industrial applications in many markets, such as energy, transportation, and defense. In order to accelerate the use of this new production method and to structure the ecosystem, we signed a memorandum of understanding with Naval Group on April 14, the culmination of a fruitful collaboration that began two years ago. In the same way, we're using our expertise to develop an innovative compressed hydrogen storage solution. Between now and the autumn, we'll be installing a demonstrator of our vertical storage solution at our own Aulnoye-Aymeries site in northern France, whose reduced footprint will facilitate integration into industrial projects in the hydrogen sector. Let's now move on to our 2023 outlook.
[Foreign language]
For 2023, taking into account our assumptions. Next slide, please. Taking into account our assumptions and current market conditions, the group expects to see an increase in gross operating income in 2023, compared with 2022, thanks to both the Tubes segment and the Mine and Forest segment. A positive free cash flow generation for 2023, despite higher capital expenditures of some EUR 220 million and non-recurring restructuring costs of some EUR 350 million as part of the New Vallourec Plan. The continued reduction of net debt. Our shareholder structure has changed significantly since the financial restructuring finalized in July 2021. 2022 marked a turning point in Vallourec's shareholder base, with the exit of Bpifrance, Nippon Steel, and SVP Global.
[Foreign language]
Bpifrance and Nippon Steel jointly had more than 30% of Vallourec's capital before the financial restructuring. SVP Global had 12.3% of the capital since the financial restructuring. Apollo remains the group's sole strategic shareholder, with 28.1% of the capital. Individual shareholders and the group's employees also hold nearly 11% of our capital. We are pleased to note the increased presence of institutional shareholders. I will conclude my presentation with few comments on Vallourec stock. The favorable global environment, driven by the concern for energy security, together with the improvement in our financial results quarter after quarter, have enabled Vallourec to post a clearly positive stock market performance in 2022. In 2022, our share price rose by 30%, outperforming the price of a barrel of Brent crude oil, +9%, as well as the SBF.
[Foreign language]
120 index of leading French stocks, which fell by 11% over the year. Despite an uncertain macroeconomic environment, Vallourec's results have enabled it to continue to outperform the SBF 120 since January 1, 2022, which is when the financial restructuring was completed, with an increase of 32% versus 10% of the SBF 120 index. Thank you for your attention. Now I invite Pierre Vareille to present you the information relating to the group's governance and the compensation of corporate officers.
Thank you, Philippe. Good afternoon, everyone. First, I'd like to give you a reminder of the changes that took place in Vallourec senior management in 2022, as already presented at the GM last year. Since March 20th, 2022, Philippe Guillemot has been our Chairman and CEO, replacing Edouard Guinotte. Given this nomination, the term of delegate to General Manager by Philippe Guillemot was not renewed. It automatically expired. It was not renewed. Given the makeup of the board, it now consists of 71.4% of independent directors. The directors cover five different nationalities. As you may know, at the GM, there was a perfect gender balance on the board, 50% women, 50% men.
Since the departure of William de Wulf, who was the representative of SVP Global, he left in October of 2022, the board has consisted of 57.1% of women. The shareholders are told that the directorship of Maria Silvia Marques will expire at the end of this GM. Maria Silvia Marques has not wished to renew her directorship, therefore, we will come back to 50% gender parity at the end of this AGM. The recruitment of a new director has been initiated by the board, we are seeking a new director. Regarding the compensation paid to the corporate officers in fiscal 2022. First of all, let's start with the compensation paid to the former management team. The base salary of Mr. Guinotte and Mr. Vallet for 2022 were paid on a prorated basis.
Regarding the variable portion due for fiscal 2022, the decision was made to calculate the variable portion of the compensation of Mr. Guillemot and Mr. Vallet at the rate corresponding to 100% achievement of the objectives up until the March 20th . The components presented here reflect what was presented at the 2022 GM in the ex-ante vote. Regarding the compensation components of Philippe Guillemot for 2022, the variable portion, EUR 533,352, i.e., 68.15% of the target, and the results of the enforcement of the criteria set for fiscal 2022. The details will be shown on the next slide.
