Ladies and gentlemen, good afternoon. Please allow me to welcome you to this general assembly. It is the first general assembly that I lead as Chairman of the Board of Directors and Director General of Vallourec, and I'm delighted to be able to meet you today. Therefore, I would like to thank you all for attending and for the trust you're granting our group. Next to me, there are Pierre Vareille, Vice President of the Board of Directors, Sascha Bibert, Chief Financial Officer, and Claire Langelier, General Counsel. Sascha Bibert has joined our group on April 19th. He used to be CFO for Uniper, one of the largest European electricity producers listed on the stock exchange. His 25-year experience in the world of energy are a sound and solid bonus to drive Vallourec's transformation.
Sascha will speak in English, therefore, headsets are available should you need translation into French. I'd like to invite the two members of the assembly who are attending and able to represent the greatest number of votes, considering the number of votes represented by proxies to constitute the bureau as scrutineers. That is to say, Pierre Vareille and SCPE Vallourec France, Germany, U.K., Vallourec Brazil, Mexico, UAE, and Vallourec Actions, represented by Eric Freudenreich. Claire Langelier has been appointed as secretary of the assembly. Claire will tell us about the legal formalities that have been done in order to allow for this general assembly to convene.
This assembly is meeting upon first invitation. Convening notices were issued in official papers, and an individual invitation has been sent to registered shareholders according to the law.
I'd like to confirm that legal documents that are requested for this assembly are available for shareholders. The quorum requested for deliberations of this ordinary general assembly is at least 20% of the total of shares with voting rights. This quorum is 25% for deliberations attached to the extraordinary assembly. The presence sheet shows a quorum that is greater than the 25% of the shares with voting rights. The assembly can therefore deliberate for both ordinary and extraordinary assemblies. The definite quorum will be communicated to you before the vote for proposed resolutions. I'd like to inform you that there are journalists, guests, and ladies as well, whose mission is to assess the proper implementation of this meeting and vote.
According to the agenda for this assembly and assemblies that are to be voted upon, I do invite you to refer to the French language, the convocation, the invitation notice brochure that has been made available at the beginning of this meeting. In this brochure, you will find, of course, the resolutions themselves, but also the reports of the board of directors.
Thank you, Claire. I therefore declare the session open. The assembly will happen as such. After a general introduction that I will make about the group's situation, Sascha Bibert will make a presentation of the financial results for 2021 and the prospects for 2022. I will tell you about our vision and our strategies to evolve towards a new Vallourec that will accelerate its transformation with the global and international plan, as announced last week.
Pierre Vareille, President of the nomination committee and President of the remuneration committee, will make a presentation about the governance of the group and compensation. Statutory auditors will present the conclusions of their report. We'll answer your questions. After which, resolution proposed will be voted upon. Within two months, I've been able to have a specific idea of Vallourec strengths and frailties. I met with part of our teams in France, Germany, in the U.S., and in Brazil, waiting for my next travels to other geographical areas. After this first tour, I have observations and convictions, plus a vision. The Vallourec group has many assets, indeed. First, being very close to its customers, leading products on their market segments, employees that are truly committed, very skilled, with an R&D department. I understand now why it is the source of so much envy and admiration.
I would like to thank all Vallourec employees for the results of the past year and for their true commitment to our future results. I am convinced that our experience in the seamless tube business, which is proud, and that will open the door of new markets outside fossil fuels. To achieve this, we need first to secure our margins that are necessary for future investments. First of all, I would like, just like my predecessors, take stock of our indicators about safety and quality, which are priorities and major challenges for our group, especially for our factories, our employees whose activities require every vigilance. I would like to thank them, by the way, for their true participation. Now, what can we say about safety for 2021? First of all, our total recordable incident rate, TRIR remains steady versus 2020.
1.65 in 2021 compared with 1.67 in 2020. Then the lost time incident rate that leads to, for an employee not to be able to work for at least one day, is slightly above 2020. 1.11 in 2021 versus 0.76 in 2020. These results count as the best for this over these last 10 years, as you can see on the graph. Still, they've been hit by the COVID pandemic that was a disturbance for our teams and a strong business recovery in North and South America that requested to hire newcomers that were less experienced in spite of our training plans. We've set up new ambitious safety objectives for 2022. To hit the goals, we will further develop our safety processes with new initiatives and increase the role and importance of field managers.
Beyond our objectives and figured objectives to be hit, our ambitions and to provide new momentum to our safety culture and to be able to compare to our best in the oil and gas industry. Quality indicators are improving with a new decrease in the number of monthly claims by 30% between 2020 and 2021. Considering the production increase contrasts way beyond the improvement of our NDT inspection processes. The Lean and Six Sigma plans that we want to implement is still bearing fruit. The integration of digital technologies and data management are extremely important and increasingly important in the improvement of our processes and control of these processes. Let me remind you that we collect over 1,000 data for each tube that is produced. In addition to these two major challenges, safety of our employees and quality, Vallourec is working to prepare the future.
My mission is to turn our group into a company that is always more responsible and a leading actor in a decarbonized economy. This first implies to have to work and to be rigorous in order to improve our scores in terms of CSR. With our commitment and great level of demand on this field, our efforts can allow us to reach performances we can all rejoice by. I will not refer to all the figures on this slide, let me just mention a few. From a social and societal point of view, diversity, men, women is a very important topic for. This is a synonym of a greater performance in 2021. 24% of our executives were women versus 23% in 2021.
With our program, Women@Vallourec, one of our three top objectives is to reach the same percentage of women at all levels of the hierarchy. The two other objectives are to ensure the conditions for success for all and to ensure compensation equality for the same kind of activities in a single country. The environment now. The water at the heart of our production process, it is the object of particular focus and is the object of a proactive reduction approach. In 2021, 40% of our water usage came from rainfall. We continuously want to optimize the collection and use of rainfall with the construction, for instance, of a reservoir in Brazil or by tunneling rainwater in the U.S. Now, regarding the resources that we use.
