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

Welcome, everyone, to the 2023 Cobram Estate Annual General Meeting. It's fantastic to see so many here and we've got a lot who have joined online as well. We -- I'm Rob McGavin and I'm the Co-Founder and Chair of Cobram Estate Board. I'd like to begin by acknowledging the Wadawurrung people from the Kulin Nation and pay my respect to the elders past, present and emerging. It's now 11 AM, and I've been at -- the appointed time for the meeting is just slightly after. And Russell Dmytrenko, who's the Company Secretary has advised that the necessary quorum is present. So I officially declare the 18th Annual General Meeting open. In the case of an emergency, there's a huge amount of exit signs in almost every direction. And hopefully, hopefully that doesn't happen. The agenda for today's meeting is, firstly, I'll give you my address. Then you'll hear from our joint CEOs, Sam Beaton and Leandro Ravetti. Then we'll proceed to the formal part of the meeting, and then we'll do a -- we'll split into 3 groups have a tour of the site. And then we're serving a lunch -- a light lunch over in the nursery, which is to the south of this building. You won't get lost, I promise. A few introductions. So firstly, on the other hand is Dr. Joanna McMillan, she's a nonexecutive director based in Sydney. Tim Jonas, who is Chair of the Audit and Risk Committee and also a Non-Executive Director, Melbourne-based. And this is Tim's last meeting. He retires at the end of this meeting. Toni Brendish who's a Non-Executive Director, also based in Sydney. She sits on the Audit and Risk Committee as well as the Remuneration and Nominations Committee. Craig Ball is Non-Executive Director based in Adelaide. He is the Chair of the Nominations and Remuneration Committee, and we have Leandro Ravetti, who is co-CEO and Executive Director of Cobram; Sam Beaton, who is also Co-CEO and Executive Director of Cobram. And you'll hear from both of them. We also have Russell Dmytrenko, who is the Company Secretary; and Jim Kompogiorgas, who is from Link Market Services. We also have a huge amount of Cobram staff here and a really big thanks to all of them for not only attending but making this place looks so shiny and knocking of work so that we can hear ourselves think in here today. I'd also like to welcome David Williams, who is joining at the conclusion of the -- joining our Board at the conclusion of this meeting. I'll have a little bit more to say about David in a minute. And Peter Glen, who is the External Audit Partner from Deloitte, and he's also the independent voting scrutineer for today. So between Jim and Peter, we should be fine when it comes to voting. We also have Richard Spencer from Deloitte here, Stephen Rapidi from CBA and Shane Belardi from DLA Piper, our legal firm, who is also here. So welcome. But most importantly, welcome to all the shareholders who are here. It's -- we had around 850 shareholders when we listed in 2021 in August '21, and we have around 3,000 now. So 3,500, I think it's reaching. So, that's good to see. A couple of words about participating in the meeting. If you're attending in person, which obviously everyone in this room is, but I'm also talking to people who are on the web. [Operator Instructions] The poll is open now, and you can vote at any time before the end of the meeting, and the poll will close 5 minutes after the conclusion of the meeting. I'll remind everyone again to vote at the end of the meeting. I'll now move to my address. It's 25 years since Paul Riordan and I cofounded this business from less than nothing. And unfortunately, Paul is not here, both of these boys are professional motor cross races in the East Coast of the U.S.A. chasing the sport they love. And Paul is chasing them around probably financing them and fixing their motorbikes, but he certainly in apology, a great person and a great friend. And Paul still, I think, the third-ish biggest shareholder in the business. Paul's Mom and Dad, Robin and Liz are here, and they were instrumental when we got this business started in helping directors in both in the right way. From humble beginnings, CBO is now world recognized as a leader in olive oil production, and it's super exciting. We've got a really great business in 2 continents, both here and in the U.S.A. and I'll go into a bit more detail. I thought it might be worth just running through a couple of things that I think make our business just so exciting. And I often feel that we have trouble articulating the different things we do and with outstanding arrogant how good we are doing all of those different things. And even the product, Extra Virgin Olive Oil, it's really, really good for you, and there's so much research around that. But it's not super easy. People know you have an orange and that's vitamin C an you drink cow's milk and that's calcium. Olive Oil has just got so many things in it that make it so good, but it can be a little bit confusing to understand why. And sometimes a single message is easier to get out than complex one because we are a business of groves nursery that you'll see this manufacturing or bottling facility, the mills, consumer sales, branded products and everywhere in between, and that's why we need 2 CEOs. If I think about the 4 or 5 really key things, I think our strong domestic position is really, really important to us and sets us apart. So we produced 70% of Australia's production of Extra Virgin Olive Oil, which gives us -- not only supports Cobram Estate which is the market-leading brand in every respect. It also gives us a pretty big position in this industry, which is terrific when it comes to everything and just especially the scale and the research and the things that drive becoming better and better. So we've got a really, really good position here. We don't have the commodity risk or currency risk with our Australian business. We grow here effectively. We grow here what we sell mostly here. So it's a pretty secure business when it comes to disruptions or anything like that, it sets us apart. We also have a strong and growing USA business. It's -- these things take a long time, but sales are really starting to move productions coming on, which is allowing the sales to move because what we produce in the U.S.A. We principally sell in the U.S.A. And we're in the middle of process at the moment, Leandro will talk about that or our harvest in the U.S.A. and will be the largest process from the U.S.A. after this harvest and produce around 35% of the USA production. We also have a proprietary system called Oliv.iQ, and it's been internally developed led by Leandro and his technical team and it covers everything from growing to milling to oil storage, quality research. And in effect, it's way that we do things that allows us to be higher quality and lower cost if you really cut to the chase. And that's pretty important. And this business is out of all qualities of olive oil is in the very bottom percentile as far as cost of production per liter, but we're in the very top as far as quality. And why that makes -- why that's so important is that, one, you can compete, if you're the last cost producer, unless your industry disappears, you're going to -- you're going to do well. But two, the consumer value comes from the quality of the product. And that's because the flavor, the smell and the health benefits are driven by the antioxidants in the olive oil and those antioxidants come from having fresh fruit, crushing it really quickly and storing it in these tanks to protect it from heat, oxygen, light or anything it breaks that down. So the consumer value in high-quality Extra Virgin is really, really material. And in fact, there's more than $10 worth of nutrients in a 750 ml bottle of Cobram Classic. If you went to the chemist and bought exactly the same amount of nutrients that are just on the shelf and the things you already know in olive oil, like vitamin E, squalene and the polyphenol mix. So if you go to our really high-quality products, it's really $20 worth of those. Now I know you're not going -- you're buying a food, but there's so much value in high-quality Extra Virgin and it's why Cobram Estate, the largest seller in Australia, but it's also the most expensive olive oil in Australia, and it's growing a lot quicker than the cheaper oils. So it's a fantastic place to be. We have around -- the replacement -- sorry, the -- we've got strong real assets. We've got 18,000 hectares of farmland that's owned freehold farmland, and it's been valued at around $700 million as in it's -- what our real assets are worth. Obviously, that doesn't include the brand. If you look at our barriers to entry and competitive advantages, it would cost someone more than $1 billion to replace our business. Not only that, it would take them 8 years to get matured if they started selling. Bearing in mind, you can't sell Australian oil if you not growing it. So it's 8 years to maturity after you plant the trees, which is sort of 2 years in the planning to get the trees up ready to plant. So it does take a while, but really significant barriers to entry. So not just in money, in time. And I think even the bigger one there is know-how. Our average yield is 9x higher than the global average in olive oil. We produce -- well we use less fertilizer and less water and materially less and sequest more carbon than the global average per liter of olive oil produced as well. So sustainability-wise, footprint-wise, cost of production-wise, and know-how. And it's not because we've been lucky it because it's really hard, otherwise, anyone else would be doing it. And our little business has published more than 30 peer-reviewed research papers since inception all around how do we get more production, higher quality, lower cost, better value of the consumer, better business. So it was easier when we're doing it, and it's certainly not easy, and we've been really lucky to have an incredible technical team led by Leandro. We have a lot of in-build growth because you planned all the trees, you run the groves the cost of running those groves to run a harvest driver and whether you're getting 2 kilos or 50 kilos per tree is reasonably similar. So your cost of running a hectare is about -- is very similar, whether it's a small tree or a big tree. So as the production comes on, that flows to cash flow and profit, obviously, if you're above breakeven because your costs are reasonably fixed, if that makes sense. So the other point is that -- we have the most -- we believe the most decorated and awarded olive oil brand in the world. Cobram's won over 628 trophies and medals, and it's been awarded the world's healthiest olive oil in 2017 and 2022. So I think those things stand as a part, and we've got just a really incredible leak cycling future led by a brilliant team. And they can commitment to continually improving is something, I think, sets us apart. And it is important that we only focus on Extra Virginal Olive Oil production. It's -- we're always critical or I and personally people have read the first chapter of each book and don't really know the product. And we've always resisted going into other things because it's hard enough to be brilliant at one thing, little only thinking we can also do almonds, and we can do avocados, and we do all these other things. So we're just absolutely stuck to this and say, well, we know everything about this and that comes with a lot of credibility when you're talking to the retail trade consumers or anyone else, and it allows you to keep at the forefront of your game and again, produce high quality to low cost. We do have lots of tailwinds as well. Very lucky in that regard with Extra Virgin Olive Oil or being the juice of fresh olives. It's the mainstream cooking oil that hasn't had heat chemicals and solvents, used in its production. Every day, there's another article comes out globally somewhere that Extra Virgin Olive Oil helps prevent chronic disease, does all of these good things for you. And every day, there's another article coming out around how refined seed oils are bad for your health. And so there's lots of those natural things that are just helping. And as you