AGL Energy Limited (AGL) Earnings Call Transcript & Summary

Good morning, everyone. My name is Patricia McKenzie, and I am your Chair. Welcome to AGL's 2023 Annual General Meeting. It's a pleasure for the AGL Board to be present in Sydney for today's meeting. You will notice that I'm chairing this meeting from the desk rather than at the lectern today. This is because I currently have an injury that prevents me from standing for long periods of time. Thank you for your understanding. I would like to start the meeting by acknowledging the traditional owners of the land on which we meet today, the Gadigal people of the Eora Nation, and pay my respects to their Elders past and present. Shareholders attending via our online platform may be doing so from other ancestral lands, and I also pay my respects to the traditional owners of those lands and their Elders past and present. May I ask you to make sure that your mobile phones are switched to silent while the meeting is in progress. Filming of the meeting is not permissioned, but please note that this meeting is being filmed on behalf of AGL for webcasting purposes. I also ask that you know where your nearest exit is in the unlikely event it becomes necessary to evacuate the building. In the event of an emergency, please follow the instructions of venue staff. The notice convening this meeting has been made available to all registered shareholders, and the necessary quorum is present here today. Today's meeting is being conducted as a hybrid meeting, and our shareholders have been given the opportunity to attend the meeting in person or via the online platform. Shareholders have also been given the opportunity to lodge a proxy or direct vote and ask questions in advance of the meeting. Shareholders and proxies attending using the online platform can submit written questions at any time. [Operator Instructions] Although you can submit your questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated, or if we receive multiple questions on one topic, amalgamated together. We will give shareholders a reasonable opportunity to ask questions, but it is possible that not all questions will be answered today. To ask a verbal question through the online platform, please follow the instructions set out on the platform. If you are attending online and are eligible to vote, once voting opens, press the vote icon, and all resolutions will be activated with voting options. To cast your vote, simply select one of those options. There is no need to hit a submit or enter button as the vote is automatically recorded. You will receive a vote confirmation notification on your screen. You can change your vote up until the time I declare voting closed. For those attending the meeting here in person, once we come to question time, you can ask a question by raising your hand, and a microphone attendant will come to you. Please show your attendance card and provide your name. To be eligible to speak in person today, you must hold a yellow or blue attendance card. If you are eligible to vote, you can scan the QR code on your attendance card with your mobile device at any time after I open the voting. This will take you to an online voting page. To cast your vote, simply select one of the options. There's no need to hit a submit button or enter button as the vote is automatically recorded. You'll receive a vote confirmation notification on your screen. If you do not have a mobile device, you may complete the voting items on the reverse side of the attendance card, and Computershare staff will collect the cards at the conclusion of the meeting. You can change your vote up until the time I declare voting closed. I now declare voting open on all resolutions. I'll now explain the running order for today's meeting. In a moment, I will make a few remarks about AGL's strategy and our progress in delivering it over the last 12 months. Then Damien Nicks, AGL's Managing Director and CEO, will speak to our FY '23 financial results and operational performance and will give further details on our progress in delivering our strategy. We will then attend to the formal business of the meeting. I would now like to introduce my fellow directors. They are Mark Twidell, Christine Holman, Mark Bloom, Vanessa Sullivan, John Pollaers, Kerry Schott, Miles George and Graham Cockroft; and our Managing Director and CEO, Damien Nicks. Also attending this meeting today is our company Secretary, Melinda Hunter; and our Chief Financial Officer, Gary Brown; as well as other members of the executive team. AGL's external auditors, Deloitte, are also attending this meeting. The senior audit partner, Harriet Fortescue, is available to answer any relevant questions in relation to the audit that you may wish to ask later in the meeting. And I thank her for attending today. Turning now to the year in review. It has been a significant 12 months for AGL, and I'm excited by the opportunities ahead of us as we undertake one of the most important decarbonization initiatives in Australia and work towards delivering our strategy to connect our customers to a sustainable future and transition our energy portfolio. Last year, we announced our revised strategic direction and issued our inaugural Climate Transition Action Plan, which included accelerated closure dates for our thermal assets: Loy Yang A by 30th of June 2035 and Bayswater between 2030 and 2033. We also outlined our ambition to supply 12 gigawatts of new renewable and firming capacity before 2036 with an interim target of 5 gigawatts by 2030. Shareholders endorsed the Climate Transition Action Plan at last year's AGM, giving us a clear mandate to pursue these objectives. At our Investor Day in June this year, we provided further details on our business strategies and our future vision. In summary, our strategy is to connect our customers to a sustainable future and transition our energy portfolio. This strategy is supported by a strong foundation across our business, whereby we embrace ESG and continue to empower our people as a driving force of a safe, future-focused and purpose-driven business. We are also leveraging technology, digital innovation and AI to enhance customer experience and strengthen our trading operations and risk management capabilities. Our strategy is also focused on driving long-term value for shareholders by strong financial stewardship and effective capital management. We have achieved some important milestones this year, including progressing our targets set out in the Climate Transition Action Plan and facilitating our customers to electrify and decarbonize the way they live, move and work. One of the most significant milestones this year was the safe and respectful closure of the Liddell power station after almost 52 years of operation, which is expected to result in a reduction of 8 million tonnes of greenhouse gas emissions annually from FY '24 compared to when the power station was operating. To give this some context, this is equivalent to approximately 5% of emissions from Australia's electricity sector in 2021. We have also advanced our near-term target of 5 gigawatts of new renewables and firming capacity by 2030, and we've increased our pipeline by 60% from 3.2 gigawatts to 5.3 gigawatts in February this year. Our pipeline includes renewables such as solar and wind as well as firming assets, including batteries and pumped hydro. And we are pursuing a number of options, including investing in innovation and technology to allow AGL to execute on the opportunities that offer the best long-term value in the future. This is in addition to our external project options, including via our 20% investment in Tilt Renewables. A key example of our progression is the recent commissioning of the 250-megawatt Torrens Island battery, which is the second largest battery in Australia. To give some perspective, the battery is roughly the same size as the Adelaide Oval and includes 218 battery cabinets housing more than 6,000 battery modules. Our ambition is to supply 12 gigawatts of new generation and firming capacity by the end of 2035 and is supported by strong optionality. For example, we will continue to expand our partnerships, look at selective acquisitions and underwrite power purchase agreements, as we already do with Tilt Renewables, on the back of our large retail portfolio. We will look for the most efficient way of sourcing the required energy and firming capacity, having regard to quality, speed to market, customer demand and effective risk management. The Board will also periodically review market dynamics, customer demand and our development pipeline with a view to accelerating our decarbonization pathway where possible. We are equally committed to a strategy to connect our customers to a sustainable future through products and services that make it easy for them to decarbonize the way they live, move and work. This strategy focuses on 3 areas: strengthening our core business while supporting our customers. As a reminder, we currently provide 4.3 million customer services across energy and telco, which translates to more than 30% of households in the national electricity market. Capturing growth in new value pools, particularly those arising from decarbonization and electrification. It is our ambition to be the partner of choice for customers as they electrify and decarbonize by providing a suite of innovative products and services that unlock new revenue streams and create a differentiated relationship with customers. And leveraging technology and digital innovation to unlock efficiency and growth through retail transformation. This is aimed at significantly reducing our current costs while continuing to increase our customer centricity. A key part of this strategy is to capture the projected increase in electricity demand through electrification as well as future population growth in major capital cities as we shift the focus of our business model from being a commodity supplier to scaling Energy as a Service, which involves providing integrated solutions to customers across the energy supply chain. To contribute to Australia's net 0 ambitions, AGL has an incredible opportunity to support our customers as they decarbonize and transition to an electrified future. With residential electricity consumption forecast to double by 2050 and a growing share of the electricity needs of residential customers being met behind the meter by customer solar and storage systems, AGL has the opportunity to capture value and transform the customer energy relationship. For households, this increased consumption is expected to come from the replacement and upgrade of 5 key assets in the home: electrical vehicle charging, solar, batteries, heating and cooling. It is clear that electrification of transport is a key requirement of Australia's path to net 0. And as policy continues to evolve to enable this, the uptake of electric vehicles is likely to accelerate quickly. Electric vehicle charging alone is expected to consume 2,000 kilowatt hours per annum per vehicle with 80% of charging projected to happen in the home. An example of our commitment to providing products and services to help drive the uptake of electric vehicles and the electrification of transport is our recent launch of an electric vehicle subscription service, which offers customers and small businesses the opportunity to try an electric car before purchasing a new vehicle outright. AGL has also recently revised its electric vehicle plan for customers by providing cheaper charging overnight, reflecting research over the past 3 years that shows that most home vehicle charging occurs overnight. We have also, over the past 12 months, helped a number of Australian businesses in their transition journey through our renewable-linked products to large customers. And Damien will provide examples of our work in this area shortly. Turning now to our financial and operating performance over the year. We delivered a solid result despite challenging market conditions and heightened volatility. Although we recorded a statutory loss after tax of $1.264 billion, predominantly a result of the decision to accelerate the targeted closure dates of AGL's thermal generation assets as announced in September 2022, underlying EBITDA was $1.361 billion, up 12% on FY '22, and underlying net profit after tax was $281 million, up 25% on FY '22. AGL regards underlying profit as the more useful measure of company performance because it excludes significant items and the mark-to-market impact of fair value movements. In particular, we had a strong second half after a challenging start to the year due to volatile energy market conditions and forced plant outages, including the prolonged outage of Loy Yang Unit 2. In the second half, we saw a strong improvement in the availability of our generation assets, which lifted overall performance and earnings. Investment undertaking to improve flexibility at Bayswater power station and AGL Loy Yang also led to improvements in the efficiency of the operation of these assets. In June this year at our Investor Day and as part of our FY '23 results announcement in August, we provided guidance for our FY '24 underlying earnings, which I'm pleased to confirm today has remained unchanged as being between $1.875 billion and $2.175 billion for underlying EBITDA and between $580 million and $780 million of underlying profit after tax. We also announced at the Investor Day a revised dividend policy effective from the FY '24 interim dividend. Under the revised policy, AGL will target a payout ratio of 50% to 75% of underlying profit after tax. This new range reflects our aim to provide the right balance of sustainable returns to shareholders while supporting our investment in the transformation of our generation portfolio. The Board also remains focused on the safety and well-being of our people, acknowledging that AGL's ongoing success is dependent on the significant contribution that our people make each day. Despite there being no serious injuries to our employees or contractors in FY '23, our total injury frequency rate increased to 2.8, up 0.7 from 2.1 in FY '22, which was driven by an increase in low-impact injuries. The Board is overseeing a number of initiatives to ensure the safety and well-being of our people continues to be prioritized. While we are progressing our strategy, we continue to operate within a complex environment. The global and Australian economies continue to be impacted by inflationary pressures, which are increasing the costs of doing business and creating affordability challenges for our customers. AGL continues to support and look for ways to improve the experience of our customers, particularly in the current affordability and cost of living environment, and has recently committed to a minimum of $17 million towards national customer support programs over the next 2 years. I would also like to emphasize that while we have a clear pathway to deliver on our decarbonization ambitions, there continues to be uncertainties and external risks in relation to Australia's overall decarbonization plans. It will require the delivery of significant amounts of supporting infrastructure to support a low-emissions electricity system. This will require an unprecedented level of coordination between all levels of government, regulators, networks, private businesses and the broader community as well as a favorable external operating environment for energy businesses and global advances in the cost of low-emissions technologies. Already, we are seeing some challenges, including delays in approvals, cost pressures and some local opposition to new generation and transmission projects. From our perspective, we will continue to work with customers, communities, industries and government to advocate for the coordinated decarbonization of Australia's electricity sector in a way that balances energy reliability and affordability. During the last 12 months, we had significant Board and management renewal. In January this year, the Board appointed Damien Nicks as our Managing Director and CEO and Gary Brown as Chief Financial Officer. Following last year's AGM, we also welcomed Christine Holman, John Pollaers, Kerry Schott and Mark Twidell as nonexecutive directors. The addition of different background skills and experiences to the Board has been positive. And the Board and management team have worked well together to pursue our revised strategy. This revised strategy has reset market confidence and the outlook for AGL. This is apparent from AGL's share price, which has increased by approximately 40% since last year's AGM. We clearly have more to do, but we are confident that we are on the right track. I would also like to make some comments on the second item on today's agenda, the remuneration report. The Chair of the Board's People and Performance Committee, Graham Cockroft, will speak to the remuneration report in more detail shortly. Last year, the company received a first strike in relation to the 2022 remuneration report. I'm pleased to say that the resolution to be put to the meeting today in relation to the 2023 remuneration report has received sufficient support to avoid the company receiving a second strike. Therefore, the conditional spill resolution item 7 will not be put to the meeting today. Finally, I'd like to say that I am excited to be on this transformation journey with AGL's people, our customers and shareholders. And now that we have reset market and stakeholder confidence, I look forward to the next 12 months and more positive momentum as we deliver our strategy. It is now my pleasure to invite Damien Nicks, your Managing Director and CEO, to address you. Following Damien's address, we will move to the formal business of the meeting.

