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

Good morning, everyone, and welcome to the Cobram Estate Olives 2022 Annual General Meeting. It's really lovely to see so many people here. And I believe we've got more online. So first time for us, a hybrid meeting, and it means we've got to start on time and try and make sure all of the instructions work and are there a lot of instructions. I'd like -- my name is Rob McGavin, I'm the Co-Founder and Chair of Cobram Estate Olives. I'd like to begin by acknowledging the traditional owners and custodians of the land where we are today. The [ Woiwurrung ] people from the Kulin nation, and I pay my respects to the elders past, present and emerging. It's just past 11:00 a.m., which is the point of time of the meeting. I'm advised by our Company Secretary, Russell Dmytrenko that we have a quorum. So our 7th Annual General Meeting is officially declared open. [Operator Instructions] The agenda today will be -- I'll give Chairman's address. We'll then hear from our joint CEO, Sam Beaton and Leandro Ravetti. We'll then do the formal part of the meeting and answer questions and hear comments from shareholders. And then we'll take a tour of the facility and come back and have lunch. So I hope you all enjoy it, and I hope you've got all your questions ready. I'm joined today by fellow directors, and I'll start on this end of the table, but in, if you can just put your hand up or stand up; Leandro Ravetti, who is co-CEO; Sam Beaton, who is the other Co-CEO; Craig Ball, who chairs our Remuneration and Nomination Committee, he's non-Executive Director based in Adelaide; Dr. Joan McMillan, who's based in Sydney, she's a member of our Scientific Committee; Professor Jonathan West's from Tasmania, Non-Executive Director and on a number of committees, but I don't think chairs any or he's getting a job soon chairing a future committees. I'd also like to welcome Russell Dmytrenko and introduce his today's overseeing the polling. And I think the adjudicated the polling here as well from Link Market Services. Jim Kompogios - Kompogiorgas, sorry, I'm very sorry about that. I'd also like to put an apology in for Tim Jonas, who has just got tested positive for COVID the day before yesterday. So we thought it wouldn't be very social if he came. So we -- Tim chairs our Audit and Risk Committee, and we wish him all the best. I'd also like to apologize for Paul Riordan not being here. He's in the U.S.A. He's watching this online. He's a Non-executive Director and Co-founder of the business. And it's quite sad to say that at the end of today's meeting, this will be his last time as a Director of Cobram Estate Olives. He's made an enormous contribution to this business. He wishes to retire. And I'll have quite a lot more to say about Paul during my talk. And we've got a lot of other Cobram executives who are here today and staff members who have done so much work in preparing the site, the food, the everything. So since our thanks. We also have Peter Glynn here, who is our audit partner from Deloitte, and he's also going to be the scrutineer for today's formal vote. We have Richard Spencer as well from Deloitte, Stephen Rafferty and Ian MacDonald from CBA. And we've got our company lawyers from DLA Piper, Shane Bilardi, Chris Mitchell and Simon [ Rimenson ]. And representatives from Link Market Services, as I said before, who will collect your voting cards on the way out and assist you with anything you need, and it's led capably by Jim. As I said, this is a hybrid meeting, and I suppose what that just means is that people can participate from anywhere they are in the world and still vote live. If you're attending in person, which everyone that I'm looking at here is, obviously, you should have got a card on arrival and you should have received a yellow card as a voting shareholder, proxy holder or corporate representative and have chosen to vote using the card or the paper voting card. If you've got a blue card, you're a non-voting shareholder, and you're entitled to ask questions and make comments, but you're not entitled to vote at the meeting. And if you're a red card holder, you don't have to leave for 10 minutes, but you're a visitor, and you're not entitled to vote today. Many shareholders are really taking the opportunity to vote on the online platform, and we thank them for that. For those attending in person who are eligible, you can cast your vote by filling out the voting card. And for those you saying online and tending to vote using the online voting platform, you should be able to get -- able to follow the instructions on your scheme and simply click the getting a voting card button. The poll is open now, and you can vote at any time prior to the poll closing, which will be 5 minutes after the conclusion of the meeting. I'll remind you again to vote during the formal part of the meeting. If I move to the Chair's address, we've just completed our first full year as a listed company. It's our second AGM, but our first on-site since 2019. Obviously, we've had 17 AGMs as a public company. Many of them held in here, some up at the groves but always at one of our sites. It was a big effort getting listed. There's a lot of things to go to, there are a lot of people, particularly our staff internally who did a huge amount of work bringing it all together, big responsibility in a lot of writing. If you have viewed the prospectus, I'm sure you can understand. And we've had some really good partners in that process, Link Market Services, DLA Piper, Pitcher Partners, Deloitte. And I think it's been a reasonably seamless transition, not as big a step is coming from a private company to a public company. So we're still learning to do things better and communicate better and be better. So we greatly appreciate any feedback that you'll have today, and we greatly appreciate the support you've given us and the fact that you're a shareholder. I wanted to touch on the high points. Cobram Estate Olives is a unique agribusiness operating in a really strong important food category. And as you know, we have 2 very impressive joint CEO, Sam and Leandro, and they'll take you through quite a lot of detail of the business and the operations. Our annual report, which there might be a few hard copies around, but it's all lodged online. There's enormous amount of detail in there, so I won't - certainly I won't bore you with all of that. And I wanted to take you through a few points where if you look at them individually, it's impressive. But if you look at them combined as a business, it's a position that's pretty much unmatched amongst our peers, both within the Olive industry and within the agribusiness sector. We've got inherent inflation protection, and this is -- this comes from having strong real asset backing, total tangible assets of over $665 million, which is mostly freehold groves, land, olive mills commercial buildings, this being one of them, and this 22-hectare site here. We have -- we produced the highest quality extra-virgin olive oil at basically the bottom of the global cost curve, which is a really neat position, and that's been able to be done because of the research done led by Leandro and our olive IQ, I suppose, proprietary integrated olive production system that covers everything from pre-olive to going into the bottle and all those places that you can improve quality or quantity or both and reduce cost. We sell our oil through market-leading brands, and this is important because we have more control over the price and a lot less variability. We don't have to worry about the world commodity price much. We don't have to worry about the currency much. And 75% of our group sales at the moment go through Cobram Estate in Red Island here in Australia and 49% of the value share of Extra Virgin olive oil in sales in Australia are through our brands and 36% of the total Oliver category. So 49% of the Extra Virgin category, but there's extra light and pure, those refined oils that come in from Europe. So it's 20%, 36% of that. The value of the brands is difficult to recognize. They carried on the books at cost, so they're not included in those tangible assets, but it's certainly a very -- they're very valuable assets. And you could -- one way you could look at it is the premium we get through Cobram versus the global price or the imported price of oil, which is really material. The other thing that we have that I think is really special is we operate in a market with really strong market fundamentals. It's really hard pushing dirt uphill. And we've had a lot of tailwinds in this category as people understand that extra virgin olive oil drives the health benefits. It's the only natural mainstream oil that hasn't had heat chemicals and solvents used in its process. It's a natural juice of fresh olives. And it's the only one that contains enormous amount of really important antioxidants and minor compounds that drive the health benefits and the health associated with the Mediterranean diet. And every day, there's another article comes out around why refined seed oils and processed foods are bad for you and why extra virgin olive oil or Mediterranean diet and vegetables are good for you. And that people are now really understanding that you should buy the highest quality olive all you can afford because the higher the quality it is, the better it is for health because there's more any oxidants and more freshness, which are all the things that you want. And it's why we aim to crush olive oil within 4 to 6 hours of picking is to lock in the freshness and the quality, and that's what we absolutely hold our hat on, which is why we've won so many awards in the Choice Magazine's most successful through all of their category reviews over the last 20 years. We've just -- we've been right at the top in all of them in the value for money, even though they were most expensive. The other thing that is -- I think is important is, particularly in this environment of really supplied -- a really interrupted supply chains and logistics and trying to get stuff and we all know when we're running any business, it's -- you've got all the things a long way in advance and they cost more and take longer. But we're really lucky because we really shielded from a lot of issues around logistics purely because we grow and sell olives in the country in which we operate. So here in Australia, nearly all of our olive oil sold here in Australia that we produced in Australia. So we're not relying on importing a whole lot of products and the same in the U.S.A. So pretty much within the 2 countries we operate, we grow and sell in those countries, which protects us a lot -- shields us a lot. It doesn't mean that there's not some things that we need to import, particularly equipment or machinery that process the olives. But apart from that, the bottles and the cartons and the oil and the people and everything else are all here. So it takes our currency risk and other things as well, but it's -- it allows us to sleep at night. The other thing is the excellent carbon position we have. It's very, very topical at the moment, and Leandro will cover this more. But our business is already a net carbon sync. And with 4 kilograms of carbon sunk for each liter of olive oil produced and sold, so right through to the retailer, it's a really good position to have and should be quite valuable to us over the short to medium term. We've also got some really good in-built growth drivers, which a lot of increasing supply in Australia from previously planted groves. The key bit there is that the cost of producing those or producing the oil. We're pretty much already carrying it because you're looking after the groves even though the -- and you're harvesting, you're doing all these things, even though you're not placing it. So we'll get a lot more production without a lot more incremental costs associated with that, bearing in mind that there is a bit of inflation around on the cost side. We do have big increases in supply coming in the U.S.A. It's been a real issue. But when we first moved there, a lot of the growers had signed up for 10 years and with other processes. And in 2023, we get a really big lift in the amount of oil available, both mainly coming to their [ pay ] growers, but also from grows we've planned ourselves and are maturing, and this will certainly drive revenue and profitability. And we also are making inroads. It's been a long ride, but it's - everything is good, it's not easy, but our value-add waste streams and our unit carbon position, I think, are 2 quite valuable things that we can make some