Bapcor Limited (BAP) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Bapcor Limited's 2025 Annual General Meeting. My name is Angus McKay, and I'm Bapcor's Executive Chair and Chief Executive Officer. On behalf of the Board, I'd like to thank you for joining us today, both in person and in line. I'd like to start by acknowledging the traditional custodians of the land on which we meet today. For those of us present in the room today, we are on Wurundjeri country, home of the Kulin Nation, and I pay my respect to elders past and present. We recognize the continued connection of all First Nations people with country across Australia and on all the land where Bapcor operates. I would like to also introduce my fellow directors. To my immediate right, Mark Powell, who is our Lead Independent Director. And then in alphabetical order, Annette Carey, Lachlan Edwards, Jackie Korhonen, Patria Mann and Kate Spargo. For the sake of completeness, I should note that I'm an Executive Director and not considered to be independent. Also in the room today are Kim Kerr, Bapcor's Chief Financial Officer; and George Sakoufakis, Bapcor's Company Secretary as well as other members of the executive team from Bapcor. I'd also like to welcome the company's auditors, PwC, represented by Alison Milner as well as Chris Dedrick, the resentative of the company's share registry, Computershare Investor Services. It is now time to start and the Company Secretary advises me that we have a quorum present, so I will now declare the meeting open. The notice of this Annual General Meeting was circulated to shareholders within the required period. Accordingly, if there are no objections, I'd like to move that, that notice is taken as read. Today's meeting is being physically held at Bapcor's registered office located at Tullam Marine Melbourne and online via Computershare Meetings platform. This format allows shareholders, proxy holders and guests to attend the meeting physically and virtually and to ask questions and submit votes online. All attendees can watch the live webcast of the meeting, which will also be recorded and available to view after the AGM on Bapcor's website. Before we move to the formal business of the meeting, I'd like to run through a few procedural and housekeeping matters so we can ensure that the meeting proceeds smoothly. I will then turn to the agenda. Before each resolution is put to shareholders, shareholders will be given the opportunity to ask questions on a specific resolution. To ensure an orderly meeting, the chair will only be taking questions that relate directly to that resolution at hand. Prior to the conclusion of the meeting, I will open the meeting to general and relevant questions. Online attendees can submit questions at any time. To ask your question, please select the Q&A icon, type your question into the text box. Once you have finished typing, please hit the send button. Although you can submit questions from now on, the Chair will not address them until the relevant time of the meeting. Please also note that your questions may be moderated or if we receive multiple questions on the same topic, we will consolidate them into a single question or query. To ask a verbal question, please follow the instructions written below the broadcast. For those attending the meeting in person, when questions are invited, you can ask it by approaching the microphone, showing your blue or yellow card and providing your name. If you're eligible to vote, once voting opens, press the vote icon and all resolutions will be activated. To cast your vote, simply select one of the 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. If you'd like to change your vote, you can do so until the time when the Chair declares the voting is closed. If you're attending the meeting in person and are eligible to vote, you may complete the voting items on the reverse side of your blue voting card. These cards will then be collected at the end of the meeting by a Computershare representative. I now declare the voting is open on all items of business. Please submit your votes at any time and the Chair will give you a warning before moving to closing of votes. As well as those shareholders online today, the holders of approximately 251 million ordinary shares or 74.13% of the company's issued capital -- share capital have already sent in valid proxies. As each item of business is read out to today's meeting, the total number of valid proxies will receive for that item, and by way of those proxies that have been directed will be shown on the screen. These figures will be as at the closing time of the receipt of proxies, which was 1:30 p.m. Tuesday, the 21st of October. In my power and my capacities as Chair during the meeting, we will be voting all available undirected proxies in favor of each item of the business. Before we move to the formal address of the meeting, I'd like to address shareholders in relation to the company's progress during 2025 and our objectives going forward. A copy of my address to shareholders and the presentation will be delivered and has been lodged to the exchange and will be published on Bapcor's website. As Executive Chair and CEO, I'll give you an overview of our progress during the fiscal '25 year and into fiscal year '26 before the formal items of business are considered. I will chair the meeting for the first six items of business, consideration of the company's financial audit accounts and related reports for the year ended 30 June 2025 and for resolutions 1A, B, C, D and E, the reelection of directors. I'll then pass over to Mark Powell, our Lead Independent Director, for the remuneration-related resolutions being Resolution 2 the adoption of the FY '25 remuneration report, and Resolution 3, approval of the grant of the FY '26 performance rights to the Executive Chair and CEO under the long-term incentive plan. Once these resolutions are complete, I'll resume the role of Chair and put Resolution 4 to the meeting, the renewal of the proportional takeover bid provisions in Bapcor's constitution. I will then address general questions at the end of the meeting. I started with Bapcor in late August 2024. When I began, I said I've been drawn to the company's strong position in the resilient automotive aftermarket industry, its healthy balance sheet and robust operating cash flows, its position amongst the top 3 in the markets where it competes and team members who are passionate about delivering for their customers. After 14 months in the role, I remain of the belief I started with. There is clearly a positive future for Bapcor. It is a strong business with a committed team, loyal customers and very robust suppliers. But there is significant work to be done. The company is over-complex, too internally focused, too reactive and has not adjusted its operating model and rhythms. This internal focus means the company has lost elements of the connection to its customers. It is that connection to its customers that made the company great. Our routes have been built on acquiring businesses, not integrating them. Some of the practices that have been accepted in the wider organization do not meet acceptable operational standards nor the required financial or commercial level of expectation. In a trading update released last Monday on the 20th of October, we said that this work to methodically address these issues is progressing slowly and the complexity involved in turning around the business means it's taking longer than expected, but it will result in a stronger and more sustainable company. We remain committed to delivering on this turnaround and achieving the 5-year indicative scorecard contained in our strategy. I'll speak more about Monday's trading update shortly. But before that, of detailed Bapcor's fiscal '25 performance and business results. As I said, the company has been progressing its structure and its capability, restoring customer confidence and building its performance over the past 14 months. I acknowledge that the continued discovery of historical poor operating practices is frustrating. However, we're committed to facing into these issues and corrected them as and when required. Work undertaken at pace to begin the simplification of the business started in fiscal '25. These changes were necessary to drive simplification, create more customer-focused operations, eliminate waste, provide greater visibility to inventory and to strengthen the company's core business for its future growth. I acknowledge that, that speed of change has impacted our operations, but drawing out such urgent actions over multiple time horizons would have been even more damaging. The actions taken include the final unwinding of the better than before headcount, consolidating small warehouse sites, reigniting store or branch openings and closures, technology upgrades and consolidations, integrating Bapcor's wholesale truck and electrical businesses under a single