Good morning. I'm Damien Nicks, AGL's Managing Director and Chief Executive Officer. I'd like to welcome those joining us online today and for shareholders in Sydney. It's great to be here together on the traditional lands of the Gadigal people of the Eora Nation for our Annual General Meeting. It's an honor to be addressing you today, my first time as AGL's Managing Director and CEO, and I'm excited to update you on the successful year for AGL in which we reset market and stakeholder confidence and advanced our strategy to connect our customers to a sustainable future and transition our energy portfolio. I'll talk more about our strategy shortly, but firstly, I'd like to take some time to reflect on the year from a safety, people, financial and our operational perspective. Starting first with safety. As always, the safety and the well-being of our people and the safe and the reliable operation of our assets is our #1 priority. This year, there were no serious injuries to employees or contractors. However, our total injury frequency rate increased to 2.8, up 0.7 from 2.1 in FY '22. This was driven by an increase in low-impact injuries. In response, we're increasing the focus on preventing common injuries before they occur and continuing to encourage employees and contractors to report all events that have the potential to cause an injury or fatality. This includes at operational sites and our corporate sites across the country. Safety is an area where there's always more to do, and we're reinforcing our commitment to a strong health and safety culture. In July, we launched our second Reconciliation Action Plan, which outlines our commitment to Aboriginal and Torres Straight Island engagement and reconciliation, as well as our aim to have trusted relationships with the traditional owners of the lands on which we operate and to collaborate on opportunities for employment and economic participation. From a people perspective, I'm pleased that after a period of uncertainty, we had a 10 percentage point improvement in our employee engagement score from 57% in FY '22 to 67% in FY '23. An engaged workforce is critical to the company's success and the delivery of our strategy, and we'll continue to focus on driving employee engagement. Before I provide an update on our financial performance, let me acknowledge the continuing cost of living pressures impacting our customers and the community more broadly. In June, we committed to increasing our customer support funding to at least $70 million over the next 2 years to assist our customers to manage cost of living pressures. We also continue to work closely with our customers to help them manage their energy bills. For example, we're using advanced analytics to identify and proactively engage with our customers who may be facing financial hardship, offering them guidance and support at an early stage as well as providing referrals to relevant government and consumer assistance programs. This is in addition to the broader range of mechanisms we already have in place to support our customers who may be experiencing financial hardship or other vulnerability. We continuously look for ways that we can help our customers and improve customer experience. And this is reflected in our customer performance for FY '23, in which we saw continued growth in customer services across both energy and telecommunications during a period of heightened market competition. We finished the year with an increase of 56,000 customer services from FY '22 with a total of 4.3 million customer services. We also maintained strong customer advocacy throughout the year with a positive Net Promoter Score of plus 5. I'll now move to AGL's financial and operational performance. Underlying profit after tax in FY '23 was $281 million, 25% higher than the prior year. The stronger financial result reflected improved operational performance in the second half and higher wholesale electricity and gas pricing realized in earnings. This was partly offset by increased operating costs and lower generation volumes due to the prolonged outage of Loy Yang A Unit 2 and the closure of the Liddell power station in April 2023. Our statutory loss of $1.264 billion was impacted by $680 million of impairment charges due to the targeted earlier closure dates of our thermal assets in line with AGL's accelerated decarbonization plan as announced in September '22 and also a negative fair value movement, should I say, in financial instruments of $890 million. A final dividend of $0.23 per share was paid in September, bringing the total dividend for the 2023 financial year to $0.31 per share, an increase of 19% on the prior year. In June this year at our Investor Day and as part of our FY '23 results announcement, we provided guidance for FY '24 underlying earnings, which I'm pleased to confirm today has remained unchanged and is as follows: underlying EBITDA of between $1.875 billion and $2.175 billion and underlying profit after tax of between $580 million and $780 million. I'd now like to take some time to outline our progress in delivering our strategy. To recap, our strategy is to connect our customers to a sustainable future, helping them to decarbonize the way they live, move and work as well as to transition to a lower carbon energy portfolio underpinned by our ambition to add 12 gigawatts of degeneration and firming capacity by the end of 2035 with an interim target of 5 gigawatts by 2030. At last year's AGM, shareholders endorsed our inaugural Climate transition Action Plan, which we refer to as the CTAP, key elements of which include the planned closure of the Bayswater power station between 2030 and '33 and the closure of Loy Yang A power station by the end of FY '35. Since my appointment as a permanent Managing Director and CEO in January this year, it has been my focus to deliver on this strategy. And I'd now like to take a bit of time to discuss a few key milestones to show the progress we've made over the last 12 months. Firstly, I'll highlight the steps we have taken to responsibly transition our portfolio. At the end of April, we safely and respectfully closed Liddell power station after almost 52 years of operation. This is expected to deliver annual and average annual emissions reduction of 8 million tonnes of greenhouse gas emissions from FY '24. We are now focused on rehabilitating this site as well as pursuing development activities related to our Hunter Energy hub, including the development of a 500-megawatt battery. In September this year, we also closed our Camden gas plant, which we're now in the process of rehabilitating. It is anticipated that the land will be handed back in its former state in March 2025. AGL divested its interest in the Moranbah Gas Project in August 2023, and we continue to progress the sale process for the Surat Gas Project. Since the release of the CTAP, we've also announced that our Torrens Island B Power Station will close on the 30th of June 2026. We are already repurposing the site with the opening of our 250-megawatt battery at Torrens Island, which is the second largest battery in Australia. In August this year, we announced a structured transition agreement with the Victorian government in relation to the Loy Yang A power station and mine. Under this agreement, we'll work collaboratively with the Victorian government on the closure of the Loy Yang A power station by 30th of June 2035. This is consistent with the closure date outlined in the CTAP. The agreement also includes a risk-sharing mechanism to avoid an unplanned closure of the power station before the scheduled date due to adverse market conditions and highlights our focus on ensuring a responsible transition. But transition is more than closure dates. We are passionate about our ambition to add 12 gigawatts of new generation and firming by the end of 2035. And I'm very proud of the work the teams have achieved in progressing this ambition in just 12 months. Some key highlights include, during August, we opened the 250-megawatt battery at Torrens Island, which I mentioned earlier. We're also close to commencing operations for a 50-megawatt battery at Broken Hill. We continue to progress the development of the 500-megawatt battery at Liddell and work towards making a final decision this calendar year. In June, we entered a 15-year power purchase agreement with TILT for almost 180 megawatts from the Rye Park wind farm. And together with the Australian energy technology group RayGen, we launched RayGen's solar plus storage plant in Carwarp, Victoria. This is the next-generation long-duration energy storage plant and involves investment in innovative technology to potentially provide a solution for long-duration storage into the future. We are also implementing measures to facilitate the transition of the broader energy market. For example, we've invested to improve flexibility of our asset fleet. Bayswater and Loy Yang A power stations can now be flexed down approximately 70% and 45%, respectively, of their nameplate capacities. And we have plans to lower the minimum generation levels of Loy Yang A units by a further 50 megawatts each in FY '24. In addition to the gross margin benefits. This results in reduced carbon emissions and allows us to operate the assets more efficiently as a response to the transition and as renewables enter the market. This will enable the generation of wind and solar when available whilst being flexible to ensure demand is met at other times. We currently have 1.1 gigawatts of reported decentralized assets under orchestration, including our contracts with Portland and Tomago, our aluminum smelters, which have demand response mechanisms that provide flexibility to manage market demand. Through further investment in this area, we aim to increase our decentralized assets under orchestration to 1.6 gigawatts by the end of FY '27. We will also periodically review market dynamics, customer demand and our development pipeline with a view of accelerating our decarbonization pathway where possible. Equally, we've made significant progress in our strategy to connect our customers to a sustainable future. As a leading energy retailer with a large and diversified customer base, AGL is well positioned to leverage expected increases in energy demand through electrification, access new value pools while driving further efficiency in its core operations. Our key achievements over the last 12 months include entering into a number of long-term agreements that have helped our large customers navigate the energy transition but are also critical to AGL in allowing us to invest in new and existing assets. For example, in August, we signed a 9-year agreement to continue to supply Alcoa's Portland smelter. In September, we signed a 15-year renewable green certificate agreement with Microsoft, under which AGL will provide Microsoft with renewable energy certificates from the Rye Park wind farm. In October, we entered into a 7-year renewable-linked power purchase agreement with CSL and a 6-year power purchase agreement with nbn. These agreements show the variety of transactions and structures we offer our customers from renewables to firmed asset-linked renewable PPAs to renewable certificate sales. We have also continued to deploy new services to support the way our customers live, move and work. For example, at our Investor Day in June, we announced our new partnership with bp pulse, which allows our customers to charge their electric vehicles at an affordable rate when they're at home or on the road. This is in addition to our electric vehicle subscription program, which has proved to be very successful with revenue growing by 38% since FY '22. We piloted a new platform, Electrify Now, to allow customers to access the information and tools they need to make informed decisions about electrifying their homes and meet their own decarbonization goals. The platform, underpinned by advanced analytics, uses customers' own smart meter data to tailor recommendations based on the individual household energy needs and their usage patterns. We continue to progress initiatives in response to demand response and orchestration such as our Peak Energy Rewards program, which is one of the largest flexible demand response programs in Australia. And it's been expanded to over 120,000 customers. During FY '23, we also commenced hot water orchestration trials that are generating interest from our customers and have the potential to provide significant flexible capacity. We're also focused on scaling our Energy as a Service solutions, providing integrated offerings across energy solutions, asset management, orchestration and asset financing. The Kerarbury Almond Farm in New South Wales is a great example where AGL designed a low-carbon microgrid, and once constructed, will help the customer -- lower the customer's energy costs, provide price certainty and help improve their reliability and their sustainability outcomes. And we're also continuing to be the largest solar provider in the country, delivering 3x more commercial solar capacity than the nearest competitor over FY '23. In summary, we are well placed to deliver on our ambition to be the partner of choice for our customers as they electrify and decarbonize the way they live, move and work and provide integrated end-to-end solutions. Pleasingly, during the 2023 calendar year, we have reset market confidence and the outlook for AGL, as shown by our recent share price performance. In addition to the achievements discussed earlier, factors that have led to the reset include our improved profit outlook driven by operational performance and strengthening wholesale prices; the successful partial refinancing of our existing debt facilities and new long-term debt in the U.S. private placement market, this included a $500 million green CapEx loan, which will be used to fund existing and future low-carbon projects; the launch of a new brand campaign Join the Change in April, and you will have seen some of the material earlier when you entered the meeting; our Investor Day held back in June, where we provided further detail on our strategy, our growth plan and our performance; and the continued delivery of our existing business strategy, as shown by our competitive gas agreements entered into with Cooper Energy, Senex and ExxonMobil. I am pleased with what we have achieved this year, but I'm even more excited about the significant opportunities ahead of us to deliver on our long-term ambitions for AGL, our employees, customers and our shareholders. We have set strategic targets for FY '27 to align with our long-term plans, which will allow shareholders to track our performance against our strategy going forward. Finally, I'd like to thank our people for their enormous contribution over the past year, including delivering our strategy and supporting our business and our customers. Thank you very much.