Regarding the operating performance criterion, the board recognized that it was 100% achieved, and that accounts for 27% of the base salary, which underscores the rollout of the reorganization in Europe, focus of the sales strategy on value creation, value over volume, and the cash control. Regarding the compensation in shares, the management equity plan. This is a share compensation mechanism, which is based on performance and is based on practices that are generally in use by private equity funds. The system was set up by the board of directors on October 13, 2021. The plan is still, it still serves the Chairman and CEO, the members of the executive committee and certain senior managers, and for these recipients, it does replace other long-term incentive plans.
Preferred shares are converted into ordinary shares, provided there is a performance condition based on the achievement of a target share price, which is met. The modification of this performance condition is submitted to the vote so that it can now be based on the average share price and weighted over a period of 90 days. Following a decision made by the board on April 30, 2023, specific methods used to judge the achievement of the performance conditions are enforced for all the recipients under certain circumstances. In the case of a significant transaction and under certain circumstances, the achievement of the performance condition will be judged with respect to the price of the transaction or the share price following the transaction that took place.
The judgment of the condition that has to do with the share price will take into account exceptional payouts done by the company, and the triggering of the performance thresholds can be adjusted accordingly. In compliance with the resolution approved by the shareholders of the GM in 2022 in the ex-ante vote on June 4th, 2022, the board of directors granted Philippe Guillemot for 2022, 2,058,876 preference shares, preferred shares, broken down as follows: 957,938 preferred shares, this is Tranche two. 957,938 preferred shares, this is Tranche three. 143,000 preferred shares, this is Tranche four. Regarding non-executive corporate officers now.
Let's take a look at the compensation of the directors who sit on the board. In 2022, the overall budget granted to the directors was EUR 1,250,000. I'd like to point out that the total amount actually paid out to the directors was well below that budget. Regarding the compensation policy that applies to corporate officers for fiscal 2023, regarding the directors, as described under Chapter seven of the Universal Registration Document, the board, when it met on the first of March 2023, decided to modify the policy governing the compensation of directors in order to ensure that they do indeed take part in the board's meetings.
Of course, the chairman must attend the board meetings, but the other directors' attendance is just as essential to the board's dynamics and to the dynamics of the committees of the board. The new compensation policy governing the directors is therefore structured as follows: The overall budget is unchanged, the fixed portion is unchanged. The fixed portion is unchanged with respect to the previous compensation policy. In compliance with the recommendations of the AFEP-MEDEF Code, which require that the portion of the compensation of the directors that is based on their attendance prevail over the fixed portion, well, that the latter will amount to EUR 30,000, EUR 45,000 for the vice chairman, and it could account for 35% of the overall compensation by virtue of the new rules for the calculation of the variable compensation.
The variable compensation has been redesigned. It will be more indexed on the physical attendance of the directors. Every board meeting of at least one hour, which the director attends in person, will lead to EUR 3,000 in compensation, versus EUR 1,500 in the case of videoconferencing; respectively, that's EUR 15,000 and EUR 7,500 for the vice chairman of the board. Every meeting of a board committee that lasts at least one hour, that the directors attend in person, will lead to a compensation of EUR 5,000, versus EUR 2,500, if the attendance is through videoconferencing. Respectively, that means EUR 10,000 and EUR 5,000 for the chairperson of the committee concerned. There's a quote, "rule of physical attendance," unquote, that applies to the variable portion.
Attendance by video conferences or audio conferencing should not exceed 40% of the meetings planned. Beyond that threshold, the members will not be compensated for the non-exceptional meetings that they will have attended by video conferencing. Travel premiums remain unchanged. The former policy is maintained. EUR 8,000 in case of travel to or from China, Brazil, and the U.S., and EUR 2,000 in the case of a trip to or from a European country, excluding France. This new compensation policy, which applies to fiscal 2023, should allow the Vallourec Group to achieve exemplary effective attendance of its directors. I'd like to point out that Mr. Gareth Turner, who represents Apollo, has decided to forgo compensation for his directorship. Let's now move on to the compensation of the corporate officers.