good headway on in the next couple of years. And lastly, a really, really good management team, and it's a credit to these 2 guys and so many other staff here of just what they do every day and how they do it and that culture of just continual improvement and research and focusing on olives. We're just olives, olives, olives and so we haven't just read the first chapter of each book on what we do. We've almost written the book on what we do because it's a new thing, and that's why we're global leaders in the production of high-quality olive oil and why we can produce such high quality at such low cost, which gives us so many competitive advantages. Our teams published more than 27 peer-reviewed research papers since inception, just solving problems and I suppose, executing opportunities and trying to produce higher quality at a lower cost. The past year has been a strong year for our core Australian olive oil business. The 2022 harvest produced 9.5 million liters, which was 53% improvement on the last down year, as you know, and we talk about a lot. Olives have a 2-year production cycle with an on-year being a high crop followed by an off-year being a low crop and to get your true cost of production, you have to get 2 years' worth of crop divided by 2 years were the costs. Your costs don't change much in those years, but they do a little bit. And if you only look at 1 year, you've completely understating your cost of reduction in an on-year when you're overstating your cost of production in off-year because it's just the way the tree works. Whereas most crops are pretty much a 1-year production cycle. So just -- it's something that to be very aware of with our company. It doesn't cause us too many issues, but it certainly caused a lot of confusion. The U.S.A., we completed successful harvest and boosted our future supply through the purchase of additional land and a 50% share in a mature 94-hectare Californian Grove. But we certainly suffered last year, and it will be again a bit this year. We're just harvesting in the U.S.A. at the moment. I'll talk about that in a sec. We certainly suffered from a lack of supply. The sales -- the demand was really strong and it was awfully difficult for salespeople cutting back. But we -- look, we did manage to grow Cobram Estate at wholesale, at factory go by 11%, which is encouraging and confirms the brand is growing, but it's been -- we could do a lot better if we had the oil and we will have the oil, but it won't be until next harvest. A couple of important updates, I think that you'd be thinking about since 30 June, and one, the California harvest, we're 15% of the way through. And there's no surprises there. It's basically in line with expectation, very early days. And the prolonged drought that's spoken about a lot is not impacting us in any material way at the moment. Of course, we have it rains and never say it will never impact, but it's to do with valleys and licenses and [ bars ] and the age of trees and other things, but our trees haven't being sacrificed due to water. Flaring is a really important time in the groves in Australia for our crop. Obviously, we have 2.5 million trees here in Australia. And they like breezy, warm, sunny conditions, and it's all done by wind. There's nothing -- we don't need bees which is quite pleasing with what's happening in the bee industry at the moment but our trees will reach full bloom over the next 14 days and it's a really important event. So we're watching the weather closely. I am pleased to say that in our 21-year history, we've not had any material issues with fruit set that have impact in any big way. We've had some really minor things, but really consistent rain that doesn't stop, which we are getting a lot of and really, really hot winds can impact flaring. So it's the first time the year where you can really assess with any [ degree ] of accuracy how good the next year is probably. So we're quite optimistic. It will be okay. But again, we don't know. The recent rain that you would have read a lot about all the flooding we've been -- we've got a lot of good drainage. We're above major flood heights on our groves and there hasn't been any material damage in our groves. We do have some minor wet areas and some waterlog areas, certainly less than 1%. And there need to be a lot of further flooding rain for this to change and there to be a material impact. Our sales to date are tracking in line with plan, both in Australia and the U.S.A. But as I said before, supply remains tight in the U.S.A. The cost during the latter half of 2022, certainly were impacted by cost increases. But since then, the costs seem to have stabilized. So they just -- I mean, everything is up and down and whatever a bit, but we have seen some -- certainly, they're not still rising at the moment. So they are what they are at the moment. Look, on a full year outlook, it's -- we don't make forecast, but it's really difficult than to do with accounting standards. Our reported profit is driven off the value of the oil in the tank at the 30th of June, effectively, and you have that on-year, off-year cycle and the accounting standard doesn't take any of that into account. But we are coming into an on-year, so it will be a really -- should be a very profitable high-level year profit, bearing in mind that that's the on-year so don't get too excited. Importantly, that 2-year production cycle needs to be understood. Most of our existing shareholders, we had 850 before we listed, I think there's 3,000 now. But most of -- they really understand it after a lot of years on how that works. And operationally, it's not very difficult to manage because oil stores and these [ vets ] really well, and we can keep it fresh in these tanks and bottle just in time. So from a low year, we might be supplying the market for 8 or 9 months. And from a high cropping year, we might be supplying it for -- from a harvest for 14 months. And again, that really helps us just smooth it out because our customers don't want, say you're a 9-year, they don't want to say, "Oh, we want all the bottles of olive in a pantry now." They just want it every week when they turn up. So our sales and cash flow are very consistent over that period. You don't notice that we're having ups and downs in the harvest. It's really in the accounting profit. Yes. Look, we expect our 2-year average EBITDA to continue to increase over time from past investments in new plantings principally. Our growth that's planned is fully funded through existing debt facilities, operating cash flow and also the equity raising. We raised $50 million last year at $2 a share. So we're doing a major upgrade at Board at the moment. The boys will talk about that, a bit difficult with the rain. And I'm really pleased to say that the Board approved a $0.033 per share dividend, 70% franked to be paid in December, and Sam will have all the details on that. Turning to Paul Riordan, who sadly is stepping down. He's been talking about it for a while with me, and we've got a fantastic relationship. As a little bit of background, he lives -- he spends most of his time in the U.S.A., his 2 boys, Will and [ Angus ] are professional motorbike riders, Paul [ and fear ] over there and living on the office side of the country to where our groves are because I think that's a better place to be for the motorbikes, and that's really what they're doing. He's a firm believer in Board renewal and the graveyard full of people who couldn't be done without. But it's not going to be the same around the Board table because of Paul's style and his knowledge, but we really thank him for what he's done. And I'm just going to read a short piece about Paul to recognize what he's done for this business. So Paul and I founded the company in 1998 with Paul undertaking the international research that validated the event opportunity for growing olives in Australia. For the next 2 decades, Paul led our olive growth development and operations, finding ideal site for growing olives and planting our first trees of Boundary Bend in 1999 and overseeing our expansion with groves at Boort and Wemen. Paul had a very hands-on role in developing the initial groves and mill and was instrumental in the company winning inaugural Australian Oliver of the Year award in 2004. Paul moved to the U.S.A. in 2008 to help drive business growth. He transformed -- sorry, he transitioned to a non-executive director role in July 2021 and [ currently sides ] in the East Coast of the U.S.A. for much of the year, where there's wife, Fionna and to boys, having developed extensive interest outside of Cobram Estate Olives, including managing their own business and livestock farming interest in Australia. We sincerely thank Paul for his incredible vision, his willingness to take risk, his determination to succeed through the many highs and lows of start-up olive farming. And he and [ Fi ] willingness and flexibility to operate their family numerous times from place to place to support our growing business. Most of all, with my - his friendly approach to work and his deep and ongoing friendship with me, CBO Board and many of our staff, we wish Paul, Fionna Will and [ Angus ] all the best, and we're assured they will stay close friends in support of CBO. And we just showed Paul at a Board meeting this morning this, but we have a small vineyard at Boort. And so we've made some wine called, Paul's Affectionate, nickname is called Reggie. We've made some wines called The Reggie, in honor of Paul and [ Fi ], and there's a little story on the back. That's the very first label. You probably can't see it, very first label that we had when we were a Boundary Bend estate. And we're just going to sell them for costs to friends and shareholders so it is a good drop can guarantee it. You better buy a lot. We don't want to insult him that you think his wine is no good. Touching on Board composition because obviously, Paul's left, there's been quite a few changes to our business in the last 18 months around directorships. So I'm here from Executive Chairman, CEO to Non-Executive Chairman, Sam and Leandro stood up as Joint Managing Directors. We have Matthew Bailey resigned from our Board last year and Tim Smith as well. Tim Smith is now the Investor Relations person on a part-time basis. And we've had Dr. Joanna McMillan join our Board before the end of last financial year, sometime around then. We are very aware that our gender balance is not so good, and we're working on it. And I'm pleased to say we've engaged a recruiting firm quite a while ago. and we're down to the final 5 who are all being interviewed this week by 3 of the directors. And we hope to come forward with someone who will add a mix of skills and diversity to our Board. And yes, we're really excited about that. We got some fantastic candidates. So looking forward to that. In closing, we believe Cobram's very well positioned, strong balance sheet, unique -- really unique supply chain and knowledge in this category and lots of advantages in the category. I think there's one area from - well, it's a bit [ of area I'm going ] to say from marketing. But from growing the olive from right through, from nursery growing, packaging, processing, I haven't got it in the right order, lab and research, marketing and sales. I don't think there's anyone that does better in olive oil in any individual part let alone only the whole lot. And I don't say that just because we're gloating, it's a fact. Demand for extra virgin olive oil remains strong, which keeps us all optimistic. We can't rest on our laurels, but we're just -- it's so much easier being in a business with tailwinds and a product that people want rather than pushing a product that has a great margin and no one wants it because it's not good for you or something else. The trees here are in great condition at the moment. So we're really hopeful of a great crop this coming year, fingers crossed that the weather behaves for the rest of the year. It's certainly been quite hard to comprehend the variability in this country between droughts and floods. I'd also like to really take this opportunity to thank shareholders for -- and our customers for the faith that you have in our company and just turning up and supporting and we're doing our very best to try and make this company more valuable and more profitable and more sustainable and better corporate citizens. I would like to ask Sam first to come forward and do his presentation. And then after Leandro, he'll hand over to Lendo, and then we'll come back to the formal part of the meeting, and we can have questions and have a chat.

