Cobram Estate Olives Limited (CBO.AX) Earnings Call Transcript & Summary

All right. Welcome, everyone. It's to have a seat. There's still seats up the front, all those at the back who aren't sitting. We're going to be here for 3 or 4 hours, so be comfortable. It's so humbling to see so many people here, incredible just I think there's 163 shareholders registered plus staff, plus friends. And I'm not sure if you're here to listen to us or for the lunch or for the free bottle of Olive when you leave. But regardless, we're very pleased to see you all here. I'm Rob McGavin, the Non-Executive Chair and Co-Founder of Cobram Estate. And I would like to have a call out to all of our wonderful staff who have made today possible building this room. Next door is where we're having lunch. Today will be reasonably straightforward. You'll hear from myself first, then our co-CEOs, Leandro and Sam. We'll then do the formal part of the meeting and questions. We'll then do a tour of all of these facilities. So you can see it, then we'll have lunch, and then you can all leave. So we do, as normal, have people joining online and on the phone. So we welcome them as well. I'd also like to introduce our directors. So our 2 co-CEOs are both -- they could be co-managing directors. In fact, they're both directors of the company. They're long-standing employees. Leandro is something like 24 years and Sam, something like 15 -- 16, sorry, just corrected me. Every year is important. The -- Sam is the -- I suppose, the finance commercial side of the co-CEOs, and they were both in Australia, but the U.S.A. has become so important that Leandro has kindly upped his family and Lauder is here. So please say hello, who's Leandro's wife. And kindly, for the sake of all of us, Leandro has unselfishly moved from a very beautiful apartment in Geelong overlooking the water to quite a small apartment in Downtown Davis to run the U.S.A. business, and we're just so appreciative. Leandro is our sort of our technical come all of expert, and you'll hear from both of them. Our nonexecutive directors on this side, we have Craig Ball, who's actually been with us since day dot as an investor on our Advisory Board initially and then joined the Board when we corporatized in 2005. Craig is from Adelaide and he chairs our Remuneration and Nominations Committee. We have Toni Brendish, who's from Sydney, who's been on the Board since 2021, had a lot of -- around '22. And she's being reelected today. So there'll be lots of things said about Toni, and you'll hear from her, but she lives in Sydney. We have David Wills, who's from Melbourne, ex-Head of Private Clients, PwC. He's not being reelected today. So I'll have to tell you about him, but he lives in Melbourne and a great asset to our Board. Dr. Joanna McMillan, who joined our Board in around 2021 as well, lives -- comes from Sydney and Joanna is on our Safety and Sustainability Committee. I should have mentioned that Toni chairs our Safety and Sustainability Committee. She also is on our Remuneration and Nominations Committee and on our Audit and Risk. David chairs our Audit and Risk, and Joanna is on our Safety and Sustainability Committee. Also welcome Hasaka Martin, who is our Company Secretary, who attends Board meetings and is full of knowledge, all things, governance. The -- I'd also like to welcome Anika [indiscernible] from Deloitte, who's our audit partner; and Andre Larson, is Andre here from CBA. Maybe you didn't -- yes, he's here. You meant to be up the front of the seat here. Anyway, don't move now. Also Shane Bilardi, who is from DLA Piper, been a long-time partner who's looked after Cobram, and it's been a great relationship. We also have our share registry here representing us who will oversee the vote. And if you have any questions, please feel free to see them. They're scattered around. A little thing about participating in the meeting. If you have a yellow card, it means you are a shareholder and you've chosen to vote using a paper voting card. If you have a blue card, you're a nonvoting shareholder. And both yellow and blue are entitled to ask questions and make comments at the meeting. If you have a red card, you're a visitor and if you have a green card, you're from the media. Although I don't think you're formally meant to ask questions and make comments, I'm sure that it will be fine if you have some burning ones or if you want to say something very nice about management. And for all those shareholders who have already voted, thank you very, very much. The poll is -- sorry, and those online, to vote, you need to click on get a voting card and then follow the instructions. Of course, you can ring the registry if you have any issues. The poll is open now, and you can vote at any time, and we'll remind you of all that later because voting is why you're all here. It's 27 years since Paul and I started this tiny little humble business as it was then. And it's been a really long journey of many ups and many downs. But one thing we have, I suppose, had is incredible shareholder support from day 1. We've -- those shareholders make up a big percentage of our existing shareholder base that invested in 1999, 2000 and 2001. There have been a few capital raisings along the way, but it's -- we're just so proud and humbled that we've been able to build this Australian company over the last 27 years to be in the ASX 300 now. Hopefully, we stay for a while or we move up. And that we've been able to do that from scratch without raising very much money. So those who have been with us on this journey have done extremely well, and they deserve it because patient capital is very hard to find. And growing olives, you need to be patient. The old saying, you grow a vineyard for your children and olive grow for your grandchildren. So -- it is starting to speed up, I hope, but it is so nice now to see the platform that we have and the competitive advantages we have, both in Australia and in the U.S.A. 2025 was a pretty successful year, both in terms of record EBITDA profit and cash flow. I won't go through and tell you all of those numbers because you'll hear that from Sam, and he's got some pretty charts, so it's a lot less boring than me articulating it. But I would like to just remind shareholders that operating cash flow is a really important way to understand our business and our business performance because adjustments -- noncash adjustments and accounting profits based on how much oil is in the tank from your harvest in that year is very important. But of course, it doesn't tell the true story and we manage -- our customers don't just say, "Oh, you've had a harvest, we'll buy that tomorrow." Our customers buy every single day. So operating cash flow sort of smooths out the on years, the off years and how everything is happening. So that's something to keep in mind because we had -- next year will be a smaller profit this year and an off year, although it won't be massively different, we're hoping. We are still subject to the accounting treatment of what's called biological assets, which in this case is the oil in tank at 30 June that's come from our groves. Interestingly, if we bought the oil from someone else, it needs to be valued at cost. But from our groves, we have to -- even though it's cheaper than buying from someone else, we have to value it at what we sell it for. So that's why it's recognized in the year of harvest. Looking at this year and probably on everyone's mind a little bit is that we've come through a period in the last few years, and there's been a bit of commentary around and of course, it's been tailwinds that there's been a global olive oil shortage due to droughts in Spain. There's been record olive oil prices due to that shortage. And how would Cobram perform when things got back to normal. Pleased to say that things are reasonably back to normal, or maybe not so pleased about that, but very pleased that we're performing well. So the price is back to sort of more historic levels. The supply is also back to more historic levels. The discounting that you're seeing in supermarkets and the out of stocks and those sort of things are nonexistent and back to more normal levels with some pretty heavy discounting. And pleasingly, we're still seeing growth in Cobram Estate. And although where we've sold something like 20% of our oil because we've been so short of oil over the last period, and that continues now, 20% of our oil from our Australian harvest was sold before we even finished harvest, so before 30 June, which then again restrains sort of this year. But we're expecting full year sales to be flat with Cobram growing. And the important a bit about that is that Cobram is our flagship brand. It's by far our biggest brand. And it's more expensive. And it's more profitable, obviously. So seeing Cobram grow just cements our confidence that consumers know they need to buy high-quality extra virgin olive oil to get good value. If they just want to buy something cheap, they'll get ripped off. And we've been saying that for a long time, but it just supports that with the heavy discounting, Cobram is still in growth. So that's a great achievement. The last couple of years, as you would know, if you've -- and for new shareholders, but we've -- we spent a lot of money and it's starting in 2012 with replanting a variety called Bona, which was 70% of the growth we purchased from Timbercorp and something like 30% of our own growth. We replaced every single one of those trees because we can have better producing varieties, which will have cheaper oil in the long term. It came at a big cost. Even the last 5 years, we've spent $250 million on 2 strategies. One is increasing supply in Australia with replanting those unfavorable varieties and planting new groves, all of which comes at a big short-term cost, but long-term gain of lower cost production, higher profits. And also the U.S.A., which we're really excited about, and we'll talk a little bit about today. By the end of 2027, we hope to have 3,600 hectares planted that's our own groves and our own balance sheet in California. California produces around 95% of the America's total production because nearly everything is growing in California. However, California is only about 5% of the market there and growing quickly. It's sort of similar to how Australia was going back 30 years ago. And an important part of our strategy over there. So that 3,600 hectares in the medium to long term will supply another 9 million liters, but that's on top of our existing third-party growers who we have them contracted. We're working to contract more. They're a very important part of our strategy over there. And we like to think and we're confident that our growing methods and the way we can have high-quality oil at a lower cost of production with a lot more volume than our competitors flows on to those growers. So we're extremely transparent with those growers with regards to how well olives will perform on where they would like to plant them because sometimes they're pulling out other crops. And the most important thing, as we always say in our business is production. You can do the best job on marketing, you can get 10x the price in marketing, if you're just incredible, not that we do. But I'm not saying we don't do a good job. But if you don't produce the olive oil, you get 0 for it. So if you get 20% more, that's great. But if you didn't produce in the first place, you get nothing. So production is just way more important in our business as a driver of profit than anything else. Now I'm not saying the brands aren't important, but you can sell olive oil anywhere. The price you get can vary, half and double, but producing it is critical. And if you go to the wrong climate, you'll get or you don't even know you're doing, you'll just get less than half what we produce. And you can imagine how high your costs are if that's what's happening. So that's what we're doing in the States with increasing supply, both our own groves and growers and working closely with them to ensure that they know the limitations on their grow if they're planting olives so that we can make them profitable because we all know in any industry, everyone needs to do well. The grower needs to do well. The miller needs to do well. The brand needs to do well, the retailer needs to do well. And ultimately, the consumer needs to do better than everyone with high-quality value proposition. So nothing is very different in the U.S.A. to Australia. And what works pleasingly, what works over there or what works here, works over there. And every time we stray from that, we run into hurdles. It's the second biggest market in the world, the U.S.A. People often say, why do you go to the U.S.A. There's less barriers to entry, even though there's a few more now than there was since Donald Trump came in. But there's certainly a lot more ease of doing business, the sovereign risk, you're not in another country that doesn't speak the language that everyone else is there. We know how to grow olives. It's a very easy thing for us to do, and I don't say that lightly. And so it's -- the risk is not high us being in the U.S.A. It's just what works here, works there. We've been there since 2014, where you grow them, how you grow them, the varieties you grow, the climate is incredible. Finding the sites is a little bit more tricky because of the micro climate in U.S.A. because of the high mountains and other things. But it's certainly producing the olive oil is not something that keeps me awake at night at all. And it's such an exciting market that also doesn't keep me awake about how we'll sell it. A couple of things