Regarding the chairman and chief executive officer, the base salary is unchanged from the 2022 policy. Regarding the variable portion, given the key significance for the groups of continuing to accelerate and deleveraging, the idea is to introduce an accelerator that can amount to up to 30% of the variable portion. This additional amount will be paid only if the group's deleveraging objectives are exceeded. This accelerator will apply to all the group's senior managers. By factoring in this accelerator, the maximum variable portion could amount to 175.5% of the target compensation, which is in line with market practices. The structure of the variable portion is still made up of 60% of financial objectives, 20% of operating performance, and 20% of objectives that have to do with Vallourec's social responsibility.
The financial performance indicators are EBITDA per ton and stocks. We call this DOH, days on hand. 20% of the variable portion is dedicated to CSR criteria, which includes safety, quality, carbon emissions, and gender parity. Regarding the other components of the compensation policy that apply to the chairman and CEO, and that have to do with supplementary pension, the non-compete clause, and the end of term compensation, remain unchanged from the policy that was voted by the shareholders at the GM in 2022. These components are also in line with the AFEP-MEDEF recommendations. We would like to remind you that Philippe Guillemot does not have a work contract. I thank you for your attention. Of course, I'd be happy to entertain your questions.
[Foreign language]
I would like to invite Ms. Véronique Laurent from Deloitte to present to you the conclusions of the statutory auditor's reports. Alexandra Saastamoinen, sorry.
Thank you, Chairman. Thank you, Mr. Chairman, ladies and gentlemen, good afternoon. On behalf of Vallourec's board of statutory auditors, Deloitte and KPMG, we would like to report to you on our audit of the financial statements for the year ended December 31, 2022. We've issued five reports, including the documents you've been given, and they're shown up on the screen. The reports concern the annual financial statements of Vallourec SA, the consolidated financial statements of Vallourec Group, social, environmental, and societal information contained in the management report, regulated agreements and commitments, and capital transactions provided for in the resolution submitted to you. I propose to give you a summary of the main points and not an exhaustive reading of our reports. Reports on the financial statements.
Our reports on the annual consolidated financial statements are presented on pages 260 to 263 and 282 to 28 5 of the URD. Our audit plan and the detailed conclusions of our work were presented to the Audit Committee and the Board of Directors of Vallourec. Our objective was to obtain reasonable assurance that the consolidated and annual financial statements, taken as a whole, were free of material misstatement in accordance with professional standards. Our two firms worked in France and abroad, know the significant entities of your group. Our approach and our procedures were adapted to the various activities of your group in order to take into account the specificities in terms of regulations, risks, organization, internal control system, as well as important or non-recurring transactions.
In the course of our work, we paid particular attention to applying accounting principles and the review of significant estimates made by management. We also reviewed the overall presentation of the financial statement and the quality of the financial information. Our reports describe the key points of our audit and the procedures we followed to address them. For the consolidated financial statements, we paid particular attention to the valuation of the goodwill and intangible and tangible assets of Vallourec Eastern Hemisphere Tubes, whose net book value amounts to EUR 474 million. Our reports contain unqualified opinions on the annual financial statements and the consolidated financial statements. We also performed the specific procedure required by professional standards and have no amounts to report. Finally, we verified compliance with the presentation of the consolidated financial statements in the European Single Electronic Reporting Format, known as ESEF.
To our special report on regulated agreements, the related party agreements. The report is presented on pages 350 and 351 of the URD. We have not been advised of any agreements approved and entered into during the year ended December 31st, subject to approval by the shareholders' meeting. On to social, environmental, and social and societal data and the management report. Our report concerns the consolidated declaration of non-financial performance in the management report; you'll find it on pages 160 to 165 of the URD. It concludes that there are no material misstatements with respect to the information provided. Finally, we issued a report on delegations of authority to carry out capital transactions on which you were asked to vote under resolutions 12 to 15, submitted for your approval.
Your board of directors' proposals on Resolution 12 to authorize it for a period of 14 months to grant existing or future ordinary shares free of charge. In Resolution 13 and 14, to delegate to it the authority to issue shares and/or securities without preferential subscription rights to members of employee savings plans set up within a group company for a period of 26 months, and to employees and officers of the company and the Vallourec Group for 18 months. In Resolution 15, to amend the conversion terms already included in the bylaws for the so-called Tranche 2, Tranche 3, and Tranche 4 preferred shares. We performed the necessary procedures in accordance with the professional standards applicable in France. In Resolutions 13 and 14, the board has not set out in its report the final conditions under which the issues will be carried out.