In 2021, 97.6% of our waste were valued with circular economy initiatives, and 90% of our plastic industrial waste were recycled or reused. In addition, we cooperate with our suppliers in order to reduce the use of packaging. Steel being a material that can be endlessly recycled. 49% of steel that we have used in 2021 comes from recycled materials. Now, about energy. Thanks to our greenhouse project that was kicked off in 2008, we managed to reduce our energy consumption, which has allowed the group to reduce its CO2 emissions by 17% between 2008 and 2020. In 2021, 44% of our energy were coming from renewable sources. If you consider the nuclear energy, we reach 87% of low carbon energy.
These performances will allow us to be rewarded and well acknowledged by our customers and by extra financial rating agencies. Vallourec is part of this prestigious list, A of CDP, Carbon Disclosure Project. Only 200 corporates worldwide are part of this list and this shows our commitment to climate. Vallourec is classified AA by MSCI, which is part of the first quartile. Vallourec is fifth out of 112 on the rating of companies that are working in the field of energy. This rating's being made by Sustainalytics. SBTI, the Science Based Targets Initiative, approved in 2021 objective of -25% of greenhouse gases for our group by 2025 versus 2017, in line with the Paris Agreement.
To protect the climate, we transparently issued the carbon footprint of our tubes, which is 1.796 tons of CO2 per ton of tube produced versus an average market footprint around two tons. By measuring and certifying the environmental impact of our products by EPD, that is Environmental Product Declaration, we help our customers reach our carbon objectives. This assessment of product lifecycle is certified by independent auditors. Let's talk about our trade momentum. The continuous success of Vallourec strategy lies on cooperation from our teams across the world and product lines. On this map, we have displayed a selection of contracts, deals that we got in 2021. Amongst the most flagship deals, there's the framework contract with ExxonMobil for the line pipe product in Guyana. It's a 10-year contract.
We've also worked in the Shenandoah project in Mexico. We also have the BOO for OCTG products. This project is one of the major high pressure, high temperature projects of the next generation, which requires a nominal pressure of 20,000 PSI for deep water drilling in the Gulf of Mexico. Several orders were also placed by Chevron for deep water drilling operations. We could also mention several important contracts of OCTG in the Middle East, Iraq, Saudi Arabia, or in Kuwait. Now, to conclude, I'd like to tell you about a deal that is particularly important to me, for it opens the way to the energy transition business. Vallourec has been selected by Storengy, which is a subsidiary of ENGIE, in order to provide a comprehensive offer of tubular solutions and associated services with the HyPSTER project.
This is the first hydrogen storage project that is supported by the European Union. 2021 has also been a year that was essential to the history of the group since we successfully completed our financial restructuring plan. That was a prerequisite for Vallourec sustainability. This has helped have a clean P&L. The debt burden has been reduced by EUR 1.8 billion. The associated financial expenses have also been reduced, and a strong liquidity or cash situation has been maintained. We now have a new shareholder composition with two sound shareholders, Apollo and SVPGlobal. During 2021, we've also simplified our corporate structure, getting minority shares within VSB in Brazil, Vallourec Star, and VAM USA in North America.
The situation for 2021 is done, and I will now hand over to Sascha Bibert, who will tell you about the financial results for 2021 and prospects for 2022.
Thank you, Chairman. Also a warm welcome to all Vallourec shareholders from my side. Today, we close the chapter for the financial year 2021. During the year, we finalized the financial restructuring, as mentioned by Philippe. This was a fundamental step forward. This restructuring provides the basis for a new Vallourec. In this context, I can report encouraging 2021 results as well as an upward-pointing outlook 2022. First to the key figures for the financial year 2021. While the volumes increased by 2.6% and revenues 6.1% or 10% on a constant FX basis, EBITDA almost doubled to EUR 492 million. The negative free cash flow was mainly a result of an increase in working capital and non-recurring charges.
Here, I want to give you more details on the revenue evolution by market and by region. In oil and gas, which represented 54% of our total revenue, sales were down -7% year-on-year or -5% on a constant FX basis. The lower activity in EA, MEA, resulting from the lower order intake in 2020, was not offset by North America, which picked up only in the second half of the year and by South America. In the small petrochemical segment, revenue was slightly down by -1.7% or up slightly on a constant FX basis. In industry and other, a strong increase of revenue was recorded of +50% or even +60% on a constant FX basis. In Europe, industry revenue was up, reflecting higher volumes.
In South America, industry and other revenue increased as well, a result of higher revenue from the iron ore mine reflecting both higher prices and volumes and of higher sales in the industry markets. Power generation revenue was down 31% year-on-year, reflecting notably the disposal of Valinox Nucléaire on May 31st, 2021. I will now comment on the strong EBITDA growth.
EBITDA stood at EUR 492 million, up EUR 234 million year-on-year, and the EBITDA margin increased by more than 600 percentage points to 14.3% of revenue, driven by, first, an industrial margin increase by 38% or EUR 229 million, reflecting a higher contribution of the mine, a higher activity for oil and gas in North America and in industry markets and savings more than offsetting the lower activity in oil and gas in EA, MEA, as well as the raw materials and energy cost increase. Second, a reduction of our SG&A costs by 3%. SG&A represented 9.2% of 2021 revenue, compared to 10% in 2020.
The operating income increased strongly and was positive at EUR 374 million, compared to a loss of EUR 1 billion in the prior year, 2020. In addition to the improvement in EBITDA, this was a result of lower depreciation of industrial assets, the positive effects of the sale of the Rheinzabern buildings and land, and the favorable Supreme Federal Court decision on a tax claim. As a reminder, 2020's operating income was also negatively impacted by significant impairment and restructuring charges. The financial income was minus EUR 236 million, compared to minus EUR 227 million in 2020. Net interest expense amounted to EUR 147 million versus EUR 196 million in 2020.