executive leader and the sale of the surplus business. It has also been challenging on our team members who have not experienced this level of change before. I'd like to commend them for what is not only what they have achieved, but the way they've gone about doing it. In parallel to this work, we've set about delivering a clear strategy and communicating that to both team members, shareholders and our stakeholders. From my earliest days in the business, the company's shareholders and team members have asked for clear direction. The 5-year strategy was announced in April of '25, articulating where and how the company will focus on building the business for long-term sustainable profitability. It leverages commonality across the group through strict strategic imperatives. Firstly, optimizing our network. Secondly, one supply chain; thirdly, customer focus; Fourth, the digitization of our business; fifth, making our stores fit and finally, simplifying the business. In the 6 months since announcing the strategy, we've been busy bringing these plans to life. While there is certainly complexity to this execution, the articulation is deliberately designed to be clear and simple. To align with this strategy, we have also defined our cultural aspiration underpinned by a reset of our code of conduct. This might seem trivial but ensuring all Bapcor employees have a common understanding of what is acceptable behavior and what behaviors are critical to the longevity of our business is fundamentally sensible. The executive team was reshaped to support the new plan with three key appointments. Simon Bromell was appointed as the Executive General Manager of Trade on the 28th of April. Simon brings a background in delivering results in complex chain and supply chain environments, including Orora, Fonterra and Mars. Kim Kerr was appointed as Chief Financial Officer on 12th May, Kim is an experienced CFO with 25 years working in ASX100-listed companies in the mining, manufacturing, chemicals and digital solutions area, and most recently, CFO at Orica. Craig Magill was appointed to the expanded role of Executive General Manager of Networks, which has been combined with the CVG business, JAS and our wholesale business units. This was effective on the 1st of June, bringing his 13 years of Bapcor experience into that role. Abdul Jaafar, George Sakoufakis, Martin Storey, Megan Foster, Morris Lieberman and Merryl Dooley remained in their existing executive roles. As announced in both Bapcor's fiscal '24 annual report and the fiscal '24 Annual General Meeting, Margie Haseltine stepped down as the company's Chair on the 22nd of August and left the Board on the 16th of October 2024. I was appointed as Executive Chair and CEO on the 22nd of August 2024. With this, Mark Powell was appointed as our Lead Independent Director on the 22nd of August 2024. Mark's role ensures Bapcor continues to have clear separation between Board and management, open communication in relation to the governance requirements and that my performance in my dual role is overseen and managed directly by the Board. Kate Spargo remains on the Board in her capacity of Non-Executive Director, and Bapcor continues to benefit from the experience and insight Kate provides. Jackie Korhonen was appointed to the Board as a Nonexecutive Director on the 1st of February 2025, bringing extensive executive and nonexecutive experience in strategy development, risk management, governance, data and technology. On the 23rd of July 2025, Mark Bernhard, Brad Soller and James Todd resigned from their positions as nonexecutive directors on the Board. The timing and the immediacy of those resignation was disappointing to all of us, but has presented us with the opportunity to accelerate the refresh of the Board that was already underway. On October 1, 2026, three new nonexecutive directors joined the Board providing a wealth of experience and highly complementary skill sets. These individuals will be invaluable to the Bapcor business. Annette Carey brings 35 years and more of experience of legal and operational experience in logistics, supply chain and the security sector in Australia and internationally. Lachlan Edwards brings 35-plus years of hands-on experience in capital management, corporate and debt advisory. Lachlan has an extensive turnaround background, including driving operational recovery, capital efficiency and sustainable value for shareholders. These are, of course, crucial to Bapcor's strategy and to restore growth and returns. And finally, Patria Mann joins with 20-plus years of nonexecutive experience across ASX listed and financial services organizations and has deep experience in audit, risk and governance. Patria has served as the Audit and Risk Chair through Committee chairs with multiple organizations and will lead Bapcor's Audit and Risk Committee. Annette, Lachlan and Patria were recruited through an independent process managed by an external consultant. You'll have the opportunity to hear from them, plus also Mark and Jackie later in the meeting. To the financial results. I've been clear that these were not an acceptable level. Yes, the headline numbers reflect the disruption associated with simplifying the business, particularly in that Specialist Wholesale segment, the necessary cleanup of the balance sheet and the change in our inventory valuation policy, but the underlying trading performance was not at an acceptable level. Statutory net profit after tax for the fiscal year '25 was $28.1 million. Group revenue of $1.9 billion declined by 1.5% on the prior year. Importantly, revenue in that Trade segment continued to grow. The New Zealand and Retail segments continue to trade in ongoing challenging conditions and the conditions in the Australian retail environment in the wider New Zealand economy. We delivered on the forecast cost saving measures. And the company's final quarter was poor, particularly in trade with both parts and equipment sales falling below our expected levels of delivery. The significant work undertaken to simplify the business also disrupted trading. That work included consolidating operations in 23 warehouses across Australia and relocating them to the existing distribution centers, closing or consolidating a further 34 branches or stores across our network, relocating 13 stores or branches and opening 21 stores and branches. Consolidating three auto electrical businesses into a Specialist Wholesale segment, previously known as AEG into a single business unit called JAS, bringing together branch locations and ERP systems. Restructuring the Specialist Wholesale segment, including the centralization of product functions and establishing a single selling entity, rebuilding the Autobarn business, including significant changes to both regional and store manager personnel, adjusting promotional cycles, enhancing our B2C capabilities and the new investment in the Autobarn brand. And investing in IT systems that included fiber to stores, a pricing engine in the Trade segment, commencing the implementation of a company-wide HR system and enhancing our cybersecurity tools and processes, and finally, introducing a common e-mail platform across the entire Bapcor Group. Given the large volume change introduced during that period of time, an extensive review of the balance sheet was undertaken announced in the July trading update. This review resulted in the recognition of significant items of $52.3 million after tax, including the statutory net profit of the fiscal '25 year, of which 82% represented noncash items. I am disappointed at the quantum and the nature of those significant items announced by but the business needed to deal with the issues in a transparent manner. It is inevitable that as a company, reviews like this in its current state will confront issues that do relate to our past. Our commitment is to deal with these as and when they arise and to do so quite transparently. The required business turnaround was always going to be challenging. However, I'm clear that the review as completed places us in a superior position to deal with the required business and importantly, operational change. Central to our strategy is safety. Fiscal '25 saw a 43.5% reduction in our total recordable injury frequency rate. The reduction was driven by an increased focus on the safety program and embedding the early intervention initiatives inside of our business, utilizing and improving the available data from right across the organization. We also revised the definition of total recordable injuries in November of 2024 to better align with both the industry and our internal practices. We are a safer business today than we were 12 months ago, but it cannot afford to be complacent. Absolute TRIFR will reduce year-over-year when excluding that definitional change, but we are continually improving the way we use Donesafe, our safety management system, lifting the accuracy of incident data and reporting