Chorus Limited (CNU) Earnings Call Transcript & Summary

Good morning, and welcome to Chorus' 2020 Annual Shareholders Meeting. Thank you for making the effort to join us online today. My name is Patrick Strange and I'm Chorus' Chair. I can confirm we have a quorum and declare the meeting open. Like everyone else, Chorus is adapting rapidly to the global pandemic. And like many businesses over the last year, we are doing ever more online, including this meeting. Our preference currently is to have in-person annual meetings, but we all know that was not possible this year. We do welcome your feedback on this meeting, however. The meeting will follow the usual format. The Lumi platform means you have the ability to ask questions and to submit your votes online. You can submit questions at any time. [Operator Instructions] Please note that while you can submit questions from now on, we will not address them until the relevant time later in the meeting. Please also note that your questions may be moderated or, if we receive multiple questions on one topic, amalgamated. Our agenda this morning is a short address from me. We'll then hear from Chief Executive, JB Rousselot, followed by resolutions, questions and voting. My fellow directors are all online with us today: Prue Flacks, Sue Bailey from Australia, Kate Jorgensen, Murray Jordan, Mark Cross and Jack Matthews. We also have our CEO, JB; our Chief Financial Officer, David Collins; General Counsel and Company Secretary, Elaine Campbell; and other key executives. This year saw our broadband infrastructure pass its greatest ever test with flying colors. The COVID pandemic meant New Zealanders were heavily reliant on our copper and fiber networks to keep connecting, working and learning through months of change and uncertainty. Our business and our people rose to the challenge, helping deliver strong operational results and further cement broadband's role as an essential utility. In fact, the Minister for Communications, Kris Faafoi, cited the total reliability and huge capacity of fiber as a key enabler of the health response to COVID by enabling widespread work and learning from home. We have also implemented a range of initiatives to support our broader industry and community. This included $5 million in financial support to our service companies and particularly their subcontractors to help them through the lockdown; and free student broadband connections for unconnected households identified by the Ministry of Education, and there are currently about 12,000 of those connections. COVID-19 has been a very clear reinforcement of the strategically critical nature of our infrastructure. The COVID lockdowns did have a major impact on our own operations, particularly in the field. Our ability to do all but essential services was severely curtailed, including installing fiber, and the ways in which our field technicians could work were heavily impacted. That we could maintain the quality of our service and still achieve the financial performance I will now summarize was a credit to the wider Chorus team. Despite those operational restrictions and the financial impact of COVID-19, we achieved our goal of modest EBITDA growth. For the year ending 30th of June this year, Chorus delivered EBITDA of $648 million and net profit of $52 million. Operating revenue was down slightly from $970 million in the prior year to $959 million. This reduction was more than offset by a reduction in operating expenditure from $334 million to $311 million. We continue to place huge emphasis on cost management and efficiency, particularly as our major build program starts to taper down. It is not easy, and it invariably impacts people on a personal basis as staff numbers fall. Credit is due to JB and the whole Chorus team for their relentless focus on this. This enabled payment of fully imputed dividends of $0.24 per share over the course of the financial year. And the Board anticipates this increasing to $0.25 per share in the current financial year, subject, of course, to no material worsening of the operating regulatory environment. During the year, we celebrated a significant milestone with the completion of the original ultrafast broadband, UFB1, rollout in November 2019. And there are now less than 150,000 homes and businesses remaining to pass in the UFB2 rollout, and we'll finish that rollout by 2022 year. Together, these projects are delivering far-reaching benefits with a growing number of smaller communities throughout New Zealand connected to fiber. Importantly, customer satisfaction for fiber installations continues to increase, reaching 8.1 out of 10 by the end of the year, and that exceeded the target of 7.9 we've set for the year. We still face challenges. The major RSPs still promote their fixed wireless offerings widely. Every technology has its place, including fixed wireless, but fiber is clearly the premier technology for those customers who have it running down the street. This competition does introduce challenges for a wholesaler like Chorus when you cannot sell direct to the customer and your major retailers favor their own, unregulated product. We have met this head on with our active wholesaler program through which we actively promote and incentivize the superior fiber network. We have also invested strongly in raising the bar for would-be competitors by investing in the technology and the unconstrained network, and over 17% of our users are now on a Gig plan. And we have just made our new 2- and 4-gigabit Hyperfibre service