Other financial income was negative by EUR -40 million, compared with a positive EUR 28 million in 2020, largely due to one-offs, such as the EUR -70 million cost of the DBOT repurchase in Brazil and the impact of financial restructuring for EUR -42 million. Income tax amounted to EUR -101 million, compared with EUR 96 million in 2020. This includes the partial reversal of deferred tax asset provisions and a positive one-off recovery of a tax credit. As a result, Vallourec recorded a full year positive net income group share of EUR 40 million, compared with a net loss of EUR 1.2 billion in 2020. The group net financial debt as of December 21, 2021 stood at EUR 958 million, compared to EUR 2.214 billion at the end of 2020, mainly as a result of the financial restructuring.
Our liquidity position as of 31st December 2021 is strong at EUR 1,081 million, comprised of EUR 619 million in cash and the undrawn committed revolving credit facility for EUR 462 million. Now let's talk about the share price. During the second semester, since the completion of the financial restructuring, the share price increased by 6.4%, and we finished the year at EUR 8.8. Currently, Vallourec share price trades at EUR 13.7, which represents a significant increase, i.e., +56% since the beginning of the year 2020. My last slides are dedicated to our full year 2022 outlook, updated during our first quarter release last week.
For our North American business, we are observing very favorable market conditions, and we expect the second half of the year to be even stronger, both price and volume-wise. For Europe, Africa, and Middle East, we expect oil and gas volumes to recover significantly with a progressive passthrough of cost to prices. For South America, we are also optimistic with respect to volumes and prices for the coming quarters. An uncertainty for the remaining year is the validation of the waste pile stability related to our iron ore mine operation. We expect the EBITDA contribution to increase in the coming quarters. Therefore, the full year will be weighted towards the second half. For the group, we increased the qualification of the outlook from above to significantly above prior year. I will now hand over to our Chairman and CEO again.
Thank you, Sascha. Let me tell you about our vision and strategy. More than ever, we want to evolve towards a new Vallourec that will accelerate its transformations by implementing an international and global plan. This plan is about to build the future of our group by privileging the value over volumes. This plan is about to turn Vallourec into a profitable company in any circumstances on the oil and gas market. With this plan, Vallourec is supposed to become a group capable to invest in its future and therefore become a key actor in the decarbonated economy. It is a new page that must be open in the history of Vallourec that must ensure its future after the prerequisite that was the financial restructuring plan that was successfully implemented in 2021. Accelerating our transformation, as you understand, therefore, is not optional.
In tangible terms, as I explained it in the preamble, the group has several assets. First of all, being close to customers, a global footprint with leading products in the markets, a strong engineering culture and expertise that goes way beyond the tube making business. There are also several opportunities to seize by increasing its low-cost production bases, by focusing on the value and not on volumes, and therefore significantly improving its cash cycle management and getting more agile in order to evolve to a fast-changing market. That is the reason why we decided to design a new Vallourec focusing on the most promising and competitive regions whose industrial organization, the workflow will greatly evolve by 2023. This means that a certain number of decisions must be implemented.
First of all, we are going to kick off the production transfer for tubes for the oil and gas business from Germany to Brazil. Considering the incapacity to be competitive in order to serve international markets from a European industrial basis, we will turn our Brazil facilities into the center of production for oil and gas products in order to serve international markets. This will help us make the most of its competitiveness in terms of cost and to ensure a greater carbon footprint. The group also decided to launch asset closing processes for Vallourec Deutschland, which makes significant losses. It has been the case for the past seven years. The earlier disposal process that was kicked off end of 2021 was not able to be concluded successfully. It is painful decision indeed that ends over 125 years of business in Germany.
It is important and necessary to ensure the sustainability of the group. France remains a global decision-making center, and the facility of Aulnoy-Aymeries, north of France, will remain at the heart of the group's R&D and European trading business. Thermal treatment cells in Saint-Saulve and Belchère will therefore unfortunately be closed. This industrial restructuring will go hand in hand with a simplification of our organization in order to ensure greater efficiency and agility, especially for support functions. All decisions will need to have a job cut by 3,000 persons in the world, and that will help Vallourec be profitable no matter the market conditions. On this slide, this is what, by 2024, the industrial footprint of Vallourec would look like. As you can see, there are three main regions.
South America, which beyond its domestic market, will further grow as a major production center for exported tubes on oil and gas international markets. North America, second region, will still serve the domestic markets and the Eastern Hemisphere, rest of the world, which will be in charge of non-domestic businesses for North and South America. Beyond this new industrial strategy, I would like to turn our group into a key player in the energy transition and decarbonating economy. The share of this new market is very limited for us, and that growth will depend on our future project success. Eventually, I would like these initiatives to allow our group to generate growing and important part of its turnover outside the fossil fuel business.
To do so, we will rely on our knowledge in terms of pressure, temperature, and corrosion that we gain with the development of innovative tubular solutions that were adapted to the oil and gas, low carbon energy, and industry markets. We also to provide new services, digital service, just like connected smart tubes. These solutions will support our customers for all along their chain of value. This constant innovation approach is a way for it to remain technologically leaders and to help our customers living up to their own challenges. By relying on our core business, we will therefore be able to go way beyond oil and gas tube production and use our expertise in order to serve the energy transition of our group.