Thanks very much, Rob, and welcome to everyone, and thank you for coming down to our AGM, and welcome to those of you who are joining us online. Before we get into the detail, I just wanted to reemphasize a point that Rob made, if you move to the next slide, Russ, around the 2-year cycle and why we encourage investors to think about our business across that 2-year cycle. As Rob said, olives are naturally biannual bearing and that means you get a lower crop, which we saw in FY '22, which will be followed by a high-yielding crop, which we'll see this year and we saw in FY '21. And under accounting standards, we're required to measure the fair value of that crop. We're then required to deduct the actual cost of production. And that increment is taken to our profit and loss in the year of harvest, not when you sell it. So what we see typically is a lower profit year and a lower crop year and conversely, a higher profit year in a higher crop year. Internally, we think about our business over that 2-year cycle because of this, and we're measured on that. And very pleasingly, we saw our 2-year rolling average EBITDA for our Australian business increased to $53.9 million, which was a 19.7% increase on the prior year. Move to next slide. The detail around our profit and loss this year, we reported EBITDA, earnings before tax depreciation, and interest of $25.1 million, which was down from $72.9 million. Now the main reason for that was because of our lower cropping year where we harvested 9.5 million liters in Australia compared to just over 16 million the prior year. From an Australian business perspective, we -- our EBITDA dropped from $77.7 million, down to $32 million, again, driven by the crop and also some rising costs that we saw in the second half of the financial year, which Rob touched on. We also saw a drop in water price, which offset some of that cost and pleasingly an increase in net price per liter. From a U.S. perspective, we reported an EBITDA loss of $4.7 million, down from a small profit. 2 main reasons for that. Firstly, our sales dropped because of oil availability, and I'll cover off on that in more detail when we talk about U.S. sales. And secondly, we saw margin pressure in the U.S.A. in the second half of the financial year, particularly around the rising cost in packaging and particularly freight. In terms of what we've done about that, we've been negotiating with the supermarkets over the last 6 months. We've implemented a price increase of our U.S.A. products, which is all -- most of it has gone through in the first 2 weeks of October of this month. Innovation and value add, our loss of $5.3 million dropped to $2.6 million loss. We continue to refocus this business and more focused on biomass and ingredient products and continue to rationalize the cost structure. From a bottom line perspective, a very small loss of $700,000 compared to a profit of $35.2 million in the prior year. Move to the next slide. From a cash flow perspective, and Rob did touch on this, that the reason our cash flow is much less volatile and more predictable is because of the way we sell our oil. Our customers want oil very consistently month in, month out. So what we do as a business is manage our oil between the on and the off-year so we can consistently supply oil. So month in, month out, we're receiving very consistent cash inflow, and we expect to see more consistent smooth operating cash flow, particularly when you compare it to our reported profit. Our operating cash flow before interest and tax increased to $33.8 million, up from $22.1 million in the prior year. We continue to invest heavily in capital projects. We invested just under $37 million in CapEx this year, predominantly around growth CapEx, land, growth development in Australia and in the U.S. As you all know, we did a $50 million private placement in December last year. We did our $2 million share purchase plan in January this year. And of course, we paid a dividend last year as well. We move forward? From a balance sheet perspective, we saw an increase in our asset value during the financial year. The main driver of this was we had our assets revalued, which I'll talk about in the next slide. A couple of things to highlight on our balance sheet is that our trees and our irrigation infrastructure is carried at cost, written down cost. We don't carry it at fair value under our accounting standards. Our land and buildings, we do revalue to fair value. As Rob touched on, our brands are carried at cost, just over $6 million, which is the acquisition price of our Red Island and Cobram Estate brand. And under accounting standards, we don't revalue our brands to fair value. From a liability perspective, our gearing dropped during the -- our debt levels dropped during the year. And also just importantly to note, we -- there's a tax liability of $74 million on our balance sheet. Of that, $63.5 million relates to a write-up -- an accounting write-up of our asset values and would only ever be realized if we sold the assets outside of the group. So overall, assets increased, debt levels decreased, resulting in our gearing dropping from 37% down to 25%. This chart really just wants -- we want to highlight the tangible assets of the group. And the bar on the left shows our -- the book value of our tangible assets. The green bar is the valuation of our assets above book value that's not recorded on our balance sheet. So overall, we've got $665 million of tangible assets. And against that, about $135 million in debt. And as you can see from the chart, our debt level is almost covered by our current assets, being our inventory, cash, and receivables. Importantly, we don't have material leased assets, unlike a lot of other agricultural companies, only about 2% of our groves are leased, 98% of our groves are freehold owned and sit on our balance sheet. There's a lot of detail here, so I won't talk through it at all, but the key point here is that we had all our grove assets and our vacant land industrial property here and in California, valued by external values LAWD and CBRE. They valued those assets at $444 million, which compared to the book value of $255 million. As I discussed on the previous slide, the valuation increment relating to the land and buildings is taken to our balance sheet. The valuation increment relating to our trees and irrigation infrastructure does not go to our balance sheet and it sits outside of it, but nonetheless, a pleasing result. Moving on to sales. We did see growth in sales in Australia, and we saw a 7.8% growth in total sales up to $105.8 million. The chart on this slide just shows our branded sales, and we did see growth in branded sales, Cobram Estate and Red Island up to $90.1 million, up from $84 million. The majority of this growth, as you can see, comes from Red Island, but Cobram sales is relatively flat, but we did see an increase in dollars per liter or margin through that brand. In terms of what we're seeing in the first quarter, we're pleased that sales are tracking in line with plan. And as Rob said, we continue to see strong demand for high-quality extra virgin olive oil. The U.S.A. is a different story. So we did see a drop in sales, and this was really supply-driven. Just to recap, we source our oil 3 ways in the U.S.A. The first of those is from our contracted growers, which is where most of our oil comes from. The second way is from our own groves, and that's increasing every year as we plant more groves and as our existing groves start to grow towards maturity. And the third way is we source -- we source oil from third-party millers. Now that parcel that we've been sourcing from third-party millers during the COVID years, we believe, has been sold through food service as that's opened up. So that was actually unavailable for us this year, which meant we had less oil to sell. As you can see, the way we've managed that oil is we've prioritized the oil towards our brand, and we're still being able to report growth in branded sales, but our private label sales have decreased. In terms of first quarter, again, with -- like Australia, we're tracking according to plan, and the price rise I discussed has been put through in all our retail accounts in early October. From a marketing perspective, we launched a major marketing campaign over the last 6 months. You may have seen us where were the major sponsor of MasterChef. We also did a major campaign through mainstream media. So TV print, and we did a lot of digital work over the last 3 months on all the major networks. The marketing campaign was really aimed at our key brand attributes and, of course, calling out the health attributes relating to high-quality extra virgin olive oil. We've seen good results from that campaign, very good initial results in terms of consumer awareness, and we expect that this will continue to drive demand towards our Cobram product. The financial outlook, we're still seeing very strong demand across both countries, which I've touched on for our product. In terms of our profit, we are coming into a 9-years, so it's not surprising that we're expecting a big increase in statutory EBITDA for FY '23, which certainly be materially higher than the year just gone. And we're continuing to expect really strong operating cash flow. Rob touched on this, but costs do remain at elevated levels that we saw in the second half of the financial year just gone, but certainly have seemed to stabilize. We continue to invest very heavily in growth CapEx, and Leandro is going to touch on that during his part. And as Rob touched on, our growth plans have been funded by our existing debt facilities and headroom and positive operating cash flow. The dividend that Rob announced has been declared. We'll be paying $0.033 dividend, that is 70% franked. Shareholders will be sent communication around this dividend and all the detail. The dividend will be paid on the 7th of December this year. We are offering a dividend reinvestment plan at a 2.5% discount. The discount will be applied against the volume-weighted average price for 5 days after the final election date. So again, details of this dividend will be sent via our e-mail or post. Now - it will be plenty of time for questions after Leandro has finished, and I'm now going to hand over to Leandro, who will touch on the business operational highlights.