widely available. And copper, which still serves roughly 0.5 million New Zealand homes and businesses, is not forgotten. Continued investment will ensure our performance continues to lift with about 200,000 of those customers now on VDSL, which can provide speeds up to 130 megabits. Importantly, we had another excellent year for reliability on the copper network, too. I must now turn to the question of regulation. The Commerce Commission has a large regulation workload in an area that is relatively new to them. We do value the open communication we have with them and the good and constructive relationship we have at all levels. Establishing a new utility framework is not easy, and telecommunications is a much more dynamic market than sectors like electricity that they're used to regulating. Our sector is also complicated by the fact that we're a listed company that was established to fulfill a government contract. We are encouraged by the initial progress they are starting to make in competition aspects, such as recognizing the need to monitor and report performance of products which compete with our regulated service and thus allow customers to make an informed choice as to the service they want. This has some urgency. It's really disappointing to see the reemergence of inertia selling by one major telco in New Zealand, particularly the -- often to senior citizens. I really thought that had been sort of disappeared years ago in New Zealand, and JB will talk more on those aspects. On economic regulation, I cannot be so positive. The things going forward, we differ on appropriate WACCs and the like, but I will not focus on that today. However, I must respectfully say that I think the Commerce Commission are simply wrong on their treatment of historical losses. Their approach materially undervalues the risks our equity investors took at the beginning of the project. So the announcement from the Commerce Commission 3 days ago, while perhaps expected, was extremely disappointing. The fact that our shareholders had already priced that decision into our share price does not make it any better. Let's not underestimate just how risky UFB was. It required billions of dollars of investments in fiber well ahead of demand. Success was in no way guaranteed. These major infrastructure programs are bloody hard, and most of them end up well over time and well over budget. We've all seen it, be it on city rail projects or the Transmission Gullys of this world, hospitals and so on. Chorus investors were willing to take on that risk in 2011, and Chorus has delivered. Through a period of high construction inflation and other headwinds, the fiber network has not only been delivered on budget and on time, but has achieved takeup of up to 60% to date and rising against an initial target of 20% by 2020. And New Zealand has benefited massively, to the envy of many other countries around the world. I have some pain reading the Commission's decision, and it's based on screeds of academic arguments which we all struggle to follow. The academic arguments are really just that, academic. It is simple, really. The international investment community all tell us the same thing, they have known how we were going to be treated at the end, they would never have invested at the outset. That means we will never be able to do another Chorus to address our infrastructure deficit in New Zealand. International investors will just not take this risk in New Zealand again, and the future financing of New Zealand infrastructure will require, essentially, government underwrites of the risk before they start, and we're already seeing that on some potential properties. It does remain my sincere hope that the Commission sees the bigger picture and looks for ways to reverse the damage done, or else, the whole country will pay -- will be worse off in the long run. Moving on. As we look to the future, the Board continues to evolve and refresh. During the year, one of our founding directors and the deputy Chair, Jon Hartley, stepped down. Jon's contribution over many years was enormous, not least during the testing period after the copper pricing debacle, and he stepped down with the Board's sincere thanks. Today, Kate Jorgensen is standing for election, having been appointed by the Board through the year, and she stands in accordance with NZX listing rules. Kate has extensive experience and has held a number of senior leadership positions within the telecommunications, infrastructure and construction industries in New Zealand. And she is unanimously recommended to you by the Board as an independent director, and she will address you shortly. Another of our founding directors, Prue Flacks, is also standing for reelection today, in accordance with NZX listing rules. You'll hear from Prue shortly. But I would like to acknowledge that in the spirit of continuing to refresh the Board, she has told me it is her intention that if elected, this next year will be her last as a director of Chorus. Thank you, Prue, for all you have done for this company. And finally, Jack Matthews is also standing for reelection in accordance with the listing rules. You will hear from Jack shortly, too. Prue and Jack are invaluable members of this Board. During the year, we made a seamless transition to a new CEO, JB Rousselot. Mark Ratcliffe did a great job as the founding CEO, and Kate Mackenzie made a huge difference in her 3-plus years, as you all saw. JB has picked up the mantle without a hiccup, well supported by a great team. Over to you, JB.