on what makes our business unique. And there's so many things that we do and so much noise in every business, and it's very easy to get completely bogged down in data and just not even see the real picture. But I think the Oliv.iQ that's been developed by Leandro and his team over the last 24 years with a lot of research, 30 peer-reviewed research papers that's been published, not only the other 100 or so that have done internally that no one knows about has given us this incredible advantage, which is I don't think in any other agricultural industry, not even by stretch. And the key pillars of productivity, quality, sustainability and low cost of production. And this system allows us to produce the highest quality olive oil in the world, talk top 5% with the lowest cost in the world, talk bottom 5% of cost. And that's an oxymoron in most industries. Usually, if you're the highest quality, you're the highest cost. So it's an incredible advantage. We have 60% high yields, 60% higher yields than the top 6% of individually producing groves anywhere in the world, and we have 9x the global average. And with that comes some great benefits around water use and other things. And our -- I think there's a point around our third-party growers and how important it is to -- if they partner with us, they can get access to the way that you can do things better to have higher quality and lower cost and more production. But over a 3-year period, we managed to increase production per hectare in the U.S.A. with 2 of our key grower partners by more than 80%. And that's just something you've got to sell versus you got nothing to sell. So prices, secondary production, I'm not saying that price isn't important. We use -- because of this system, we use 37% less water, 63% less phosphorus -- sorry, 61% less nitrogen and 82% less phosphorus per liter of olive oil produced than the global average. So although we have inputs from our growers, when you divide it by the liters we produce, we're very water efficient and fertilizer efficient, which means sustainable. We're also a net carbon sink because we grow the olives and that sequesters carbon and offsets all of our carbon emissions. The quality is also really important, not only because it drives the consumer experience and value through health and flavor, but also because it's very difficult to walk the -- sorry, talk the talk, not walk the walk. And every olive oil brand in the world effectively has disappeared over time because of rip consumers of milk the brand. So we just focus on quality, quality, quality. Oliv.iQ allows us to do that. And we're lucky to have such an incredible technical team and also should manage Claudia, who manages this site in the laboratory who supports Leandro greatly in that side of things, but it starts with the growing, the milling, crushing every olive within 4 hours and all the things that we do over the journey to learn how to have high-quality olive oil at a lower price. And the science is just so clear that the health benefits are in the micro in the freshness of the oil and the antioxidants in the oil. And so that's where our focus is. And I think that's why as we talk about it and as consumers learn more, we seem to do better. And every day, there's a lot of tailwinds in our business. Every day, there's another article around -- around long-term chronic disease prevention, health consuming high-quality extra virgin olive oil. And sadly, every day, there's another article around about either adulterated olive oil or how highly refined seed oils are bad for your health. So we do have some incredible tailwinds. It's not all just us being great. And our people, it goes without saying there's just some incredible people here who have been here a long time. And if they're not incredible, they don't stay very long. So you can be assured that anyone here is incredible. But we -- and I go on -- it's dangerous territory to name a few individuals, but I really would like to name a couple who are key. Claudia, who runs this site and is Head of our labs and research and just a highly -- just a fantastic leader and has a wonderful team under her lover. Ruth Sutherland, who manages all of our groves in Australia lives at Boort, manages all of the plants, the processing plant, the groves, the staff across 3 sites. She -- it's probably a $40 million budget that she oversees there with hundreds of people for those of you who have been to Boort and seen our Open Dale Boundary Bend, you'll know, but Ruth is an incredible person and it's so lovely to have her as part of the team. We have a couple of guys who have gone to the U.S.A. One is Nico Urbin, who's Head of Sales and Marketing over there. He was here, uprooted again his wife and small child to go to the states for our business. He's doing a really, really good job. Conor Churchin, who was our operations type guy here, Paul Ruth had to leave him -- had to let him go, but he was running our processing plant. He and his fiancée moved to the States, again, doing a fantastic job planting all these thousands of hectares of olives that he was involved with here in Australia and with processing. In the U.S.A., it's slightly different. Our operations here are very spread out. But in the U.S.A., everything is basically within 20 minutes. Our bottling site is the same site as our processing site is the same site as our head office and laboratory. So it's probably -- I won't say easy to manage because that will be disrespectful to Leandro because I'm sure it's not. But basically, on the way to work, Leandro is 12 minutes from the office where he lives, and he can look at our groves on the way in our young trees. It's all very easy, whereas I know here, he would leave at 2:00 a.m. to be at the groves at daylight to look at the groves and do that because he had something else. So I just think it's probably slightly easier from that point of view and definitely more central. We're only 15 minutes from Sacramento International Airport, and that's the capital of Argentina -- sorry, of California, big mistake. Argentina is going very well at the moment. So Anabel Godino, who is our CFO, who's just come back from maternity leave and obviously, the finance function does a huge job at supporting the rest of the business, and it's a very important part. Brent Crosbie, who is Head of Sales and Marketing, he attends all our Board meetings, Head of Sales and Marketing for everywhere. Nico reports to him in the U.S.A. [ Zoran ] reports to him here in Australia. Sorry, there's so many others, and that's a bit dangerous, but there's -- I don't want you to think it's just us 3. It's -- there's a whole team doing a great job, and we're really, really appreciative. Another thing that's probably different about our business that we really keep reminding ourselves of that we just focus on olive oil. I always say it's really hard to be good at one thing, little only 2 or 3. So table olives or other crops that, of course, we could do it, but we feel that -- and we are critical of people who have read the first chapter of every book, and we would just like to think that we've almost written the book, and that's our focus and everything we do without dragging people in different directions. So I think that's a big advantage. Having the loyal brands is incredibly important so that we're not price takers. The other thing that I think is great with our business is that what we grow in Australia, we principally sell in Australia and what we grow in California, we principally sell in the U.S.A. And that reduces a lot of variables from supply inputs, currency movements, logistics. We saw what happened in COVID. And it allows you to just be really engaged and know what's happening with your customer. So we are unapologetically focused on that because it's easier, but it's also the right thing to do. We've got a lot of tangible assets. In Australia, we produced 70% of Australia's olive oil. I think in the U.S., we're producing something like 35%, but that will grow extremely rapidly over the next few years as a percentage. So that's exciting. $975 million roughly of tangible assets, excluding our brands. So we -- our earnings are one thing, but it's backed by farmland, which also makes you sleep a little bit better at night from an investment point of view. And a couple of things that I can't be to miss the opportunity to articulate. One is that as a shareholder in Cobram, your friends often ask, why should I buy Cobram? It really does come down to quality, and we pride ourselves on that. That's why we have Red Island and that's why we do private label, and that's why we do all different other outlets because we want the best olive oil to always be in Cobram because that's where the consumer value is. And it's principally extra virgin olive oil is a juice of fresh olives. And the fresher it is as long as the olives were fresh when you crush them and you crush them within 4 to 6 hours, you'll have incredibly high-quality extra virgin olive oil, which drives all of the consumer benefits and value. And -- it's those minor components being the antioxidants, as I said before, that really do -- the science is reasonably clear on that's what gives the health benefits. And that's -- so many people dying chronic disease, they're not dying from malnutrition and what's causing it and what's preventing it. And I think that's the step that more and more people, and that's the question more and more people are asking. The other thing that it might be -- you might think it's strange that I say this, but the category is highly sort of adulterated, always has been. There's mixed and blended extra light and pure rotten olives that had to be refined and heat chemicals and solvents, they get sold in Australia or other places at the same price as extra virgin. And there's sort of this misleading conduct. And then extra virgin, a lot of it is adulterated depending on how well the country tests. In fact, there's something like 70% of sales globally are extra virgin as in label, but only something like 30%, 35% of global production is extra virgin. So you don't have to be Einstein to know that if you don't know and trust the brand you buy, you're going to get fleeced. And we -- we've been able to take advantage of that, I think, here over a long period of time, and that's what's happening in the U.S.A., too. But just as people learn they're being fleeced, they don't feel very happy about it. And then as they learn that it's healthier to buy high-quality olive oil, it's better for your family. So the loyalty in Cobram speaks for itself when you look at the discounting in the market and I think that Cobram is still in growth of record year last year when there were so many out of stocks and all those things. Looking forward, obviously, we're in a business that relies on producing olive oil of Australian or California domicile and there's no doubt that, that takes a fair while. It seems to go quickly for us, but I'm sure as shareholders, sometimes it goes a bit slowly. But the amount of olive trees that are continuing to produce and come on over time are just going to keep driving our revenue and profit and the size of our business. But it just doesn't happen in 2 or 3 months. And Cobram is certainly an investment for those with a longer-term view and who are not looking to trade in and out on every second thing. I know there's a lot of those in the market, but we're certainly not one of those. And certainly, we feel that just long-term value and wealth creation is -- it's a good place to be, but others can be the judge of that. A few updates since the 30th of June. We obviously raised $178 million that everyone would be aware of, net of costs to accelerate our U.S.A. growth, which is pretty exciting. As someone said, well, that's really good because otherwise, you would have sent Leandro to the U.S.A. with one hand tied behind his back. But we had plans there. We're just accelerating and it's pretty exciting. We're about 12% or 15% of the way through our U.S.A. harvest at the moment. Leandro has flown back in a couple of days ago, and all things seem to be on track there. We are flowering next week and maybe early the week after our Australian groves. Leandro has been up to the groves. All things seem on track there. Hopefully, the weather behaves in the next couple of weeks. And we declared a $0.045 dividend that's fully franked that will be paid in late November. So that's the Christmas present. We are very confident about the future of the company. We know that -- we have really good foundations, really good people, very good industry, quite a lot of tailwinds and quite a lot of competitive advantages. And one of those is not only just the Oliv.iQ and the ability to produce high quality, lower cost, but it's also the sheer amount of investment needed and the time frame you need to wait. So because we've been planting for so long, we're starting to see the benefit of that. And our costs don't rise proportionately to our production increase because obviously, the overheads remain reasonably similar. So more olive production means -- of oil means higher profits, all things being equal. And just a reminder again that we did just come off the back of an on year. And we still expect that the EBITDA in 2026 will be lower than 2025, subject to all the normal variations. And I would just again like to thank shareholders so much for their support and for coming today in great numbers. And that brings me to the end of my address. So I'll hand over to Leandro and Sam. And then when they're finished, we'll do the formal part, and then everyone can ask as many questions as you like.