Thank you. Good morning all. Great to be able to talk to a real audience again. So thank you very much for coming to visit us here in Lara. And thank you for all of those that are following us online. Thank you, Rob and the Board for the trust and support, particularly over the past 2 years or 1.5 years since Sam and I took over as joint CEOs. And I'd like to really thank Sam. I couldn't think of a better person to share the leadership responsibilities that we have. I knew we worked together for more than 15 years. So I knew we had a great working relationship, but it was only after becoming joint CEOs that truly the trust, the respect, and the understanding that we have for each other grew stronger. So thank you. We can move to the first slide. It's not normally something that we talk about, but we received a number of comments and calls, and e-mails from shareholders about the current situation in Spain and the drought in Europe and how that would be affecting the international olive oil market. And that's why we thought it would be important just to give you a very quick snapshot of that situation. This graph here shows the evolution of the production of olive oil over the past 20 years. So the different colors represent different countries. We've got the green for Italy, the light blue for Greece, which are #2 and #3 producers gradually declining for the past 17 years. And in red, we got Spain, the big largest producer, around 50% of the total global production. And you can see the ups and down a bit of that jigsaw thing. That's mainly related to environmental aspects. And if you -- if we look at what we got as an estimate for the 2022, '23 harvest, we see a significant drop pretty much across the entire Mediterranean, especially for Spain, but also for Italy, Turkey, Tunisia, and some other countries like Morocco and Portugal. 2 things I want to highlight on this graph. The first one is that the average production of olive oil around the world have not actually significantly increased in the past 20 years. In fact, if we average the production of the past 5 years, including this last estimate, we got just under 3 million tonnes of olive oil. And if we average the production of the past 20 years, we actually got exactly the same figure, just under 3 million tonnes of olive oil. The second factor that I want to highlight is represented in that graph with the black line. The black line is the global consumption of olive oil. And what we can see from this graph is that clearly and consistently consumption is being restrained by supply. In fact, in several occasions, we see consumption coming down as a consequence that just simply there's not enough olive oil to sell. And if we go back to the estimates of this coming year, the amount of contraction that will need to happen if these forecasts are true, and we are in the very, very early days of the production, we will see a significant constriction in olive oil consumption, probably higher than what we have seen in any of the previous 20 years. And obviously, not having enough oil is a clear reason why you're going to curve down consumption, but the other leading factor will be price. And we move to the next slide. So it comes to no surprise that if we look to the bulk price of olive oil in [ Europe ] extra virgin oil in Spain as the main market, we have seen a sharp increase as soon as these forecasts are becoming realized with the new harvest with prices at historical highs and almost double -- or a bit more than double of what they were 2 years ago. As Rob said, in our business, one of the great things that we have is that because we are selling most of our oil through branded products, we are sheltered from the many, many years of low commodity prices. Probably the opposite is also true in times where the bulk price really spikes, the benefits that we'll reach us will be only and mainly of indirect nature, just mostly because imported oil will have to be sold both in the U.S. market and in the Australian markets at a higher price or likely to be at a higher price or if not, with lower depth and frequencies of promotion. We can move to the next. As a summary of FY '22, a lot of things have been said, it probably has been arguably one of the most challenging seasons all over it from the business perspective, not just for us, but many other businesses around the world, raising inflation, tight labor market, COVID restrictions. In the case of Australia, consistent rainfall through harvest that keep coming, and we have been hearing that happening in the case of the U.S., the drought. And that's why when we analyze these good results that we have seen in this year is actually a reflection of how resilient our business model is. And despite having an off year or a low crop in year in Australia, being able to produce almost 12 million liters of oil, it's actually a great achievement and consolidates Cobram Estate olives as one of the largest, if not the largest, fully vertically integrated olive oil companies in the world. As Rob mentioned, the rain and the floods, fortunately, have not impacted us directly at the groves. We did experience some flat damage back in 2010 and '11. So definitely, our thoughts are with those communities, those families, and those businesses that have been impacted by these flats, which are certainly a very difficult thing to handle. We can move to the next one. In the last harvest is in 2022, we were always expecting this to be a down year. But we were actually quite pleased with the 9.5 million liters of olive oil produced. It was a big jump over 50% higher than the previous off year. And fundamentally, it helped us to lift the 2-year rolling average yield by another 15% on the back of the 15% that we achieved the year before. This was under very challenging circumstances. We got over 150 mills of rainfall during harvest. That's more than 156% more rain than normal. It ran over 37 days out of the 60 days of harvest. So virtually more than one every second day, we have been experiencing rain. That's nearly 70% more rainy days than average. And our staff has done a fantastic job to be able to get us safely to the end with very limited impact on the timing of harvest or the quality of the oil. The stuff is brilliantly led by Ruth Sutherland. Ruth is probably watching us from Board, working hard on the extension of the processing plant, and also was supported by Rachel Walker and [ Dale Smith ] grove managers at Boort and Boundary Bend. Naturally, the 2023 crop, as Rob and Sam have said, is going to be a larger crop. The trees have put a significant amount of growth over the past growing season. We jumped the first hurdle. The first hurdle is going through winter. We had any significant first damage. It was actually a very good winter. It was mostly wet, cool winter with very, very limited extreme cold temperatures. So the trees are really well set for a good [ flaring ] that obviously, as Rob said, is about to start now, and we'll take about 14, 15, 16 days to conclude. So certainly, the conditions that will happen, not necessarily every single day, but you probably want a majority of good days or a good amount of good days to guarantee a normal fruit set. As Rob said, oil is always pollinated by wind. We don't rely on bees for doing that. We just move to the next one. Talking about California, I just landed back from California, got here yesterday morning. So the news that I'm bringing are actually hot from the press. So probably being extra virgin olive oil should be called from the press but anyway, it's -- and things are actually going well in California at the moment. We were off to a pretty good start. We started doing little batches early in October, but the mainstream harvest started the Monday of the week before, the 17th of October. We actually yields quite in line with our expectations. The harvest is doing really well. We were achieving very good processing in efficiencies early on. The weather is fantastic from the harvest perspective, low 20s, sunny, breezy. It's exactly what we expect. And the forecast is actually looking quite good for the next 2 weeks so fingers cross, things will continue to progress this way. I just wanted to highlight one thing because it seems minor, but it's a great achievement. I mentioned that we started harvesting on Monday, the 17th of October. When I left California on Tuesday this week, we were already bottling the 2022 harvest into our California select bottles. So within a week, convert the olives from the trees into the oil in the bottle and being shipped to retailers in California is a great achievement. Obviously consolidates our message about the importance of freshness and the quality of the oil that gets delivered to customers, but also highlights the fact that we are quite constrained about oil, and we're desperately wanting and waiting for that fresh oil to come out. And it's also a great achievement from all our team in the U.S.A. that probably some of them are watching us now that actually built a great culture and great systems allowing us to be able to do that and to then capitalize on the large growth that we're expecting over the coming years. And great thanks in particular to Conor Churchin, our COO over there; and Trenton Gallagher, our CFO, that are brilliantly leading this team. Move to the next one. I think Sam and Rob already talked a fair bit about the challenges around the increasing cost pressures, particularly around fertilizers, electricity, labor. Fortunately, in this particular year, especially in the operations in Australia, some of those rising costs has been partially offset by lower water prices. If we looked at the 2022 financial year, we end up paying an average of $88 per megaliter of water. That is just slightly over half of what we pay in the financial year 2021 and slightly under half of what we have been paying as a long-term average. To date, we have purchased a bit over half of our total water needs for this coming year and the average price that we have been paying is $42 per megaliter, so a bit under half again of what we paid last -- in the last financial year. Move to the next on - sorry, one thing that I wanted to mention about the previous slide is the fact that clearly being able to produce, and that means grow mill and bottle over 85% of the oil that we sell, combined with our very conservative approach in terms of stock on hand when it comes down to packaging materials. And the fact that we don't -- or we strongly rely on locally supplied packaging materials have helped us to provide that strengthening the supply chain that led to when it was that about a month ago, receiving the recognition from calls as the overall supply of the year, competing against thousands of other suppliers, achieving that is a great credit to our systems, to our decisions, to our business, but also to our staff across the entire production chain. But in particular to a lot of the stuff that is with us here today that works here in Lara about 70 staff all up between bottling, admin, warehouse, logistics, oil management that help us to achieve that. So thank you very much for that. And then we move to as a conclusion of the last part of my presentation is talking again about our 4 growth pillars, which are very, very simple. The first growth pillar relies on us being able to produce more oil from our existing groves in Australia, mainly through obviously the maturing profile of those