[Audio Gap] the meeting. The notice of meeting sets out 6 items of business and 1 contingent item of business. As I mentioned earlier, item 7, the conditional spill resolution, will not be put to the meeting because the company did not receive a second strike in relation to the 2023 remuneration report. Resolutions in relation to items 2 to 6 will be voted on and are supported by your Board. A poll will be conducted on each resolution. We will display details of the direct and proxy voting for each item of business after the discussion on that item. Votes will be counted immediately following the meeting, and the results will be notified to the ASX before the end of today and posted on the company's website. Turning now to the first item of business. AGL published in 2023 -- its 2023 annual report in August, which contains full information about the company's financial and operating performance during the year. Under the company's constitution and the Corporations Act, there is no requirement to ask shareholders to vote to adopt the accounts. However, you may ask questions or make comments on the 2023 annual report and the management and performance of AGL. As I mentioned earlier, Harriet Fortescue from Deloitte is available to answer questions relevant to the audit. I would now like to invite questions on the 2023 annual report and the management and performance of AGL. I'll first take questions from the floor of the meeting and then written questions from the online platform and verbal questions from online. When I call for questions from the floor of the meeting, I ask that you please announce your name, and if relevant, the name of the organization you represent. For shareholders asking questions via the online platform, please submit your questions now if you have not already done so or please follow the instructions to join the queue to ask a verbal question. We'll now open questions to the floor first. If anyone holding a yellow or blue card, please raise your hand, and a microphone will be brought to you.

[ Natasha Lee ], shareholder. I note that in terms of expenses, the fuel costs for electricity didn't go up very much, and gas costs, gas purchases decreased slightly. Now given the discussion about cost of -- inflationary costs and the increase in the fuel imports, understanding that there was a period of plant closure at Loy Yang, the numbers sort of don't quite drill right with me. Can you give some further explanation on the makeup of those fuel costs?

I think I'll ask our Managing Director to respond on that issue.

Thank you for the question. Look, I think when you look through the results of FY '23, it was a year that had -- was a year of 2 halves. The first half was impacted significantly by the market volatility, which saw some significantly high wholesale prices. But it also had the impact of Loy Yang A Unit 2 out of the market for a period of time. So the results were, if you like, somewhat distorted. What you're starting to see now, that is our results come back to more of a normalized level of both energy and gas costs. But what I would say is the geopolitical impacts that we saw over that period of time certainly had an impact that impacted both gas and coal through the market.

Yes. Were you running down your stock of, say, coal during that time? Because my gut feeling is that the cost probably should have been a bit higher because of those geopolitical inflationary impacts.

So in terms of the coal that we have, we own the coal down in Loy Yang. So we mine that coal. That is coal that comes straight out of the ground. In terms of Bayswater up in New South Wales, that coal is through contracts. We hold the amount of coal that we need on hand to manage the portfolio of generation. What we saw over that period of time, coal did also come off to some degree as the Liddell power station also closed.

I've got another question about the -- about your financing. You talked about your U.S. placement, which I think is some $1.5 billion. Is there an exchange rate exposure? And how are you managing the risks associated with that placement?

Yes. The exchange rate exposure is hedged so that the risk is managed.