Thanks very much, Rob, and great to see everyone. My name is Sam Beaton. I'm going to give you an update on the financial results for the year to 30 June 2025. And I'll also give you a commercial update. I'll then hand to Leandro and his area is more around the operations and also an update on our growth strategies. In terms of this year, it was a terrific year for the business. We reported record operating cash flow, record profit. We also continue to see strong demand for our high-quality locally produced extra virgin olive oil in both Australia and in the U.S.A. In Australia, we reported double-digit sales growth in the U.S.A., substantial branded growth. And in Australia, we got through our growth CapEx program. So we will now turn to more of a sustaining CapEx level in Australia, and most of the growth CapEx will be focused in the U.S.A. From a numbers perspective, our EBITDA was $116 million. This was up from $66 million last year. Our operating cash flow before interest and tax was $83 million, which was up just under 30%. Pleasingly for us, this was driven by packaged goods sales growth, where in Australia, our branded sales growth grew by 16%. And in the U.S.A., our branded sales growth more than doubled. We think about our business in 2 business segments, the Australian Olive Oil segment and the U.S.A. Olive Oil segment. Both of those areas improved from a profit perspective. In Australia, it increased from $61 million on an EBITDA level up to $110 million. This was driven by our increased crop and also our higher selling price, which contributed to a higher margin. In the U.S.A., our EBITDA increased to $6.6 million. Again, this is driven by increased sales and margin, somewhat offset by investing more in people and marketing really to set us up for future growth. From a cash flow perspective, our operating cash flow before interest and tax was up from $64 million to $83 million and after interest and tax, $58.1 million. As a business, we continue to invest in capital projects. The majority of that growth CapEx, we invested $81.5 million. Some of those larger projects, we finished the Boort processing mill expansion and then the majority of that CapEx went into the U.S.A. into investing in land and growth developments. And during the year, we paid a dividend, which is $12.1 million net of the dividend reinvestment plan. This chart shows our operating cash flow over the last 5 years, both on a pre-interest and tax and post interest and tax level. As you can see, it's grown from $22 million 5 years ago up to $83 million. The contributing factors to this are really quite simple. The maturing profile of our Australian groves, the higher net selling price and the contribution from our U.S.A. business. Rob touched on this in his speech, but we've invested over $250 million in the last 5 years in both Australia and in the U.S.A., majority of this in growth CapEx. As a recap in Australia, we've planted over 1,100 hectares, we've rebuilt our Boort mill, more than doubling the capacity there. We now have enough capacity in our mills in Australia to mill every tree that's planted at full maturity and also our third-party growers that have contracted with us on the longer term. And we also did a number of other small projects, including the automation project here at Lara, which you'll see today on your tour. From a CapEx point of view, as I said, we're through the growth CapEx phase in Australia. Moving forward, we will now return to sustaining CapEx levels, and we estimate that will be between $10 million and $15 million per annum. In the U.S.A., we've planted 1,385 hectares as of today. And we've purchased a lot of land for future development. And I'll -- Leandro will talk a lot more around what we're doing from a growth development perspective in the U.S.A. We're also undertaking a warehouse expansion in the U.S.A. as we speak and also increasing our bottling capacity. From a balance sheet perspective, so our reported assets -- gross assets of $811 million, net assets of $446 million. A couple of key items to highlight that our trees and irrigation infrastructure are recorded under our accounting policy at written down cost, not at fair value. And if you included those items on our balance sheet at valuation, there'd be another $166 million of value. Our brands also are recorded at what we paid for them originally, so just over $6 million, not at valuation, so you can't revalue a brand upwards under accounting standards. And just in relation to the deferred tax liability, the majority of that of $99 million, the majority of that relates to a historical accounting write-up and would only ever be triggered for payment if we sold the assets outside of the group. These charts, so on the left 2 bars, 30 June 2025 and the right 2 bars at 30 June 2024 shows our gross -- adjusted gross assets on the left and then next to that, our borrowings. When I say adjusted, we've adjusted for the valuation of the trees and the irrigation infrastructure. So as you can see there, we've got around $980 million of gross assets and a borrowing ratio or a net debt ratio of 27.1%. Of course, this was before our equity placement in September this year. Moving on to sales. So this is sales at a group level. Sales grown from over the last 4 years, $138 million up to $237 million. As you can see from here, more than 1/4 of our sales are now in the U.S.A. This is just Australia, so Australian packaged goods sales. So these bars have sales over the last 4 years. The bottom part of the bar, the purple part is branded sales and then private label on top. As you can see, the branded sales this year grew by 16.6%, which is a terrific result. We just released our new marketing campaign in Australia for Cobram Estate. You may have seen it. This is really focused on highlighting the freshness and quality of our olive oil. It is a health-led campaign and particularly highlighting the consumption of high-quality extra virgin olive oil and the link to heart health. Moving to the U.S.A. So the U.S.A., this is the same packaged goods sales over the last 4 years. The bottom bar is Cobram in purple and then private label on top. As you can see from here, our Cobram sales during the year more than doubled or 101% growth. We're now in more than 18,000 stores. We're the #9 brand at 30 June. We've just clicked over to the #8 brand as of the last couple of weeks. So that business is really in an exciting position, and we're certainly excited by what's ahead. Just recapping on the U.S. market for those who are not aware in terms of the size of the market and what's happened -- what's been happening over there in the last 4 years. So this is grocery sales. The bottom part of the bars is olive oil and the top is other edible oils such as seed oils and other vegetable oils. As you can see that the size of this market in supermarkets for olive oil is USD 2.84 billion, which is well over about AUD 4.4 billion, and that compares to the Australian market, which is only $600 million. Now if you look at the sales over the last 4 years, you can see compound growth of 16.6% per annum. And this has been really driven by the health benefits, the flavor profile, the usage occasion and the premiumization of the Olive oil segment. So those trends, combined with what we're doing, what we're seeing with Cobram give the Board really terrific conviction to move forward with our U.S. strategy and in fact, accelerate it. And that was principally why we did the capital raising in September this year. As most of you will know, we raised $178 million through a combination of an institutional placement and a share purchase plan. I'd like to thank all shareholders who participated and certainly welcome those new to the register. Leandro will talk more about usage of funds, but these funds will all be applied to growing our supply position or our olive grove position in California USA. In terms of business update, so the Australian sales, we're still on track to sell out of our 2025 crop by 30 June 2026. The U.S. sales continue to be robust, slightly ahead of plan. But again, we will be limited by supply in this financial year. Net selling price across the whole group, slightly better than this time last year for the quarter to 30 September. As Rob touched on, we have seen promotional programs or discounting in both countries return to more normal levels where it's heavy discounting from imported products. But pleasingly for us, we're still seeing strong demand for Cobram Estate branded product. In terms of the U.S. crop, we're not expecting that to be materially higher than last year. Leandro, I'll touch on that again, reminding that in Australia, FY '26 is an off year. We're only expecting it to be moderately lower though than 2025. But our profit -- our reported profit will be lower in FY '26. And from a cost perspective, we're seeing costs relatively stable across the group with the exception of temporary water. Temporary water is trading around just above $300 a megaliter. Historical average is just under $200. So $100 per megaliter in our business translates to about a $4 million incremental cost. And finally, the dividend. So we formally announced the dividend this morning of $0.045 per share. It will be fully franked. We will be offering a dividend reinvestment plan as we did last year. There will be a 2.5% discount to the calculated price at the record date, 7th of November, and we'll be paying it on the 28th of November. So before I hand to Leandro, I'd just like to thank our amazing employees, our executive, our Board, the support from our Chair, Rob. I'd like to thank all loyal shareholders. And I'd also like a special thanks to Leandro for the support he's given me during the year. Thank you.