Accordingly, we do not express an opinion on these resolutions or on the proposed cancellation of preferential subscription rights. We will issue a supplementary report in the event that your board makes use of these delegations. For Resolution 15, we will issue a supplementary report if any conversion of preferred shares is carried out by your chairman in accordance with the provisions of the bylaws. Ladies and gentlemen, thank you for your attention.
Thank you. Now we're going to move on to Q&A. Before you take the floor, please introduce yourself. First question?
[Foreign language]
Yes. Good afternoon. I'm a former employee of Vallourec, Cate Fiedler-Kohl. I have a question to Mr. Vallet regarding the compensation of the directors. You said that. The policy is more attractive, in the report, it appears that your attendance is exemplary. Why are you increasing the compensation in order to enhance attendance? Your attendance rate is already good. I would also like to congratulate you for the EUR 1,250,000 budget that you do not use, only EUR 840,000. It shows that even some directors work for free. I have another question, if I may? An easy one. I did not understand why the compensation committee members were not paid.
Yes, very specific questions, indeed. The budget has not changed, but it's a framework, and it, you know, it's normal that what the directors are paid is below the overall budget. As you have understood, we have international directors from China, the U.S., Brazil. Therefore, we believe that it was necessary to make certain that they would attend. In the interest of full disclosure, Mrs. Marques stepped down from the board because she could not easily attend the meetings and travel that much. I'd like to pay a tribute to her. She was a very effective and efficient director during her whole term.
Therefore, this is a principle of ours. We cannot accept that directors attend by videoconference. It was the case during COVID, of course. It's important that everybody attend physically, which is why we compensate that. This does not mean that we're increasing the compensation of directors. Regarding the compensation committee, this holds true for the nomination governance committee, too. As you know, these two committees have almost the same members. Therefore, the idea is not to double the compensation of the committee members. Even more specifically, there was only a single committee in the past. It was broken down in two, so we did not, you know, multiply the compensation by two. Next question, if any.
[Foreign language]
Good afternoon, Pierre Ferenbach. I'm a former employee. You did not speak about the defense market. Do you have operations on the defense market? Do you supply tubes for the CAESAR, which is currently in use in Ukraine? Do you supply tubes for the manufacturer of bombs? Unfortunately, the bomb market is quite buoyant right now. When it comes to defense, of course, we are held to the strictest confidence.
In my presentation, I did mention the agreement that we entered with Naval Group. We produce parts for Naval Group, and that, of course, has to do with defense, as you well understand. Let me make an addition. The person next to me knows all about this. The compensation of the directors for fiscal 2023 will be lower than for 2022. The rules we've set up make the compensation lower. We're not changing the compensation for attendance in physical, but attendance by videoconference will be paid half the amount.
The idea is to encourage directors to physically attend the meetings. We think it's important in the interest of the quality of the exchanges during the meetings. Do we not have any further questions? If there are no further questions, I'd like to thank you, and I suggest we move on to the resolutions. I will give the floor to Sarah. Sarah Dib, Secretary of the GM, who's going to tell us how the electronic voting system works, and then we will vote on each of the resolutions.
[Foreign language]
Thank you, Philippe. Let me first give you the final quorum. On the attendance sheet, we have 2,648 shareholders, who all have 148,172,119 shares, representing 225 million, and the quorum is therefore 81.1%. By virtue of the legislation, recipients who hold preferred shares will not be entitled to vote on resolution 15, regarding the modification of the terms and conditions of preferred shares, and their ordinary shares will not be taken into consideration to calculate the quorum. Nor for the calculation of the majority, for the adoption of the resolution. Based on the attendance sheet numbers, I confirm that the 25% quorum is achieved for the adoption of the resolution. Now, we have a quick video that shows you how to vote.
Insert the card chip up to the red line in the voting unit. A welcome message confirms that the card has been inserted correctly. Your name and the number of actions, voting weight, is shown on the screen. When the voting is open, the screen of the voting unit displays the possible answers. To vote, press the button corresponding to your choice. For example, to vote for, press the one button. A message on the screen of the unit confirms the receipt of your vote. You change your mind? Simply press the X button to erase your answer and enter your new choice before the voting session closes. If your card is incorrectly inserted, an warning message will appear on the screen of your unit. Be sure not to return the unit and the card at the end of the event. Please turn off your mobile phone during the meeting.