I've got a couple of questions. I'm a shareholder. My name is [ Ramba Vumuta ]. The dividends we declared in financial year '19 is $1.19, and it came down to $0.98 in FY '20 and $0.75 to '21 and $0.26 to '22. And now we are a little bit high with $0.31. This is a worrying trend. That is my comment. And another one is the statutory profit and loss after the tax. Last year was $860 million plus, positive, and this year is minus $1.2 billion. So people who are dependent on dividends, I think for the last few years, we are very disappointed. That is my comment. And second thing is, are we going to go back to the good old days of getting a dividend of $1.19 in future?

So turning first to your question on FY '22. There was a significant market suspension during that year by AEMO regulatory intervention, which impacted the results significantly and flowed through, I think, to the dividend. We can't make predictions about future dividends, but we will certainly -- the determination of actual dividends is made at the time of determining the profit for the year. But we recognize the need to provide value to our shareholders while also ensuring that we have cash flow sufficient to fund the transition. And so the Board will look closely at what is available for payment in dividends in the coming years.

I definitely believe that you will work hard to make that happen, to make improvements in the dividend and earnings. Another thing is the customers who are shareholders, do they have any benefits of being a shareholder, being a customer? Sorry, can I rephrase the question?

Yes.

I'm an AGL customer. I use gas and electricity of AGL. I'm also a shareholder. Does it have any benefit of being a shareholder? Do you think anything like that?

So there's no individual benefit of being both a shareholder and a user. But what we -- what I would suggest you do, we've got people outside this meeting who can also have a look at your account and the plan that you're on to assist with that, if that is helpful, after this meeting.

My name is [ Roman ]. I have multiple holdings. I would like to provide a couple of comments, a couple of questions. Most of it about your marketing, which is spending millions of dollars with going over. But tell me, any of you guys tried to contact your call center? Any? I'm not a customer of AGL. I was. But you now spent hours to get through. What kind of service you guys provided? Now offers, you spend millions of dollars on marketing. You can see AGL on TV, on radio. But when you try to get the software, certainly, nobody know about it. They ask me to email them or send them the offers that I received because they're not aware of it. What's the point to spend money for marketing products which nobody know about? You spend, again, millions of dollars instead of reducing the rates for existing customers to provide better service. Customers leaving you guys because there is no value. Origin, for example, on top of your customer -- as a customer, they give you value. They give you points for Woolworth. They give you a discount for fuels. You guys do none of it. Why? I will ask like a previous gentleman before me, why you can't offer like other companies, discount to loyal shareholders who lost a lot of money keeping your shares. Why can -- again, any other companies offering it to the customer. You bring back your more customers and loyal customers. Paperwork. If any other companies, energy company, and you are become more green company, why anything needs to be done by paper? Everything is done through Internet now. Why I need to go and print your forms, then fill it up by hand and then send it to you by mail, which hopefully will arrive? Why you can't do like any other company through Internet, email, something which arrived in 2 seconds instead of you waiting for 2 weeks and then you hear, sorry, we did not receive your paperwork. We are -- everyone know about energy cost, huge cost. When our share price going back to the value which it was? We -- loyal shareholders losing a lot of money on this company because there's, again, no -- somehow money spend not the way it's supposed to be. Our customers leaving us. It's something needs to be done about it. Again, who is your marketing director? Can I see him? Because there's a lot of things can be improved. Also, you sell an Internet which -- I don't know where you got it from. But it's overpriced and underdelivered. Even your guys who start to use registration, a problem to use your Internet. This is a company who provides Internet, can't use their service, their own product. And the last comment, you called emergency meeting a couple of years ago at ICC. Then you cancel it without nobody that you actually cancel it. I did effort to come to this meeting. There's also many shareholders just to hear, sorry meeting was canceled. Why you can't communicate to our shareholders what's going on?

Well, thank you, sir, for that very comprehensive list of questions. I'll try to answer those for you. In relation to the call center, we certainly had a period of time after the recent increases in the cost of electricity, which were determined by the regulator, where our call center was under a huge amount of pressure. And the time did blow out beyond that, which is acceptable, and we apologize for that. It has now come back to within appropriate and reasonable levels and meet targets. We did put on a significant number of additional call center people to assist during that period. But of course, people do need to be trained in order to answer those calls appropriately. We intend to ensure that we meet the standards that we have set as we move forward on the call center. In relation to advertised rates not being available, I believe they should be available. We don't understand why that might have happened. We stand behind our advertising, and we do offer those rates that are -- that we have advertised. So I'm not sure how that was not able to be communicated to you, but we'd be -- we will have customer service representatives and executives available after the meeting, who I'm sure would be pleased to discuss that further with you. Using funds to provide better services to customers. AGL's policy, our practice moving forward is to be customer centric. And we intend to ensure that we are providing a suite of services to our customers and offerings to our customers, which will meet their needs into the future, particularly their needs to decarbonize and to electrify as we move forward. We think we have a fairly comprehensive and attractive suite of products now. But as we move to Energy as a Service, we will provide even wider services to our customers so that we can meet all of their needs that we can partner with them in their journey moving forward to a net 0 future. In relation to benefits to customers, we have quite a number of benefits to customers. There is a customer benefit scheme. And as a customer myself, I receive the emails, letting me know that I can buy running shoes at reduced prices. I can do all sorts of things that are made available, if you're interested in doing that. But I think it's an interesting point that you've raised and one that we can look at to make sure that we are providing benefits to customers. We do also try to provide benefits across the scheme to customers such as our Electrify Now website, where if you are interested in further electrifying your own home, there is a pretty comprehensive opportunity on that website to determine how best to go about it. And AGL will assist you in that journey. So there are -- and there are many other offerings along those lines, which I think help the customer. And we're all about the improving the customer experience as we move forward, and that's what we're focusing on right now. The discount to loyal shareholders, we -- I think we can take that one under consideration as we move forward. It hasn't been a program that we have adopted in the past. Paper, we certainly intend and are encouraging our customers to move to the Internet for their interactions with AGL. And we now have -- and I'll ask Damien for the percentage of customers who are now Internet only.

Yes. We have fully digitized mechanisms to talk to our call centers and so forth. So again, I think it's probably worth the customer services staff having a chat with you afterwards to see what happened in that instance because everything should be digitally done with those interactions.

Yes. And we do have a significant percentage of our customer base who are -- who only interact with us via the Internet. So that is the future. That's the way we're headed, and we encourage our customers to move to that.

And that percentage is roughly about 54% of our customers interacting us just purely digitally these days.

In relation to the costs, we certainly understand that the cost of electricity has risen significantly. And we're very aware of the impact that, that has on our customers. Damien mentioned in his speech that we have put in place a $70 million program over the next 2 years to assist our vulnerable customers. We're using AI to identify and reach out to those customers to assist them so that they understand the government programs and assistance available to them and the many programs that AGL has available to assist them. And Damien outlined some of those in his speech. We'll continue to do that. We are, however, pleased to say that our customer base increased in the last year. And we continue to, through various avenues, seek out new customers to become a part of the AGL customer base. The sale of Internet, the move into telecom has been quite recent for AGL. It's a small percentage of the services that we offer at this time. But it's one that some customers prefer to be able to have both services, electricity and telecom with the one service provider.

Yes. And what I would say, again, customer services upfront, we have a very competitive Internet rate compared to some of the major competitors out there. So again, I'd like to take that up separately if we can because certainly, we can help you there.

And Dan, perhaps you might speak to the cancellation of the ICC.

Well, yes, I think you mentioned in relation to a cancellation of a meeting at the ICC that I believe, if I've got this correct, would be when the demerger was originally bought in. We did endeavor to communicate with all of our shareholders during that time, but maybe it didn't get to yourself, so apologies.

Thank you. Any other questions?

My name is [ Andrew Fraser ], shareholder. My concern is about stranded assets, the aging power plants, coal-fired power plants. And I was 1 of those shareholders that was very disappointed when that Atlassian deal didn't go ahead because it offered an immediate retirement of those assets and an immediate transition to renewable energy, which is what I think we need to do because I feel that these aging power stations are simply not economic anymore. And it's no good waiting -- 2035 is something we need to retire them now. And when a great benefactor comes along and offers a deal like that to retire them immediately, you grab it with both hands. Now Brookfield is talking about doing something similar with Origin, but it's been stopped. Are there any kind of moves to try and recourt Brookfield or similar capital providers to try and negotiate a deal like that? Is there any plans to do that?

Thank you for the question, Mr. Fraser. Let me deal first with the question of the aging power stations. It is clear that the power stations in Australia are moving towards the end of their economic lives. And we need to build -- and investment needs to be made to ensure that we continue to have generation available to replace those assets. That is the part of the transition, which is going to take some time. It is a transition not only for AGL, but for the entire energy industry. And in order to ensure that we, in fact, are successful in that transition, there will need to be a concerted effort by governments, by regulators, by the energy industry and by the business and communities to ensure that we do, in fact, build out the renewables and firming capacity necessary to replace the coal-fired generation. At AGL, we are ensuring that we are meeting our CTAP. We are looking to deliver the 5 gigawatts in firming and renewable capacity by 2030 and the 12 gigawatts by 2035. And we are continuously monitoring the market to determine whether there is opportunity for us to accelerate those programs. And we will do so wherever it is possible and appropriate to do so. However, we do need to ensure that there is a reliable and affordable market for electricity in Australia, and we need to balance that also with the clear need for decarbonization and in our case, the return to shareholders. We have not had any offers, available tools or made to us in respect to AGL. Should that occur, the Board will consider that offer and determine whether it is in the best interest of the AGL shareholders. When we received the earlier offer from Brookfield and Grok or 1 of those companies, we looked at it carefully but it was not in the opinion of the Board in the best interest of AGL and we did not agree to pursue us.