Good morning, all. Thank you very much for coming and joining us here in person or those that are online as well. My name is Leandro Ravetti. I'm one of the joint CEOs looking after the technical and operational side. And as Rob said, it is my first year as a USA resident. I'm sure you can pick my American accent, sorry, South American accent. Certainly, as Rob said, it wasn't an easy decision to move to the U.S. particularly because, well, my wife and I were leaving behind a great network of friends that became family in this country that welcomed us with open arms 24 years ago. But as soon as we hit the ground in California pretty much running at full speed with all the things that were going on, we became -- we felt that happiness that really comes with knowing that you made the right decision. I think that from very early on in our careers, Rob mentor as senior executives, particularly those that are trusted with the higher salaries to always be looking how we can actually -- and where we can actually add the most value to the company and the shareholders. And certainly, you're going to see all the things happening in the U.S.A. and it became very clear that there was nowhere else for me to be than in the U.S.A. So I was definitely very happy with that decision. It's a decision that couldn't have happened without the amazing team of executives that we have here in Australia, starting with Sam. I said this many times before, and I think it is as valid today as it was 5 years ago when we started as joint CEOs, but there's no one better that I could think of to have as a partner doing what we do than him. But Sam is not alone. On the operational side, Rob touched on this. We have Ruth Sutherland, our Head of Horticulture that had been looking after our trees and mills for over 10 years and Claudia Guillaume looking after the oil from the moment that leaves the farms until it reaches your pantries and being with us for more than 20 years. So really them and their teams are doing a great job as well as Brent that are normally not including my speeches, but since moving to the U.S. became a very trusted mentor and adviser on all things related to sales. So thank you very much. We will move to the presentation. I won't really cover those figures in detail because I'll be talking through them with the presentation, but they just simply summarize the fact that from very, very humble beginnings, which many of you remember with plenty of ups and downs, more downs than ups for many years, we became one of, if not the largest fully vertically integrated olive oil company in the world, especially when we consider the geographical reach, the level of production, the total area planted and the brand strength. Harvest, yes, it has started in the U.S.A. last week as we planned, very early on, just under 15% of the crop done, but everything tracking according to our thoughts. And those thoughts were that, well, the crop wasn't going to be significantly different than last year despite the production from our own groves growing as a percentage. And the difference was coming from some third-party growers not performing quite as we hoped. So that limited supply until the rest of the younger trees coming into production will continue to limit the sales in the U.S. In Australia, as we have announced a few months ago, harvest finished on time and as planned very early in July. But I just wanted to share with you some statistics to give you more of a clear idea about the size of the operations and the scale of the logistical -- I wouldn't say nightmare, but definitely the logistical challenges of implementing that operation. To give you an idea, our harvesters last year had to straddle over nearly 11,500 kilometers of trees to complete the harvest. That's almost twice the width of Australia or 1/4 of the earth circumference. So definitely a fair bit of area to cover. The operations, both at our farms went on for about 88 days, started at Women -- the Women Grove, just north of Boundary Ben, a bit early in April and finishing early in July at Boort with the last trees being peaked, 24/7, 7 days a week, day and night, nonstop. We see more images of the farm, the harvest is working, the fruit being delivered and the oil being produced in the mill. That oil goes into stainless steel tanks. You're going to see some of those in our facilities here in Lara, where we put nitrogen, temperature control to preserve all the quality, all the freshness, all the good things that Rob mentioned about the oil. And in general terms, what we have done is we milled around 75,000 tonnes of our own fruit, produced a bit over 13 million liters of oil. On top of that, we milled another 1 million liters from long-term third-party growers at Boort. And then on top of that, we purchased another 1.3 million liters from other Australian millers, making up a total of oil available this year of 15.5 million liters. Some other nice photos of our great staff at the groves that help us to complete that challenging operation that is always harvest. From the crop outlook, Rob mentioned that being on the farms on Sunday, Saturday, Monday and Tuesday, having a look at the flowers. Pleasingly, the good condition of the trees, the good weather conditions throughout winter and early spring so far and the maturing profile of our trees, especially the younger trees that we planted at Boort more recently determined that it is going to be an off year, but a very good off year with the production only forecasted to be modestly lower than what it was in FY '25. The rest of the operations are running smoothly, particularly the integration of the recently acquired Lara business that harvesting manufacturing business in Mildura, and we are already working very, very hard and quickly towards one of the main goals of that transaction that is the development of a faster and more efficient harvester to help us with our growth, both in Australia and in the U.S.A. Sam talked a little bit about the cost, largely stable. Water is the main variable cost. So you see the graph of showing the average water purchase price over the past few years. $139 per megaliter was the weighted average of all the water for the last FY '25. And as I mentioned, every $100 more per megaliter that we pay has an impact of approximately $4 million to our business. And now we can cover -- the main things that are happening around our 4 growth pillars. The pillars are pretty simple. They have not changed. It's all about growing the supply of olive oil mainly from our growers in Australia, but also increasingly from third-party growers, continue to grow our U.S. business, and I'm going to put a fair bit of emphasis on that area for obvious reasons now, continue to increase the net return per liter through making our olive oil sales more premium, but at the same time, reducing our production costs and also capitalizing on our sustainable position and upcycling our olive oil byproduct. In terms of increasing the supply from our growers in Australia, I think it's important to highlight that still 30% of our trees in our own growth are still not mature. So in other ways, a different way of putting it is that our mature growing area will grow by 42% over the next 5 to 6 years. And if we put on top of that, the 2,000 hectares of third-party growth -- long-term third-party growth that we've got signed, that adult area will almost double in the next 8 years. So there's plenty of additional oil to grow and support our branded growth sales in Australia. The last of the large capital projects in Australia was completed in this last financial year, which was the rolling of the additional equipment at our Boort mill. You see the photo there of the amazing facilities that we have now that mill can mill up to 1,800 tonnes of olives per day, making it one of the largest olive oil mills in the world. Fortunately, no more additional growth CapEx is required in Australia, and we'll be transitioning entirely to sustaining CapEx from this current financial year. The situation of the olive oil supply in California is obviously very different than in Australia with a significantly more immature tree profile. Only 15% of our trees in California are mature and an amazing 65% of the trees that we currently have in the ground are yet to produce its first crop. So they are either 2 or 1 year olds or just recently planted. The interesting thing is once we complete all the plantings that we are looking at doing over the next couple of calendar years, '26, '27, on the back of the capital raised and some of our own funding. The production when all those areas reach maturity will be nearly 20x larger than the amount of oil produced as an average over the past 2 years. So it's a significant growth in the supply from our own growth. This is a different way of looking at that. Once we complete the planting that we are doing right now, we would have just under 1,400 hectares of growth in the U.S. that we are managing, and we are looking at planting another 2,200 hectares over the next 2 years in the calendar years '26 and the calendar year '27 to bring the total area under our management to approximately 3,600 hectares of olive growth or in a different way of doing it is almost the same size of any of our 2 growth, either Boort or Boundary Bend. These are some images of the trees that we planted in November last year. They are much bigger trees now. That's 180 hectares that we have planted completing the Phase 2 of our Esparto South Ranch and the Phase 3 of our Dunnigan Hills Ranch. You also have photos of 2 absolutely stunning beautiful properties that we purchased and we are developing right now, which are right next to or in very close proximity to our existing growth. And in those areas, we are planting another 360 hectares right now. We started planting a couple of weeks ago, and we'll be finishing in a couple of weeks' time. So it's all really happening at the moment. And you can see the people planting. I took this photo a couple of days ago before jumping on a plane and coming to Australia, a few other images of irrigation being laid out and everything else. So it's plenty of activity happening. And -- it is in those properties that will be continue to roll the next set of plantings early in the spring in this coming calendar year. We also to keep up with the additional oil that we will be producing over the next 5 to 8 years. We're also expanding our warehouse, particularly for finished goods in our Woodland facility. And we are commissioning our new bottling line. This is going to take place in the early months of 2026, increasing the volume of production of our bottling line from 3,500 to over 16,000 bottles an hour. So that will give us a lot more capacity and a lot more efficiency, obviously, having an impact in the reduction of bottling costs in the U.S.A. [Presentation]