educate people that Extra Virgin Olive Oil is really, really good for you. And if it's high quality, it's even better. And so the high the quality you can afford is the best thing you can do for yourself, and that's flowing through on why people turn up to way. And it is one of the most adult rated foods on earth, but I think that's really helped us a lot because consumers are understanding there's so many cases of consumers being routed, obviously, it's a really high-quality high-value product that can be easily blended with low-quality oils, producing Extra Virgin is really hard. We crush every oil on our farms in about 4 hours, definitely less than 6 and that's a massive logistical task. And globally, I mean, 25% of the world's olive oil is Extra Virgin, but around 65% of world sales are Extra Virgin. And about 95% of our production is Extra Virgin because of our system. And it's not because growers just go, "Oh, we don't care." It's because the marketing companies that don't grow. And there's a number of really big ones, really don't care what they sell. It's this whole sell extra light and pure to places like Australia. Everyone will think that's fantastic. Charge the same amount as Extra Virgin. I think it's even better and it's an absolute route. But as people pick that up, they come to the brands they know and trust like Cobram. And it's a fact that if you don't know and trust the brand of olive oil you buy, you'll almost certainly get ripped off. It's -- you'd be lucky not to. I better stop rating on about olive oil. The past financial year was good. The harvest was a little bit disappointing. I won't go into a huge amount of detail -- but just really coal conditions meant that our fruit numbers were there, but the fruit didn't reach the size that they do on average, and they certainly didn't reach the amount of oil in the fruit. On average, we still produced a strong EBITDA of a bit over $40 million. We had strong operating cash flow, a record of $54.1 million. And interestingly, that was coming off the back of a low crop year. So that cash flow was driven after we just had a very small harvest. So thinking and looking at our business, it's very important to look at operating cash flow because these big tanks allow us to manage the small harvest with the big harvest. As you know, olives have a biennial bearers. So what they don't give to you this year because it's a low harvest, they compensate and give more next year and vice versa. Obviously, we have a growing profile of production coming on. So the lows will be higher and the highs should be higher on average. But if you don't look at our business over a 2-year period, it can be fairly misleading because our cost reduction is similar on a low year. It really overstates our cost of production because per liter in new cost, it looks like is costing you $5 a liter produced, and then you get a big harvest with a similar cost and you think, oh, it's only $3 a liter produced or whatever those numbers are. So looking at over 2 years is really important. That can be open feasing for you. It's not confusing for us. We can store it really well in these tanks. So almost the antioptimists are protected because there's no heat light or oxygen that get into when there's a stored. We bottle just in time for the consumer to keep that shelf life. So we manage the ups and downs because customers turn up every day and buy oil, they don't just want it when you've had a good harvest or not. So operating cash flow or average profit over 2 years is certainly the way to look at our business. And we will be coming into our off year this coming year, which means headline EBITDA will be lower than the last year, most likely. But it doesn't mean that operating cash flow, the fundamentals of the business, all those other things aren't good. Just -- I'll touch on a little bit before, but our people, our core values are honesty, humility and passion. And I think that these 2 guys have spades of both of those, but so many people in this business do and the success of the company is a direct reflection of the passion, the focus, the integrity, the commitment of our staff. And we -- the [indiscernible] saying is it's never the place, it's the people and certainly the case that the people really drive this business, and we've got some really wonderful people. So sincere thanks to all the team members. We are committed to ensuring a safe and healthy work environment for all of our sites. It's not easy when you have sites that are picking and machinery and harvest and working day and night, but Ruth and her team and so many of the others do so much work to ensure the safety first of our staff. And it's a great credit to them, how few days off with injuries this business has and how well I believe that the staff are thought about and looked after as they come to work for us. A couple of important things post 30 June to mention. One is the USA Harvest. It started. We're about 15% of the way through. Leandro just flew back the day for yesterday. In fact, I'll diverge for a second. I reckon Leandro is the only CEO of a reasonable size listed company that packs up his stuff and goes to Boort for harvest and lives there for 3 months while his wife works in the processing plant doing the night shift and runs it and then goes to the USA and runs that harvest. I mean, just how much that means to lifting the team and making really good decisions on the spot. Of course, it will run if he's not there, there's great people. But it's just that extra commitment to doing things that are needed. So, I diverge there for a minute, but the harvest is looking pretty good. It seems to be on track at the moment. U.S. It will be much bigger than last year. It's there on year over there. And most of our Australian groves are flowering at the moment. Some have just gone through that and conditions have been absolutely ideal, which is terrific. And sales in both U.S.A. and here are really, really strong. So we should see a fantastic year sales-wise. Water costs have gone up. The bureau announced El Nino price is pretty much -- our average price in the last -- since 2013 is around $200 a meg for this business to buy water. But it I think last year was something like $40 because it just kept raining and no one used water. And even this year, the storages are just absolutely chock-a-block, but because they announced a drought there was a fair bit of change in the water market. It went up to about $200 a meg, which is long-term average is back to about $150 or something now. And probably, we'll continue to slide, but who knows. And the Board has declared a dividend of $0.033 per share, 70% franked. And we do expect that franking to go up. It's just that the government's accelerated depreciation, we meant you could write absolutely everything off in any business, has meant that the amount of tax paid is less than what it would have been if they didn't do that. So we probably were expecting that would have been 100%. But because those separate depreciation rules, we it's about 70%, and we probably should move to 100% moving forward. Think I've covered most of that. So I might move to a sadder news, which was the passing of Jonathan West. So Professor Jonathan West was a Director of Cobram since around 2007. And a lot of people in this room would know, Jonathan. It was a massive shock. We didn't know he had MND. He didn't want anyone to know. He -- he just -- he sent it text to me 12 hours before he died with a whole lot of stuff around a whole lot of things. That's the most incredible man and so intelligent, but commercial, funny. And I think of it I don't -- I think a mentor that will be hard to replace. And I know that Sam and Leandro and myself, he was like a mentor and adviser to many global CEOs, including CEO of [ Bendigo ], he elected in business strategy to Harvard for 18 years, and he was a bit of a Dag. He wasn't a snobby, academic intellect who thought he is better than everyone else. He really was a down to earth bloke. And we -- why he came -- we knew he was losing weight in a bit crop, but we just but he went so suddenly. But he came the board to see the start of harvest, the opening of the new plant, and we're planning a 600-hectare -- sorry, 400-hectare olive grove. And we've decided in memory of Jonathan to name that Olive Grove Jonathan's. All of our groves have names anyway. And we're building a stone rough cut chair that will sit under a Gumtree and Jonathan's Grove,and we're going to call it the Thinking Chair after Jonathan. We -- I also want to touch on something else that's I suppose, difficult and it won't be the same. But Tim Jonas, after 25 years involvement with the company as a Advisory Board Director, initial shareholder has decided to retire. He wanted to retire last AGM, and I talk him into staying on for another year, but we thought we better do the right thing and find a replacement to Tim, but you couldn't find a more integral hard-working, thinking, conservative. He's very compassionate, but in board meetings when he gets a bit upset about something that he's concerned about. He certainly wears his heart on his sleeve and always best intentions, but we're just going to missing so greatly. We we'll have some sort of celebrations, but I would like to -- and Tim absolutely hated spending money on tractors processing plants, tanks, anything that disappears. I say that ingest, but it was like "you bloody farmers all you do is spend money." But we thought in memory of Tim that we've just done a $35 million upgrade of the Boort plant that we are going to name the Boort plant, the Tim Jonas Mill. Tim doesn't know that. I just shocked him because I thought he might -- I didn't even send in the Chairman's report for approval because I thought he might read it in there, so I thought I'd -- and we're doing an opening and having an open day at Boort. So everyone, all our shareholders can come up and we're going to unveil the Tim Jonas mill at that time. So I'd love everyone to put their hands together for Tim, a magnificent effort. We have found Tim's replacement. This has been announced to the market, but David Wills, who's here today and with Robin is going to become a nonexecutive Director of Cobram Estate. And I'll say fill Tim's shoes, but they're pretty big shoes to fill, so I won't say that. And David's had an enormous amount of -- we went through an executive search firm to look for someone and it's been going on for quite a while. We are absolutely delighted. David wasn't really looking for anything, but we talked him into coming on this board. Love his background, his parents on the service station in Albury and spent much of his childhood filling up cars and cleaning the windscreen and went on to become an extremely successful accounting career with Arthur Anderson, Earnest Young and PwC, [indiscernible] say the name. But they're not all bad in PwC. We know that. And he retired in 2019 from PWC as Global Head of Private Clients. And we hope that -- well, at the moment, David's Chair of the Essendon Football Club Audit Risk and Integrity Committee and he holds a number of other positions, but none in listed companies. So at the end of this meeting, Dave, it's going to commence as an executive -- nonexecutive director, and we hope that you'll have a chat to over lunch and is happy with his appointment as we are. And in light of Jonathan passing away, we are going to go and look for another nonexecutive director and during that time, try and enhance the talent and the composition and the required skills and balance of our Board. We haven't started that process yet, but we will soon. And we'll give you an update as soon as there's been an appointment made. I think that's about -- may you be sick of seeing me by now, but I would really like to take this opportunity to thank shareholders so much for your support of us and all of our customers. And we wouldn't be here if it wasn't for our customers and our loyal shareholders. So thank you, and I'll hand over to Sam Beaton first. And after that, we shall do the formal part of the meeting, and we'll certainly have then a question time for any questions at all. So we'll hold those until the end. Thanks, Sam.