Did you actually consider that tomorrow, those assets might be worthless? Is that -- did you consider that point that -- I mean, there wouldn't be any assets at all and AGL would be nothing. I mean that seems to be a pretty strong imperative.

Our view is that the coal-fired generation assets will remain economic until the end of their lives. But we have also entered into agreements such as the agreement with the government in Victoria, which minimizes the risk of that asset becoming uneconomical. And we'll continue to ensure that we manage risks in relation to the economic operation of the coal-fired generation assets throughout the period until it is appropriate to close them down. Thank you. Any other questions?

Yes. Madam Chair. My name is [ Ron Strauss ]. I'm a shareholder. I just wanted to know have you sort of worked with the new recruits to the Board in the last 12 months? And have they been agitating for change at too faster rate? Or have they just settled in and now assume the off-peak mode? So just some feedback of how you've been working with the new recruits, please?

Thank you [ Mr. Strauss ]. We have been pleased to welcome the new directors to the Board, and they have brought additional skills, which have been very useful in our discussions moving forward. We have been able to find common ground and to agree unanimously on the way forward for AGL. And examples of that have been the unanimous agreement to the appointment of Damien Nicks as our Managing Director. I think that decision is 1 of the most important decisions any Board makes. And Damien has been well received in the market and is doing a fantastic job for AGL. We also agreed on the revised strategy, which was presented at the Investor Day this year. That strategy incorporates our desire to look for additional opportunities to accelerate the decarbonization program. So in addition to the CTAP commitments, we are looking to accelerate where that's appropriate and where the Board considers that, that is the best decision to be made for the market and for our shareholders. The Board is working very well together. I'm very happy with the level at which we operate. It's strategic, it's appropriate and it's definitely collegiate. Any other questions?

Hi, good morning. [ Isaac Pang ] here from the Australasian Center for Corporate Responsibility, ACCR. So my question relates to AGL's ambition to add 12 gigawatts of new renewable generation and firming by the end of 2035. So AGL states that it is building a generation and firming portfolio to meet projected growth in electricity demand from electrification. So based on the company disclosures, your combined storage and renewables target of 12 gigawatts will only replace up to 60% of your coal generation portfolio. So how does this 2035 target enable you to maintain market share and meet demand growth?

Thank you for the question. Yes, we certainly intend to look to that 12 megawatts. As a minimum, we will, as I said earlier, look for additional opportunities. That will include our program of renewables and firming capacity. It will also include PPAs, which we will enter into and contractual arrangements. So it's not -- it will all be in relation to our build. We're looking to ensure that we can meet the needs of our customers moving forward, and we will use various means to ensure that we are able to do so.

Good morning. My name is [ Kasman ] and I'm a shareholder of quite a few years. Now both you and Mr. Nicks have talked extensively about the transition to a decarbonized company. In this process, have you used any outside consultants and any of the 4 -- big 4, who found to have been pretty poor in their ethics and everything else. If you have, how much money was allocated to them? And are you seeking to review your relationship in the use of consultants?

Thank you for that question. Yes. We use multiple consultants, certainly, in looking at the transition that we -- and we have used many consultants and certainly, beyond the big 4 with specialist expertise. We do, however, use the big 4 on various projects in our organization. And we will continue to do that as they provide the service that we need. We recognize that there was some conduct, which was unacceptable and which we do not accept as the appropriate level of conduct for any company. However, that does not, I believe, reflect on all employees in the big 4, and we have ensured that the people that we interact with have met the necessary ethical standards, and we will continue to ensure that as we move forward.

I mean you say that you look at them closely, but all the revelation that said the inquiry have shown clearly that not only was the ethical behavior beyond any acceptable standards, but also they were gouging us the taxpayer and the companies that they were providing services for. How do you take that into account when you're examining and looking at the tenders? I mean, so far, they've been private, but the revelations have for the first time revealed what their practices are and how awful they are found to be in betrayal a very accepted civilized standards of behavior.

Look, I think that's more an operational issue, and I'll ask Damien to respond.

Yes. Look, thank you again for the question. Look, from our perspective, we use a wide range of consultants in this organization, both locally and internationally when we're thinking about the transition because we want to make sure we get the best advice we can when we're steering to this transition. In terms of the local big 4 here in Australia, we'll continue to assess each of those on the particular projects to make sure they've got, 1, the right skill sets for the work they're doing. Two, they meet our requirements from both the compliance and ethical standards perspective. They're the things we assess every time that we look at various consultants coming into our organization. So we'll continue to do that, and we'll continue to assess as the market continues to move.

Have you considered using universities? University of New South Wales has a UniSearch, which is -- looks at problems of all sorts management as well as technical issues, which I'm assuming that you are pretty extensively involved in. Have you considered the use of universities as experts and with their resources -- research resources and provide you with a better service than some of these private consultants who standards have been found wanting.

I think to my answer earlier, we use a whole wide range of, whether it be, consultants or experts in this market because technology is ever evolving, whether that's in the direct technology space, whether it's the energy transition space, we do have contacts and we do deal with universities as well as part of this transition.

Okay. The other question is about the dividend reinvestment plan. Why haven't AGL given us a discount? I mean, you're getting interest free money to reduce your debt and everything else. And why is there no discount available for the dividend reinvestment participants? And how many are -- shareholders are participants in the dividend reinvestment plan? And if and when they were participating in the dividend reinvestment, how much money was raised?

The dividend reinvestment plan has actually been suspended. There was -- it was a very small number of people who participated in it, and the administrative costs actually outweighed the benefit to our shareholders. And so we're not at this time looking to reinstate that dividend reinvestment plan.

What I'm saying is that if you do offer a discount, there may be more people wanting to participate and give you interest-free money, which is to the benefit of the company as well as to the shareholders.

Thank you for that feedback. And we will take that into account as we consider moving forward that dividend reinvestment plan and look at it again from time to time. We have any more questions from the floor? Okay. Fantastic. James, could you please let me know if there are any online, written or verbal questions relevant to this item?

Yes, Chair, there are 7 online questions and no one on the phone. The first question comes from [ Ms. Kathy Sklavos ]. Can you explain the company's thinking around the Internet offering, as I do not see the likely connection as a power supplier?

Yes. I think I addressed this a little earlier. The telecom offering, which AGL has, is a pretty small part of our business. We looked to the adjacency of telecom as an offering to hopefully benefit our customers. We do find that customers who take up the Internet offering remain with us for longer periods of time, which is a good thing for the organization. It's not going to be a huge part of our business, but we will continue to offer that service to our customers.

The next question comes from Mr. [ Yoga Srikanta ] At the Investor Day, it was mentioned that the dividend payout ratio would be 50% to 75%. Any sense what is expected to be for this financial year? And where within guidance do we currently sit, upper or lower end?

Also could you just repeat the last part of that question, I didn't quite catch it.

And where within guidance, do we currently sit, is it upper or lower end?

Well, I won't be able to comment on where we sit within guidance at the moment. This is an ever-changing world in electricity and things -- and it's a great deal that can happen between now and the end of the financial year. In relation to the dividend, the determination as to where we sit between the 50% and 75% range, what we made at the time at which we understand the net profit for the year. And we'll then consider what is necessary to reinvest into the organization for the business and the transition and how much we are as available to pay out for dividends to our shareholders.

The next question comes from Mr. Juan Lee. Are you considering the development of AGL's own electrolyzer facility to bolster power stability using hydrogen? If you are, do you also have intentions to market or export surplus hydrogen? What are your thoughts on the viability and financial potential of producing and exporting hydrogen?

We are currently participating in some pilot programs in relation to hydrogen on our sites, and we'll continue to do so. We do not have firm plans at this time in relation to hydrogen moving forward. There's quite a lot to be done in that area before it becomes viable, but we'll continue to participate and to work through the technologies with our partners on our sites. Do you want to add to that, Damien?

Yes, probably the only small addition I'd make to that. In terms of firm generation or gas generation, there is a potential to use hydrogen into peaking gas plants. We continue to look at that technology today. It's anywhere from sort of 10% to 30% but that will continue to evolve as that technology also evolves.

The next question comes from [ Stephen Maine ]. Could the CEO please comment on the current situation with our biggest competitor, Origin Energy, which is about to be taken over by a Brookfield-led syndicate. After Brookfield bought AusNet and then tried to buy AGL, aren't there competition concerns with 1 foreign entity, having such a large market share in the Australian energy sector? Did we raise any concerns with competition regulators about this proposed takeover? And do we hope that Australian Super votes the deal down on Thursday?