Great. They are truly beautiful properties. If you ever have the opportunity to come over to California, please let me know. I'd love to show them around. They are actually definitely worth visiting. They are world-class properties in a great, great growing area. I really look forward to see those trees developing over the coming years. Before I leave California and because what we say now it's followed quite closely by the industry over there, I just wanted to touch on 2 important things. The first one is that olives are a great crop for California. It's a great crop for the portfolio of crops being grown in California. When it comes down to helping California to retain a sustainable position in terms of food production. Rob touched on the amazing market opportunities in America. There is a market that is 9x bigger than Australia. The consumption is really strong. From the growing side, the comparisons are also incredible. Just to give you an idea, California has approximately 4 million hectares under irrigation with 1.6 million of those hectares being permanent crops, almonds, pistachios, walnuts olives, citrus, grapes. In comparison, Australia, if we look at the Murray-Darling basin irrigation system, has about 330,000 hectares under irrigation and only 130,000 of those are permanent crops. So it's less than 10x smaller than the permanent agriculture irrigated land in California. So what shows us plenty of potential to grow the growing side in California. And certainly, with olives being such an efficient crop from the point of view of particularly water use is set to play a very, very important role. Just to give you some other stats, in comparison, olives use about 80% less water than almonds, one of the big permanent crops in California, around 65% less water than pistachios or walnuts and significantly less water, nearly 100% or more or less water than alfalfa or corn or rice, which are other crops, annual crops that are done in that area. So definitely, lots of opportunities there. And to support that performance of olive, we are trying to do as a company our part, too. So we are partnering with local agencies to put a lot of focus and emphasis on flat control, on aquifer recharge and actually underground water monitoring to preserve the long-term health of that water supply in California. Olives are also quite tolerant to a number of salts that are naturally present in water in California. And that's why for us, it's a lot easier to utilize the surface water available. And some real actions that have taken place, we invested quite heavily in state-of-the-art irrigation systems, but also in infrastructure to be able to interconnect a lot of farmland that we are purchasing that was not previously connected to the surface irrigation system to bring the surface irrigation system water to those properties, allowing us to significantly reduce at least for most of the time until we got those rare years with some only limited water allocation from the surface system that we need to use the underground water. So by stopping or significantly reducing the ongoing pumping of that aquifer water that was happening before we developed these properties. Just to give you an idea over the past 3 years, we have reduced the consumption or the utilization of over 5,000 acre foot of water or what is equivalent to about 6,600 megaliters of water over the last 3 years. So a real improvement to maintain and sustain the health of that aquifer that is going to help us through some of the limited years where there's only partial water allocation. The second point, it's around our -- or the vital role that the third-party growers will continue to play for us in California. Rob touched on this and far from not be willing to engage, we think that the third-party growers will play a crucial role for us in the development of our business or the ongoing development of our business in the U.S.A. The main reason is when the Californian production only represents 3% of the American market, increasing the awareness of American oil is critical to boost the sales. We've seen this. We went through that process here in Australia where the hardest yards were the first few years when the Australian consumer didn't know much about Australian olive oil. A bit of the same is happening in the U.S.A. I think that the moment that the American produced olive oil start representing 10%, 15%, 20% of the marketplace, the visibility over the great quality of oil that California can produce will help us all in terms of sales. So that's actually a pretty important part. And the other side is that we feel and we strongly believe in partnering with those growers in aligning our interest. I feel that with us investing alongside them, we're actually showing how much we trust and how committed we are to the long-term success of the industry. And at the same time, by scaling up our production is helping us to implement what has been a successful experience with the partnering relationships here in Australia, where it's easier for us to establish long-term supply contracts where the pricing is aligned with brand value and where we can transfer our Oliv.iQ IP to help the growers boost their production. Just to use a real example of California, our production of our youngest, most mature grow, which is only 6 years old, has been last year, nearly 3x higher than the Californian -- current California industry average. So it's quite easy to see what Rob said, it's very difficult to get any return out of the oil that you don't produce. And if we can help growers to produce 2 and 3x more oil than what they currently do, it will certainly help both them and us. I wanted also to show you a couple of photos. On the top right-hand side, we can see the Boort that it was great to have them over in California last month, having a look at everything that we are doing and having a specific strategy session around the development of the business in the U.S.A. And then also a photo of our entire team in the U.S. As you can see, it's a very lean and very committed team. I definitely would like to thank them all for their current efforts and for the flexibility that always comes with a rapidly expanding and growing business. Rob touched on a couple of them. Conor Churchin, our COO, that became a bit of a master in terms of land purchasing and development. Nico Irving, our Head of Sales and Marketing, certainly doubling the sales of our branded product in the U.S.A. doesn't happen on its own. So it played a very, very important part there. Our CFO, Alyce Gowan, our HR Manager, [ Christina Killian ] that with the rapidly expanding team is working overdrive and even a recently created position of Industry Relations, Justin Smith, showing our commitment and the importance that we are now placing to the relationship with third-party growth. On the third pillar in terms of improving the net return per liter, we, as a company, are continuously exploring every possible alternative where we see that technology can help us to unlock higher efficiencies and because of that, lower in production costs. We've got plenty of projects going on. One of those, which was the implementation and commissioning of these automated guided vehicles that we see in this photo, and you're going to see them operating in the warehouse during the tour, is going to definitely help us with the increased amount of oil in Australia to continue to handle this product safer and at lower cost per liter. And lastly, I'll touch on the last of our growth pillars with sustainability. Certainly, sustainability, as you know, have been in our DNA for the past 25 years. Although since we listed, we took a bit more formal approach to it. We compiled our objectives into 3 key pillars: people, planet and business. You can read all of that in our 2030 sustainability strategy. But just this year, we had a couple of significant events. One of them in particular was the establishment of sustainability-linked loans with CBI, aligning the interests of the loan with our interest from the sustainability pillars. And we believe that, that has been definitely a great achievement. And similarly, a number of other certification and accreditations around this process and continue to invest a lot on consumer education, health care professional education around the sustainability and the health aspects of extra virgin olive oil. You can read more about those targets again in the sustainability report. It's actually quite comprehensive and very, very important. Obviously, for time reasons, I cannot cover them all. Probably one of the things that I really wanted to highlight is the fact that, again, for second year since we are measuring it, we can confirm that our operations are a net carbon sink with the carbon being sequestered both above ground and below ground in our operations, more than offsetting all the emissions around Scope 1, 2 and even Scope 3, which is all the emissions that we are not doing, but our partners supplying bottles or transporting oil to the supermarkets are currently doing. So we are better than all that, which is a great position to be in, considering that still in Australia and particularly in the U.S.A., we've got a significant amount of trees that are yet to mature and because of that, to think even more carbon. And finally, I'll just wrap up with what is becoming a bit of a flagship about our sustainable, responsible position with the environment. It is the project and the advancement of the project to protect and enhance the habitat of the endangered Malleefowl, almost mascot from now at the Boundary Ben site in partnership with both the Victoria and the National Malleefowl Recovery Group. So this is all from my presentation. So I'll hand back to Rob now for the more formal part of the meeting.