Thanks very much, Rob. Thanks to everyone for joining us, and welcome to those who have joined us online. This year has been a very pleasing year for the company. We grew global sales by 21% to $169 million. Pleasingly, for the business, we grew sales in both Australia and the U.S.A. businesses. In our Australian business, we grew sales by 15%, up to $122 million and in the U.S.A., up 46% to $43 million. Again, pleasingly, we grew branded sales, Cobram Estate, both in Australia and in the U.S.A. and Red Island in Australia. From a profit perspective, we reported an EBITDA of $40.8 million. This was expected because it was an on year. And as most of you know, you recognize most of the profit from the crop in the year of harvest, not in the year of sale. From a 2-year rolling average EBITDA, we reported that of $30.1 million. This was down on this time last year, and that's because our on cropping year this year was lower than 2021, and Leandro will talk through the reasons behind that. From an after-tax profit perspective, we reported $7.7 million. Operating cash flow was record at record levels of $54.1 million before interest and tax. And in terms of funding at 30 June, we start with $56.4 million in cash and undrawn facilities to fund future growth. In terms of our business, we report our business in 3 segments: the Australian Olive Oil business, the U.S.A. Olive Oil business and Innovation and Value Add. Our Australian Olive Oil business, we did increase EBITDA from $32 million to $38.5 million. This was driven by the larger Australian crop. Was offset slightly by some unexpected growth in Red Island and private label, which is lower margin in the first half of the financial year. We rectified this in the second half of the financial year by changing our sales program, and we also put through a price rise around 12% of our -- on our Red Island product range and also our Cobram teams. The U.S.A. business, a pleasing result. We -- last year, we reported a loss $4.7 million at an EBITDA level. This was turned around to a profit of $2.9 million. The profit largely driven by the increase in sales, and we also increased our gross margin on those sales. This time last year, we put through a price rise across all our packaged goods range of between 15% and 20% in the U.S.A. In Innovation and Value Add, we reported a small loss of $800,000 an improvement on $2.6 million loss last year. We continue to focus this business on B2B activity, mainly around adding value to the waste streams by selling it as either biofuel or feedstock. From a cash flow perspective, and Rob touched on this, but we would expect a much more consistent operating cash flow compared to our statutory profit. And that's simply because of the way we manage our oil. So a higher crop in year, we actually can supply the market for up to 16 months. And then a lower crop in year, we supply the market for as little as 8 months. And the reason we do that is because our customers purchase oil very consistently month in, month out. In fact, week in, week out olive oil purchases are not seasonal at all. So we manage the oil over the 24 months, which again means that our operating cash flow is much more predictable and consistent. I touched on the first slide, but operating cash flow before interest and tax of $54.1 million or $39 million surplus after interest and tax. We continue to invest heavily in capital projects. We invested $56 million this year. These capital projects, we expect to add long-term growth to the business in the coming years. And we paid a dividend last year of 12 -- sorry, $11.7 million. That's net of the dividend reinvestment plan. From a balance sheet perspective, we reported net assets of $288 million at 30 June 2023. Just a couple of things to point out on our balance sheet. Our trees and irrigation infrastructure are recorded at written down cost, not at fair value. There's around, there's $121 million of value that sits outside our balance sheet that relates to the trees and irrigation infrastructure. Our brands are also within that intangible asset line carried at cost. We purchased Red Island in Cobram for around $6.5 million despite having global sales of $117 million. From a liability perspective, just the $80 million tax liability, the majority of that relates to a deferred tax asset in relation to historical write-ups of assets in prior periods and would only ever be payable if we sold the assets outside of the group. From a debt ratio perspective, it did increase. This was expected as we drew down debt facilities to fund growth capital projects. The debt ratio increased from 25% to 30%. And I will note that at 30 June 2021, that same ratio was 37%. This slide on -- the 2 bars on the left-hand side are our growth or our real assets based on the tangible assets at 30 June 2023. And on the right-hand side is at 30 June 2022. This is for our balance sheet. And in addition, we've added on the $121 million that I referred to that relates to the value of trees and irrigation infrastructure over and above costs that are not on our balance sheet. So at 30 June, in just under $720 million of assets against borrowings of $191 million. Again, just to reiterate here that these asset values don't include any value relating to the brands despite having sales or global sales of $117 million. Just moving on to sales. So Australian sales grew 14.9% and for the year. This chart is just our packaged goods sales, so Cobram, Red Island and Private Label. Our packaged goods sales grew by 14.6%. We were pleased to see growth in Cobram Red Island and Private Label. We continue to invest heavily in marketing. Most of our marketing dollars are spent into the Cobram brand, and you may have seen us advertising on TV. We did a lot of work outdoor and also digital and social. And most of our marketing continues to be around educating consumers around the quality, health benefits and usability of Extra Virgin Olive Oil. From a market share perspective, we remain the #1 brand. We have a 24.2% share at Cobram, and Red Island, the #3 brand at 10.6%. So overall, 34.8% of the total olive oil category in Australia. Moving on to the U.S.A. Certainly, a very pleasing result from a sales perspective after a disappointing year last year where we were constrained by oil supply. We -- the business grew by -- or sales grew by 46%, up to $42 million, which is very pleasing. I think most pleasing for us that this -- a lot of this growth was driven by Cobram Estate. So Cobram Estate sales grew from $10.4 million up to $17.7 million. And as I touched on before, we did put through a price rise of our Cobram and Private Label products around this time last year, which has been well received. These charts show the supermarket sales at scan to what the consumers actually pay. It doesn't include the likes of Costco, Whole Foods and HEB. But it's a good snapshot of the majority of groceries where we sell our product. As you can see here, we grew 22.8% in store in terms of dollars and in terms of distribution, 19% distribution point increase. We're now ranged in 17,800 retail outlets. We did have some good wins towards the end of the financial year. We've got key ranging in Publix and Kroger. And Cobram Estate remains the #2 Californian brand in the U.S.A. and the #9 olive oil brand in the whole of the U.S.A. In terms of a trading update, so what's happened since 30 June 2023. We've seen a really strong first 4 months of the financial year, both in Australia and in the U.S.A. sales are tracking in line with our expectations and certainly well ahead of this time last year. We put through a price increase on our Cobram bottles. Recently, this was effective 4th of October this year, so about a month ago. Early indications are that this has been well received. We're seeing very good results from that price increase. The global shortage of Extra Virgin Olive Oil is certainly creating some opportunities for us, and we're also capitalizing on this and seeing some good organic growth. We are trialing a small number of programs in the U.S.A. with California -- Australian Extra Virgin Olive Oil in packaged format. And we're certainly seeing better pricing from any of our low-value ore that we sell in bulk. From a cost perspective, costs seem to have stabilized. There are some costs that still remain at elevated levels, such as diesel. One of our big variable costs being water, we've purchased well over half of our water for this season at an average price of $148 per megaliter, which is well below our long-term average purchase price of $201. Capital projects are progressing well. I'll let Leandro cover off on those in his part. In terms of financial outlook, we're certainly expecting the sales outlook to remain positive. We're expecting the strong consumer demand to remain there. We have been successful in getting improved ranging in some of our key retailers and improved distribution points. Our ultra-premium products, our Black Label product has also been given improved distribution and ranging. So expect that to continue to drive sales. And of course, the favorable trading conditions around the shortage, the global shortage of Extra Virgin Olive Oil and historically high prices are a big advantage to our business, both in Australia and in the U.S.A. The eating at home trend seems to be a trend back to an at home given the economic conditions, and we expect that to have a positive impact on our business. from a U.S.A. crop perspective, Leandro touch on that, but we're certainly expecting a significantly higher crop this year. Operating cash flow, we expect that to remain strong for the full year. and our existing capital projects, we're funding those out of the existing debt facilities and surplus operating cash flow. Just moving on to the dividend. The Board resolved to pay a dividend this morning at $0.033 per share, 70% franked. It will be paid on the 13th of December 2023. We will offer a dividend reinvestment plan. It will be at a 2.5% discount to the volume-weighted price over a 5-day period after the close of the dividend reinvestment election date. The details of this dividend will be sent to all shareholders on e-mail or letter, so you receive that in the coming days. I am now going to hand over to Leandro. Just before I do, I'd just like to thank Leandro for his terrific support and leadership and work ethic -- is quite amazing. I'd like to thank all our employees in both Australia and in the U.S.A. We've got an extremely talented and hard-working group that certainly make Leandro and I very good. So thank you very much and looking forward to working with you over the next 12 months.