Thank you for that question. I'll just briefly touch on. I won't touch on Origin itself. That's a question for themselves. In terms of we made a submission into that particular transaction, we simply see it as part of submission to the ACCC that we wanted to ensure that the appropriate guardrails and ring fencing was in place between those entities, should it proceed.

The next question comes from [ Mr. Tyler Yi ]. What is the potential long-term impacts to AGL if the proposed acquisition of Origin goes ahead?

I think we've just answered that question really. It's a matter for the shares of the Origin as to whether that goes ahead or not. And the competition aspects have just been dealt with by Damien.

The next question comes from [ Ms. Kathy Sklavos ]. Good morning, everyone. As an investor in AGL for quite some time, I was wondering when do you likely see the dividend returning to a franked position?

We currently have some tax losses, which we will continue to use within the organization. Once those tax losses are exhausted, we will then be able to move to a franked position for dividends. It depends -- we can't be exact in the time frames for that.

Yes. Look, I'd just add to that briefly. Over the next couple of years, as those tax losses get utilized, then we'll come back to the market in terms of the amount of franking that may be available.

And the last question comes from Michael Coburn of [indiscernible] Proprietary Limited. Write-offs last year of financial instruments were over $800 million, a very large amount. What are these? Are there any offsets in our revenues? And will they continue in future years, presumably both positive or negative? Is there a cash transfer as well? Or is it just a book entry that we seem to be able to just shrug off?

I'll take that one, James, if you like. So yes, these are accounting fair value market adjustments. You'll see both the positive and the negatives that we've seen through our accounts over the last few years, particularly in the volatility in the energy markets. They are noncash in nature. But ultimately, the changes in wholesale prices will ultimately move through our book in cash over the coming years.

Thank you. I think then we may move on. The second item of business concerns the adoption of the remuneration report of the company for the year ended 30th of June 2023. The People and Performance Committee assists the Board with AGL oversight of remuneration policies. Graham Cockroft is the chair of that committee. Before inviting questions on the remuneration report, I would like to invite Graham to speak to you about AGL's remuneration policy during FY '23.

Thank you, Patricia. Good morning, everyone. My name is Graham Cockroft, and I am the Chair of AGL's People and Performance Committee. As the Chair previously mentioned, at last year's AGM, 30.7% of the votes cast on the '22 Remuneration Report were against the adoption of the report, and AGL received the first strike. This year, all major proxy advisers recommended that shareholders vote in favor of the 2023 Remuneration Report, and no material concerns were raised. Based on the proxies lodged ahead of the meeting, AGL will not receive a second strike in respect of the 2023 Remuneration Report. Following the 2022 AGM, the People and Performance Committee oversaw a review of AGL's executive remuneration framework to ensure that it aligns with and will drive AGL's revised strategy and the commitments made last September and our Climate Transition Action plan. After listening to our stakeholders' feedback on the executive remuneration framework, and our disclosures in the 2022 Remuneration Report, we made some refinements, which I will shortly explain. Those refinements are focused on progressing our longer-term decarbonization objectives whilst maintaining strong cash flows to support future growth and shareholder returns. The refinements to the executive remuneration framework were not extensive given that proxy holders, who are broadly supportive of the 2022 remuneration report. Refinements that the Board made, which applied in FY '24 include, first, increasing the weighting of the strategic objectives and the STI scorecard for the Managing Director and CEO from 15% to 20%, to align with other executive key management personnel and to deliver progress towards AGL's longer-term decarbonization objectives on future growth. Second, introducing operating free cash flow as a second financial metric alongside underlying profit after tax to drive strong cash flows from the existing business, which will support future investment and growth. Third, increasing the weighting of the carbon transition metrics in the LTI plan from 25% to 30% to enhance the focus on the commitments made to decarbonization through the CTAP. And fourth, refining the carbon transition metrics in the LTI plan to align with the CTAP commitments. The Board engaged with investors and proxy advisers on these refinements during FY '23, which were generally supported. The FY '23 remuneration outcomes are outlined in the remuneration report, which commences on Page 66 of the 2023 annual report. The Board believes that the remuneration outcomes for executives are aligned with the experiences of shareholders during FY '23. In January this year, Damien Nicks was appointed the permanent MD and CEO; and Gary Brown was appointed the permanent Chief Financial Officer. The fixed remuneration for both Damien and Gary was established with reference to market benchmarks, but also reflective of their relative experience. This aligns with AGL's approach of establishing an executive's fixed remuneration initially at a level reflecting their experience, which allows progressive increases to apply as the executive performs and becomes more experienced in their role. No other executives had changes to their fixed remuneration levels during FY '23. The short-term incentive or STI outcomes for executives continue to be measured against scorecards containing group and individual strategic objectives, which are established at the commencement of the financial year and comprise financial and nonfinancial measures. STI awards for the financial year were in the range of 72.1% to 73.8% of the maximum opportunity. The Board considered that these awards reflected the company's performance over the year and rewarded executives appropriately for delivering above performance outcomes. I'll now move to AGL's long-term incentive for LTI plan, which is designed to align executive reward with long-term AGL performance and shareholder experience. The performance conditions for the FY '20 LTI grant were tested in FY '23. The relative total shareholder return and return on equity hurdles were not met. And accordingly, there was no vesting. This aligned with the shareholder experience over the performance period. This is the third consecutive year with 0 vesting to executives for the LTI. I would now like to discuss the retention awards that were paid to key management personnel during the financial year. In FY '23. The Board determined that with the ongoing uncertainty following the withdrawal of the proposed demerger and the announcement that the previous MD and CEO would be stepping down, retention awards were considered necessary for both Damien and Markus, our Chief Operating Officer. To ensure continuity of leadership for operations and to mitigate the risks of further destabilization of the executive team. Following his appointment to the MD and CEO role, Mr. Nicks elected to forfeit his retention award and recognition of the opportunity and the increase in this remuneration provided by the new role. Mr. Brokhof's retention award was delivered 50% in cash and 50% in equity with a 1-year restriction. Finally, nonexecutive directors -- sorry, nonexecutive director fees were not increase during FY '23. The last fee change was in January of 2020. In summary, the Board has listened to the feedback from stakeholders regarding the 2022 Remuneration Report, and we believe we have taken appropriate action during the course of FY '23 to address that feedback. The Board recommends that shareholders vote in favor of this resolution. Thank you, and I'll hand you back to Patricia.

Thank you, Graham. Now let's turn to questions on item 2, the 2023 Remuneration Report. We'll start with questions from shareholders and proxies in the room today. If anyone holding a yellow or blue card has a question, please raise your hand and a microphone will be brought to you.

Thank you, Madam Chair, [ Natasha Lee ], shareholder, again. I see that the long-term incentives are over a 3-year period and appreciating that you have invested long-term incentives due to various reasons. But most companies are moving to a 4-year horizon. Will the Board consider extending that to better align with longer-term incentives?

Yes, we have moved the LTI to a 4-year period.

No, that's great. I didn't see it in the report, but I did see that there was a 3-year horizon. Thank you.

Thank you. Any other questions?

[indiscernible] again. I have no objections to the recommendation. But what I'd like to ask you is -- there's a lot of [indiscernible] blows working at the base level. What do you do to encourage, recognize and reward those people who make up the bulk of the work on which the bonuses are paid to the senior management? How do you encourage, recognize and reward plenty of people right down at the base, who don't get rewarded quite as well in their pay or other measures? Could you just give -- enlighten us on those factors, please?

Yes. In relation to the majority of our employees who work in the operational sphere, we have EBAs at each of our workplaces, and then negotiated at a regular period with the unions involved to represent the workers. And we have agreed to those EBAs that they are all in place, and having corporation agreed increases to conditions and to payments for those workers. Would you like to speak to that?

Maybe just to add to that answer. So all of our TFR employees are entitled to incentives at very structured levels throughout the organization and the EBA employees are tied to the share reward program as well. So they're the 2 structures we have in place different levels through the organization, but people -- all people can participate.

And do you give them the educational opportunities? I mean given the massive transition from point A to point B, I mean, is your organization -- learning organizations, do you encourage learning and give them opportunities, formal or informal, in trying to grow themselves and contribute to the pool of ideas that allows AGL to be a good employer and a good company to work for? What do you do in that respect?

So short answer is, absolutely. We encourage all of our employees to deliver the strategy that's in front of all of us. Their incentives are set based on where they are in the organization, what particular areas they're focusing on to deliver our strategy. So simple answer is yes, they are entitled to it and they are encouraged to deliver that.

Okay. The other thing is when I raise them the issue of consultants. Can I suggest that you put aside some part of the annual report in which you outlined the number of consultants, which company and how much money was being used. And if you have reduced your use of consultants and increasing your own organizational skills and opportunities, then if the money is not being used in use of consultants, is it being distributed and encouraging the growth of skills within the organization. Can we have a separate section to allow us to see, who you're employing and how much money you're paying them?

I think I was going back to your original question on consultants. So look, why don't we take that one on notice. As I said, we use a broad range of consultants both the big 4, but other consultants throughout the organization to ensure that we are at the forefront of where technology in both the energy industry is going, but also technology from a pure technology sense as well. So let us take that one on notice.