Thank you very much, Leandro. Did you notice that my presentation had no slides. And the further we went through, there was more photos, more videos, more -- I think they might be trying to send me a message, next year, I might not even get an audience. But I know you all came for the formal part of the meeting. So I will try and get through it as quickly as possible, whatever. So thank you. The Company Secretary has confirmed the Notice of Meeting and explanatory memorandum dated 30 September 2025 was circulated to shareholders entitled to receive it within the notice period. The matters requiring consideration today are outlined in detail in the Notice of Meeting and explanatory notes. The notice will be taken as read. Before moving to the various resolutions to be considered today, I will briefly outline procedures for today's meeting. I'm sorry, I've got to do all this. In accordance with -- otherwise, they might have to get us back to vote again. In accordance with the company's constitution as set out in the Notice of Meeting, we have determined that voting on each of the resolutions will be conducted by a poll rather than a show of hands. The poll -- the result of the polls will be declared and released to the ASX later today and also be published on the Cobram Estate's website. The Chair -- as Chair of the meeting and detailed in the Notice of Meeting, I will vote where authorized all undirected proxies in favor of each resolution. As mentioned previously, for all those attending in the meeting in person, you can cast your vote filling out the paper voting card. If you have any other questions, please see MUFG, which is a link -- used to be Link, must be a new name of the corporate markets team member at the registration desk. Voting online for those shareholders participating in the meeting via the online voting platform, as mentioned, you can cast your vote using electronic voting card that you have received when you validated your registration. If you have any questions about casting your vote online, please refer to the online voting platform or call the number set out in the guide or on the screen in front of you. How to ask questions. If you have a yellow or blue card and wish to speak, please make your way to 1 of the 2 microphones on the side of the building. There will be questions after each resolution, and then we'll have general questions at the end. So don't panic. We're happy to stay all day. If you wish to submit a written question, select general business or a specific resolution, type in your question and click submit. Comments can also be submitted in the same way. And for those participating in the online platform, you will be able to submit questions by registering as a shareholder or proxy holder and selecting the Ask a Question tab. [Operator Instructions] For those participating online or via web phone, if you have any questions, please call MUFG Corporate Markets on 1-800-990-363. You'd think in this day and age, it will be easy to vote. I think you'll show hands with all these technologies to us. So let's go to the first. The financial statement reports. This is the first item of business, and it's for discussion purposes only and not a resolution relates to the 2025 financial statements and reports. However, the Board and auditors will certainly take on board any feedback from shareholders. The 2025 annual report contains the company financial report, directors' report, independent auditor's report for the year ending 30 June 2025. A copy of the 2025 annual report is available on the Cobram Estate website and was e-mailed to all shareholders to whom we have an e-mail address or sent to those shareholders who requested. The financial statements have been approved by the directors and the auditors, noting my earlier comments, I will take the financial statements and report as read. To receive and consider and approve the financial report and related directors' report and auditor's report for the year ended 30th of June 2025, at this time, I'd like to invite any questions or comments to management of the company and the financial report or to ask the auditor any questions relating to the audit report or preparation of the auditor's report. Firstly, we'll take questions from the floor. Is there any questions from the floor with regards to the first item? It's pleasing. Is there any web phone questions, Hasaka? Any online?

No, there's no questions online.

Yes, good. Okay. So let's go to the next item, which is item to be voted on, which is the adoption of the remuneration report. The remuneration report detailing the company's approach is contained in the 2025 annual report, which is available on the website, and we'll take that remuneration report as read. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. The vote is advisory only and not binding on directors or the company. Details of the votes for this item are now on the screen. Noting that each of the directors has a personal interest in their own remuneration from the company, the Board unanimously recommends that shareholders vote in favor of adopting the remuneration report. Are there any questions, and we'll go from the floor first. Any online or...

There's no questions on web phone or online.

Excellent. So as there's no further questions, can you please select for, against or abstain next to item 2 on your voting card. Thank you. And Item 3a is re-election of Non-Executive Director, Toni Brendish. Toni has more than 30 years' experience working in blue-chip FMCG, health care, manufacturing, agriculture and telecommunication companies in Asia, Australia and New Zealand, including over 20 years in Chief Executive Officer or Managing Director roles. Toni is currently Non-Executive Director of ASX-listed natural fish oils manufacturer and ingredient business, Clover Corporation, the Independent Chair of Fresh Produce Group, one of Australia's largest vertically integrated produce suppliers. Toni commenced as a Non-Executive Director of Cobram Estate Olives on the 23rd of January 2023. Toni is a member of the Audit and Risk Committee and Remuneration and Nomination Committee and is Chair of the Safety and Sustainability Committee. I'd like to invite Toni say a couple of words, please.