it as and when it occurs and focusing on health and safety as a reduction opportunity. We continue to build a diverse workforce representing the communities in which we operate. It remains focused on creating an inclusive environment, particularly trying to improve our gender balance. The company has, however, made limited progress on a gender balance change with the total number of females employed at Bapcor increasing from 28% to 29% over the last 12 months. The expectation for us to make greater progress will be through a diverse cohort of managers setting the culture and making the right hiring decisions. A voluntary engagement survey was offered to all team members in March of 2025 with 85% of the organization participating. This participation demonstrates an engaged workforce who want to be part of the solution and importantly, the turnaround. Our engagement rating was 52% and the company has been giving a significant amount of feedback on how it can improve its culture and build on opportunities to create flexibility, inclusivity and a sense of belonging for all our team members. We have responded to this feedback with actions that include the strategy road shows that targeted our Australia and New Zealand personnel, career development conversations with every Bapcor employee and direct engagement by the leadership team right across the two big countries we operate in. Our responses continue as we look to change the culture of the organization. In fiscal '25, we launched a refreshed ESG strategy and strategic framework to ensure that our sustainability efforts remain focused, measurable and aligned with stakeholder expectations, operational priorities and regulatory change. This strategy is shaped across 4 single pillars: environment, team members, supply chain and communities. It was informed by the insights from Bapcor's fiscal '24 double materiality assessment and consider the impact Bapcor has on the environment and society as well as the influence of ESG factors on the company's long-term performance. Fiscal '25 also saw the development of a comprehensive decarbonization strategy and commenced preparation for the mandatory climate-related disclosure requirements under the Australian sustainability reporting standards. This is due to commence in fiscal year '26. Earlier this week, we provided an update to the stock exchange of our Q1 performance and provided financial guidance for the first and second halves of the fiscal '26 year. Details can be found on our website. Management has continued its execution of the strategy. Operational reviews have been a feature of the first quarter of fiscal '26 and with the following key actions already undertaken. Pricing reviews on key person categories to increase our competitiveness in the market, ranging reviews in Trade and JAS to ensure the right stock is in the right location, utilizing key promotions to engage with new and lapsed customers with a particular focus on our key accounts, implementing a retail-specific demand and merchandising planning team, training for sales teams members particularly our new staff, utilizing NPS, Net Promoter Score feedback to drive our focus on customers. The recruitment of staff to key positions with the focus on filling open customer-facing role as a priority, optimizing our store network, including opening new stores, closures as required and refurbishments, and finally, an in-depth review of the Tools & Equipment business within the Trade segment is underway, and that has unfortunately identified unsatisfactory operational practices that have required our immediate attention. In half 1 of fiscal '26, additional investment of some $16 million will be made, brand and product marketing activities to improve brand awareness in the sales and retail segments and in our JAS business. Technology of some $6 million and in our supply chain to support security of supply as we now finalize the embedding of the warehouse rationalization that was completed at the end of last fiscal year. Cost savings initiatives have also been launched in quarter 1 of '26. These include the optimization of our supply chain structures and associated costs, simplification of some of our support office structures in line with our new operating model, the reprioritizing of people and technology spend to prioritize customer-facing activities and changes to the New Zealand distribution footprint to optimize site and distribution costs. We expect statutory net profit after tax for half 1 of '26 to be in the range of $3 million to $7 million. excluding any potential impairments associated with the New Zealand segment. Underlying NPAT for half 1 of '26 before one-offs and nonrecurring items is expected to be in the range of $14 million to $18 million. Statutory NPAT for the full year '26 is expected to be in the range of $40 million to $50 million, again, excluding any potential half 1 impairment associated with the New Zealand segment. Underlying NPAT for the fiscal year '26 before any anticipated one-off or nonrecurring items recognized in half 1 is expected to be in the range of $51 million to $61 million. NPAT in that second half of fiscal '26 is expected to significantly improve from the first half due to operational improvements where we're focusing our attention on sales growth, the benefits of the pricing realignment measures already underway, realization of the benefits from cost-saving initiatives that are built into that half 1, which are expected to generate $20 million in pretax savings in the half, and the nonrecurrence of $16 million worth of pretax first half items. Our NPAT and our cash flow forecast remain and demonstrate Bapcor will remain within our debt covenants and we have access to sufficient debt facilities to fund our ongoing operations. We are privileged to have excellent lenders who support the turnaround that is underway. We're now firmly focused on delivering the strategy over the next 4 to 5 years. Growth in leadership in the Australian trade sector, expanding our store network, becoming a market leader in New Zealand, investing strategically in digital and e-commerce solutions, stabilizing and growing our retail organization and maximizing shareholder value. This will be undertaken with a ruthless focus on operationalizing the six imperatives that I spoke to before, and we'll invest further in technology and people capabilities as we are required by discrete segment earnings growth. With the refreshed Board and leadership in place, the investment underway to implement the business strategy, the Board is confident the company is addressing its deficiencies, closing the performance gap and is positioning itself to return to sustainable growth. My first year at Bapcor has provided with numerous insights into the huge contribution of the team around [indiscernible] and with great pride that, that team members take on wearing the colors of our company. It is clear the team members are genuinely passionate about this business and the company, and they are here for customers and the communities in which the company serves. As leaders, our job is to provide direction and stability. It's a privilege to lead Bapcor and I sincerely thank all our team members for what they do every single day. There is a great deal to accomplish. So on behalf of the Board and the group leadership team, thank you to our customers, suppliers, shareholders for supporting the company as we drive these required changes. I look forward to delivering the strategy and beyond in the 12 months and plus to come. We'll now move to the formal part of the meeting. Shareholders and proxy holders can vote on each item of the business to be conducted at today's meeting in person or via the Computershare online platform. Instructions on how to vote and how to ask questions were provided at the start of the meeting. For those attending online, please refer to the Computershare online meeting guide for any further information. The phone lines are now open for verbal questions. The first item of business is the consideration of the company's audited financial statements and the related report for the fiscal year ended 30 June 2025. The Corporations Act requires that the audited financial statements and related reports for the fiscal '25 year -- financial year be laid before the meeting. I now declare that these reports, which were made available to shareholders on the 29th of August 2025 via both the ASX and Bapcor's website have been laid before this meeting. Although shareholders are not required to formally vote on the company's financial and related reports, I would welcome any discussion or questions on the reports. As I previously mentioned, the company's auditors, PricewaterhouseCoopers and Alison Milner are in participation in this meeting and present. And I'd ask you if you have any questions for the audit, we can direct those directly to them. So I will start by asking if there are any questions.