[Foreign Language] And thank you, Patrick, and good morning, everyone. It's hard to believe that it's almost a year since I've joined Chorus, and it's even harder to comprehend what we've been through together in that time. COVID-19 has turned the world on its head. It's challenged economies and societies, but it has also shown the extent of New Zealand's foresight in 2011 when it chose to build a fiber-to-the-home network. When the country had to enter lockdown in March, the substantial investments that we have made in broadband capacity meant that many New Zealanders could continue to work, learn and connect from their homes. We had bolstered our fiber network capacity in 2019 to cater for streaming demands ahead of the Rugby World Cup. As it turns out, that was just a dress rehearsal. In March, lockdown broadband traffic set peak time records that were higher again as people turn to online streaming in their droves and kept connected with their whanau online. The second lockdown was just in Auckland, but it generated almost the same volume of traffic, helped by streaming services like Netflix not restricting the quality of their service. Daytime network traffic has also changed forever as working from home became accepted practice and as we all embraced video conferencing applications out of necessity. In September this year, average monthly broadband usage was 380 gigabytes, up from 279 gigabytes at the same time last year. And the average usage on fiber was 456 gigabytes, up from 360 gigabytes last year, and that's a staggering increase. Without a doubt, 2020 was the year that proved broadband networks are essential infrastructure. COVID-19 has meant many countries are now waking up to the need for the capacity and performance of fiber broadband. We've seen a flurry of announcements from network operators in countries like the United Kingdom, Germany, the Netherlands and Switzerland, all pledging to invest in building more fiber network. And just across the Tasman, the National Broadband Network has recently announced that they'll spend $3.5 billion to make fiber available to 2 million more homes. So fiber is well and truly on trend. One of the less-appreciated aspects of New Zealand's fiber rollout is the extent of the coverage being provided. In November 2019, we completed our original fiber contract milestone of taking fiber to 24 of the larger towns and cities. Under the UFB2 contract, we're taking fiber to smaller communities as part of the wider goal to take fiber to 87% of New Zealanders by the end of 2022. The government says fiber is already available to about 83% of Kiwis. And as the slides showed, we're well ahead of most European countries. New Zealand communities with just a few hundred homes, like Kumara or Granity on the South Island's West Coast or holiday hotspots like Hahei and Waihi Beach in the Northern Island, can now get better broadband than large parts of Sydney or London. And these are fantastic outcomes, and they are a testament to what can be achieved through public-private partnerships for infrastructure investment. In August, we announced further partnerships with the government to take fiber further. More than 300 kilometers of fiber are being built from Fox Glacier to Lake Hawea and from Te Anau to Milford. As well as lighting up more gigabit communities, these new links will provide enhanced network redundancy for the lower South Island. COVID-19 has undoubtedly helped New Zealanders realize the benefits of a fiber connection at home. Fiber uptake in the areas where we've made it available is now 62%, up from 55% at the same time last year. Invercargill is leading the way on 74%, and Auckland is close behind on 70%. These are really impressive numbers, and they would probably put us in the top 5 for uptake among European countries. What's even more impressive is the rate at which New Zealanders are embracing 1-gigabit plans. About 17% fiber connections are now on 1 gigabit, and that's up from 11% at the same time last year. The number of customers taking our lower speed, 50-megabits plan, has begun to decline because consumers now attract greater value to higher speeds, and the market proposition for fiber is evolving. Some retailers no longer offer the entry-level plan, and we have recently reduced the price of 1-gigabit plans. This price change is part of our active wholesaler approach where we have our own strategies to promote faster uptake of fiber. One of the great things about New Zealand's fiber ecosystem is that Chorus' role as an independent wholesaler has enabled the emergence of a diverse range of retailers. This growing diversity means consumers are benefiting from sharp retail offers with a range of different customer propositions. Small retailers are focusing on things like customer service. Electricity retailers are bundling broadband with power. And Sky TV plan to enter the broadband market next year, replicating a strategy that has proven very successful in other markets. We're taking the view that we can't just leave it to retailers to promote fiber. There are still about 470,000 customers who could connect to fiber today but haven't done so yet. And mobile network operators have economic incentives to promote alternative wireless technologies to their existing fixed line network customers. In recent months, you may have seen us taking a bigger role in encouraging awareness of fiber. A few months ago, the then Communications Minister described fiber as the highest standard for Internet connectivity. We think he's right. Our fiber, it's how we Internet now campaign, focuses on how fiber can resolve many of the issues that we've all experienced on other technologies: things like glitching during video conferencing, websites loading slowly and the frozen buffering wheel when watching programs online. The Commerce Commission's broadband monitoring report has highlighted the strong