[Foreign language]
The vote will be conducted. We will vote on the resolutions one by one with the system that was handed out to you. The system handed out is strictly personal. It takes into account the number of shares that you hold or represent. The full text of the resolution is available in the invitation brochure that's available on the company's website, and that was given to you at the entrance. I will merely read out a summary of each of the resolutions. After reading out each of the resolutions, we will immediately vote, and I will say, "Please vote." You will then have 10 seconds to vote. When the countdown is over, I will say, "Time is up," and you will no longer be allowed to vote. The results will immediately be screened. Well, not immediately, but just a few seconds after the voting is closed.
[Foreign language]
For the resolutions in the ordinary portion of the GM, a majority of 50% of votes is required. For the resolutions in the extraordinary portion of the GM, a majority of 2/3 of the votes is required. Here we go. Ordinary portion, resolutions. Resolution One, approval of the parent company accounts for fiscal 2022. Please vote. Time is up. The resolution is carried. Resolution Two, approval of the consolidated accounts for fiscal 2022. Please vote. Time is up. The resolution is carried. Resolution Three, appropriation of the result for fiscal 2022. Please vote. Time is up. The resolution is carried. Resolution Four, approval of the information pertaining to the compensation of the corporate officers, as required by Article L. 22-10-9-1 of the French Code de Commerce, and that can be found in the report on corporate governance. Please vote.
[Foreign language]
Time is up. The resolution is carried. Resolution Five, approval of the fixed, variable, and exceptional components of the total compensation and benefits paid for 2022 or granted to Mr. Philippe Guillemot in his capacity as Chairman and Chief Executive Officer. Please vote. Time is up. The resolution is carried. Resolution Six, approval of the fixed, variable, and exceptional components in the total compensation and the benefits paid or granted, to be granted to Mr. Edouard Guinotte for fiscal 2022, and in his capacity as Chairman and Chief Executive Officer from January 1st, 2022 to March 20, 2022, inclusive, and the financial terms that have to do with the execution and the close of his function as Chairman and Chief Executive Officer on the March 20th, 2022. Please vote. Time is up. The resolution is carried.
[Foreign language]
Resolution Seven, approval of the fixed, variable, and exceptional components of the total compensation and benefits paid or to be granted to Mr. Olivier Mallet in fiscal 2022, in his capacity as Deputy Chief Executive Officer from January 1st, 2022 ,to March 20th, 2022, inclusive. Please vote. Time is up. The resolution is carried. Resolution Eight, approval of the compensation policy applicable to the Chairman and Chief Executive Officer for fiscal 2023. Please vote. Time is up. The resolution is carried. Resolution Nine, approval of the compensation policy applicable to the directors, excluding the Chairman, for fiscal 2023. Please vote. Time is up. The resolution is carried. Resolution 10, authorization to be given to the board to trade in the company's shares. Please vote. Time is up. The resolution is carried. Resolution 11, approval of the climate strategy. Please vote.
[Foreign language]
Time is up. The resolution is carried. We're moving on to the extraordinary portion of the general meeting. Resolution 12, authorization to be given to the board of directors to grant performance shares. Please vote. Time is up. The resolution is carried. Resolution 13, delegation of authority to be given to the board in order to carry out a capital increase for the recipients of a corporate savings plan with cancellation of the preferential subscription right. Please vote. Time is up.
[Foreign language]
The resolution is carried. Resolution 14, delegation of authority to be given to the board in order to carry out a capital increase for the employees and corporate officers of Vallourec and its entities with cancellation of the preferential subscription right. Please vote. Time is up. The resolution is carried. Resolution 15, amendment of the articles of incorporation. Please vote. Time is up. The resolution is carried. Resolution 16, powers for formalities. Please vote. Time is up. The resolution is carried.
[Foreign language]
Thank you, Sarah. There being no further business of our AGM, I hereby close the meeting. I thank you for your presence, your loyalty, and your support. The 2024 general meeting will be held on Thursday, May 23rd, 2024, for your information.