Yes. Thank you, Angus. This is [indiscernible]. Yes. I'm Stephen van Emmerik, I'm the representative of the Australian Shareholders Association. So a couple of quick comments, then I'll get into questions. I've got a couple of quick questions for the auditors. Firstly, well, thanks to Angus and Mark and Kate get together with the pre-AGM meeting with us and I think give honest and useful responses. Sometimes we agree to disagree, sometimes you have listened to us, and we do appreciate when you've taken actions based on those concerns. I guess, to the new Board of Directors, good luck. I don't think it's going to be a cushy job. We wish you all the best. We hope you align yourself with shareholders and get out there and buy a few shares. I will have questions for you when it comes to the votes. I guess, all the write-offs that have come to light this year, you've said you're cleaning up the balance sheet. You don't have to clean something up unless it's dirty to begin with. I guess my question is related to previous year's financial statements, what was the problem really. I mean, is it incompetence? Is it fraud? Is it unreasonable optimism? That's the first question. What was going on? The second question is why didn't the auditors find anything. I mean there's been multiple times that you reviewed and found extra problems. Why didn't the auditors find into those problems? And will they go back and review their past audits and see what they could do better, so there's not a repeat of this problem in the future? So really 3 questions for you, Angus.

I might take the first one, if I could, and then I'll...