performance of fiber relative to other technologies when it comes to features like latency, speed and two-way traffic. VDSL is also shown as performing better than wireless at peak times. And despite this independent evidence, wireless broadband providers are not required to disclose the expected performance of their service. For me, this is one area of New Zealand's broadband regime where consumer protections are falling short. In Europe and Australia, broadband providers for fixed and wireless networks have the same standard of product disclosure. In New Zealand, only fixed line broadband consumers are told exactly what they're getting. This difference is concerning when we are fielding constant reports of consumers being automatically transferred to a wireless service if they don't contact their telco provider to object within a certain time frame. From the complaints we're receiving at our community meetings in fiber rollout areas, many consumers do not seem to understand the true nature of the change in their service. Many were given the incorrect impression that they had to change because of an imminent shutdown of the copper network, and some have even found themselves downgraded from faster VDSL services. So we'll be raising these consumer concerns and the clear gap in disclosure as part of the Commerce Commission's wider review of consumer issues within the telecommunications sector. Our foremost priority is to win in our core fiber business. To that end, we've set ourselves a goal of achieving 1 million fiber connections in 2022. We're making good progress and are approaching 800,000 total fiber connections. In the 3 months to the end of September, we added 33,000 connections. We've ramped up our managed migration program to lift connection intensity across our existing footprint. This means more doorknocking and targeted marketing to meet our FY '20 (sic) [ FY '21 ] installation forecast of between 145,000 to 165,000. The strength of this migration activity is evident from our Q1 numbers. We drove more than 15,000 installations and about 7,000 connections in Q1. And by stimulating installations in this way, we're achieving about 50% uptake within 6 months of the installation. And we're also very pleased that our focus on customer experience in prior years is continuing to yield positive results. Last year, we lifted our customer satisfaction for fiber installations from 7.7 to 8.1 out of 10, and that was ahead of our target of 7.9. This year, we're tracking at 8.2 for the first few months of FY '21. We're continuing to aim higher, and we're now focusing on things like the switching experience when customers shift into a home where fiber is already installed. Related to this, we continue to embrace digital tools in our push to streamline our processes. Ultimately, efforts like improved fault diagnosis simultaneously improve customer experience while also helping us and our industry partners to reduce our operational costs. The other aspect of customer experience that we're paying close attention to is the broadband experience in the home. Our new WiFi-capable optical network terminal will potentially remove the need for retailers to recover the cost of a separate router and will remove the need for consumers to wait until the retailer's router is delivered. This should help make moving premises or changing retail providers a seamless experience for consumers, much like it already is for electricity consumers. We already have more than 250,000 WiFi-capable terminals installed in homes, and we will be switching the WiFi capability on before Christmas. We're also excited about the potential of new WiFi technology. While there is a lot of marketing hype about 5G, fiber is already widely available and WiFi 6 devices are now on sale. And when you connect fiber with a WiFi 6 device, you're going to have substantial boost in WiFi capacity and speed within your home or your business. At the same time, we'd like to see New Zealand follow the lead of governments in the U.K. and U.S. where large amounts of new unlicensed spectrum capacity is being released in the 6-gigahertz range. Commentators are describing this as the biggest advance in WiFi in 20 years. The 6-gigahertz spectrum helps reduce interferences between devices and, when used with 6-gigahertz-capable devices, delivers stronger signals and gigabit speed. And that will further benefit fixed line broadband users and smartphone users whose service default to WiFi. And as you can see from the slide, fiber just keeps getting faster. We've just made our 2- and 4-gigabit Hyperfibre services available to about 3 million New Zealanders, and we've also already been testing an 8-gigabit service. Finally, another understated aspect of our transition to fiber broadband is the environmental sustainability benefit it brings. Fiber-to-the-home broadband networks use significantly less power than copper and wireless networks on a power per subscriber basis. As the chart on the slide shows, fiber uses about 12x less energy than VDSL or ADSL. This is because data is transmitted by light and we no longer need electronic equipment in streets to power broadband transmission. The resulting drop in power usage, once most people have migrated to fiber, is expected to help us reduce our network-related carbon emissions. And as we've seen through the various pandemic lockdowns,, by enabling people to work from home, broadband is also helping New Zealand realize the emissions-related benefits of reduced travel. The Energy Efficiency and Conservation Authority has estimated that if 1 in 5 New Zealanders opted to work from home once a week, it would prevent 84 kilotonnes of carbon dioxide entering the atmosphere every year. So fiber is well and truly helping New Zealand realize a better socioeconomic future. Chorus is proud to play a big role in that evolution. Thank you, and back to you, Patrick.