Good afternoon, everyone, and thank you for the opportunity to address you today. When I joined the Cobram Estate Board in January '23, I was immediately impressed by the quality of this business from our world-class olive groves to our premium products that compete on the global stage. And over the past 3 years, I've had the privilege of contributing to the strategic direction of the company, and I'm excited about the opportunity to continue this work. Throughout my executive career, I spent over 20 years leading businesses with revenues up to $2 billion across Australia, Asia and New Zealand. And most relevantly, I served as the CEO of Westland Milk Products, where I led a business with over 90% export focus across 43 countries. So I understand the complexities of agricultural businesses that must balance farming operations with manufacturing excellence and international market dynamics, challenges that are very similar to those that we face here at Cobram. So what I bring to the Board is hands-on experience in operations and supply chain and leading large teams. I'm also passionate about ESG and sustainability, areas that are becoming increasingly important to our customers and our social license to operate. Since joining the Board, I've been particularly focused on understanding the unique aspects of olive production and oil manufacturing. I've worked to bring my operational experience to bear on questions of efficiency, quality and market positioning. And I believe there are significant opportunities ahead for us at Cobram Estate. I'm seeking reelection because I believe the work that we've started has significant momentum, and I'm committed to seeing it through. The next few years will be critical as we navigate the market opportunities that you've heard today, some of the operational challenges and the strategic growth options. I believe my experience positions me well to continue to contribute meaningfully to these decisions. So to all the shareholders here today and online, I don't take your trust lightly. Board service is a responsibility I take seriously, and I commit to bringing the same rigorous thinking, commercial judgment and dedication that I've applied through my career. So thank you for considering my reelection.

Well done. Thanks, Toni. The votes for Toni are on the screen. So I think you're reasonably safe. But the directors, excluding Toni, unanimously recommend that shareholders vote in favor of Toni, and we thank him for his service. But are there any questions for Toni or for the Board from the floor first? Very good. Anything Hasaka online or webcast?

There's no questions from the web phone.

So as there's no further questions, can you please vote for, against or abstain next to Item 3A on the voting card. Moving to Item 3B, which is the reelection of Executive Director, Leandro Ravetti. Leandro is a graduate, graduated as an agricultural engineering with an agriculture engineering degree in Argentina and worked for the National Institute of Agriculture Technology and Olive Production Research from 1995 until he moved to Australia in 2001 and joined Cobram Estate Olives. Leandro has studied and worked as an invited researcher at the Olive Growing Research Institute in Italy and different government olive institutions in Andalusia, Spain, where he completed a post-graduate degree on Olive Growing and Olive Growing and Processing. Leandro was appointed Executive Director of Cobram Estate Olives in 2005. As part of his role, Leandro has overseen all technical aspects of olive growing and olive oil production, developing the Oliv.iQ growing system. Leandro was appointed joint CEO, technical Production of Cobram Estate Olives on the 20th of April 2021 and formally held the role of Technical Director. Leandro is just going to say a couple of words. I know you've heard from him a lot, but one more short time.

Thank you, Rob. Definitely, you have heard from me a lot. So I just wanted to simply thank you. It has been an honor and a privilege to be at the Board of the company, learning heaps over these past 20 years. And I will look forward to continue helping the growth of the company. So thank you.

Thank you, Leandro. And the votes are on the screen. And those that are voting against, I think they should go and see a doctor. But they're entitled to vote however they want. So the directors recommend, Leandro's -- excluding Leandro, recommend because he's abstaining, recommend that you do vote in favor of Leandro. It's very important to the company, very important to your wealth. And I really don't understand that one bit. So is there any questions for Leandro or the Board? Online or webcast?

No, there's no questions online.

All right. Excellent. Could you please vote for, against or abstain next to 3B on your voting card. I think this is the last item actually. Item 4, the ratification of prior issue of placement shares. And this is effectively just cleaning up. There's absolutely nothing planned, but you can only issue 15% of the company's shares within a 12-month period without shareholder approval. So we felt that it will be -- it is reasonably normal practice at the next AGM that's reset just in case. But certainly, there's no underlying intention or anything untoward. But of course, you can ask as many questions as you like with regards to that. But details of the resolution contained in the explanatory memorandum that accompanied the Notice of Meeting. On the 9th of September, the company announced that it had received binding commitments from new and existing institutional investors who are clients of Aitken Mount Capital Partners to subscribe for 54.6 million shares at issue price of $3.20 per share to raise approximately $125 million. The resolution, therefore, seeks shareholders ratify for the purpose of Listing Rule 7.4 for the issue of 54,687,500 shares to the September placement participants. Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of shareholders over a 12-month period to 15% of the fully issued ordinary shares it has on issue at the start of that period. The September placement does not fit within any of the exceptions set out in Listing Rule 7.2, and it has not yet been approved by shareholders. It effectively uses up part of the 15% limit in Listing Rule 7.2, reducing the company's capacity to issue further equity securities without shareholder approval under Listing Rule 7.2 for the 12-month period following the date of the issue. The company wishes to retain as much flexibility as possible to issue additional securities in accordance with having to obtain shareholder approval for such issues under Listing Rule 7.2. Accordingly, the company is seeking shareholder ratification pursuant to Listing Rule 7.4 for the issue. Details of the votes for this item can be seen on the screen, and the Board unanimously recommends that shareholders vote in favor of this resolution. Are there any questions, and we'll go from the floor first. Do you want to go to the speaker? Just line up at the speaker if you have any questions.

[ Michael Barrett ] is my name. I've been a shareholder since you floated on the market. There's been a spectacular increase in share price. And my first sort of question is, how did you come to strike the price after languishing fairly at around about $2 or something like that. And all of a sudden, it's gone to about $3.20. How did you strike that price to float this capital raising?

So there's 2 parts to that question or to answering it. One is that the share price went up just through market participants. And obviously, on the expectation of some, I believe, that we would be in the ASX 300. In saying that we also had announced a record profit. And although you can talk about what profits will be in the future and not until you announce them, does the market often listen. And the price was effectively -- the price closed on that Friday at $3.23. It's normal to give some discount, although this was quite a small discount. And although we would have never in our wildest dreams considering raising money probably sub -3. We felt with the -- and had been discussing for a short period, but not openly to anyone, just internally at the Board that with the opportunities in front of us with land availability in California and all the things we know that this would be in the best interest of shareholders and that Atkin Mount were able to get it away at that price.

Okay. Because my broker said to me that the company was overpriced and he said this is ridiculously totally overpriced.

I hope he's wrong.

I've actually proved him wrong because there's been no retreat from that price.

Have you moved brokers?

It's still a good [indiscernible].

We all have those sort of...

The second question I have, it might fit into an after question.

That's okay.

But you've got the written down value on the books of the crop. Now how do you value that for insurance? Or do you insure because that does have implications if there's a serious flood or a fire or I know there's tornadoes in Victoria that I didn't know about the other day or any natural disaster that would seriously affect the business because you do rely on having a crop and good crops of that?

Yes. I'll answer it in broad terms, but some of the detail might need to be answered by Sam. You're right, we do rely on Australian olive oil supply to support Cobram Estate and Red Island because they're 100% Australian. So that comes with the pros and cons. The risks -- we obviously do a risk register and update it in the early days, it was many, many days of looking at what are our risks everywhere from where we store the oil to someone breaking in, the oil being turned on fire, all of those things. And some risks are insurable and some aren't. Our advantage to a certain extent is that we -- our groves, we got 3 groves in Australia that are around 2 hours apart. A fire -- we put a huge amount of time and effort into fire reduction, burning and fire engines and not moving on those really hot days when that could be a risk. But the likelihood of a fire having all 3 groves is -- and there's a reasonable amount of flexibility within our supply of oil depending on exactly when that fire might happen because fire is a reasonable risk, more so it may be a [indiscernible] than further north where it's -- we've got the river to -- the Murray River to the north of us, which is where the prevailing winds come from that drive the fires mostly. And also, it's just a very sparse area where grass isn't very close together because it's a 12-inch rainfall. And we do ensure but it's -- we still do fire insurance, but every year, they double the price and half the amount they'll pay you. So we're just putting more and more work into fire breaks and doing stuff internally that reduces the fuel load to manage the fire risk. But I don't lay awake at night thinking fire will burn all of our groves. You think, well, I might do part of one of our groves if we're unlucky. And we do have something like $25 million in insurance. Is that...