trees and also increasing efficiencies, continue growing our business in the U.S.A., continue promoting our branded sales to be able to drive a higher return per liter of oil and also capitalizing on our opportunities linked to our great sustainability position and our value-add opportunities. So I'll then cover some of the key aspects related to those 4 growth pillars moving forward. In the case of the first point about producing more olive oil from our Australian growth, obviously, having been able to achieve for 2 consecutive years in a row, a growth of 15% of our 2-year rolling average. It shows the great strength of that pillar. And as I said before, on one side, we got a great opportunity to continue growing, given that 29% of our trees are still immature and a further 7% has not even come into production yet, and that is not even considering some of the new planting that I'm going to talk about. But probably, I must admit that most excitingly for me and for all our team has been the fact that we also added more oil by being able to lift the average yields of our already mature growth. So we looked at the graph on the left-hand side of your screen - well, your right-hand side of the screen. And what we can see there is that when we go see them and an off and on-year, the average yields that we have been able to achieve in our mature [ orcas ] grew from just under 14 tonnes of olives per hectare to over 16.2 tonnes of olives per hectare in the 2021, '22 season. This is actually quite important because it talks about the long-term prospects of productivity. At this point, I think that has been mentioned before, but I'd like to highlight again a little bit some key aspects around the biannual nature of olives. In reality, this alternative-bearing phenomenon is actually quite common across most fruit trees and olive trees in particular. And it happens quite simply for one reason, producing olives or producing and sustaining a very large crop of olives is quite demand in energy, the energy that the tree has to produce. So if it's spending too much energy supporting in the crop, it doesn't have enough energy to put into growing more shoots that are going to be the ones that actually hold the crop the following year. The opposite happens in an off-year, not enough energy going to a supporting crop, so you can put a lot of growth and set the tree for a big crop the following year. And if you have been following our results, particularly in the past 5 years, there has been quite a bit of a sharp tendency of going up and down in that on-off cycle. And the main reason for this is because back in 2018 due to the nature of our replanting program, the vast majority of the mature trees that we have under production were all located in one single grove, which was Boundary Bend. And that grove was hit in 2019 by damaging frost events that reset the entire grove or vast majority of that grove towards an off-year and then an on-year after that and so on. So this improvement that we have seen in the overall yields and also the reduction in the delta between the on and the off-years. It's linked to a number of management practices that we have been applying in particular, the setup of more than 180 [ frost fans ] to protect those trees at Boundary Bend and Wemen in particular. But also the replacement of those lesser performing varieties, improvements on pruning, improvements on irrigation, incorporating technology like satellite imaging to pick up those 1 percentages that are very difficult to see at ground level and with the naked eye. But also because gradually, the mature trees from Boort that we have been replanting back in 2015, '16, and onwards are joining the overall balance of trees across the company, and that helps to reduce that delta. So we can move to the next one. As I mentioned, obviously, as many of our production costs are rather fixed. Obviously, every bit of extra oil that we are able to produce mostly flows to a better financial result for the company and really as profit. And that's why we will continue investing in this first growth pillar. One of the projects is the upgrade of the board mill, which by early April -- early mid-April in this coming 2023 harvest will be operational. We're increasing the capacity of the mill overall by 160%. You've got some images there of the current situation of the work happening on the ship and some of the images of what the mill will look like. The reality is going to be the largest facility - is going to be the largest olive mill in the Southern Hemisphere and certainly one of the largest olive mills in the world. So we move to the next slide. And the other thing that is happening at Boort is that the development of the new 415-hectare planting just to the southeast of our existing grove at Boort, and that will be increasing the overall production of that grove by 13%. Then if we move to the pillar of the U.S.A., obviously, we said that several times, supply has been our biggest constraint in terms of being able to grow our branded and private label sales over the year. So I'll just highlight some of the key milestones of the things that we have been able to achieve over the past 12 months and that we are planning to do over the next year or so. We purchased 2 properties next to other 2 properties that we had before to be able to develop what we call the Dunnigan Hills Ranch in 2023 and '24 financial years, which will allow us to add about just over -- just nearly 400 hectares of olive grove. And then what we have done also, we purchased half of a mature existing grove, which is what we call here and is in Napa, Orestimba Ranch. And all those ranches share one common thing that is probably a bit hard to see from the map, but they're all located on the foothills either of the Sacramento Valley or the [ Central ] Valley, not actually far from the influence of the delta of the Sacramento River with San Francisco is. That position where it offers is a great shelter against frost-damaging events in California. At the same time, a little bit of an influence from those cooler air from the ocean, keeping temperatures doing some a bit more moderate and allowing more oil accumulation, and at the same time, having allowing us to access dual sources of water from surface irrigation when it's available and also underground water. So all in all, every year that goes by, it confirms that ecologically and geographically, the growth and the location that we have chosen are fantastic to grow olives in California. We can move to the next slide. I'm going to show you just very quickly some slides of that -- photos that have been taken from our growth over the past 2, 3, 4 days are actually quite fresh. This is an image of our [ colossal ] from Australia transported to the U.S.A. and harvesting our Debo grove, which is our oldest grow in California. It's a fairly small growth, but getting close to maturity at the moment. Move to the next one. We've got images of Espartp Ranch grove. To the left, is a beautiful location planted in 2021. And then on the right-hand side - your right-hand side here is the Dunnigan Hills Ranch already prepared, ready to be planted in the next spring. And then we got, I think, one more set of images of our Hungry Hollow Ranch planted in 2019 with a great crop this year being harvested by the Boort, which is this oversized [ grape ] harvester. The harvest in the U.S. this year was always expected to be an off-year for the entire California industry, but we're going to be producing an amount of oil that is roughly in line or similar to what we produced last year. And that is mainly driven by 2 things. One of them is our growing younger trees, like the ones that we've seen in the photo that actually have a very, very, very good crop. And the other factor is that we have increased the area of contracted growers that we have for about 1,300 hectares in 2021 to more than 2,100 hectares between this year and 2023. So it's actually more than a 60% growth in the contracted area in California that will help us to support that growth and that big jump on production that Rob was mentioning for the next harvest. Move to the next slide. When we talk about the third growth pillar, which is obviously increasing or aiming at increasing our return per liter of olive oil, we certainly have a number of levers that we can pull to achieve that from playing from the mix of oil that goes to the different brands and private labels to the packaging format that gets used to the depth and frequency of promotion. But new product development is certainly one of those things that we can use and try to use to achieve a better return per liter. And here are some of the examples that happened over the past 12 months, we have a limited release of really, really nice varietal oils, the Manzanillo and the Koroneiki [ than ] exclusively for Coles and also available online. Our truffle infusion that had years and years in the making because we were never happy with the flavor until we actually got it right in terms of the flavor and the quality of the infusion. And much more recently, our garlic and chili, the truffle oil is available across all supermarkets and the garlic and chili through Woolworths and online. I just want relating to new product development, thank the entire NPD group that we have working is a cross-functional group, but in particular, Claudia Guillaume from the technical and manufacturing point of view and Lissy Byrne-Jones from the marketing side because they've been driving a lot of really exciting things. Some of them will be coming soon and I'm not allowed to say much regretfully, but you will be able to see that happening soon. We move to the last of the pillars, which is our sustainability and value-add pillar. Definitely, 2022 was a very active year on this front across many, many areas. In particular, the amount of work and opportunities that were coming, we're getting quite significant, and we decided to create the new position of sustainability manager. We employ Justin Pilgrim. They had a fair bit of experience on the carbon credit space but also worked several years with WWF. And through Justin, we have actually set up a cross-functional sustainability committee that very quickly have determined those 3 pillars around the work that we need to do with people, with the planet, and across our business. And these are the 3 things that I'm going to be touching on now. But we always knew that olive oil was a very sustainable product. And to be honest, we were -- when we started all this, when Rob and Paul started all this, we were essentially farmers at heart. And sustainability wasn't really front of mind for us. We had a lot of other things to worry about, trying to get the audits to work and to be able to produce. But right from the very beginning, we pay a lot of attention to be very conscious about the use of our natural resources, especially water and fertilizer. And all those really good horticultural practices actually set up the base of what is our sustainability fundamentals now and have driven the creation of the Oliv.IQ management system that I'll remind you that is able to help us to produce 9x more olive oil per hectare than the industry average around the world, all doing that by using steel 37% less water, 61% less hydrogen and 82% less phosphorus per ton of oil than the industry average. So it is really a great achievement that we have done here. In terms of