Good Morning. Before I start the presentation, definitely, I would like to thank you all, thank Rob, thank the Board for your ongoing trust and support. And like you, Sam, definitely thank you for making our joint CEO roles so much fun and certainly a very easy and enjoyable thing to do every day. From the operations point of view, this past year, 2023 have been certainly a very challenging one, particularly from environmental point of view, with record rainfall levels in Australia, particularly in late winter, spring and early summer last year or this calendar year and this past financial year. And the tail end of a long drought in California. It was only this time last year that we were receiving questions from you about flood warnings in our groves and sites in Australia and what was the water situation happening in California. So from the business perspective, from my perspective, it's really good to see somehow a return to more, what we call, normal weather patterns across all our operations. Sometimes you may get asked what happens with the dry weather. Definitely olives absolutely enjoy and really like a nice hot dry summer providing that you have irrigation to provide the water that trees need. And that idea about full irrigation that we are able to do across all our farms is one of the key advantages that we have over the rest of the world industry. We need to remember that more than 65% of the olive trees around the world are grown in dryland. That means that the 100% rely on rainfall to grow and to produce and 25% of the remaining trees are the only deficit or partially irrigated. So it makes a big difference to be able to have that ability to fully provide the water needs to the trees. And talking about irrigation is also very pleasing to know that the water systems that our trees are based both in Australia and in the U.S.A. have already communicated that we have full allocation of water for the 2023, '24 season in Australia, but also for the upcoming '24 season in California. Last harvest, well, Rob already touched on that and we communicated this to the market several times. Obviously, those went weather conditions, really cold conditions that I'm going to show in detail ended up having an impact on the overall yields, particularly in terms of quantity of oil in the fruit and the actual size of the fruit reducing the expectations of what we had. The 12.5 million liters of olive oil that we produce was 32% higher than the crop in 2022, but still 24% lower than our initial expectations. Fortunately, the -- those 12.5 million liters were of really great quality and combined with 1 million liters of third-party groves that we produced in Australia as well, more than allow us to support the size plan that we have for this financial year. In this slide, we wanted to show in a very graphical way, particularly in the graph on your left-hand side is the evolution of the average daily maximum temperatures throughout the past season. That's the blue line. And then in those sort of staggered brown line, you see the long-term average maximum temperatures. What we can see clearly is that during the period of August, September, October, November and all the way up to the beginning of December, the average maximum temperatures of everyday were clearly below long-term average. In fact, during all the period we had nearly 3 full degrees colder temperatures than long-term average. That actually caused a delay on flowering of about 10 days. And then when we see after a period of normal temperatures during the late part of December, January and February, the temperatures dropped back again below average in late March and April, shortening the overall season and leading to those lower oil content and smaller fruit that are represented in this other graph on your right, where you see that 76% of that 24% down crop was mainly driven by a 9% lower yield on average and a 17% lower than average fruit size. And how do you know that? Well, if we actually measure -- we actually measure the fruit size of every olive that we pick. And if we divide the entire amount of olives that we process by that average weight, it give us a number of fruit. And that number of fruit that we processed last year was very much in line, actually, just 1% up from the number of fruit that we assumed that we were going to have. So in fact, having had good normal weather conditions the crop would have been in line, which is a pleasant things to know. Just in case if you are wondering what that number is, it's a little bit about over 30 billion olives that we harvested and picked and processed last year. So not an easy feat, probably a good time here to thank our brilliant head of horticulture, Ruth Sutherland, that is with us today and our grove managers, [ Dale Smith ] and Rachel Walker and all the staff for doing a wonderful job under certainly very difficult circumstances. Rob touched on this. Our trees at both at right at full bloom right now and the -- The Trees at Boundary Bend just passed that period a couple of days ago. with really good weather conditions, temperatures in the mid-20s, no rain, happy days, very early days to call for a final result. But certainly, the 2024 harvest, which is expected to be enough year for a large amount of our trees is shaping up quite well, mainly because there's no frost or any other environmental damage reported today that could affect their potential and because the weather conditions in flowering have been quite good. What you see there is an image of the actual olive flowers, perhaps you may not have seen them in the past. They're very, very tiny white, and that golden dust that sits on top of olives, that's the pollen grain, which in the case of olives is spread by the wind. So let's remember that all the trees don't need or rely on bees for pollination. It's all done by the wind. So any issues with bees or bees availability or health of bees around Australia won't affect us or the cropping potential. Rob touched on this. Yes, I've been in the U.S. until yesterday, so just coming with good fresh news and some good fresh Extra Virgin Olive Oil from the first half in the U.S. that hopefully, you will receive in your gift packs. We're still waiting for that to arrive. So it's truly really coming hot from the press or probably cold from the press should be. But I'm sure you're going to enjoy a really lovely fresh oil. The harvest in California started at the beginning of October with our growth is progressing quite well. We've done just a little bit under 15% of the fruit. Everything is trucking as we expected. And now there that the Californian crop in 2023 will deliver a significantly higher crop than what we have done -- than anything that we have done before, mainly driven by the additional growers that we contacted and the maturing profile of our trees. What is probably remarkable is that even when we only harvested less than 15% of the fruit, we have already filtered, bottled, sold and shipped nearly 0.25 million liters by the end of October, that is showing how high the demand for the Californian product is. And just to wrap up my presentation, I'd like to touch again as we normally do across our 4 growth pillars. And what are the main key actions that we are doing in terms of continue to drive that growth. The pillars very simple. Hopefully, you know them by now, is actually all about increasing our production from our Australian groves, mainly due to the maturing profile of those trees but also due to some efficiency gains, growing our fully vertically integrated business in the USA, increasing our return per liter for every liter of olive oil that we sell and capitalizing on the sustainable position of our groves and value-add products. In terms of the increase in the supply from our Australian business, One of the things that is actually very interesting out of this growth pillar is that we still got plenty ahead of us. As you can see from this graph, only 61% of our trees have reached maturity. So that mature growing area is set to grow by 64% over the next 9 years with 11% of the trees yet to come into production. The key part of this growth pillar is that, it will strongly drive the improvement of the financial performance of the company. Most of our production costs are fixed or almost fixed. So every additional liter of oil that we're able to produce, is able to flow directly as profit as the groves mature. We have had three -- or we have 3 main capital projects linked to these 2 of those projects have been completed last financial year and one is happening now. The first of the projects that have been completed last year is 407 hectare greenfield planting that we have done at Boort just to the southeast of our farm. This is a grove that Rob was mentioning -- was named after Professor Jonathan West. Certainly, he would be very much missed. He was a great mentor to ask, especially in a day like today where he would always take the time at the end of the presentation to just tell us, or tell me how I can make it a bit more engaging and a bit more educational. So definitely, I'll miss him very much. The other capital project linked to planting around the groves was the development of the replanting of 271 hectares at our Wemen grove, which is happening right now. And that would be the last of any significant capital projects required in Australia, at least in the short, medium term to drive that growth profile that I mentioned before in the previous slide. The last of the projects linked to this has been certainly the opening of the Tim Jonas mill at Boort this year, an amazing engineering development that have increased our capacity at Boort by 60% last year and is set to continue to grow with the new processing lines allowing us to process in excess of 2,000 tonnes of olives per day. Probably you may not know what that means. Well, that's about 400,000 liters a day or 2 of these big tanks every 24 hours. So certainly a big, big capacity, and we'll make it one of the biggest olive mills in the world. Hopefully, you will be able to join us and see that firsthand next year at the beginning of harvest. The second growth pillar is linked to our operations in the U.S. This map here shows the location of our operations, mainly around the Woodland location, which is where we have our mill, our tank farm, bottling line, laboratories and offices. And also, we have some other grove to the south. All those locations share one thing in common. They are on the foot hills -- on the western foothills of either the Sacramento Valley or the San Joaquin Valley. And that really provides those groves a really nice sheltered position against potentially damaging frost in spring or autumn, which is a great thing. But also the close enough to the delta of the Sacramento River allowing that nice cool air from the sea to influence the temperature and keep the hot temperatures during summer relatively moderate, allowing even better oil accumulation. So the things that I'm going to touch on about the USA are the things that are mainly driving our additional availability of oil. As Sam said, that has been one of our main constraints in terms of growth over the past few years. So definitely, those are the important things. The first achievement has been increasing the area under contract. We grew our contracted area from third-party growers from 1,300 hectares to 2,100 hectares over the past 2 years. That's a growth of over 60% that we're going to see capitalized during this harvest. We have also completed the development of the Dunnigan Hills property. You see some images there. It's a 354-hectare development. Very, very important in terms of what it means for the company. And to give you some perspective of the size that we are talking about, especially for those earlier shareholders, we planned this over the past 6 months, the equivalent of JV2 and JV3 combined all at once. So certainly a big task that is happening at the same time as we are processing and bottling and doing everything else. Other images from our groves, the grove that you see on the top left-hand side of the screen that our DeBo grove. This is a very first grove that we planted in the USA. It's a relatively small grove, but very important because in that grove we tested a number of different varieties to better understand which ones are performing really nicely, which ones give us really good quality oil. And we use all that information for the newer plantings. And the one that you see on the bottom right-hand side is the short of our Sparta grove, that was only planted just a bit over 2 years ago. So it was planted in 2021, and we harvested already this year with really nice yields. In fact, the first olive oil that you're going to be trying is coming from that beautiful grove. And last but definitely not least, we have also -- or carrying out right now definitely much needed expansion of our milling facility, storage facility, bottling facility and warehousing in Woodland to be able to cope with not only the extra amount of oil and fruit but also the proportional amount of increase in sales. The images that you see from the mill, obviously, the earlier images of the construction, but what the mill looks like now have doubled the capacity of the mill, taking it to become now the largest Olive mill in California. And the storage facility have grown from just under 3 million liters to over 4.5 million liters of storage capacity. So a massive, massive growth. So when it comes down to this growth pillar about the USA, if we look back at the past 12 months, to be honest, it is very difficult not to feel excited and amazed about the pace and the scale of the development of this growth pillar, because we doubled our planted area over the past 12 months. We doubled our milling capacity, but it's not just production, some touch on this. We increased our sales overall by 45% or a bit more. We grew our branded sales by nearly 70%. We have already sold 250,000 liters of this harvest, and we achieved all that before even having access to this year that is going to be the best crop ever. So definitely, all very exciting news and a great job led by our team over there, brilliantly led by our COO, Conan Churchin; and our CFO, Trenton Gallagher. So thank you very much to them too. In terms of the third growth pillar, which is simply trying to increase our return per liter, we try to tackle this point through multiple different ways. The first one has been the innovative way of approaching marketing and education. And we do that through different actions, like the virtual tastings that have been incredibly successful, educating consumers from that point of view. But also long-term health care professional educational program, where we have been educating health care professionals about all the good things around extra virgin olive oil. The other thing that we have done is definitely the development and launching of higher value items to be sold both through online, like our pouches that you see there, the recyclable pouches in refillable forms or our higher-value ultra-premium range that has just been listed in the retail space. And then obviously, the most obvious one, which is the management of the final selling price through a different balance of depth and frequency of promotion as well as the regular price reviews. But the important thing with this pillar is that to achieve it, it really requires a lot of multidisciplinary work from a lot of people. And that's why, again, I wanted to highlight and recognize the contribution of our Head of Technical and production, [indiscernible] our Global Head of Science and Marketing, Brent Crosbie, who is now in America and our Head of Sales, Nicolas Urbin, for leading their teams and managing this continuous contribution between all the teams here. So fantastic work. And then we get to the final growth pillar around sustainability. Certainly, sustainability in 2023 has been another very active year. As Sam said, we are very pleased with the change in the direction and strategy that we apply to this area. A couple of years ago, providing a lot more focus on business-to-business relationships and focusing on selling ingredients and biomass directly to a number of different entities from nurses to hospitals to food manufacturers or green housing, we do that with a very lean structure. Just to give you an example, last year alone, we have sold over 7.4 million kilograms of biomass to other businesses. So definitely a great improvement. Sam showed the figures. There has been a turnaround or improvement of nearly $2 million in this division, which it would have been even higher if it hadn't been for the mid to write-off nearly $1 million worth of obsolete stock linked to our decision to discontinue our retail sales of the branded products, both in Australia and the USA. Last few points around sustainability. I want to highlight the fact that we have registered our Australian carbon sequestration project with Verra, trying to capitalize on some of the carbon credits that our groves are able to generate. We also continue with our reforestation program at Bend grove, 166 hectares planted last year, 123 hectares of new land will be planted this year and many, many more initiatives that fortunately have been recognized independently by the Australian Financial Review and Boston Consulting Group, naming us sustainability leaders in agriculture and environment for second year in row. And also really pleasingly winning the Better Tomorrow award from Woolworths in 2022 and the Core Sustainability Supply of the Year this year. To finalize with my last slide, we normally are quite wary about a lot of fluffy and empty wording when it comes down to sustainability and environmental initiatives. So I just wanted to finish my presentation with a real example of one of the many things that we do. The image that you see on the left there is a satellite image of our Boundary Bend grove. The areas painted in yellow and light green as some of our reforestation projects that I've been talking about before, and then we also got highlighted the hundreds of hectares of native vegetation that we fence out or we left as natural corridors. That's all painted in purple. And the reason why we lifted those areas and those corridors is essentially to protect the native fauna, the different animals that are in the Mallee. And one of those animals is that bird, you see in that image there is a Malleefowl. It is an endangered species that happens to live nearby our environment. And last year, we established a formal partnership with the Victoria Malleefowl Recovery Group, who is a group that happens to have a number of different initiatives, including some observation nesting sites and it happened that some of those nesting sites are just to the northwest of our farm in that green area there, and some of the initiatives that we funded and help the setup of live camps that are actually filming the birds 24/7. They're really, really unique birds. They built nest in the funnel of dirt mounds and they keep the eggs at the right temperature by throwing more dirt or removing them out of those mounds. They are very, very unique animals. And we're actually quite pleased to support this initiative not only for the Malleefowl itself, which is great to see the numbers improving and doing this, but also for that to be an indicator of the health and the diversity of the environment surrounding our groves. And just to show that all the practices that we apply to our groves are far from damaging the environment, actually helping it to be better every day. So this is the end of my address. And before I hand it back to Rob, I also would like to thank our marketing team that is at the back here, Russell, our CFO, our Head of People and Culture, Kate Quinlan for organizing and putting together this AGM, always a big challenge when we are really busy in trying to get more and more things. So again, thank you for the latter stuff. Thank you to a lot of stuff in particular, to try to squeeze us in between the busy production schedule. Hopefully, you will enjoy it and appreciate the opportunity to see what we do. We are certainly very proud of it. Thank you very much.