Feel free.

I think -- so the balance sheet review is designed to look at after having consolidated such a significant amount of the organization, what we needed to be aware of. Yes, we did find things that we, as a new management team, took a different judgment on, and we did take a different judgment on those and that represents the bulk of what is net -- was raised as an expense in the $52 million. We, as a management team, also made a call and was backed by the Board to change our accounting policy on the way in which we value stock. So those are 2 things that we distinctly took a proactive approach to, Steve. I appreciate that the former had a very unpleasant consequence to the P&L. The final one around what we did note was a mistake around the intercompany balances. That has been something that has clearly been present for a while. We had to stare into that and recognize that and deal with it. Why did it occur? The complexity of this business, the systems environment, and all those things contribute. But finally, I'm going to say, from a management perspective, that's on us to have got right before. I'm not going to look at the auditors and say it was their job to find that. We should have been on that first. But Alison, I might hand to you.

Thank you for the question. Before addressing the specific question, if I can just highlight our role as auditors. Management prepare the financial report, which the Board approve. Our role is to give an independent audit opinion on the financial report as a whole, providing reasonable, not absolute assurance that it's free from misstatement. We plan those procedures based on areas where we believe there's a higher likelihood of misstatement. We do acknowledge there was a prior year error. The prior year audit was performed in line with applicable accounting standards using the information available at the time. The issue later identified was not evident at the time we prepared -- performed our prior period audit. Once identified, we did work with management to assess the impact of those errors and ensured it was corrected and disclosed appropriately as you can see in Note 3 of the financial statements. We updated our risk assessment and our audit approach accordingly in the current year. We also outlined in terms of the question in respect to the significant items in relation to our audit, we don't comment on specific matters. We do note, though, in respect to the audit work performed in those areas, we assessed those in line with Australian accounting standards, ensuring that they are appropriately treated and disclosed in respect to the financial report as a whole. Did that answer those questions?

I think I've got as much answer as I'm going to get. I guess I have got a follow-up question, maybe that's more to the CFO or to Angus is like, has the review of the balance sheet been completed? And if so, does that mean you take ownership -- fair enough, mistakes we made in the past. Do you take ownership from this point forward as far as write-downs, et cetera? Or is it something that's still ongoing? I know there's -- you may be looking at the New Zealand business to some extent?

So the starting point is to make sure I take accountability and ownership for what we've just done. So I'm not looking to blame the past. That's my responsibility now. And clearly, anything that happens in the future is without a doubt my responsibility. The balance sheet review that we conducted in July, that is complete. We continue to look through this business as we look to simplify it. I think the simplest stat is prior to me joining, lots of good work. We went from 43 ERPs to 19 over my single year tenure, 19 became 17, and our plan is for 17 to become 15 by the end of this year. That level of complexity probably tells you a story in its own right. I'm not looking to find issues nor is Kim, but when we do, we'll deal with them as and when they arise. But our job is to make this business simpler to the comments I made earlier.

Okay. And will you be putting the audit out for tender or not?

Not this year, no.

Thank you.

We'll see if there's any other questions in the room? At the very end, there will be a general questions, please. Okay We'll come back to you then certainly, sir. So can I just check, are there any questions online?

There is one question from Stephen Mayne in relation to when was the external audit last competitively tendered and when will it next be competitively tendered?

So Stephen, I don't know the answer to the first part of your question. But as I said, for this year, we're not going to be changing away from PwC. With a newly constructed Board and newly constructed audit committee, we'll now look to what our plans are for the future. At this stage, for this fiscal year, there will be continuity. No other questions online?

No further question.

Fantastic. Thank you. So I would now ask the Company Secretary to record that the audited financial statements and the related reports for the year ended 30 June 2025 have been received and they've been considered by shareholders. Moving to our next resolution. The next item of business, Resolution 1A, relates to the reelection of Jackie Korhonen as a Director. Jackie was appointed to the Board on the 1st of February 2025 as an independent Nonexecutive Director and her qualifications, background and experience are summarized in the Notice of Meeting. I'd now like to invite Jackie to briefly address the meeting.

Thanks, Angus. And good afternoon, fellow shareholders. As Angus mentioned, I joined the Bapcor Board as a nonexecutive Director in February this year and I have over 35 years' experience in the technology sector with a track record of leading large-scale transformation programs. I welcome this opportunity to continue to support Bapcor as we invest in technology to improve customer experience and to simplify our business. If reelected, I'll bring practical hands-on experience in digital transformation, data and technology governance and risk management to the Board. My focus will be on helping to ensure Bapcor's technology investments deliver tangible improvements for customers and team members while strengthening our operational resilience and data-driven decision-making, all the while keeping our business and our customers safe. As a member of Bapcor's Remuneration and ESG Committee, I will support remuneration and talent frameworks to attract and retain high-quality people while aligning risk and governance to drive sustainable performance and shareholder returns. In addition to my role at Bapcor, I sit on other boards in other industries. I feel this exposure assists me bring different perspectives and insights to our Board decisions. If elected today, I'll work diligently with my fellow directors and management to drive growth and create shareholder value. Thank you for your consideration.

Thank you, Jackie. The resolution appears on the screen, and I'll take it as having been read. Also appearing on the screen are the details of the valid proxy votes on this resolution. I'll now turn to questions. Are there any questions in the room in relation to this resolution? Steve, why don't you jump first? You go first and I'll then come to this gentleman.

Two questions. Same questions for all the directors up for -- I'll just ask them once, so I don't take up your time. First question is related to corporate governance. Given having an Executive Chairman is completely contrary to the ASX and ASA governance guidelines, what will you do beyond your usual director duties to ensure that high corporate governance standards are upheld? That's the first question. Second question is, we represent retail shareholders. And really, you can't expect retail shareholders to put their money into Bapcor if directors aren't willing to. I know there's minimum standards. No one really achieve much in life aiming for the minimum. Will you commit to buying a significant number of shares compared to your own wealth given that Bapcor's share price is where it is, and hopefully, it gets to somewhere a lot better? That's my 2 questions.

Thanks, Steve, for the question. As part of taking on the role at Bapcor in February, I did some due diligence, particularly with Mark, our Lead Independent Director, on the Executive Chair and CEO role and how it worked. Mark explained to me how the role worked, particularly whenever there's decisions to be made or any conflict how that's handled. He gave me confidence that the Board and need to understand the clear separation and appropriate governance when it comes to the performance of the CEO and that we provide opportunities for shareholders to talk to the nonexecutive directors. And I got myself very comfortable that at this point in Bapcor's journey that this is the right thing to do for the company. Yes. And I think all of us have gone through the same process. There are times in meetings where Angus excuses himself, Mark takes the lead, and we have discussions that are appropriate without him being there. So I became quite confident, and I think it's the right governance at this point in time. On the shareholding, we have a policy that I will adhere to. I've already commenced buying some shares to align with that policy. And yes, I'll absolutely comply.