people, and we can move to the next slide, one of the things that we have done and continue doing is putting a lot of emphasis on education, educating healthcare professionals, educating our consumers about the great things behind extra virgin olive oil. I always like to quote Dr. Mary Flynn from Brown University in the United States when she says that when it comes down to scientific evidence, in terms of prevention and management of chronic disease like cardiovascular disease, diabetes, cognitive decline, and many types of cancer, no other food cans even close to extra virgin olive oil. And there's so many other things that we can say about this. We were talking about this -- about this morning. Extra virgin oil is actually one of the most ancient foods that we have nowadays. Genetically, the olives that we currently have not changed. We are crushing exactly the same olives, exactly the same varies that were crushed by Romans and Greeks 2,000, 3,000 years ago. And by this one, it is really one of those foods that have been able to retain not only those flavor characteristics but also all the health benefits that come with it. And we have done a lot of really great initiatives in this space. We partner with Melbourne University -- with Monash University to certify our infusions as low-friendly, which is have been a great achievement. We continue driving our healthcare professional education campaign through Cobram Estate and through our Olive Wellness Institute. We've been doing also what we call now the Cobram Estate Academy, which really are the virtual tastings and I'm sure most of you or all of you, hopefully, have done them. And in that process, we managed to break a Guinness World Record last year. Again, a great achievement with more than 18,900 kits sent and more than 16,700 unique views on that night. That was a great achievement, and thank you to Sarah Haworth and Sian Armstrong, our company dieticians and healthcare professional educators to drive this area of the business. And we move to the next one. But we also put a bit of emphasis on our own people and making sure that we did everything that we possibly could to attend the physical and mental well-being. And probably for those like us that have been lucky enough to be with the company from the very beginning and being able to leave and breathe the humility, honesty, and passion values that Rob and Paul lived everyday was quite easy to grow under those values. But Sam and I always thought that as the company grew and we have more employees, more locations, it was actually quite important not only to identify those values that made the company what it is today but also to promote them and to recognize them with our own staff. In fact, 2 weeks ago, we had our staff award night where we gave 2 awards for each of those values to 6 really worthy recipients. But I just wanted to tell you one story. So I'm going to take 1 minute to tell you one story in particular because I was directly involved with nominating [ Dale Smith ], which is our grove manager at Boort and to the award of humility. Doing harvest, I was -- I moved to Boort to be able to be right there just in case that it was COVID restrictions and everything else, and I could give a hand with the tight labor market there. So like most people do at Boort, I joined the local gym, not a big gym, it's a fairly small place. And I was there one late afternoon and 2 Argentinian backpackers that we are working with us were doing some weights and talking to each other, they had no idea who I was or that I would actually understand Spanish what we are saying. And I realize that we're talking about Dale, which is actually his -- technically, it was his overall boss and say, "What a great guy Dale is. He's so worried at all times that we actually okay and that we've got everything that we need both at work, but also outside work." And the other guy said, "Yes, I agree with you. But not only that, last night, it was raining and we needed some help to fix fish plates in the harvest, which is the piece of equipment that goes at this part of the harvester. So Dale goes. And when you have to fix a fish play, there's only 2 positions that you need. You can either go on top, which is an easy one or you can have to be lying your back on the muddy ground, contorted under the machine. And without any hesitation, Dale went straight for the hardest one." And this guy who said, "Look, I just cannot believe that Boors will actually do that to allow us to have an easier time because we had to keep picking through the night." So at that point, I interrupted them. And I thank them for that feedback. And we're actually quite surprised. I think that they thought, "Oh, you Leandro, whatever, they thought that it was probably like a 90-year-old things." So they were quite surprised me in the gym. Apologies if it took too long, but I think that -- I thought that it was actually important for you as shareholders to know those little stories of the people that actually help us make this company [ EBITDA ] apart from the probably more familiar faces that you see a couple of times a year when we discuss these results. We can move to the next one. When we move to the planet, we -- as Rob said, we completed 2 full independent carbon footprint evaluations, and both of them came up with very, very similar results, highlighting the fact that our biomass below the ground and above the ground is able to sync as Rob said, a net amount of about 4 kilos of carbon dioxide per liter of oil that we produce. And certainly, based on that, we have been exploring different ways of converting that position into actual different types of carbon credits. But the other thing that came out of those reports was the fact that we still had opportunities to keep doing even better. And one of those opportunities that was highlighted was actually the reforestation with native vegetation of some of the areas that [ Cobram groves ] that we're already cleared, but not plenty with olives for a number of reasons. And that's how we partner with the non-for-profit carbon farming foundation to plant and develop a number of stages. The first stage of 200 hectares of native vegetation, and you can see the image there was planted at Boundary Bend in August and probably it must have been the better-irrigated mallee plantation in history with the amount of rain that those little seeds got. So hopefully, we'll be off to a really good start. But what we can see from this photo is quite interesting is these areas that we are planting here will be interlinked with some of those native vegetation corridors that we already left in our farms. We've got more than 1,300 hectares of native vegetation that has been previously marked out. And it's generating a great environment to protect native animals as well. And if we move to the next slide, one of those native animals is the Mallee fowl, which is a very unique bird. I'm not sure if you're familiar with it. It lives really in those environments where we have our grove. It is an endangered species. And they actually next in this really unique dirt amounts that they actually build and they keep the temperature of the eggs constant by throwing more dirt or taking dirt out of the eggs. Anyway, trying to make sure that it comes out of the list of endangered species. We have partnered with the Victorian Malleefowl Recovery Group and one of the initiatives that we are sponsoring with them is a live camp. So hopefully, through our social media, we will be able to follow this unique and amazing process of the nesting of this bird. Go to the slide. From the business perspective, obviously, we are supporting the sustainable development goals at the moment of developing our own sustainability framework. And we also just joined the United Nations Global Compact. This is a network of companies that share the same view around 10 basic principles that covers really essentially human rights, employment or labor, environment and anti-corruption. And we move then to the second last slide that I have. Another area that we've been putting a lot of focus is in maintaining our criteria to reduce and value our waste, to our zero waste -- we call our zero waste approach. The images that you see there is our brand-new pomace treatment plan that we are about to commission at our Boundary Bend processing plant. This treatment plan is the final result of years of research and development that we put to get here and it's a partnership with sustainability Victoria. And what this plan is going to allow us essentially to improve the quality and the consistency of our biomass that, in turn, will allow us to capitalize in a number of business opportunities that we have been exploring. And they are really waiting for the product to come out of this treatment plan to be able to manage as renewable energy as animal stock or feed or as organic fertilizer of high value. And on the last slide that I have, I just want to touch on the fact that also as a result of a number of years of research, we just launched the 2 products under the Wellgrove brand. One is our essential grains, which is a really interesting mix of natural antioxidants, mostly from Mediterranean-type vegetables, but also from olive leaf tea and extra-virgin olive oil powder. And the other one is the plant protein that thanks to the extra-virgin olive oil powder has a much creamier and rich texture, which is not something that you normally link with plant-based protein and the exclusive and oxidants coming from olive is that we have the hydroxytyrosol and maslinic acid will aid with muscle recovery. You have some of these samples to try in your hamper bags at the end when you are leaving. All these initiatives, again, I just would like to highlight that put us in the situation that less than 0.1% of our outputs from all our funds and operations actually end up in landfill. And when it comes down to outlooks, it's probably difficult always to be precise about that when we're talking about new product development and when we're talking about new markets. But what we are confident is that we have really reached and passed the most expensive and capital-intensive time of research and development for this phase. We're also very confident that we learned our lessons about where and how it's better and most cost-effective to sell the products of our portfolio. We have also reached -- or we are about to reach, especially with the biomass, a mature point of the business, similar to what we have already achieved with the extraction of oil left over in the [ Pulmas ] and our refining plant, which has been really quite successful for a number of years. So with all this in mind, it is hard not to be very optimistic about this growth pillar because really in the short term, we would have been able to achieve the 3 goals that we set ourselves regarding these, which is really to position and promote even further the image of the olive tree and the olive products and especially extra-virgin olive oil as a healthy and sustainable product to support Cobram Estate with a very, very credible sustainable story well backed up by science and credits. And third, to be able to convert our long-standing cost center of handling the waste from our production to a profit center by upcycling these byproducts of olive oil production. I think I cover all what I had to say. So thank you very much, and I'll hand you back to our Chair, Robert McGavin.