Thanks very much, Leandro. . There's much anticipation in the room as we move to the most exciting part of today, which is the formal part of the meeting. And it's becoming trickier each year because we have people in here who are voting with cards, we got the online platform, but we also have a WebPhone platform well, and we need to ask questions from each of those. So I'll try and move as quickly as I can and give plenty of time for questions on each resolution. Our company Secretary has confirmed that the Notice of Meeting, the explanatory memorandum dated 2, October 2023, 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. That notice will be taken as read. In accordance with the company constitution as set out in the Notice of Meeting, we have determined that voting on each of the resolutions will be conducted by deed poll rather than a show of hands. The results of the poll will be declared and released to the ASX later today and also published on the Cobram Estate Olives' website. As Chair of the meeting and as declared in the notice of meeting, I will vote where authorized all undirected proxies in favor of each resolution. As mentioned previously, for those attending the meeting in person, you can cast your vote by filling out a paper voting card. If you have any questions or you didn't get one, the Link Market Services team is where you first walked in, if you have any questions or you want to check anything. There is also the ballot boxes, which look highly secure and sophisticated sitting here and probably a few others. So at the end of the meeting, make sure you put those -- your votes into the boxes. For those shareholders participating the meeting via the online platform, as mentioned, you can cast your vote -- direct vote using the electronic voting card that you received when you validated your registration. If you have any questions about casting your vote online, 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. A bit about how to ask questions. If you have a yellow card or a blue card here in the room and you wish to speak and ask a question, when prompted to do so, move to one of the microphones. If you don't mind saying who you are and then asking your question, that would be terrific. For those participating on the online platform, you can submit questions by registering the shareholder or proxy holder and selecting the Ask a Question tab. 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 we'll see those come up on the screen, the questions or comments. If you wish to ask a verbal question via phone web select, go to WebPhone, enter your name and click on the green phone button, and you will be connected to the meeting. Press star one to ask a question at the time of your item of business. And please make sure that you have muted the video on your computer device. For those participating online via WebPhone, if you have any questions, please go Market Link Services. I will consider questions from the floor prior to WebPhone and online questions. I'm sure everyone is clear with all that. Out of fairness, I ask if you could just ask one question at a time so that we can get through as many as possible on each resolution. And I reserve the right as chair to rule questions not pertaining to the AGM or out of order. The six items of business today. We'll allow time for each questions before we vote. The first item of business is financial statements and reports. It's on the agenda for discussion purposes only and is not a resolution that relates to the 2023 financial statements and reports. However, the Board and auditors, Peter, are certainly happy to take any questions and feedback from shareholders. The 2023 annual report contains the company's financial report, the directors' report and the independent auditor's report. A copy of the annual report is available on the website and was e-mailed to all shareholders for whom we have an e-mail address or sent to those shareholders who requested it. The financial statements have been approved by the directors and audited noting my other comments, so I'll take financial statements and report as read. To consider it and -- to receive and consider and approve the financial report and the related directors' report and auditor's report for the year ended 30th of June 2023. Do we have any questions for management with relation to the financial report or auditors or Peter from Deloitte's with regards to the audit, preparation and content of the auditor's report.