Good. Okay. But I think it would be useful to have a separate section to identify so that the shareholders can get some idea of just how much money -- normally, I assume that these costs would be absorbed in management. But I think if you have a separate section, then we get a better understanding, who's being employed and how much money is being used to pay them.

Do we have any other questions on the remuneration report?

Hello, Madam Chair. It's [ Julian Mills ] from the Australian Shareholders Association. Just a quick question regarding the remuneration report or perhaps it's a comment. The complexity of the CTAP LTIs, is there a way that you could perhaps link them to more specific goals so that you could see the transition or the relationship between the LTIs and your climate transaction plan? And the other comment that we'd like to make as CSA is there a way that we could also see the actual remuneration of the CEO and the KMP in your annual reports because you produce a statutory that we just like to see what the take home is.

Thank you for that question. So in relation to the link between the LTI and the CTAP. The LTIs are 70% shareholder experience and 30% on the CTAP. We have 3 areas in that LTI, there's reductions in emissions. There's renewable and firming targets, and there's a growing revenue. And we think that's an appropriate allocation of the CTAP and the decarbonization programs into the LTIs. We feel that that's the appropriate balance at this point.

Can I just -- I suppose what I'm trying to say is, is there a way that you can directly link it to your goals so that it's clearer for shareholders to see that relationship because I think it's just very difficult getting into all the numbers around -- whether they're percentages or whether they're emissions. For the average shareholder, it would just be good to see some kind of simplified graphic that explains it a little bit easier than having to get into those numeric sort of indicators.

Yes. Thank you. I think regrettably, this is a particularly complex area. But let's see what we can do about making that a bit more accessible to shareholders when they're having a look at the goals that we've said. Any other questions? Not? James, could you please let me know if there are any online, written or verbal questions relevant to this item?

Yes, Chair, there are no questions online or on the phone.

Thank you. I think we may now move on. Details of the proxy and direct votes that have already been cast on this item are shown on the screen. As you will see from the proxies, the vote against our remuneration report is not more than 25%, which means that AGL do not receive a second strike on the report. Please place your vote for this item if you have not already done so. [Voting]

I'll now turn to the third item of business, which is the reelection of directors. In accordance with clause 58 of the company's constitution, Mark Bloom, Miles George and Mark Twidell will retire from the Board with effect from the close of the meeting and now stand for reelection as directors. Each of Mark Bloom, Mark Twidell and Miles George will speak to you briefly about why they are seeking your approval to continue as a Director of the company. I'll then open the meeting to questions before inviting shareholders to vote on each resolution. Mark Bloom, Miles George and Mark Twidell each bring a range of complementary skills and experience to the Board. The Board has considered the performance and contribution that each of these directors make and is supportive of their reelection to the Board. Each of Mark Bloom, Miles George and Mark Twidell is considered an Independent Director. The Board, excluding each Director, in relation to their own reelection, recommends shareholders vote in favor of this resolution. I'll now invite Mark Bloom to speak to you on his reelection.

Good morning. I really appreciate you joining us today and for giving me the opportunity to cover some relevant details of my career and my background. I'm an accountant by training with the CA qualification in Australia. I retired from a full-time executive career as a finance executive in April 2019. My career spanned 36 years as CFO and an Executive Director at top 20 listed entities in real estate and insurance and financial services. I spent 16 years at Westfield and Scentre Group after having spent 20 years in insurance and financial services with Liberty Life in South Africa and Manulife Financial in Toronto. Following the demerger from the Westfield Group, the Westfield Australia and New Zealand centers valued at $40 billion were listed as Scentre Group as the 12th largest company on the ASX. As CFO, I was responsible for establishing a full spectrum finance team encompassing treasury, tax, operations, finance, compliance, risk management, financial reporting and legal. At Scentre Group, together with the CEO, I was instrumental in driving rapid cultural change, resulting in a highly engaged and strategically focused business. I currently have 3 other ASX-listed entity directorships at EBOS Group, Abacus Storage King and Pacific Smiles Group. These roles enable me to identify best practices and across industries and to apply these learnings to the benefit of AGL. I've been fortunate in my career to work for organizations which have a strong entrepreneurial culture, which has allowed me to bring my experience and business acumen to board discussions. At AGL, I am Chairman of the Audit and Risk Management Committee, and I am also a member of the Safety and Sustainability Committee. I was also 1 of 3 nonexecutive directors, who led the review of AGL's strategic direction last year, including overseeing AGL's climate transition action plan, which is a foundation of AGL's current strategy. AGL is in an industry which is experiencing substantial but exciting change. I am keen to be part of the Board that helps AGL navigate apart through this period of transformation. Should you provide your endorsement, then I would be very honored to continue to participate on this Board and company. Accordingly, I offer myself for reelection, and thank you for your consideration.

Thank you, Mark. Miles George will now speak to you on his reelection.

Good morning, all. I'd like to thank you for considering my candidacy to continue on to serve on your Board. By way of background, I trained as an engineer and have spent the last 23 years working in the renewable energy generation industry in Australia and internationally. I've worked in project development, investment, operations, financing and in general management, including serving as the Chief Executive of Infigen Energy and CleanCo Queensland. During my career, I've also served on various regulatory and industry bodies, including as Chair of Australia's Clean Energy Council and as a member of the Australian Energy Market Commission reliability panel. I've also served as a nonexecutive director on board, including Spark Infrastructure Group, while it was listed on the ASX and the not-for-profit Australian Conservation Foundation. I believe that Mike's background, experience and passion to make a strong contribution to your Board will benefit shareholders. AGL is undertaking a major transformation in a rapidly changing energy market. I'm excited by the opportunity that this presents to secure long-term value creation for AGL's shareholders. I look forward to continuing to work for the benefit of the company and shareholders, as we move towards a cleaner energy future. Ladies and gentlemen, thank you for considering my candidacy to continue to serve on your Board. I offer myself for reelection at this meeting.

Thank you, Miles. Mark Twidell will now speak to you on his reelection.

Thank you. I'm grateful for the opportunity to stand for the reelection today for the AGL Board. I'm an engineer by trading with over 30 years' experience in building new markets, programs and teams globally in the solar and storage sectors. My most recent executive experience was at Tesla, where I was leading the business in the Asia Pacific region, also covered the Americas, Europe, Middle East and Africa at various times well as at Tesla. Experience helping companies and governments in the energy transition, I served on the Board of the Australian Renewable Energy Council -- Australian Renewable Energy Agency, sorry, the Commonwealth Solar flagships Council and with Miles as Deputy Chair of the Clean Energy Council, Industry Association. Since joining AGL last year, I've witnessed the whole organization's unwavering dedication and professionalism to embrace the energy transition, whilst maintaining a customer-centric approach with focus on safety and reliability of energy assets in today's markets. Now great progress has been made, but there is still work ahead. Homes and workplaces are rapidly electrifying through technologies like solar, batteries, electric vehicles and heating and cooling systems. Industrial processes are replacing carbon-intensive thermal energy, resulting in significant new electricity demand, and these changes will bring material opportunities for AGL. So along with actively contributing across the full spectrum of governance activities, our focus and -- continue to focus on 2 key areas to support AGL's strategy, leveraging my skills and experience. So empowering millions of customers, with value optimizing services and their behind-the-meter assets through digital platforms, distributed customer energy resources are pivotal in building the flexibility in the future energy market to balance supply and demand. And AGL is really well positioned to lead in this domain. And then secondly, navigating the deployment of solar and wind and storage capacity in -- as an increasingly competitive and supply challenge world and that includes an unrelenting focus on safety and delivering benefits to communities as our thermal power stations transition into industrial energy hubs. And finally, I just want to assure you my absolute commitment to act independently in the best interest of all shareholders. And thank you again for this opportunity.

Thank you, Mark. I'll now take questions on the reelection of Mark Bloom, Miles George and Mark Twidell. Let's start with questions from shareholders and proxies in the room today. If anyone holding a yellow or blue card has a question, please raise your hand and a microphone will be brought to you.

Thank you. [indiscernible] again. I have no doubt that your series are pretty impressive with what you've said, and I have no reason to doubt it. But are you a contrarian thinker? And can you give me 1 example where you suggested something, which was opposed by the majority on the Board or any other organization that you work for and that your ideas prevailed over a majority? Can any one of you 3 directors seeking reelection tell me whether you are a contrarian thinker that you put a proposal, which was opposed by other people, but in the finance -- you persuade powers led the Board into implementing something that you thought was positive and for the customers as well as for the company? Can any of you give me 1 example, please?

Thank you for your question. I don't think it would be appropriate for any of the directors to discuss the matters which are dealt with at the Board. Suffice to say, all directors put forward their opinions and their views and suggestions on the way forward for AGL. And it's for the Board then to determine the -- on the balance, the way forward. And we do that by forming a consensus.

Look, I think we get caught up in this management speak for a long time, and I've been in the diversity research sector for a long time and I found that quite often people who have spoken out in the best interest of the company and the customers have been quashed. So I think what we need in particular a company like AGL, which is transitioning that is usually some dispute or rather somewhere and they never get out into so that they can be heard. And as we found in the banking industry, once I was told that if you pay peanuts, all you'll get is monkey. And as we found, there were plenty of people getting big bonuses, but were found to be no more than monkeys. NAV is one and CVA was another. And I think they were all found wanting. So I'm just saying, in a very broad sense, you don't have to identify the particular ideas, but the idea that you flowed it as a director, did that find expression?