Thanks very much, Leandro. Now to the really exciting part of the meeting. There's a bit to go through, and I need to make up a little bit of time, so I'm just going to read through what I need to read through quickly, and then we'll get to the voting and try and leave as much time as possible for questions and comments. The company secretary has confirmed that Notice of Meeting and Explanatory Memorandum dated 26th of September 2022 was circulated to shareholders entitled to receive it within the notice period. The matter required consideration today but 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 the procedures. The results of the polls will be declared and released to the [ axis ] later day will also be published on the Cobram Estate website. And in accordance with the company's constitution as set out in the notice of meeting, where we have determined that voting on each of the resolutions to be ducted by a poll rather than by a show of hands to give those online and in the room a better opportunity to cast their votes. As Chair of the meeting and as detailed in the notice of meeting, I will vote where authorized all undirected proxies in favor of each resolution. As mentioned previously and for those attending the meeting in person, you can cast your vote by filling out a paper voting card. If you have any questions, please see a Link Market Services team member at the registration desk where you first came in and registered today. For those shareholders participating in the meeting via the online platform, as mentioned, you can cast your vote - your direct vote using the electronic voting card that you received when you validated your registration. If you have any questions about casting your online vote, please refer to the online platform guide or call us on the numbers set out in the guide or on the screen in front of you. I hope it go smoothly. For anyone with a yellow or blue card, who wishes to speak or ask questions when asked, if you can make your way to the microphone over there and just line up and we'll get through the questions. And for those participating on the online platform, you'll be able to hit questions by registering as a shareholder or proxy holder and selecting the Ask a Question tab. I will consider the questions submitted online after I've taken questions from the floor. Out of fairness to everyone present, I ask that you limit your questions to one at a time and restrict your questions and comments to the resolution considered until we get to the latter end of the meeting where you can ask any questions. I reserve the right of chair to real questions out of order or not pertaining to the AGM. We're moving to the formal business. There are 4 items of business. We will discuss each of these following time for questions and vote where appropriate. Item 1, financial statements and reports. I have it in my hand before, but I don't have it with me, but you have received it. And the first -- this is the first item [ business of gender ] for discussion purposes only and is not a resolution and it relates to the 2022 financial statements and reports. However, the Board and orders will certainly take any feedback on from shareholders. The '22 annual report contains the company's financial report, directors' report and the independent auditor's report. A copy of the annual report is available on the Cobram Estate website and was e-mailed to all shareholders for whom we have e-mail addresses or sent to those who requested it. The financial statements have been approved by the directors and audited. Note in my early comments, I will take the financial statements and report as read. To receive and consider and adopt the financial report and the related directors' report and auditor's report for the year ending 30 June 2022. At this time, I invite shareholders to ask questions or comments to the management of the company or to Peter Glynn, who is our auditor partner from Deloitte. Are there any questions from the floor? And if so, if you could just move forward to the microphone? Go ahead.