My name is Norman West and I'm representing the ASA as a proxy a collector and an observer. And I'm a shareholder. Don't want to read card accidently. Firstly, I'd like to commend the board, everybody else involved with the company. And I think I said this last time, holding a hybrid meeting a little -- starting to be weaknesses in hybrid meeting, some companies are avoiding them. But you are -- and I'll produce a -- very obviously proud of it. Otherwise, we wouldn't be here in such a unique environment. So thank you very much. A lot of other recommendations are only little ones, parking down here compared to the whether last time is excellent. I think I can get out without getting grounded.

You haven't paid the bill yet.

That's your problem. And it's delightful to have nibbles and a cup of coffee, if you're traveling [indiscernible] of your shareholders from outside of Lara and again, that's deeply appreciated. And I have a question. Question in regard it was covered briefly in the marketing. But in Australia, you've got 2 major retailers who can play hard ball from time to time depending on placement and orders, et cetera. What is your advantage to hold your position within those 2 major ones and anybody else. And secondly, a question, is the U.S. market a similar sort of situation as we have in Australia.

Thanks very much, Norman. Thanks very much for the compliments. Great to have you here again. Firstly, with regards to the question around how do we hold our position with the retailers in Australia, bearing in mind, there's only 2 of them and have a reasonable amount of market cloud. Number one is that consumers buy our products, and they make more money stocking our products because consumers like them and they sell. So we get more facings because consumers realize they mightn't be the cheapest, but they're better value. And obviously, they do their homework and within the industry. They know that we're extremely professional to deal with. We can store every liter that we produce each year. There's consistency, not only in our products where the private labels we supply them and that we spend a lot of money and drive the industry in marketing that category. Extra virgin olive oil is the highest value product in the mainstream oils and fats category. So extra virgin olive oil effectively is driving the whole category from their point of view of revenue, profit, those other things. So it's a terrific relationship. And as we've got bigger, it's got better. The U.S.A. is a little bit -- the second question related to the U.S.A. and whether it's similar to here, it's not as in there's a huge amount of retail over there. There is the big guys, Costco, Walmart. But to be honest, it's -- whatever works here with consumers, with the trade, the strategies that work here, which aren't rocket science, they work in the U.S.A. And every time we try and divert from it in any material way, it doesn't seem to work very well. So -- it's not -- it's really just having really high-quality extra virgin olive oil, knowing the category super well. The buyers know that we know and that we try and supply the buyers with a lot of information that we have around what we're seeing, and I think they value that. So thank you. Any further questions? Any online platform?

No questions there.

Well, that's good. Let's go to number two, adoption of the remuneration report. We might get a few here. The renumeration report detailing the company's approach is also contained within the 2023 Annual Report, which is available on the Cobram website. Noting my early comments, I will take the remuneration report as read. Further details about the resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. This vote is advisory only, is not binding on the 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?

No online questions.

All right. Well, that's really good. As there are no questions, could you please select for, against or abstain next to item 2 on your paper voting card or submit your vote online if you're on the online platform. Thank you. The Item 3A is election of Nonexecutive Director, Toni Brendish. Toni has more than 30 years' experience working in blue-chip fast-moving consumer goods companies, health care, manufacturing and agriculture, telecommunications companies in Asia, Australia and New Zealand, including over 20 years as Chief Executive Officer, Managing Director roles. Toni's most recently held the position of Chief Executive Officer of Westland Milk Products in the South Island, New Zealand. Prior to this, Toni spent 11 years working for the Danone group as Managing Director of the infant formula and dairy businesses in Australia, New Zealand, Malaysia and Indonesia. She has also worked for Kimberly-Clark and Colgate Palmolive together with a number of other blue-chip FMCG organizations. Toni is currently a Non-Executive Director of ASX listed natural fish oils, manufacturer and nutrient ingredient business Clover Corporation. She was recently appointed as a shareholder representative director on the board of Prolife Foods, a private New Zealand consumer foods business with brands including Mother Earth and Scoop and Weigh. Toni is also on the board advisory Committee for dairy farming and milk producers Aurora Dairies. Toni commenced a non-executive director of Cobram on the 23rd of January 2023 and is a member of the Remuneration and Nominations Committee and the Audit and Risk Committee. I now invite Toni to briefly address the meeting.

Good afternoon, everyone, and I'm very pleased to be here today and very pleased to have been on the board for the last 9 months. As Rob's already detailed my bio, but you'll also see it in the annual report. I guess I just wanted to highlight on the pieces where I've been involved as a Chief Executive or a Managing Director. And particularly the areas of working with Danone for 11 years, and a lot of that was in the infant formula manufacturer, which has a very high standard in terms of production, regulatory and resulting quality of product. And during that time, working with Danone had significant supply chain and operational challenges to deal with as well as working across a number of international markets. As Rob mentioned, my last executive role was Chief Executive of Westland in the South Island of New Zealand. This was a dairy producing company. And again, the issues around operational complexities, supply chain, insights from consumers were all very relevant. So for me, I think it is that library of knowledge, commercial acumen and strategic insights is where I think I can bring the most value to the Cobram Board, in addition with the rest of my board portfolio. So I am very pleased to be putting myself forward for shareholders' consideration to be elected as a director. Thank you.

Thank you, Toni. Is there any questions?

No online questions.

Great. As there's no further questions, can you please select for, against or abstain next to the Item 3a on your voting paper. Item 3B, the reelection of Non-Executive Director, Craig Ball. Craig is the chair of the -- of financial services firm, Taylor Collison Limited and is responsible for corporate finance and in equity markets. He became a Director of Taylor Collison in 1992 and his extensive experience in the Australian equity -- equity capital markets. Craig holds a bachelor of the economics degree from the University of Adelaide. He worked for a decade with chartered accounting firms before joining the stock broking industry in 1987. Craig has been involved with Cobram Estate Olives since 1998 as a founding shareholder and has been there the whole step of the way with Tim Jonas, insisting in the formation development and was appointed as a non-exec Director in 2005 when we became a public company. Craig is a member of the -- is the Chair of the -- is a member of the sorry, is a member of the Audit and Risk Committee and Chair of the Remuneration and Nominations Committee. I'll now invite Craig to say a few words. I'm just thinking it might be better if you stand up, sorry, Toni, just because everyone is sitting down, probably can't see. You can do sit again if you want.

Thanks, Rob. They probably could have seen me sitting down. Sorry, Toni. So first of all, thank you for allowing me -- giving me the opportunity to address the AGM today. It's an honor to work with such a high-caliber team of employees, executives and Board of Directors. The culture of Cobram, which is really important to us, has been built from the inception when Rob McGavin and Paul Riordan launched themselves into what was then a high-risk venture. They were joined along the way by many of you, initially as investors and now shareholders. I was also one of those investors and shareholders in the early days. This company has gone through many challenges, including those thrown by agriculture, financial, government regulatory changes, the U.S.A. expansion and the list goes on. The ability for this team to be proactive in their planning and responses to overcome these obstacles has been critical in achieving success to date. As a nonexecutive director, I've been involved in facing some of these challenges. The culture of the Board has been to assist in driving forwards. We've recently lost Professor Jonathan West and from the close of this meeting, now Tim Jonas retires, both of whom have added exceptional value to Cobram. I cannot speak highly enough of Jonathan and Tim's contribution to Cobram. With these changes to the board, I think I can continue to add value as the board evolves. As Rob said before, I was a chartered accountant, and I was a member of the professional body for 40 years. I worked as a chartered account and then in the stockbroking industry, in corporate finance, leading numerous equity capital market transactions for ASX-listed companies. If reelected, I look forward to continuing to assist shareholders and the company's employees drive the continued growth and maintain Cobram as an excellent corporate citizen. Thank you.

Thank you very much, Craig. Before we vote, is there any questions?

No online questions.

Good. If you can now please lodge -- will please select for, against or abstain next to 3b on your voting paper. Item 4, Cobram Estate Olives Limited employee incentive scheme. Details of the resolution summary of the employee incentive scheme are contained in the explanatory memorandum as accompanied the Notice of Meeting. As outlined, the employee incentive plan is intended to assist the company to attract and retain key staff whether directors, employees or contractors. The board believes that grants made to eligible participants under the employee incentive plan provide a powerful tool to underpin the company's employment and engagement strategy. Details of the votes for this item are now on the screen. Noting that each of the directors are entitled -- sorry, are eligible for participation in employment scheme. The board unanimously recommends that shareholders vote in favor of adopting the employee share scheme. Are there any questions?

No online questions.

Good. Yes. Sorry, I didn't see yes, can yes.

Is this for all employees?

Sorry, just say that again.

Is the incentive plan for all employees?