Thanks, Jackie. Please pass the mic James. around to this gentleman, please.

Michael Barrett is my name. I'm just an ordinary 708 shareholder. I was in the -- very early in the float. I think I paid $2 of the shares when they came on market. The question I have for the directors putting themselves up today, is have you done a formal training course in corporate governance either through the Institute of Directors as part of a degree program or something like that because I served on the Board at one stage, and I found that it was a real hassle having fellow directors who hadn't done that sort of formal training and contemporary as well because legislation is changing quite frequently?

Thanks, I appreciate it.

You want each of us to go along?

Yes, that might be the simplest way to do, please.

So yes, I did the AICD course as well. I also did the New Zealand Institute of Directors course. I also commit to keeping continuous learning. Three years ago, I did an ESG course through London Business School as well. The past year, I've done a program through INSEAD on executive coaching as well. So I believe in continuous learning. And yes, so that would be my answer.

Thanks, Mark, and thank you for the question. Yes, I've also participated in the AICD course. I attend a lot of -- there are a lot of free seminars that you can attend through law firms and other professional services firms on matters that are particularly relevant and up-to-date and relevant for nonexecutive directors and for company Boards in general and I'm a lawyer by background, and I was the Company Secretary and General Counsel of Linfox and Lendlease subsidiary. So I'm very familiar with corporate governance requirements.

My name is Lachlan Edwards. I'm one of the new directors. Thank you for the question. I guess part of my executive role is that I advise companies and Boards. So I am keeping up to data on these matters every day as part of that. In addition, I chair a number of Boards or a nonexec director on them. So in those capacities, I have to keep up with all of the requirements, and I do so. And in my last public company Board, I also was Chair of the Responsible Entity Compliance Committee for that company, which kind of takes you to a higher level of governance again. So yes, I'd like to think that I keep up to date. And I think your question is very pertinent something we should do. Thank you.

Yes. Thanks for the question again. Yes, I did the AICD Company Directors course quite a few years ago. And as part of being a member of the AICD, I commit to annual training. The AICD actually has a target for its members to attend courses throughout the year. So I make sure I keep up to date. I sit on a number of different Boards, 2 other listed Boards, 1 government Board and 1 nonlisted Board, 2 of them in the financial services sector. So as part of my Board responsibilities there, I get annual training from each of those Boards. and particularly on regulatory issues that are, as you mentioned, constantly changing. And yes, I think part of the -- the great thing about being a Board Director is that it is a job that gives you continuous learning, and that's part of the reason that I like being a director is because it is a role that I can continuously learn and developing. As you'll hear when I give my presentation later, I've been a nonexecutive director for over 20 years. So obviously, so I have, obviously, quite a lot of non-executive experience, which I can draw upon. I'm also a fellow of the Australian Institute of Company Directors. I'm a former partner of KPMG and obviously, all those roles and memberships, et cetera, require and which I undertake regular professional development, which is very, very regular, very -- and there's lots of opportunities to do that. Currently, the big one is obviously around AI, et cetera, but we certainly try to keep ourselves contemporary and up-to-date with what's going on. But the experience, I think, also accounts for an awful lot.

Yes, I agree also that it's a really important question. And similarly to some of my colleagues or all of my colleagues, I attend a variety of programs every year around governance as well as other topics relevant to non-exec directors. Sort of hesitate to say I've been a nonexecutive director for around 25 years, so I guess that -- it's inevitable that you learn and you keep learning during that time. I was made a life fellow of the AICD 2 or 3 years ago. In recognition, I think, of the governance areas that I cover. I've attended various AICD programs, but I took the 5-day program for around 8 years back along. So I think it is important that we keep up because you're right, the rules do keep changing. But as Jackie said, it makes it interesting. It keeps us motivated and interested in what we're doing, it will be a shame if it was static. So it's a really great part of the role to actually keep that learning.

Can I ask both Kate and Karen at the back are there any questions online?

No questions on this item of business.

Great. Thank you. As such, I'd like to then formally put this resolution to the meeting. The next item of business is Resolution 1B and this relates to the reelection of Annette Carey as a director. Annette was appointed to the Board on the 1st of October 2025 as an independent Non-Executive Director and her qualifications, background and experience are summarized in the Notice of Meeting. I'd now like to invite Annette to briefly address the meeting.

Thank you, Angus, and good afternoon, everybody. So this month, I joined the Bapcor Board as a Nonexecutive Director bringing more than 35 years of executive, legal, operational experience in logistics, supply chain and security sectors. Before commencing my nonexecutive career, I held CEO roles at Linfox Logistics and Linfox Armaguard and was also the Executive General Manager International at Australia Post. I'll bring practical expertise and operational leadership, supply chain and risk management to the Board with a focus on supporting Bapcor's extensive distribution network, strengthening supply chain resilience and helping deliver improved outcomes for our customers, our team and our shareholders. Some of you may know or may not know that Linfox has a very large network of mechanical workshops, so I also bring customer lens to my role as a director here. I welcome the opportunity to support Bapcor as it continues to implement a robust supply chain strategy to safeguard Bapcor's competitive supply chain and ensure products are in the right place at the right time for our customers. In addition to my role at Bapcor, I sit on the Boards of Sigma Healthcare and Kinetic Group. And next month, I'll be joining down at ADI. These roles, along with my experience as an executive, allow me to support the Board and my Board colleagues and management team to deliver and implement Bapcor's strategy and to drive shareholder value. Thank you for your consideration.