Thanks, JB. We now come to the resolutions outlined in the notice of meeting. We have Prue and Jack return as [ director ] at existing rules and standing for reelection. And we have a new recently appointed director, Kate Jorgensen, standing for election under the NZX listing rules. The Board unanimously supports their reelection and election. A rich bio for each director standing for reelection or election was included in the notice of meeting. The fourth resolution relates to the fixing of fees and the expense of our auditors, KPMG. Now voting today will be conducted by way of poll on all items of business. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. Then if you are eligible to vote at this meeting, a new polling icon will appear. Selecting this icon will bring up a list of the resolutions and present you with voting options. To cast your vote, simply submit one of the options. There is no need to hit a submit or enter button as a vote is automatically recorded. You do, however, have the ability to change your vote up until the time I declare voting close. So I now declare voting open on all items of business. The polling icon will soon appear. So please submit your votes at any time, and I will give you a warning before I close voting. I and my co-directors intend to vote all undirected proxies we hold in favor of the resolutions. There will be an opportunity to ask questions on each resolution. [Operator Instructions] You can also ask general questions and we'll address those after the resolutions. Let's move to Resolution 1, the reelection of Prue Flacks as Director. I invite Prue to address you. Prue?

Thank you, Patrick. [Foreign Language] Good morning, ladies and gentlemen. The past 8 months have reinforced the importance of reliable Internet infrastructure as New Zealanders have been required to adapt how they work, manage their daily lives and interact socially. The performance of the Chorus network has been outstanding, and I'm very proud of the way our network has supported New Zealand through an immensely challenging period. That said, we are not complacent, and the role of your Board is to ensure the company remains focused on supporting our communities, delivering on our strategic objectives, including responding to competing technologies, and continuing to create value for our owners. I have been a Director of Chorus since its demerger from Telecom New Zealand 9 years ago. During that time, Chorus has successfully completed the original UFB rollout and is well on track to complete UFB2. Chorus is now recognized as the key infrastructure provider of an essential utility, which has been so important in enabling us all to continue to operate our lives during the COVID-19 pandemic. I'm a member of the Nominations Committee and also of the People, Performance and Culture Committee, which we call the PPCC. And I just want to comment briefly on the role of the PPCC. Our people are at the heart of Chorus' success as an organization, and considerable Board and executive time goes into ensuring that we have the right environment, tools and culture to enable our people to perform to the best of their abilities. This investment enabled our people to rapidly transition to working from home during lockdown. And although employee engagement remained high over this period, we will continue to look for opportunities to improve our flexible working options as COVID-19 has unquestionably influenced the way organizations will work going forward. The PPCC also oversees the initiatives which Chorus has to increase inclusion and diversity within our company. In addition to flexible working, we are focusing on increasing gender and ethnic representation amongst our people leaders and closing any gender pay gaps. The wellbeing of our employees is a priority and a particular focus during COVID-19, and we have a comprehensive wellbeing program to support this. About a year ago, I passed the baton of chairing the PPCC to Murray Jordan. And I mentioned this deliberately because just as the Chorus business is transitioning from a network builder to a network operator, it is important that we refresh our Board and committee composition to ensure it remains fit for purpose. I'm standing for reelection as a director as I believe my skills and experience enable me to contribute as the collective Board skills are refreshed. However, as the Chair has noted, it is my intention to stand down at the ASM in 2021, and I am seeking your support for reelection on that basis. [Foreign Language]. Thank you very much.