Ulrika Wising has been appointed at the executive committee as a senior vice president for the energy transition in order to help us accelerate our development in five identified fields: geothermal energy, wind, sea wind, sun energy, carbon sequestration, and hydrogen. The share of these new markets in our turnover remains quite limited, and their growth, as I said, will depend on the success of our projects. Let me give you an example with a few tangible projects that are already been kicked off. Geothermal energy, first of all. The group recently announced investing in GreenFire Energy, which is an American startup developing geothermal systems in closed loops. This operation has been done with Baker Hughes and Paine Schwartz Partners, which are part of our customer base. Geothermal energy is supposed to play a major role in the energy transition and decarbonization of our economies.
It is indeed the only renewable source of energy that can provide basic energy that is decarbonated and multiple use. In the field of carbon sequestration, the group has been selected by Neptune Energy, which is an international independent company for drilling and oil and gas production located in Europe, North Africa, and Asia-Pacific, to test materials for a capture and storage of the carbon gas in Northern Sea. Still in the same region of the world and in the same field of activities, we provided tubes for a global leader working in the field of energy. Another ambitious project that I referred to, HyPSTER, which is the first hydrogen storage project, renewable hydrogen storage project that is supported by the European Union. Storengy, a subsidiary of ENGIE, selected Vallourec in order to provide tubular solutions and associated services.
Vallourec is also cooperating with Aker Solutions and plays an important role in the Hywind Tampen project, which is one of the greatest floating wind farm projects. It also is an innovative energy project that is implemented by Equinor. Once this project is achieved, Hywind Tampen will be the greatest floating wind farm on the planet and the first source of energy that is renewable for oil and gas offshore platforms. Eventually, we'd like this initiative to generate a growing and important part of its turnover outside fossil fuels. As you can see, the Vallourec Group is already part of a decarbonated energy economy, sorry.
I would like to thank you for your attention, and I would like to invite Pierre Vareille to present to you with the information that are linked to the governance of the group and compensation of the corporate officers.
Thank you. Good afternoon, ladies and gentlemen. Let me tell you about the changes, the general management. As you know, after a selection process that has been time-consuming, I would say, that has helped us identify a certain number of candidates, the board of directors decided to select Mr. Philippe Guillemot here to take over Mr. Edouard Guinotte as a general director of the company. The board of directors met on March 20, 2022 in order to make that change happen.
As Philippe explained it several times during his presentation, the objective for this change is to accelerate Vallourec's transformation towards greater focus being put on value instead of volumes and in order to make sure that our company is still able to reach a positive return even when the cycle is not as favorable as it is today. In addition to this, and according to the provisions of the Code of Commerce, the term of office of Mr. Mallet, a deputy chief executive officer who was the CFO of the company, has terminated on March 20, 2022, and Mr. Philippe Guillemot, therefore, is the only corporate officer of the company. Another change that is important on April 15th, 2022, Mr. Sascha Bibert joined the company as CFO. He took over Olivier Mallet, as I just said. The board of directors was renewed quite significantly.
Today, it comprises 52.5% of independent directors. The members of the board are from 5 different citizenships, and we have a perfect parity, 50% women and 50% men. Actually, the perfect gender parity here. Concerning remuneration of corporate officers, as I said, Mr. Olivier Mallet was the corporate officer up until the 20th of March, 2022. This is why we are mentioning it today. The annual fixed part concerning Mr. Edouard Guinotte, President, Director General as of the 1st of April, 2022, EUR 600. And for Mr. Olivier Mallet, EUR 600 ,000, of course, before tax, and for Mr. Olivier Mallet, EUR 470 ,000.
For the variable part, with Mr. Edouard Guinotte has a variable share, so allowing for the increase to 100% of the fixed part and even 135% if the maximum objectives are reached. With the same logic, the variable share of remuneration of Mr. Olivier Mallet varies by zero to 75% of the fixed share, depending, and can reach 100% if objectives are reached. Now, for the variable share, this is in the universal document that's available, you see that Mr. Guinotte has reached 78.22% of the variable share to which he could take a part in. Concerning Mr. Mallet, the same share was given to him, so he has reached 73.52% on the variable share.
As you know, there was a general assembly on the 7th of September, 2021, which attributed a remuneration plan with so based on shares, so in a private equity logic, so mostly value creation for shareholders in this scheme. This scheme is beneficial to the CEO, the deputy CEO as well, when there was one, to the members of the executive committee and other executives, and just about 70 executives and replaces all the other schemes that had been attributed to these executives previously. Shares were attributed, a third of ordinary shares and two-thirds of preferential shares according to rules that are also in the Universal Registration Document.
Without any annual renewal, a certain number of shares were attributed to the CEO and to the deputy CEO, as you can see on this slide. Let's now broach the remuneration of directors of the company. The amount of the annual budget line attributable is EUR 1.25 million, we have reached this amount. We have a breakdown of this budget depending on the participation of directors to board of directors to make sure that the directors of this company sitting at the board of directors be present to as many meetings as possible. Let me call your attention to the fact that Mr. Gareth Turner representing Apollo and Turner, Mr. William de Wulf do not have any presence tokens as they're called.
Mr. William de Wulf , who is the representative of employees at the board of directors, who is here today, decided to turn down the remuneration of these tokens, and I would like to salute this decision that they took. Now, in terms of the policy of remuneration for corporate officers in 2022, concerning the fixed annual part of this remuneration for Mr. Edouard Guinotte and Olivier Mallet, and as a reminder, he was the CFO until 20th of March , 2022. There was no change. As of 20th of March , 2022 , Mr. Guillemot came into the group with a remuneration of EUR 1 million. Concerning the variable share, no modification. In relation to the previous situation, the exact same principles apply.
Objectives of a variable share for 2022 based, so 60% on the financial performances, especially on net cash flow generated by the operations. This is crucial because, as you know, it is crucial for a company to generate cash, as it's called to survive. Operational performance represents 20%, which is good because there is acceleration compared to performances and corporate social responsibility accounting for 20% in terms of quality, safety, and a mixed indicator concerning the carbon emissions and the mix. The CEO has decided to increase this corporate social responsibility policy, and you see this illustrated here.