So just to cover off on that. So we do have insurance on our trees for fire in particular. In relation to the crop, we don't have insurance because it's -- one, it's very, very difficult to get. But if you can get it, it's just cost prohibitive. So we obviously look at more of a risk management approach there. In the USA., we do have crop insurance because it's largely subsidized by the government. So very different over there.

So in other words, you're carrying a lot of the insurance -- what an insurance company would -- underwriter would carry, you're carrying it yourselves. Is that -- would that be fair enough if you [indiscernible] down a bit. You've been prepared to invest in capital with fire equipment and everything to reduce that risk. Is that what I'm...

Yes, in relation to the crop. In relation to [indiscernible] insurance coverage.

The olives are at the core of the business. Okay. Now just a little [indiscernible]. My Italian relatives have now switched to Cobram.

Share price will go up.

That's right. And the other thing is that your frankness is just fantastic, really. And I think you're selling my gold shares and...

Broker is not going to be very happy. Thank you very much. Is there any other questions? Anything online or webcast?

No. No questions online or on the web phone.

Excellent. So can you please vote for, against or abstain on item 4 of your voting card. And we'll now go to general questions. So if you have any, feel free to line up at either speaker, and we'll try and work out who's best to answer them. We'll get back to you if we can.

Rob, [ David McKenzie ] as a shareholder since about 2012, I think. Just interested in -- you talked about the planned expansion of olive production in the U.S. in terms of company-owned. But I'm wondering over the next 5 to 10 years, what's the sort of profile you're aiming at in terms of, say, millions of liters of production from third-party contracted groves?

Yes. Look, it is a very good question. The answer is not so simple, but we are -- we -- anyone who talks to us, who wants to partner for a longer period and reasonably exclusively, we're happy to take on. Of course, we have to ensure that, that fits into our capital program with regards to being able to process the fruit in a timely manner. But certainly, from a selling it point of view, we're not at all worried about that. It's such a big market. Now the price is a different story. But as we said before, if you don't produce it, you're 0. And if you do a great job of marketing, you get 20% more. So it's around that production. But probably the most important thing, and Leandro said, there is a lot of potential over there, but there's no other crop that I'm aware of or mainstream crop where the best grower gets 60% more fruit than the top 6% of growers in the world. I mean 20% is just massive above the average, little only the sheer volume that we get above most others. And I think our average in California is something like 3x the average of California, even though they've planted all the olives since 2007. And it's because it's not easy and because the site selection is quite difficult. And one of the really things that we pride ourselves on is just being honest with growers to say, if you plant on that site where you're already pulling out these vineyards, you have these limitations. So you'll get half as much oil at best. And it can be a bit of a shock, but there's no use leading them into a self -- a form of sort of or belief that they're going to somehow just produce 10% or 20% less, which is what you would expect in a lot of other crops if you're not in the most ideal area. So I didn't quite answer the question, but almost unlimited because it's just -- it's there, it's happening. But again, it takes a lot of money, it takes a lot of time. So it's not going to be like something that's ridiculous, does that make sense? And these things just happen slowly. They got to get the trees, to order the trees, to find the land, to do the work, they will put in the irrigation, spend all the money. So we just keep assessing that as a Board as we go. But at the moment, there's no limits on. If someone comes along and they've got a suitable site and we can see they'll be profitable, the last thing we want to do is help someone plant olives that we know will never be profitable unless they're getting paid twice as much as anyone could afford to pay because they'll be disappointed and it will be our problem. And we need the industry to be really successful where growers are making good money, not -- we've got to pull these out and plan something else because they didn't work when the science is pretty clear where they're going to work or not in that growing area. And it will be that production side that risks the industry. It won't be the sales side in my humble view.

Okay. Can I ask a second question?

Yes. Go for it.

I noticed just in sort of skimming through the early parts of the financial report, this got a bit of a mention, but hasn't been discussed today. What's the current status and plans in relation to seeing if there's any value to be gained out of the waste products from production?

Do you want to. I'll hand this over to Leandro?

It's an area that has been growing. As we announced a couple of years ago, we shifted away from the previously designed idea of doing a branded sales around it. We are quite happy with the work done on the development of the different streams of -- but mainly on business-to-business. And so far, we are working through selling the vast majority of our byproducts on a business-to-business basis. I think it's not being reported separately because we found it is a lot easier to integrate it now as part of a farm profit reporting, but certainly has been profitable for the past 3 years. And we expect that to continue to be so and slightly increasing year-on-year as the supply of byproduct continue to increase, too.

Just firstly, I was wondering if you might expand on the water purchasing strategy this year, particularly if it does get a bit warmer over the summer to mitigate any sort of upside in that water prices around that. And you possibly wouldn't trust the Bureau of Meteorology's website or anything related to that, but any thoughts around that and how you might mitigate that risk around a hot summer?

Yes. Thank you, Mark. And it's around temporary water pricing and availability. We -- our strategy hasn't changed for 10 years through drought and flood because you can't -- you don't know when it's going to rain and you can't work out what every speculator is going to do. And as you say, the bureau is often wrong. But we just buy the water as we need it. And we found over the test of time that's rather than trying to speculate because the bureau are still saying that there's a short La Niña, there's northwest flows of air. There's a positive dipole that we're going to get this rain, which it is raining now, but maybe not enough. And the price, we can outcompete anyone on the price of water. We don't want to because we're giving away money, but there's no mainstream crop that can pay more for water than us because others don't use a lot, they're resilient. We're efficient. It's -- we've got a great business. And a lot of the water goes to annual crops who really their [ ceiling ] even now. We've never had trouble getting the water. It's just what price you pay. And so we don't know how you really lock that in without looking silly at the end of the year. And of course, it doesn't mean that we mightn't buy water that takes us through to Christmas now because of January. But again, if you just go into the market and try and push it because you want to fill it and others are still getting allocations and no one knows what's going to run. We just found over the long term, better off just buying it when you need it to a certain extent, and that is what it is.

And then just secondly, in terms of the U.S. market, just to comment on the pricing relative to what we're used to in Australia and looking at some of the other brands like olive brands over there. But also looking like the Spain, I think the industry is saying that Spain profit can be down 7%, but -- and also tariffs on some of the European product. Is there some upside in terms of pricing in the U.S.? Or how do you think about that premium position?

No one wants to answer this one.

No, happy to. Yes, I think just in terms of pricing, so there's really 2 local brands or Californian brands, us and California Olive Ranch. We sit below them in terms of pricing, but above the main European brands, which are probably 20% to 30% lower than us. There's been, as we said in the opening address, there's been a little bit more discounting from the imported products similar to Australia. In terms of tariffs, it's really important to remember that only about 3% of what's consumed in the USA is produced in the USA. So we have a real competitive cost advantage compared to all the importers, which makes up about 90% of consumption.

So is that European tariff flowing through, is it or in terms of European pricing, I guess what I was trying to get at.

European. So what the retailers have to pay for European products, they'd have to pay a tariff on it, which ultimately you'd expect to work through to pricing.

And that tariff might change next week. Are there any other questions from the floor? Any questions from...

No questions online.

All right. Well, that's absolutely terrific. And certainly, we're all around, we'll have a tour of the facilities and come back in here for lunch. There's toilets both at the front and the back. But please just come and see any of us to ask questions, give us your feedback where all is. If you could please vote if you haven't done so, and the poll will close in 5 minutes from now. And I'm just -- how are we going to do -- so purple -- those with the purple hairnet are going to be led by Leandro. I'm assuming you go first. And are you going to go out that door. Okay. So why doesn't everyone -- well, thank you very much, and we'll see you over lunch. Thank you so much. And we'll -- if you follow Leandro, if you have purple and then red, maybe, Sam, if you just stand halfway along or something, and then Leandro can get cracking as soon as he can. And then green hairnet going to be with Stuart and Andrew Burgess -- Claudia, sorry. And Sam, if you stand in the middle and Claudia is up here roughly, but all those with a purple hairnet can just follow Leandro out the door.