Thank you, Annette. The resolution appears on the screen, and I'll take it as read. Also appearing on the screen are the details of the valid proxy votes on this resolution. I'll now turn to questions, and I'll see if there are any questions inside of the room.

Steve, I know that you've asked us all the same 2 questions. So just following up on Jackie's comments, I went through a very similar process, obviously, spoke to Mark, in particular, the Lead Independent Director about how the process of an Executive Chair and CEO worked. And I also spoke to the other nonexecutive directors on the Board. And I also indeed spoke to Angus about the role and how it was working. And I was satisfied that there was sufficient framework around governance and separation when it needed to be separation and avoidance of any potential conflicts of interest. In terms of holding shares, yes, I plan to do that this month because of what has happened with the trading hold, et cetera, and the information that came to light was obviously cautious about buying shares until we got past the AGM, but it's certainly my intention to do so.

Just checking any other questions from inside the room. Karen, can I ask if any questions online?

Yes, I've got a question from Stephen Mayne. This situation at Bapcor is unusual. We had the mass resignation of 3 independent directors on July 23, and then their mass replacement with 3 new appointments effective October 1. As one of the new directors, could Annette Carey detail her experience with the recruitment process and whether she knew any of the existing directors before joining the Board? And could the Chair detail whether any of our major shareholders, such as Australian Super with 16% were consulted before the public announcement on the personnel being canvased to repopulate the Board in these trying circumstances? It's fine for this to happen, and I'll be voting in favor of all new directors today.

Okay. Thanks, Stephen. So the process was I was approached by the executive recruitment firm that was engaged by the Board to do the search. I had a discussion with them. I had a look at Bapcor obviously, I had been following Bapcor in the financial press, so I was aware of some of the issues. I went through a series of interviews, both with the executive recruitment firm, and I was able to ask questions, get answers to any concerns that I had. I spoke to each of the nonexecutive directors. I spent time with Angus. I then went through another round of interviews and a process of due diligence, were provided with quite extensive information, which took some time to go through. I came back with follow-up questions. And at the end of that process, I believe there are a number of people who were shortlisted, and I was offered the job and I took it knowing that it was going to be a real challenge, but I actually like a challenge. I led a cash business during COVID, so I'm not afraid of tricky times. So yes, in terms of my relationship with other directors, I have known Angus professionally as a customer and service provider in my role, primarily at Linfox. We never met outside our professional relationship, but we would attend meetings to negotiate the rates, particularly for Pacific National as we're one of their biggest customers. So that was always fun. And Kate Spargo, I met several years ago at Sigma. Kate and I served on the Board of Sigma Healthcare together for about 2 years, but I had never met Kate prior to that. So they are the only relationships that I have with members of the Board.

Thanks, Annette. Stephen, to your second -- to the second part of the question, and maybe I'll come back. The second part of the question in regard to the way the directors were selected if you like, so we did use an executive recruitment firm who went to the market and looked for people. There were clearly a lot of names we've got thrown our way. They were all put into that executive recruiter for them to do the initial passing over that. And I can absolutely say no shareholders were consulted. We did not go to our shareholder base, asking for them to make nominations. So Karen, any other questions?

I have another question from Stephen Mayne. Many thanks for embracing best practice transparency and releasing the proxy of votes to the ASX along with the formal addresses before trading commenced this morning. The 90-plus percent support for all resolutions, including Annette's 93% support is relevant given the media campaign activist investor, John Wiley has been running against the Board leading into the AGM. It was great to also guess the head count data showing that only 365 of our 14,521 shareholders engaged with the Computershare proxy voting system. We know now that only 2.5% of the shareholders voted, but those who did collectively own 74.1% of issued capital, showing how corporate voting in Australia is a big investor game with retail shareholders barely participating. What sort of engagement leading into the AGM? Did the Board have with the 7 substantial shareholders disclosed in the annual report, including Mr. Wiley? And the second part, I think Angus, you've answered, did one of them suggest Annette Carey to Board?

So Mark, I want to leave the -- between you and Kate, you led the pre-AGM engagement.

Look, going right back to 2020 when we had a strike against the Rem report, we've realized we have to engage pre-AGM actively with our shareholders. That hadn't happened by the chair previously. So the chair and the Chair of Rem has always engage you with major shareholders and proxies. Obviously, now as we moved into a situation with an Executive Chair, what we've done last year and this year, is we've met with major shareholders and all the proxies, including the ASA, the Australian Shareholder Association. Angus has joined for the first 10 minutes or so to answer any questions. He's dropped off the call, and then it's been left to us as myself and Kate as independents to cover governance matters, to cover rem report, to cover ESG. And so that's what we did this year. And we think that's a good practice. And we answered the questions they had leading into this AGM.

I think just for completeness, those major shareholder engagement included.

Yes, it did include, sorry, I should have said that.

Karen, anything else online?

No further questions.

Thank you. As there are no further questions, I'm going to put this resolution formally to the meeting. Might need to offer a toilet stop along the way here. Although I will jinx myself and say that no planes have landed, that's a good start from noise. So the next item of business is Resolution 1C. This relates to the reelection of Patria Mann as a Director. Patria was appointed to the Board on the 1st of October 2025 as an independent Non-Executive Director and her qualifications, background and experience are summarized in the Notice of Meeting. I'll now pass over to Patria and invite her to briefly address the meeting.