The board of directors has decided to calculate pro rata temporis the variable remuneration of Mr. Edouard Guinotte and Mr. Mallet on the basis of a success in line with the objectives at 100%, as you said, as you heard previously, and remuneration of Mr. Edouard Guinotte in terms of its variable share was close to this 100% reaching of objectives, and objectives as were presented on the twentieth of March looked like this would be the same for this year. One detail, annual variable remuneration of Mr. Philippe Guillemot is guaranteed up to 50% against which the annual remuneration is capped at 100% and cannot reach the 135% that I mentioned previously. Following the nomination of Mr. Philippe Guillemot, there were a number of modifications concerning the remuneration plan, so with a share holding scheme as of the thirteenth of October, 2021.
Because Mr. Philippe Guillemot only wanted preferential shares and not ordinary shares. One clarification, the attribution that you see on the screen, and that is also in the universal document of reference, covers four years and will not be renewed annually. I will go quickly over the different elements of remuneration for Mr. Philippe Guillemot. I think it's important to say that he is not going to take advantage of a works contract. It's also important to say that there is a non-competition clause for 18 months with the possibility for the board of directors to forgo this clause and a clause in case of so forced departure, which follows the line of the MEDEF, which means that the whole of his remuneration would be capped at the amount for representing two years of average remuneration.
Last paragraph, financial conditions of the departure of Mr. Edouard Guinotte, who was a corporate officer of the company, and this is why this is subjected to the approval of the general assembly. The council decided to implement the obligation for non-competition. A transactional compensation of EUR 728,857 was allocated, and there was a job contract termination compensation and an outplacement compensation in the limit of EUR 50,000 as well. Let me underscore that the conclusion of this transactional protocol is aligned with the objectives of the code of governance of the AFEP-MEDEF conglomerate and association. Thank you for your attention.
I am now going to give the floor to the statutory auditors. Thank you, Pierre. I'm now going to invite Mrs.
Alexandra Sastamaine from the KBMG company to present the report of the statutory auditors.
Unfortunately, the mic is off. Interpreters cannot hear the speaker to be able to translate. Unfortunately, the speaker is not using a microphone, therefore interpreters cannot hear her.
I will not read our report in detail, but just to make a presentation of the summary. Our reports on consolidated annual accounts of the company are presented in page 272 to page 276, and 249, 253 of the Universal Registration Document. Our audit plan and the detailed conclusions of our works were presented to the audit committee and board of directors of the group, works. Our audit ensuring reasonable assurance that the consolidated annual accounts as a whole presented no major anomaly.
Both our firms worked in France and on the international scales in all important entities of your group. Our approach and diligence were adapted to the different businesses of your group in order to consider the specificities in terms of regulations, risks, organization, internal control to the audit systems, and important or non-recurring operations. We particularly focused on the implementations of accounting principles according to management's comments and studied the overall accounts presentation and studied the quality of information, financial information. We highlighted key elements of our audits and diligence that we did implement in order to meet our requirements for annual accounts. It is about the valuation of shares, consolidated accounts. We particularly focused on assessing acquisition gaps and material, non-material investments.
Regarding the investments, we carried out a value loss test on isolated assets according to the IFRS 5 standard and according to Vallourec North America standard. No loss of value was identified. Industrial assets in Germany were classified as C and D assets, and we made sure that the estimated value of disposal were above the accounting value. We made sure that the accounting and our ratings were providing appropriate assessments. We have no reservation expressed on the annual accounts and consolidated accounts for the group. We've also checked on specific considerations according to the standards implemented, and have no particular comment to make. Special reports on the regulated conventions. A report refers to the features of these conventions, including the reasons that led to the conclusions. These are presented in pages 354 and 356 of the universal registration document.
A report about social, environmental, and societal data is presented in the management report. We worked on the extra-financial performance and results are presented in the reference document, page 48 and 50. There is no major fault if we refer to all data provided. We also issued a report on capital operations for which you will have to vote with the resolutions 18 to 20 to 23, and 27. The Board of Directors suggests to delegate the competence, your competence for 26 months for the capital operations as described in the resolutions and also to delegate the shares that would be bought by your company according to the provisions of Resolution 28. We implemented the due diligence, considering the professional doctrine applicable in France according to the 18th, 23rd, and 43rd articles.
The board of directors did not justify about the price of emissions, therefore, we cannot justify the way these amounts were calculated. Now, about the rest of resolutions, the board of directors did not specify about the definite conditions for emissions to be done, therefore, we cannot provide any opinion on these, nor on the subscription preference rights removal. We will provide an additional report should this be required. Ladies and gentlemen, I'd like to thank you for your attention.
Thank you very much. Now, we will take your questions. Questions of people, shareholders in this room. Before you take the floor, we'd like please to tell your name and job title. With a microphone, of course. One question? Yes. Jean Claus.
You referred to the need for Vallourec to transform by boosting its sales and especially in the field of renewable energy. What is the timeframe? What is the level, you know, in terms of percentage, perhaps? What is your target, both in terms of percentage and timeline?
Maybe it's a bit early to ask this question, but well, thank you. Thank you for your question. Well, first of all, as I explained, we already have tangible projects indeed that you know developed in order to boost our turnover leaving behind fossil fuel business. As we said, it all depends on the success of these projects that our profits will depend on. The rationale behind it is that gradually, let's say, perhaps by 2030. Oh, sorry. By
In a reasonable timeline, perhaps it could reach 30% of our turnover that will be done in this field, and we can consider that the turnover for the group in oil and gas field will decrease. Anyway, it is absolutely necessary for the group to work in different fields and to focus on energy transition at first, obviously.
Another question with a microphone, please.