I can assure you that no voice is quashed at the Board. Certainly, my policy as Chair is to ensure that every voice has the opportunity to be heard. And in relation to specific ideas, there are -- we deal at the AGL Board with a wide variety of issues. And I believe and can honestly say that the contribution of each of these directors is very valuable. They bring to us different skill sets in different areas. And every director is prepared to listen to that expertise. And where that -- where suggestions are made, which are appropriate, we will adopt them.

Okay. I have some other questions later on.

Any other questions? James, could you please let me know if there are any online, written or verbal questions relevant to the resolution to reelect the directors?

Yes, Chair. We have 3 online questions and no questions on the phone. The 3 questions online are all from [ Mr. Stephen Maine ] with 1 each for Mark Bloom, Mark Twidell and Miles George. The first one for Mark Bloom. Having served on the Board since July 2020, could Mark Bloom, please comment on the influence activist investor, Mike Cannon-Brookes, has in the boardroom, particularly after the 4 candidates he backed were all elected at last year's AGM. In Mark's eyes, are all the directors acting independently? And when Mike Cannon-Brookes recently publicly criticized the pace of our energy transition, what impact did that have in the boardroom.

It is absolutely the case that all of the directors appointed at last year's AGM are acting independently. And I can assure our shareholders that they all are acting in the best interest of the company and the shareholders. And I think that's -- I've described to you previously that this is a well-functioning and collegiate board.

The next question is for Mark Twidell. Could new Director, Mark Twidell and the Chair, comment on the recruitment process that led to his appointment to the Board after last year's AGM. Was a headhunter involved? Did the full Board interview Mark? And did they interview any other candidates? Mark has excellent credentials in the renewable sector. Did he know any of our directors before engaging with the recruitment process? And has he had any past dealings with Mike Cannon-Brookes?

So Mark Twidell, as with the other directors elected last year were nominated by a shareholder, and it is the right of any shareholder to nominate someone that they believe would be appropriate to sit on the Board. The shareholders of AGL elected to those 4 directors, and the Board then made sure that we made the Board work.

And the last question is for Miles George. In 2019, Treasury Wine Estates voluntarily moved to annual elections for directors in line with best practice that occurs in both the U.S. and the U.K. dual-listed companies like News Corp, and Rio Tinto, all do this due to the laws in the U.S. and U.K., and BHP has continued doing it even after its U.K. DLC ended in 2021. Can the Chair and Miles George, one of our newest directors, comment on whether our company will follow this TWE lead and move to annual elections of directors at the 2024 AGM. Such a move will improve board accountability to shareholders and also avoid the situation where the 4 so-called Atlassian back directors are all in the same 3-year election cycle.

Under the constitution of AGL, 3 directors must stand for election each year. This ensures that we have continuity on the Board that we have not constant change and allows us then to turn our minds to the business of AGL and the transformation that we've outlined. That is common practice in Australia, and I believe it's appropriate. We have not considered changing to an annual election of directors, and I don't think that we need to do so at this time. We will be determining -- as other than Mark Bloom, all directors were elected last year. And that means that as we move forward, 3 directors will stand each year. So we will not find ourselves in a situation where the 4 directors supported by a shareholder last year and elected to the Board will stand together in reelection. Any other questions, James?

No more questions?

Thank you. I think we can move on. Details of the proxy and direct votes that have been cast on item 3 are shown on your screen -- on the screen. Please place your vote for Item 3A, 3B and 3C if you have not already done so. [Voting]

I'll now turn to the fourth item of business, which is the grant of performance rights under the long-term incentive plan in the 2024 financial year to the Managing Director and CEO, Damien Nicks. The number of performance rights to be granted to Damien is 162,146 with a 4-year performance period. The number of performance routes that ultimately vest for Damien will depend upon the extent to which the performance conditions have been satisfied over the relevant performance period. The plan has 2 performance conditions. As outlined by the Chair of the People and Performance Committee earlier, the first measure relates to AGL's TSR, and the second measure relates to carbon transition. The ASX listing rules require that shareholders approve the granting of performance rights to any director, including the Managing Director. The Board, excluding Mr. Nicks, recommends shareholders vote in favor of this resolution. I'll now take questions on the performance of -- on the grant of performance rights to Damien Nicks. Let's start with questions from shareholders and proxies in the room today. And again, anyone holding a yellow or blue card, please raise your hand and a microphone will be brought to you. No? We'll move on then. James, could you please let me know if there are any online, written or verbal questions relevant to this item?

We have 1 online question and no phone calls.

Thank you. I think we can now move on -- sorry, you said one. I thought you said none. Apologies.

That's okay. We have 1 online question from [ Mr. Stephen Maine ]. When disclosing the outcome of voting on all resolutions today, including this LTI grant, could you please advise the ASX how many shareholders voted for and against each item similar to what happens with the scheme of arrangement. This will provide a better gauge of retail shareholder sentiment on all resolutions and was a voluntary disclosure initiative adopted by the likes of Metcash, Altium, AUI, Texas, Webjet, Tabcorp and Myer over the past 2 years. The ASX itself and Qantas both did it for the first time this season. AGL is almost 50% owned by more than 130,000 retail shareholders, but less than 5,000 of them bother to vote each year, giving outsized voting power to shareholders like Mike Cannon-Brookes, please disclose the turnout so we can better understand the problem of retail voting apathy in Australia.

Yes. As stated in this question, this is a voluntary decision, and there is no legal requirement for disclosure of the number of shareholders voting. We have adopted the practice of the consolidated votes of proxies and shareholders and not disclosed the number of shareholders voting. And at this point, we will intend to continue with that practice. I might add that the retail shareholder percentage in AGL is now at around 40%. Okay. Thank you. I think we can move on. Details of the proxy and direct votes that have been cast on item 4 are as shown on the screen. Please place your vote to this item if you have not already done so. [Voting]

I'll now turn to the fifth part of the business, which is the approval of termination benefits to relevant executives. The Corporations Act restricts the benefits that can be given without shareholder approval to the individuals, who hold or held in the previous 3 years a managerial or executive office on leading employment with AGL. AGL's group policy in relation to termination benefits and entitlements is to treat departing employees fairly, having regard to applicable laws and market practice, while balancing this with the need to avoid excessive termination payouts. Approval shareholders is being sought so that AGL can continue to give effect to this policy while complying with the Corporations Act. The notice of meeting sets out details of the people for whom approval is being sought, why approval is being sought and the benefits and titles and entitlements for which approval is being sought. The termination benefits authorization obtained at the 2020 AGM lapses at the end of this meeting. As such, AGL is seeking a further 3-year approval, which would have effect until the conclusion of the 2026 AGM. The board, excluding Mr. Nicks, recommends shareholders vote in favor of this resolution. I'll now take questions on Item 5, the approval of termination benefits for eligible senior executives. And let's start with questions from shareholders and proxies in the room. If you're holding yellow or blue card, please raise your hand. No, I can't see any questions on that. James, could you please let me know if there are any online, written or verbal questions relevant to this item?

Yes, Chair. There are no questions online or on the phone.

Thank you. I think we can now move on. Details of the proxy and direct votes that have been cast on item 5 are shown on the screen. Please place your vote on this item if you have not already done so. [Voting]

I'll now turn to the sixth item of business, which is the reinsertion of proportional takeover provisions into AGL's constitution. Clause 12 of AGL's constitution contains proportional takeover provisions that prohibit AGL from registering a transfer of AGL shares under a proportional takeover bid unless the bid is approved by resolution issued by shareholders in general meeting. Under the Corporations Act, proportional takeover approval provisions must be renewed every 3 years or they will cease to have effect. The provisions were last approved by shareholders at the 2020 AGM for a period of 3 years. If the proposed resolution is approved by shareholders, the proportional takeover provisions will be reinserted into AGL's constitution and will have effect on exactly the same terms until the 21st of November 2026. The Board recommends shareholders vote in favor of this resolution. This is a special resolution, which means that it needs 75% of the votes to be passed. I'll now take questions on Item 6, the reinsertion of proportional takeover provisions starting with shareholders and proxies in the room. If you have a yellow or blue card, please raise your hand. Looks like no questions on that. James, could you let me know if there are any relevant questions online or by phone?

Yes, sure, there are no questions online or on the phone.

Thank you. I think we can now move on. Details of the proxy and direct votes that have been cast on item 6 are as shown on the screen. Please post your vote for this item, if you've not already done so. [Voting]

I'll now turn to the seventh item of the business, which is the conditional spill resolution, which will not be put to the meeting today given that the company did not receive a second strike in relation to the 2023 remuneration report. That concludes the formal items of business for today's meeting. A summary of the proxy votes I hold as a nominated proxy for shareholders in relation to each resolution are shown on the screen. The polls will remain open for another 10 minutes. Results on the poll on each resolution put to the meeting will be provided to the ASX as soon as possible today and posted on the company's website. On behalf of the Board, thank you for attending and demonstrating your interest in AGL by taking part in this meeting. I now declare the meeting closed subject to conclusion of the poll. Thank you.