Very short.

Sorry?

My name is Norm West. I'm a shareholder from Bendigo and for those who don't know where Bendigo is, it's near Boort. I'd just like to thank you and the Boort and staff, very warm welcome when we arrived, and it's a delight to meet with people who are so willing to assist. And secondly, congratulate the Board on holding your meeting here where your half your production or most of your production is achieved. There's plenty of companies with good products and hide away from what they actually do. So congratulations. Thank you.

Thanks very much, Norm. Very kind of you. Russell, any questions from the online platform?

Yes, no. There's no question.

Yes, there's no questions from online. So we'll move to item 2. Item 2 is the adoption of the remuneration report. The remuneration report detailing the company's approach is also contained within the 2022 annual report, which is available on the Cobram Estate website. Now in my earlier comments, I'll take the remuneration report as read. Further details about the resolution contain explanatory Memorandum that accompany the Notice of Meeting. This vote is advisory only and not buying on the directors of the company. However, it sends a strong message. Noting that each of the directors has a personal interest in their own remuneration from the company, the Board unanimously recommends the shareholders vote in favor of adopting the remuneration report. Are there any questions from the floor in relation to the remuneration report? While you're coming up, I'll ask if there's any questions that have come through online with regards to remuneration report?

No questions online.

All right. That's good. As there are no further questions, could you please vote for, against, or abstain next to item 2 on your voting card or platform, whichever the case may be? Item 3 is the reelection of Non-executive Director, Tim Jonas, who unfortunately has got COVID the day before yesterday and is quite ill and obviously, wouldn't attend even if he wasn't well because he'd give it to everyone else. Tim is a former managing partner and National Chairman of Pitcher Partners and National Association of Independent accounting firms across Australia. His qualifications include a Master of Business Administration and Bachelor of Commerce. Tim is a fellow of the Institute of Chartered Accountants. In Australia, Tim holds several directorships and provides business advice to our wide range of businesses, particularly in the agribusiness sector. Tim is currently a Director and Treasurer of the Australian Stockman's Hall of Fame and Heritage Center in Longreach, Queensland and Chairman of Daniel Robinson Proprietary Limited Property Holding. Tim has been involved with Cobram Estate since the inception and was appointed as a non-executive director in 2005. He currently chairs the Audit and Risk Committee and is a member of the Remuneration and Nominations Committee. The directors with Tim Jonas abstaining, names recommend that shareholders vote in favor of this resolution. Are there any questions from the floor in relation to the reelection of Tim Jonas? Are there any questions online?

No questions online.

Okay. As there are no further questions, I'll ask you to please select for, against, or abstain next to Item 3A on your voting card or online platform. Thank you. Item 3B is a reelection of Executive Director, Leandro Ravetti, who you just heard from. Leandro graduated as an agricultural engineer in Argentina and work for the National Institute of Agricultural Technology and Olive production Research from 1995 until he move to Australian in 2001 to join our business. Leandro has studied and worked as an invited researcher at the Olive Growing Research Institute in Puglia, Italy and different government mental olive institutes in Andalucia, Spain, where he completed a post-graduate degree on Olive Growing and Olive Oil Processing. Leandro was -- he's got a long resume. Leandro was appointed Executive Director of Cobram Estate Olives in 2005, as part of the [ Leandro ] overseen all technical aspects of olive growing and olive all production, developing the Oliv.IQ growing system. Leandro was an alternate director of the Australian Olive Association between 2009 and 2012 and was drafting leader for the Australian Olive Oil Standard. Leandro has also received numerous lifetime award from the Australian Olive Association for his outstanding contribution to the Australian olive industry, and he was also a recipient of an award in the Master Olive Chemical Engineering - Olive Milling and Chemical Engineering category in the inaugural "Health & Food, Extra Virgin Olive Oil Awards" announced in Spain in 2017. Leandro was appointed Joint-CEO (Technical and Production) of Cobram Estate Olives on 20 April 2021 and formerly held the role of Technical Director. I was going to ask Leandro to say a few words, but he's already said a lot, and we're pretty short of time. The directors, with Leandro abstaining, unanimously recommend that shareholders vote in favor of this resolution. Are there any questions from the floor first? Any online?

No questions online.

Great. As there are no further questions, can you please select for, against, or abstain next to Item 3b on the voting card or the online platform? Item 4 is to transact any business which may be lawfully brought forward. Russell [ is the only ] business that may have been brought forward. Are there any questions from the floor? And we will have a session after this on general questions. Any questions online?

There's one general question. From Mr. John [ Volv ]. Please advise the payout ratio to shareholders of the $0.033 dividend.

Sorry, there's a bit of banging. What…

Please advise the payout ratio to the shareholders of the $0.033 dividend.

Sam, can I refer to you on this one?

Happy to answer that, Rob. I think importantly, as a Board, we don't have a strict payout ratio, and we consider a number of factors when declaring a dividend, including the profitability of the company over a 2-year cycle, which for Australia this year was $53.9 million and including the operating cash flow of the business, which for this year was $33.8 million. And of course, the desire of the company to reinvest some of the profits back into growth CapEx. To put it in perspective, the dividend of $0.033 represents about $13.7 million payout in cash terms.

Is there any other general questions or comments before we take a tour? Do you mind moving to the mic, please? If you just line up at the mic, if you want to ask questions. Thank you.

My name is [ Henrik K ]. I'm a shareholder. I noticed that you're not putting the plan protein into gyms and fitness centers like GoodLife and Fitness First. That might be an option for the company. And also I've noticed in the supermarkets, there's no pure out-of-oil margarine or butter. That might be a number option for you as regards products.

Yes.

That might be good because butter olive oil, there's nothing 100% olive oil in those 2 categories to my knowledge. So that might be an avenue for [ year ].

Yes. The [ difficulty ] is that you can't make the olive solid without hydrogenating the fat. And that's a really unhealthy process. It creates a lot of byproducts that are in all of those margarine that really humans probably couldn't consume. I can talk -- I could get our nutritionist to comment, but we have tried to make extra virgin olive oil spread, and we haven't been able to do it in a way that we're happy with the health outcomes, particularly and our cost of product is prohibitive as well because of the quality of the oil we're using and the process you would go through. So we've thrown that idea in the bin.

Yes, pretty exact. But as regards to the plant protein, get them in the gyms and fitness centers in Goodlife and Fitness First [ one on the other], and they don't have your product in there.

All right. Well, it'd be fantastic. Have you got a note of that? No, thank you very, very much. That's terrific.

[ Michael Barresi ]. [indiscernible] recently on the register. I was watching this company for a long time and then jumped in as soon as it went to market. So you really do have a great enterprise. I've got a few here. I've actually been involved in the citrus industry in this area around along the Murray. And one problem for perpetual up here is salt. And as I mentioned in [ salting ]. Now is there a problem in growing olives or is it not citrus [indiscernible]?

Yes. No. Look, olives are the second most salt -- commercially growing crop salt-tolerant, commercial on craft after the date palms. They sustain high levels of salt, and we're not -- we've got very good water that's going on all of our groves and we don't plan any low-lying areas where there's salinity. We test all the soil before we ever plant, and most of ours are on extremely good soil. So that's not an issue for our -- in our production cycle.

Okay. Another thing is you speak about product development, and I guess that's the right of development as well. Are you holding any plant patent rights at all? And if you are, do you put them a value on those on your balance sheet?

No. We don't have any plant variety rights on any of the olives that we grow. The olives that work best here are the same ones that work best all around the world for consistency of production, flavor, health attributes, ease of harvest, coming to production more quickly. There is some plant variety of rights on some, I believe, on some dwarf varieties, which is a different -- they plant 1,600 trees a hectare. We don't -- look, we manage some groves and there's a little bit of that in California, but it's -- I don't think there's any royalties paid or anything like that. It's just -- yes, there's no royalties paid [ line ] it's just confirming that. Do you have anything else to add, Leandro, on that?

The majority of the generics with all is unprotected is, as I said, has thousands of years of oil and it's not an easy thing to improve genetically because the cycle is too long. There's not too many plants. It's not really -- there's not too much economic incentive to improve the genetics of olive.

Okay. Now with the olive, you top work them at all, rather than having to replant once you've reached maximum production it's on way out. Do you rip up and replant the whole patch? Or do you do your top work on the [ roof system ]?

The yields that are reflected there in one of the graphs of the presentation is already -- those yields are already considering a replanting program of 2.5% of the farm per year. So that represents an overall reduction of around 15% of the yields because you always will have 5% of your trees being dropping and about 10% that are in different stages of maturing. Although effectively doesn't happen exactly that, but it's already factored in our projection. Average life of a commercial modern olive oil would be around 35 to 40-year mark.