You explained in the last report that the Brazil mine recovered and starting its operations again. Can you tell us if productivity is today as it used to be? If not, what is the level in terms of operations today? Well, indeed.
Indeed, you duly noted that we communicated on this just a few weeks back, and we got the authorization to restart our business for next three months. Obviously, we intend to expand this three-month period of time since we are working on the dry waste storage area that was the object of the accident at the beginning of January. As we explained in our press release, we are now recovering and resuming by 70%. It will reach 100% over the three-month period of time. We are now in this upgrading curve, and hopefully at end of July, we will be operating at 100% of our capacities.
Good afternoon, Mister. I'm a bit surprised that nobody is in this room of that some members of the supervisory board of directors are amazing. I don't know how many members are represented here today.
Well, there are three of us in this room today, Pierre, myself, and Mr Bibert . All right. Maybe more members could have attended. Yes, this general assembly is organized in French. It's taking place in French. All the members are not French-speaking members. Yes. The information given to us can be useful to them as it is useful to us. Well, you know, they all have their own agenda, and such as that hadn't joined the group in the past. Yes. It was short notice. You're right. Thank you.
Michel Emery. I've been a shareholder for more than 12 years. I wanted to understand, what can you tell us about the reason or reasons for your predecessor who left?
We met him once last year and that was it. Well, I will hand over to Pierre.
Since I did not attend the previous meeting, I think, but we clearly explained that this company had an objective, and unfortunately, the objective hadn't been hit necessarily. We wanted to reach a positive net results in terms of cash generation, no matter the cycle. As you know, we are a cycle-based activity, and that required a complete transformation of our company. Announcements were made last week. It seemed, it appeared to the board of directors that we needed fresh blood. We needed new vision, somebody who would not be an expert of the company and who was an expert in this process of recovery. Philippe Guillemot has worked on several such projects.
Maybe you've seen what he's done in the past. He's successfully implemented several recovery plans, and that is why, considering the objective of the board of directors, that is to generate cash no matter the situation, we needed to indeed tackle this profound and deep transformation plan that goes way beyond the restructuring plan. Philippe talked about agility, about the changes of operating methods, and therefore, we needed someone who would who had, as his past experience, such an experience of recovery plans. This does not question the quality of Edouard Guinotte, and he's my friend, by the way, and he's quite remarkable. I mean, he's had a wonderful career within our group, and we've had the chance to thank him for this. Of course, we wish him every possible success.
We needed new blood and somebody who's used to implementing such recovery plans.
Just a request for information. My name is Mr. Chevert, individual shareholder. I took part. I listened to a number of general assemblies, and everyone started giving a few words on the Ukraine-Russia conflict, and I'd like to know if this conflict has had an impact on your group. Thank you for this question, if I didn't mention it's that this impact is very low, and not to say nonexistent on our activity. There's just one subsidiary in the group that had -20% and a very small subsidiary at that for projects that have now been completed. This is why I did not mention the subject. Thank you.
The Ukrainian-Russian crisis leads to a modification in purchases of the European countries in the foreseeable future, let's say the end of this year and the year to come. Is the fact that we are buying less from Russia leading these countries to call upon other suppliers, in particular the Middle Eastern suppliers, Near Eastern and maybe Africa.
Could you, in any way, make an estimate, let's say, of the purchases that would be made from these other regions and the volume in the Vallourec production? Would this lead to additional growth that had not been computed before the Ukraine-Russia crisis?
Yes, indeed. This is the other side of the impact of the war in Ukraine on our operations.
What's for sure is that you saw the price of oil has increased substantially, first of all, because the slow world recovery that preceded this crisis had led to tensions between the supply and demand. Since this conflict at the outskirts of Europe, we are led to consider an embargo on oil, maybe on gas soon that has to be offset in the other geographies. Russian oil represented 44% of oil consumption in the world outside of Russia, so obviously these 44% will have to be offset and bought somewhere else. We see that the world economy still needs 100 million barrels of oil daily that has to be maintained in the years to come. We have investments to make up for the depletion, as we call it. For...
to this is added the embargo on Russian fossil fuels. This is what explains, in part, of course, a strong uptake of activity in the USA and also in the Middle East, as you mentioned, even though the countries in OPEC are still very cautious in terms of the increase of their production, because they want to maintain oil prices at levels that are sufficiently high to support their economies, as you may have observed.
No microphone. The gentleman will be given a microphone so that we can hear your question and record it.
Mr. Aburra, hello. Individual shareholders.
Starting from an observation, you usually have many participants in the General Assembly, and I see that the room is practically empty today, and I'd like to know if the number of shareholders has gone down in the last few months. I can say that this is what we've been observing during this current year for all general assemblies. I don't know if this is due to the fact that last year we had video conferencing systems for general assemblies or because of the COVID crisis, which is still underway. I've had the same situation in other general assemblies, especially on site, for sure. What I mean to say is, has the number of industrial shareholders, so what we call retail, gone down or no?
I don't have the exact figure because that's what the question is. We will give you the quorum of the assembly today, and you'll see that it's quite significant, actually. Comment off microphone, but the panel agrees. Yes, you'll see the quorum after the meeting, and you will see that the quorum illustrates this participation. German is the answer to a question off microphone. Correct. Sascha Bibert confirms.
Hello. Mr. Chairman, you mentioned the departure of your German industrial base from the group we know, so German rigor, and our financial director will not contradict me for sure, and also the stability of this country within Europe.
This departure of operations to the benefit of Brazil, which is also a beautiful country, but maybe a little bit less stable with also in terms of currencies, exchange rates, a number of fluctuations which could also impact the group. Finally, in terms of your skills on the ground and your teams on the ground, how could you explain and reassure us in relation to this decision and its impact?