Thank you, Prue. Have we received any questions for Prue or on Resolution 1?

I confirm we've received no questions on Resolution 1.

Thank you. I will now move as an ordinary resolution that Prue Flacks be reelected as a Chorus Director. If you've not done so already, I ask shareholders to vote on Resolution 1 using Lumi. Moving on to Resolution 2, the reelection of Jack Matthews. I invite Jack to address you. Jack?

Thank you, Patrick. [Foreign Language] Good morning, everyone. I am seeking reelection today, having first been elected in 2017. It's a privilege to be a part of the Chorus Board, and I'm pleased to have the opportunity to seek your support for my reelection as an Independent Director. I've been a strong believer in the social and economic benefits of broadband technology for a long time. In fact, my first executive role in New Zealand as Chief Executive of Saturn Communications was building the first broadband network in Australasia, in Wellington and Christchurch about 20 years ago. The importance to New Zealand of the broadband infrastructure that Chorus builds and maintains has been clearly demonstrated this year. Our network has enabled Kiwis to work and learn online and stay connected during a very challenging year. The resilience of both the network and the team of Chorus people supporting it has been impressive. It's vital that we continue to focus on the performance and growth of Chorus as we transition from building to operating this essential infrastructure as well as providing a stable infrastructure platform to support our communities. Our fiber network provides data capacity and capability that will help drive New Zealand's economic recovery while supporting new and emerging services. Prior to a movement to governance a few years ago, I had more than 20 years of broad corporate experience in New Zealand and internationally, meeting companies at senior levels. I was the Chief Executive of Fairfax Media's Metro Division in Australia. Before that, I was CEO of Fairfax Digital, COO of Jupiter TV in Japan and CEO of Saturn, then TelstraSaturn based in Wellington. I'm currently the Chair of MediaWorks and a Director of both Plexure Group and New Zealand Golf Network Limited. I'm a former Director of The Network for Learning, APN Outdoor Group and Trilogy International. And I'm also a former Director of Crown Fibre Holdings, a key government stakeholder and partner of Chorus. While my previous roles were in different industries, the common themes of utilizing technology and understanding the increasing demands on new technology are themes and issues where I have strong experience. This experience helps me support and challenge management in assessing the performance of the company and contributing to making the right investment and development decisions to increase shareholder returns. Recently, I moved on to the Audit and Risk Management Committee from the PPC, so I bring a fresh perspective and set of skills to the work that, that committee carries out. Ultimately, my primary focus is aligned with yours, as shareholders, to see Chorus grow over time. In my view, this requires a real focus on operational excellence and the management of key relationships with customers and stakeholders. With your support, I look forward to continuing to work with my fellow Directors and Chorus' strong management team to achieve these objectives and continue to provide value to you as shareholders. Thank you.

Thanks, Jack. Have we received any questions for Jack or on Resolution 2?

I can confirm we've received no questions for Jack or on Resolution 2.

Thanks. I now move as an ordinary resolution that Mr. Jack Matthews be reelected as a Chorus Director. If you haven't already done so, I ask shareholders to vote on Resolution 2 using Lumi. We now move to Resolution 3, the election of Kate Jorgensen as Director. Kate?

Thank you, Patrick. [Foreign Language] Good morning, shareholders. It was a privilege to be invited by the directors to join the Chorus Board, and I'm pleased today to have the opportunity to now seek your support for my election as an Independent Director. I'd like to briefly address how I got here, why I'm here and what I can contribute as a Director of your company. Firstly, as a new Director, I think it's relevant to you as shareholders to know how I came to be appointed. Having identified the specific skills required for this Board appointment, the Board undertook a broader director search through an external search firm. And after a number of meetings, I was fortunate to be appointed by the Board earlier this year. Secondly, why do I want to join the Board of Chorus? The importance to New Zealand of the infrastructure that Chorus builds and maintains can't be overstated. The COVID-19 pandemic has meant New Zealanders have been heavily reliant on our copper and fiber network to keep connecting, working and learning through months of change and uncertainty, and we will continue to look for opportunities to help New Zealanders stay connected in this new COVID environment. As we move into a world of flexible working, online education and video conferencing, the need will only increase for faster and more reliable connectivity, connectivity provided by Chorus infrastructure. I was particularly pleased we could play a part in supporting the wider community by helping the Ministry of Education identify about 12,000 households that needed a broadband connection to help students keep up with their schooling during the pandemic. Lastly, what can I contribute to the Chorus Board? I had significant financial audit, governance and commercial experience working within the telecommunications, infrastructure and construction industries in New Zealand. Most recently, I was CFO of Vodafone New Zealand. Prior to that, I was CFO of KiwiRail, CFO of Fletcher Building's infrastructure division and a senior audit manager for KPMG. I see my experience as adding strategic value to Chorus as it transitions from a highly successful build phase into the next stage of its corporate journey. I've been appointed to the Audit and Risk Management Committee and look forward to bringing my combination of skills and experience and fresh perspective to complement and strengthen the Board's existing skill set. As a former Advisory Board member of the New Zealand Sustainable Business Council, I also value the role Chorus network can play in enabling New Zealanders to lead sustainable lives through things like reduced commuting and improved digital access and flexible working practices. In these extremely challenging times, I'm keen to ensure that Chorus continues to enable New Zealand to thrive. With your support, I look forward to working with my fellow directors and Chorus' strong management team to achieve ongoing success. Thank you.

Thanks, Kate. Have we received any questions for Kate or about Resolution 3?

I can confirm we've received no questions for Kate or on Resolution 3.