Yes. For all employees. Yes. And just a little bit of background, the one we're doing now is for the Australian employees and a sub plan of that is the one that's coming second with this USA employees, and they're pretty much identical except that there's a few benefits to employees with no adverse impacts on our business to have a slightly different plan because their tax system in the U.S.A. is different to in Australia. As there's no further questions, can you please select for, against or abstain next to item 4 on your voting card? Item 5, Cobram Estate Olives Limited 2023 US incentive plan. Details of the resolution and a summary of the U.S. incentive plan that contains Explanatory Memorandum accompanied in the Notice of Meeting. As outlined, the U.S. incentive plan enables the company to issue performance securities for employees in the U.S.A. The board believes that the USA incentive plan will enable the company to attract, incentivize and retain personnel involved in the company's U.S.A. operations. Details of the votes for this item are now on the screen. The board unanimously recommends that shareholders vote in favor of adopting the U.S. incentive plan. Are there any questions?

No online questions.

As there are no further questions, please select for, against or abstain next to item 6 on your voting card. Item 6 is to transact any business which may be lawfully brought forward. We now move to Item 6. Russ, has there been any items legally brought forward.

No items.

There's nothing to vote on there. Before we go to general questions, can I ask that, if you've not already done so, can you please vote next to each resolution 2 to 5 inclusive on your voting card, and please make sure that you then hand your voting card to the one of the returning officers at the end of the meeting. Representatives will be situated also at the exit center. There's a box up here. In five minutes' time, that will close. And as mentioned earlier, the results will be live on the resolutions announced to the ASX promptly after the meeting when they're known. So let's move to general questions about anything of anyone.

Chair, Mark Topy, shareholder. I just wanted to ask in terms of the cost pressures and the cost of let pressures that we're seeing and inflation and the consumer space, just how the company has responded to that? And perhaps how you're positioned both similar sort of pressures in Australia and the U.S., eating at home and taking advantage of that. Can you maybe comment on that sort of backdrop and how you see the company positioned?

Andy, how do you want to answer it? I'm happy to have a go.

You have to go, Robin.

Look, there's no doubt that cost has increased and that people are having to make some more difficult choices than they did particularly a couple of years ago because everything seems to have gone up. I don't have to tell this room about all of that. What we've noticed in times of economic downturns and hardship, particularly the JFC comes to mind, which was a pretty scary time for a few years. for lots of people. The sales of our products, it was probably the fastest growth period we had ever had. And we're seeing really strong sales because people are probably not compromising so much on the quality of food they take home when they do need to make compromises. They're probably more likely be compromising on eating out or other maybe more discretionary things. And I think that the health message around extra virgin olive oil is a reason to pay for better as well. So I think those 2 things stand in pretty good stead. There's no doubt that there's been a lot of price rises go through on absolutely everything doesn't matter if you get to build or you got a supermarket or wherever you are. So as far as input costs of the business, we're not have really backed off, and we have actually seen some really big reversing in red protein cost, I think that will flow through. The labor market is freed up, absolutely for sure. So some of those impacts on the business. I might throw to -- do one of you guys want to comment on the U.S.A. or what you're seeing because I...

Yes. I think, Rob is exactly right. The data we're seeing is supporting a trend towards eating back at home, and we're seeing that both in Australia and in the U.S.A. And yes, sales rates have been really strong across all our product offering or we play in private label, Red Island is mid-tier and Cobram the high-end space. So it's a very, very similar trends across both countries.

I could maybe just add to that because I was actually involved in disseminating the results of a study this week that was looking specifically at Australians and how much they're cooking at home. And the results were for the average Australian, the dinners was 5.2 meals a week. And the people who ran the survey were quite surprised that it was so high, and it was almost similar for lunchtime meals. So I think that's really reflective of the fact that the cost of living rises or meaning that people are cooking more at home.

And 98% of our sales are straight to the consumer, retail, not foodservice. So even when COVID went down, our sales went up. So we aren't tied to that more discretionary eat-out spend if it is curtailed. Come forward, feel free just to line up or just stand up whenever.

Peter Colis is my name. Just a question for Leandro, probably as much as anybody. Can you explain why, technically, we have on years and off years, particularly when you've got plantings in different areas that -- and plantings at different times, is it to do with the harvesting methodology or what I think a lot of people would probably like to know why that occurs?

Yes, it's -- I'll try to make it very simple. There's only so much energy that the trees can produce and that energy either goes to support crop or support new growth. And that new growth is what's going to give us the crop the following year. So the larger the crop this year, the more energy that goes to feed the fruit and there's less energy left for growth on the following year, which is going to give us the next year's crop. Essentially, that's the reason. It's not only applying to olives. It applies to a lot of other fruit trees as well. The reason why it tends to be synchronized, it's mainly because of some of the negative environmental events. If we happen to have a damaging frost event, like what happened in 2018 at our Boundary Bend groves, all the grove in general terms come down to an off year, has plenty of energy to put growth so the 2019 crop is really high. Certainly, what we have seen over the past 3 or 4 years is a reduction in the difference between the on and the off year. And a fair bit of that has to do with the younger trees at board coming into production. Those trees are still not synchronized on the same cycle. So we got more and more hectares of that growth, not caring much about what year it is and still yielding relatively well. And that's why we are seeing that gap between on and off year sort of getting narrow and hopefully will continue to get narrow over time.

And we -- just while the next person is coming up, we have put in a lot of frost fans to try and we think we've reduced that risk or we have reduced that risk significantly of having a frost and then getting into that situation. Sorry. Your question.

My name is Michael, and I'm a shareholder. My question is you made an important point that 98% of sales are straight to the consumer. What is being done to increase sales business-to-business.

Business-to-business?

Restaurants, establishments.

Yes, we do sell to restaurants, but it's around where do you get -- where is the most security in the sale and where are you getting a good price. And effectively, it's reasonably hard work in a lot of food service because the olive oil is an ingredient that isn't sort of very visible to the consumer in their shop. So when I say we sell the 98% to consumers, a lot of that is through businesses like Woolworths and Coles and other people that have it on shelf. But we've -- we don't -- we see that if we sell more into food service where -- because we only grow so much oil, we've only got so much to sell that we're not only reducing our profit but we're increasing our risk because when things get tough, people don't eat out as much. And so having a consumer that actually turns up to somewhere and buys your branded product is probably the most secure sale you can ever have. Whereas a restaurant can very easily go, it's a bit tough or not going to or even worse to candor something -- some rubbish into your bottle and put it out. I'm not saying they do that, and we have some fantastic restaurants but it's really the top end that buy our product, that's why it's 2%.

I'm Leone from Becker Smarsh. And I do work for an organized charity called Soul Food, and we present -- we prepare food for our community every week, and it has grown from about 40 meals a week up to about 130. Do you have any program within your organization about helping organizations like us, such as donations of oil.

Yes. Look, we absolutely do, and we do a lot with Food Bank and others, but I might -- who is best to answer exactly what the deal is at the moment.

No. we certainly do have. We focus a lot on more local programs within the [indiscernible] community, but more than happy to take it offline and just have a discussion about how we can collaborate together.

Yes. And it's -- yes, just talk to us, Leone, and obviously, we try best to help where we can. Any other questions? Any online questions, I can see a nice comment there. Saying great presentation, and we'll continue to remain very excited about the future of the company. Keep up the great work. We need more of those comments. Oh here we go, Peter.

Rob I'm interested to know what's happening in terms of fake extra virgin olive oil. What progress is being made in encouraging the government to do something about because I know your laboratories are very hot.

Is this about fake olive oil? Yes. Where do I start? We have an Australian standard that was initiated by the Australian Oil industry and really led by Leandro. It was adopted by Food Standards Australia, but it's only voluntary. They can mandate it in 4 states in the Commonwealth agree through their subcommittee of government sort of [indiscernible] in consumer competition area, but they've chosen not to. I don't think they ever will and sometimes it's better just to get on with what you do and do it yourself rather than trying to rely on government to do anything. There's just so many competing arguments and in the end, I think that most governments want cheap food and they don't actually care what it is as long as inflation is down, but that might be cynical..

Chris, a shareholder. A number of years ago, there was -- when the water rates, I think it was mainly the Murray–Darling basin market got very high, and it was low concern on how it was operating and I think it might have been here, I was pushing through a grid to try to get how that market to change. Did anything happen in the way the market operates and is likely you will end up with very high water rates again.

Yes, thank you for the question, and it's around the price of temporary water. So we all know that when it rains, the price of water is really cheap. And when it's sort of drought, the price of water is really high. The problem is that you have as a business is you don't know really when it's going to rain or when it's going to be a drought. And our strategy is to buy the water when we need it and pay the price that it is because trying to second guess where it might be can be dangerous. And most of the time, if you try and long-term lease water or almost always, the counterparty on the other side won't guarantee the water, but they'll just guarantee whatever the allocation is. So when you hit a really bad drought, you have been paying a pretty high price to secure this water, but you don't get it any way. We only get what the government announced. So we are really comfortable with that strategy. The biggest issue with the market is, and we've just put in a submission to the Productivity Commission. You should go and read it. And it -- the productivity put out their draft report the recommended review in the water trading. I thought most of the stuff in the Productivity Commission report wasn't talking about much that was going to add much productivity to this country. But all that aside, the biggest issue is that we're the only country in the world where the temporary water, being the allocation water, being the water available to use can be bought by anyone. You don't have to be a consumptive user or a farmer or industry or township to buy it. You can just be a trader. And that drives bigger peaks, that drives the price higher in periods of drought, and baseline demand disappears more because it's out of the reach of so many other crops. I mean we are blessed that we can pay probably more than anyone -- any other mainstream crop for our water because we're really profitable, really profitable crop, consumer brands, all those things, and olives don't use a lot of water. So per megaliter, we can pay more than in wells, a great position to be, but a lot of farmers aren't in that position. So the baseload demand disappears to a certain extent. So then when you get flooding rains or lots of water, full allocations. There's a lot of that baseline demand that's not there for the water to use it in low-value crops, so the water price is even cheaper. So not only is that risking industry and survival of communities in the basin during periods of drought, it actually also makes the water a lot cheaper in periods of flood because the baseline demand is they've been sent broke during a period of time. So I think it's a serious issue that the country will have to face at one point. Just no one really -- it's a very complex market. Let me say that, but no one really understands that it I think, when I say no one, I'm generalizing. Is there any other questions? There's one up the -- here you go.