Thank you for your question. First of all, going back to our operations in Germany, these operations actually have to do with two segments. Oil and gas operations, which it was announced so in December of last year, that they would be transferred to Brazil, but bigger volumes in terms of the industrial segment.
It was decided last year not to remain with these operations because they were running a deficit. This divestment operation did not come to a head, and so we decided to close these operations and sites. Industrial activities in Germany were not profitable, unfortunately. The fiscal year 2022 is not going in the right direction because the energy price increases, which are higher in Europe than the rest of the world, and therefore the increase of raw material prices as well has degraded the situation even more. This is for Germany. Now concerning the transfer of operations to Brazil. The growing importance of Brazil for the group, you are right. We have to so reinforce skills in Brazil. They've already been improved, and they will be continuously.
This project is being monitored very closely with many skills in the group that are brought on board to make sure that the skills ramp up, to make sure that these product references that will now be manufactured in Brazil go smoothly, and for Brazil to be able to serve the international market, well in addition to its domestic market. This project is very well detailed today and leading us to consider the end of transfer to be by the end of the year 2023. To date, this is the project that we are really mobilized on because, as you said, it is crucial for the future of the group. You mentioned exchange rates.
Of course, we have run a number of simulations to see at what exchange rate we would be in difficulty, and we would need to see the real gaining value significantly for even this to be the case. Even if this were the case, it's probable that other geographies to serve our international markets would see their currency be revalued as well. Because what counts first and foremost is who you're in competition with and if your cost base is more competitive than that of your main competitors. We looked into this, and we did confirm that this choice of using our Brazilian industrial base to serve export markets is the right scenario.
Hello, Mrs. Lerouge, individual shareholder. Who are your main competitors?
Our competitors, well, depending on geographies, but today our main competitor is Tenaris.
For each market, the American market, for instance, we have other competitors, U.S. Steel, Benteler, who are actually much smaller. The three main ones are Tenaris, ourselves and U.S. Steel for the American market. Now, for other geographies, we have Nippon Steel, which is a main player, especially for Asia. For a market such as the Chinese domestic market, we have Chinese players on this market, which for the time being are not very present for export markets. We only have two main, so world leaders, Tenaris and ourselves. We are the two major players worldwide considering that we are so more high-end, so more premium connections as they're called, which are becoming a very selected club because this calls upon a aggregate of know-how and technologies that are quite difficult to obtain.
Tenaris is based in Luxembourg, but coming from India, based in Argentina, Mexico, the USA in terms of its industrial footprint. You have so two bases, a low-cost base in Mexico in particular. This move that Vallourec is making today is simply doing what Tenaris has been doing for a number of years already because the industrial base that Tenaris maintained is mostly in Romania, so Central Europe.
Patrice Miniere. Patrice Miniere, individual shareholder. I'd like to understand about Brazil and mine. The cost of steel per ton is going up and down. Is this important for Vallourec to keep this mine operating?
Well, this mine, as you have been able to see it during the first quarter results communication, is a beautiful business for the group with strong potential for the future.
Therefore we must take care of this. We must operate it. It grants us a unique integration level for our business because if you consider the alternative steel solutions, we can produce our own steel, and we have a very strong integration level in Brazil. By the way, this leads to a 30% decreased carbon footprint than if we compare with what it is in Germany. There are many bonuses and assets that are attached to this level of integration. Therefore, we want to keep up with this good integration level. Right. If there are no other questions, I see nobody else raising hands. I just have one comment to make, just to answer your question, Senator, about the number of administrators of directors attending. It is an important question indeed.
As you should know that it is quite legal and there is no particular governance issue. You may have noticed that three independent directors come from the three main product consumption areas, Brazil, America, Houston and China.
We made a choice, that is to have directors who knew their market, knew the countries, knew the customers. Obviously, these are people who speak English and who live in their different countries. That's the reason why.
Thank you, Pierre, for this additional comment. If you have no further questions, I would like now to ask Claire Langelier, who's Secretary of the Assembly, to tell us about the voting, electronic voting systems, and then to vote upon each of our resolutions.
Thank you, Philippe. First of all, I'd like to say that the attendance sheet shows that 2,383 shareholders with 109,271 shares out of the 220 million shares attached with voting rights are attending. That gives a quorum of 69.62%.
Now, I'd like to invite you to take a look and to watch the video in order to have quick explanation about the practicalities for the electronic voting system. You can place your chip card in. Make sure that the arrow are going down. You can insert the card up till the red line in the voting cell. Then you have a message confirming that the procedure is correct. Your name and number of shares, voting rights appears on the screen. When the vote is open, you have three options. You have to click on the right switch. If you want to vote for, you click one. Then you get a confirmation message. After voting, if you want to change your mind, you just need to hit X to erase and vote again before the voting session is closed.
If your card has not been placed correctly, then you will receive a message on your screen. Don't forget to hand the voting equipment at the end of the vote, to hand it back to us. We will vote for each resolution individual. After reading each of these resolutions, the vote will proceed, and I will tell you that the voting is open. You will have 10 seconds to vote. When the countdown is complete, I will tell you that the voting time is closed, and you won't be able to vote any longer. Results will be displayed on the screen a few moments after. Ordinary part of the assembly. First resolution: approval of the accounts for 2021 fiscal year. The vote is open now. The vote is closed. Resolution has been adopted about corporate accounts.
Second resolution: validation of consolidated accounts for 2021. Open. It's closed. Resolution adopted. Third resolution: allocation or distribution of the results for 2021. The vote is open. It's closed. Resolution adopted. Fourth resolution: validation of the regulated convention referred to in articles L. 225-38 according to the Code of Commerce about a transactional agreement protocol with Monsieur Edouard Guinotte about the implementation and discontinuance of all his functions within the Vallourec Group. Vote is open. It is now closed. Resolution adopted. Fifth resolution: renewal the terms of reference as administrator for Mrs. Angela Minas. Vote is open. Vote is closed. Resolution adopted. Sixth resolution: renewal the terms of reference of administrator for Mrs. Hera Siu. The vote is open. It is now closed. Resolution adopted. Seventh resolution. Ratification of the co-optation of Mr. Philippe Guillemot as Director. Vote is open.