Thank you, Angus, and good afternoon, shareholders. I also joined the Bapcor Board as a Nonexecutive Director this month. I have more than 20 years of nonexecutive experience across ASX listed and financial services organizations. And I will draw on that experience to support the implementation of Bapcor's strategy aimed at improving shareholder value. As an experienced audit committee chair across multiple organizations, I have been appointed as the Chair of Bapcor's Audit and Risk Committee. I will apply my deep expertise in audit, risk and governance to focus on the strengthening of financial discipline, controls, oversight and governance alongside Bapcor's CFO, Kim Kerr. In addition to my role at Bapcor, I sit on the Boards of Bega Cheese, GWA Limited, GDI Property Group. And from these, there are a number of relevant and overlapping experiences that I can bring to the Board. I've considered my workload and confirm that I have the capacity to commit the time required to the Bapcor Board. I also believe my past and current roles provide me with relevant perspectives and insights to support well-rounded Board discussions and decision-making. If elected today, I look forward to being part of Bapcor's journey through its next chapter. Thank you. And while I'm here, I'll answer, Steve, your 2 questions. On the executive chair role, I actually have that on another Board. So despite knowing it's not considered best governance, I know it can work if done properly. So -- and I also did my same due diligence because that was one of my first questions when approached about the Board. And I do believe after my diligence and discussing with all and now being attending the Board meeting and having exposure to the more that it is the right thing to do and the right place for this company right now just to lead us through this period, particularly with the focus that Angus has got on turning every rock and sorting this place out for shareholders. On the shares, absolutely. I always invest in the companies I'm on the Board of. But with the timing of when we were appointed, it was all very last minute and the trading window has been closed. I believe it opens sometime after this meeting. So then we'll have the first opportunity to actually invest. Thank you.

Let me turn to the room again and see if there are any other questions from the floor. No. Karen?

No questions on this item.

Fantastic. Thank you. With that, there are no other questions, I now formally put this resolution to the meeting. Behind me is the screen indicates the position. I'll take that as read, also appearing on the screen are the details of the valid proxy votes on this specific resolution. Thank you. The next item of business is Resolution 1D and this relates to the reelection of Lachlan Edwards as a director. Together with Patria and Annette, Lachlan was appointed on the 1st of October 2025 as an independent nonexecutive director, and his qualifications, background and experience are summarized in the Notice of Meeting. I'd now invite Lachlan to briefly address the meeting.

Thank you, Angus. Good afternoon, fellow shareholders, and I say that partly to answer 1 of the 2 questions that I know I have to answer in that I am already a shareholder of Bapcor. I think I own about 14,000 shares. Let's take that as an approximate number. And it is my intention to acquire more shares. I came off the Board of HPI in February, I think it was of this year when we completed a hostile takeover from Charter Hall. And if you go back and look at the shareholding I had in that, you'll see, yes, I do more than the minimum. So I intend to do so here. And once the window opens in the next day or so, then as long as Angus gives me permission or Mark, whatever the process is, then I will make sure that I might start doing so. I bring extensive corporate advisory, capital markets and turnaround experience to complement the skills of my Board colleagues. I will apply that hands-on experience in capital management, corporate and debt advisory and turnaround to support our management team and perhaps particularly Kim, as they ensure that Bapcor is in the best possible position to restore growth, defend value and improve returns for all of us who are shareholders and stakeholders in this business. Over 35 years, I have held a number of senior roles in major corporate advisory firms including Lazard Australia, Goldman Sachs, both in Asia and Europe, and then in Rothschild & Sons, again, in Asia and in London. In those roles, I've provided advice to the Boards of many public companies in some of the world's most complex situations across a range of industries. Turnarounds are difficult and they require all stakeholders to come together to get through difficult times and create value on the other side. At the center of that is the Board and the management team, and I have had extensive experience in these particular situations. And while I'm at that point, I will answer the other of Steve's questions. the ASA's questions, which is the question about the Executive Chair. It was my second question. My first question as a Board Director was always about health and safety. But the second question was, what is the reasoning behind this. I heard the reasoning behind it and the ability to judge how that works I think, will come with the fullness of time. But what I would say is this, when you're in a restructuring and turnaround of the business and particularly one that's as large and complex as this, communication and understanding between Board and management is incredibly important. And I actually think there's great value in this situation for shareholders and stakeholders to actually combine the two roles. So in that way, I would say, while the general corporate governance principles are right, you do have to look at their applicability in each situation. And my judgment is that this is a situation where it is warranted. And I look forward to seeing it play out, and I look forward to hopefully seeing that turn into benefit for shareholders over time. In addition to my role at Bapcor, I'm the Managing Director of Faraday Associates, which is an independent corporate advisory boutique, which I founded, and I serve as the Chair of a private hospital, Matilda Nepean Private Hospital in Sydney and I'm Deputy Chair of The Bell Shakespeare Company. Until recently, I was on the Board of HPI -- have I run out of that. Maybe that's a sign that I'm talking too long. If reelected today, and I ask your vote, I will partner with my fellow directors to provide the governance appropriate to support the management team as they drive operational recovery, capital efficiency and sustained value for all of us as shareholders and uphold the Bapcor brand as great places for our staff and our customers to come together. Thank you very much.

Thank you, Lachlan. So the resolution appears on the screen, and I'll take that as read. Also appearing on the screen of the details of the valid proxy votes on this specific resolution. With that, I'll turn to see whether there are questions in the room. And Steve, if you want to go again, you're more than welcome. But yes, are there anyone else inside of the room? No. Karen can I turn it to you?

No online questions have been received on this resolution.

Thank you. So I'll now formally put this resolution to the meeting. The next item of business is Resolution 1E and that relates to the reelection of Mark Powell as a Director. Mark was appointed to the Board on the 1st of September 2020 as an independent Nonexecutive Director and was appointed as Bapcor's Lead Independent Director on the 22nd of August 2024. Mark's qualifications, background and experience are summarized in the Notice of Meeting, and I'll now invite Mark to briefly address the meeting.