How long do you expect a material [ of treater ] last, like in the trees produce fruits and whatnot have different life spans. They decline in productivity after a certain time. Do they last 50 years, 100 years or whatever.

So the olive trees can live for thousands of years. But commercially on a modern grove like ours, the lifespan is usually around up to 40 years. After that, you get start seeing a little bit more of that alternacy and a slight decline and gets harder to peak. So in our planning, what we assume is a 2.5% technical replant in per year, which allows you to keep an evergreen producing crop. Sometimes you're going to be replanting trees at 30 years old, sometimes they can last up to 50, depending on the variety and the environment. But 40 years is a very reasonable number for commercial olive grove.

Okay. Next question.

My name is Dan. I'm a shareholder. I'd first like to comment the most pleasing thing I've learned today is that you don't need bees for pollinating. You rely on the wind. Anyway, what my question relates to is that -- you've talked about your growth, quality, your product, the acceptance, particularly acceptance in America. Now when I think of America and you're nominating California, it sounds like it might be the limit of your spread at the moment. You're dealing with a population that's about half as greater gain as the Australian population. Being one that's always taken an interest in Australian companies, particularly Australian primary companies, such as Select Harvests. I'd like to come to the point that a company that is successful, a company that sees growth, a company that's experienced shortage in your product, it allows for price increasing, and just stated that your price increasing has been accepted. Are there predators knocking on your door? Or do you have a sign up that says, the exit's over there. Now that didn't happen to Tassal and there's other companies that are suffering from the self-same problem. Have you got a plan on how you're going to handle it?

Sorry, and the question is how are we going to handle someone knocking on the door to want to buy the business?

Yes. Because you're a successful business. You're a business worth investing in. And I think you've got share growth there, share price growth.

Yes, I agree with you on all those points. I -- look -- we always say if you run a business so good, you want to keep it yourself, someone else will want it. And we absolutely love this business, and we see a huge amount of growth in it, of which is certainly not built into the share price at the moment. And it might sound arrogant, but the U.S.A. it's almost impossible for it not to work. I mean it's working now, but it's just we know how to grow the olives. We know how to do it, the highest quality life cost. There's not a lot growing there. It's just bringing that production on. It will absolutely drive revenue and profit. There's almost no question to it. It's not like this big risk, but it takes time. So I'm not quite answering your question, but we get approached from time to time. We're not looking for people.

I appreciate you can't answer that too far.

Sorry?

I appreciate you can't answer that type of question too far.

No, it's fine.

What I do also see and it's also a humongous benefit to your company is you've got the medical efficiency. You've got everyone saying your product is good. What -- and also make it that makes other people think that your company is worthwhile as compared someone like Treasury Wine where the government medical profession, everyone is telling you, stop drinking the stuff. But they see it worthwhile to go and spend $900 million and extending their production or extending their range. Now there must be merchants and et cetera, et cetera, in America that would be assessing this company very, very closely.

Yes, you're probably right. We really just focus on really what we're doing and how we can achieve more shareholder value. And we just all love the business. We're not talking about selling it. But others will notice. I think we haven't been around a long time. We're just really listed, getting used to us. It frustrates me personally, but the market is the market. It frustrates me personally that we're even put in the same basket as most of the other ag companies in Australia because most of them can completely lose their margins because of currency, commodity risk or having to pay their supply as a fortune for their product. And we control all of that. We're always going to be the bottom of the cost curve because we're the biggest grower and we're just leading the world in those 30 peer-reviewed research papers, which was 26 on a year ago to get how do we grow higher quality, lower cost and to keep expanding. So I see this as just the most incredible business that no one else is seeing yet. When I say that, everyone in this room is, but we're speaking to the converted. So I really appreciate your comments, and I believe in what you're saying. And it's one of the reasons that we -- the proxy advisers, 2 proxy advisers sort of voted -- suggested shareholders should vote against our remuneration and our options plan. But I sort of feel that a lot of the reason you see a lot of other companies grow and you've just named one that's going to spend another billion on something is that the executives are just thinking about their pay packet. And if I can make the business twice as big, I can get paid 50% more, but shareholders, it could be the dumbest deal ever, it's not 1 plus 1 equals 3, it's 1 plus 1 equals half. And we've been really disciplined in our remuneration to senior executives for a long period of time has been. So these boys here, and along with a couple of others, got 10-year options 12 years ago or longer over shares are well out of the money and they've done really well out of it. But if they left or if they were sacked, they got nothing. And it's tax effective. It keeps them motivated to think long term and we need to plan to grove and go and spend all this money short term, when you're trying to get your share price up in the long term for long-term value is really difficult. So we struggle with KPIs when we're in an ag business, we can only sell what we produce. We don't want -- sometimes we say to salespeople, no one in our business gets a bonus that's tied to a sale or to anything else. There is no profit centers within all of our business where this guy says, "Oh, no, if I charge marketing more for bottling here, well, I can get a bigger bonus." We used to do that 15 years ago. We took the whole lot out. Everything is a cost center. The profit belongs to absolutely everybody. And look, we all know that high percentage, I don't know if is 10% or 20% or whatever it is, but high percentage of employees is too good to sack and not good enough to keep. But if you got something that's around the whole company performance, you're giving money to people that you're sort of trying to manage out or you wish they'd leave, and you're not giving enough to the ones that you want to stay. I'm raving on a little bit, but it's just trying to stick to our knitting without -- and move with social change. We don't want a proxy list saying that we don't have enough. Our -- the issue that they complained about was the senior executives, their salary was too much fixed without enough discretionary because 80% fixed with 20% in this case, discretionary, but it's not listed. So we need to do a lot better job at communicating it. And we are in ag and sometimes in the hardest possible years where it runs all harvest and you just never get to sleep. Well, you might have your worst profit year, but you can't then just punish the one guy who saved the whole business and say, we're not getting anything this year. So we have to take all of that into balance and do what's right for our business and our shareholders and trying to communicate that better so that we do have support of proxy holders and others with things like it was really pleasing today that no one spoke against our remuneration or our options plan. And we haven't given up many of those in recent times. But for those people who you know they're going to be the next Sam and Leandro is coming through to be able to ensure that they could retire wealthy if they put their whole career in here in its 10 years' time or 7 years' time is something that I think we as shareholders need to do to have good staff but to have them fully aligned for the long term with us as well and make sure they hang around. Long answer to a short question. Any other questions? Okay. Well you can still ask questions when we're having lunch. We're going to do a tour and have lunch. But I'd really like Clea Dillon to come up, Brian Dillon's daughter. I believe she is the youngest shareholder, 13, here today. And I'm going to -- I'm going to give her a gift pack and part of this -- but part of the reason is that it might remind you now in here is a few little goodies but Leandro assures me that the first harvest from the U.S.A. that was harvested last week arrived at 12:00 and it's going to be in this. So at the end of your lunch when you leave in the office there, you can pick up a bag when you go to your car, and this will be swapped out with the first harvest. But I would like to thank Cleo very much for coming along and encourage her to get all of her school friends to buy some shares. So I think now the online voting is closed. Those results will be out soon. We -- you have 3 different colors of hair nets. So just to split you into groups. And sorry. Tim, want to say a couple of words? Sorry, Tim Jonas is going to say a couple of words.

Just in signing off, two thank yous. Firstly, for the honor shown to me I guess by my colleagues with naming this the new board mill after me, it's far too great an honor, but I thank you. And -- but I do promise not to try and run the mill. I would have trouble turning the switch on, probably. But most of all, to thank everyone here and online and the shareholders for allowing me to be involved. It's a wonderful company, and it's been wonderful to be involved. Thank you.

I can see Tim next year, Peter, look out. He'll be in the audience with 30 questions about mistakes he found in the annual report. No, he won't. Good on you, Tim. Thank you. Absolutely fantastic. So those of you with red hair nets are going with Leandro maybe.

I'm green.

First is green and Leandro and I'm just thinking that if you just walk straight to the back of your green and turn right, you can follow Leandro and you'll end up at the lunchroom. And then we'll just wait for a minute or two, and then those with red hair nets can follow Sam. And then the lucky ones who have got purple are there with me. But sincere thanks to everyone for coming. I hope you enjoyed it, and it's so good to see so many people here.