Vote is closed. Resolution adopted. Eighth resolution. Validation of information referred to as Article L 22 10 91 of the Code of Commerce included in the report on the corporate governance. The vote is open. It is now closed. Resolution passed. Ninth resolution. Validation of fixed variables and exceptional elements that are part of the complete remuneration and advantages paid out during 2021 to Mr. Edouard Guinotte as chairman of the board up until June 30th, 2021. The vote is open. It is now closed. Resolution passed.
10th resolution. Validation of fixed variable and exceptional elements that are part of the total remuneration and other advantages paid out during 2021 to Mr. Edouard Guinotte as chairman, CEO from January 1st, 2021 to December 31st, 2021 and from January 1st, 2022 until 20th of March , including financial conditions that had led to the discontinuance of his functions as CEO on March 20, 2022. Vote open. Vote is closed. Resolution passed. 11th resolution. Validation of exceptional variable and fixed elements that are part of the total remuneration and other advantages paid out during the fiscal year 2021 to Mr. Olivier Mallet as a member of the management board up until June 30th, 2021. The vote is open. It is now closed. Resolution passed. 12th resolution.
Validation of exceptional variable and fixed elements that are part of the complete remuneration paid out during the fiscal year 2021 to Mr. Olivier Mallet as a deputy general director from July 1st, 2021 to December 31st, 2021 and January 1st, 2022 until March 20th, 2022. Vote is open. It is now closed. Resolution adopted. 13th resolution. Validation of fixed variable and exceptional elements that are part of the total remuneration and other advantages paid out during 2021 to Mrs. Vivienne Cox as a chairwoman of the monitoring or supervisory committee until June 30th, 2021. Vote is open. It is now closed. Resolution passed. 14th resolution. Validation of elements attached to the remuneration policy for the CEO for the fiscal year 2022. Vote is open. It is now closed. Resolution passed. 15th resolution. Validation of the remuneration policy for the deputy general director of 2022. The vote is open. It is closed. Resolution passed. Resolution number 16.
Validation of remuneration, the remuneration policy for directors other than the chairman for 2022. Vote is open.
Okay, it is closed. Resolution passed. 17th resolution. Authorization granted to the board of directors in order to act on the acts of company or share, sorry, share of the company. Vote is open. Is now closed. Resolution passed. Partie extraordinaire. Extraordinary part of the meeting for the 18th resolution. Delegation of competence to give to the board of directors to decide the increase of share capital of the group or another group by the issuing of shares or securities giving access to capital immediately or forward capital with preferential subscription rights. Vote is open. Vote closed. Resolution adopted. 19th resolution.
Delegation of competence to give to the Board of Directors to decide on the capital increase of the Company or another company with the issuing of shares or securities giving access to immediate or forward capital with suppression of the preferential subscription right by a public issuing other than the public issuing mentioned in the Article L. 411-2 number 1 of the Monetary and Financial Code. Vote open. Vote closed. Resolution adopted. 20th resolution.
Delegation of competence to give to the board of directors to decide on the capital increase of the company or another company with the issuing of shares or securities giving access to immediate or forward capital with a suppression of a preferential subscription right with a public offering targeted at the first paragraph of article L. 411-2 of the Monetary and Financial Code. Vote open. Vote closed. The resolution is adopted. 21st resolution. Authorization to give the board of directors to determine the issuing price in the framework of a capital increase with issuing of shares with the suppression of a preferential subscription right with the limit of 10% of capital per year. Vote open. The vote is closed. The resolution has been adopted. 22nd resolution.
Delegation of competence to give the board of directors to increase the number of securities to issue in case of a capital increase with the maintaining or suppression of the preferential subscription right. Vote is open. Vote closed. The resolution has been adopted. 23rd resolution. Delegation of competence to give the board of directors to pursue the issuing of shares or securities giving access to capital immediately or in future without any preferential subscription right, remuneration in nature constituting a capital increase or securities giving access to capital outside of a public offering initiated by the company and a public offering swap. Vote open. Vote closed. Resolution adopted. 24th resolution.
Delegation of competence to the board of directors to pursue the issuing of shares and/or securities giving access to immediate or future capital without any preferential subscription right in the case of a public exchange offering initiated by the company. Vote open. Vote closed. The resolution has been adopted. 25th resolution. Delegation of competence to the board of directors to pursue the issuing of shares of the company without any preferential subscription right, the consequence of which will be the issuing of shares of the subsidiaries of the company, securities giving access to shares in the company. Vote open. Vote closed. The resolution has been adopted. 26th resolution.
Delegation of competence to give the board of directors to decide on the increase of share capital with incorporation of bonuses, reserves, profits, and any other financial sums. Vote open. Vote closed. Resolution adopted. 27th resolution. Delegation of competence to give the board of directors to decide on the capital increase of the company with the issuing of shares and/or securities, giving access to a share capital immediately or in future, with suppression of the preferential subscription right reserved to the members of employee savings plans. Vote open. Vote closed. Resolution adopted. 28th resolution. Authorization given to the board of directors to reduce the share capital with a canceling of self-held shares. Vote open. Vote closed. Resolution adopted. 29th resolution. Modification of statutes. Vote open. Vote closed. Resolution adopted. 30th resolution. Powers for administrative formalities. Vote open. Vote closed. Resolution adopted.
Thank you, Claire. The agenda, having been fully covered, I declare the meeting closed. I'd like to thank you for your presence, your loyalty, and your support. Thank you.