Comvita Limited (CVT) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining us today here beautiful day again, as we have had in previous years and also shareholders online. I'm Bridget Coates, Chair of the Comvita Board. I would like to invite Nikki Reddy customer experience manager to come forward and open our meeting with the karakia.

Thank you. [indiscernible]

Thank you. I'd like to welcome you all to the 2026 Annual Shareholders Meeting for Comvita. Before we start, some housekeeping, please. For those in the room, can I please ask you to put your phone on silent. If a fire alarm should go off [indiscernible] symbol to the left and right. Please exit and convene in the grass area out in front of the venue. And please follow other instructions from the team [indiscernible] Comvita's directors include Mike Sang, Head of our Chair of our Audit and Risk Committee; Bob Major, Chair of our Safety and Performance Committee; Gregor Barclay; Michael Tai; Peter Nathan, who is not able to join us today; and I'm joined in person to my colleagues who you can see on the stage here and by members of the senior leadership team, including our chief executive, Karl Gradon; Mandy Tomkins-Dancey up the front here; and other members of our leadership team As I say, Peter Nathan has provided and his apologies for this meeting. I'd also like to welcome Glenn Keaney from KPMG. Thank you, Glenn. And Andrew Matthews from who has legal adviser, both here today and also the team from the share registry MUFG pension and market services. MUFG conduct the voting on the formal business later in the meeting and act as scrutineer. So today's meeting is being held both in person and online through MUFG's online meeting platform. The Chair and CEO's addresses and the slides have been posted on the NZX and also on comvita.co.nz under the Investors section prior to this meeting. For those of you attending the meeting virtually, if you would like to submit a question, the Q&A is open during the course of the meeting, so please feel free to submit questions throughout the meeting, and these will be addressed in the Q&A section. Click on the Ask a Question box at either the top or the bottom of the web page and enter your shareholder or proxy holder number to validate yourself, type your question and click submit. I would encourage you to submit your questions as early as possible in the meeting. If we receive multiple questions on any topic, these will be amalgamated together. And any questions not answered in time may receive an e-mail response after the meeting. So voting today will be conducted by way of a poll. If you are eligible to vote at this meeting and you are joining us online, you can vote at any time during the meeting by clicking Get a Voting Card and entering your shareholder or proxy holder number. After completing your selection, click Submit Vote at the bottom of the electronic voting card. You can change your vote up until the time the voting closes. More information on how to vote online is contained in the virtual meeting guide, which is available on the platform or alternatively, you can call the help line on 080-0200-220. If you are an eligible shareholder or proxy holder attending in person, you should have received a voting card when you registered. When it's time to vote, please click the relevant box to indicate whether you are voting for, against or abstaining from the resolution. If you do not have a voting card and are eligible to vote or have any questions, please make your way to the registration desk, which is just outside the room. The Company Secretary has confirmed to me that the Notice of Meeting has been sent to shareholders and all other persons are entitled to receive it. The financial statements for the year ended 30th of June 2026 and the auditor's report for the period are available under the Investors Center on our website. Our annual report, including our financial statements, were made available on our website on 28th of August on the same date as we announced our annual results. Hard copies are available either through MUFG pension and market services, or by contacting our customer experience team on 800-504-959. I have been told that we have a quorum. And given that the time is now past 2 p.m., I now declare this Annual Shareholders' Meeting open. Proxies have been appointed for the purposes of this meeting in respect of approximately 91.8 million shares, representing over 70% of the total number of shares. Now to the agenda for today's meeting. My address this afternoon will focus on the commitments we made to you a year ago, the progress that we have delivered against them and the priorities for our next phase. I will then hand over to our Chief Executive, Karl Gradon, who will provide an update on the market environment, our strategic priorities and the progress we are making and the financial outlook for the company. Questions relating to these presentations can be asked during general business at the end of the meeting. We will then conduct the formal business of the meeting, discussion of the annual report and financial statements, consideration of the ordinary resolutions relating to remuneration of the company's auditors, director elections, removals and remuneration before finishing with general business. For each of these items of formal business, there will be an opportunity for shareholders to ask questions. We would ask that you hold your questions until they are called for under the -- in the relevant item of business. A year ago, our Comvita was at a critical point. We faced a balance sheet, profitability and organizational challenges. Our lenders were providing short-term support, but had made it very clear that a lasting solution was required with urgency through debt repayment or a potential strategic transaction. We also faced low confidence from investors, including major shareholders who had signaled their intention to exit and significant gaps in our management team. Our priorities at that time a year ago were very clear. Strengthen the balance sheet, secure long-term bank funding, restore profitability and cash generation, reduce inventory, strengthen leadership and put the company on a more sustainable footing. Those were the commitments we made to you as shareholders, and we are all pleased to be held accountable for meeting those commitments. While there is certainly more to do, the results demonstrate substantial progress against each one of those priorities and the business is in a material -- materially stronger position than it was 1 year ago. Let me take you briefly through the progress that we have made. Firstly, we have materially strengthened the balance sheet. In May this year, we completed a $40.5 million recapitalization comprising a $30 million entitlement offer and a $10 million placement. Importantly, the capital raise was structured to provide certainty and participation for all eligible shareholders. while minimizing economic dilution for those who did not choose to participate, we delivered a much more balanced outcome in terms of protecting all shareholders than some had anticipated that we would be able to do in meeting those objectives. We also refinanced our balance -- our bank facilities through to September 2028. Combined with much stronger cash generation and strengthened working capital management, this saw our net debt reduce from $62.4 million at the end of FY '25 to a net cash position of $0.5 million at the end of FY 2026. We have substantially reduced inventory from $135 million at the end of FY '24 to $79.9 million at the end of FY '26. Together, these actions have given Comvita a much stronger financial foundation on which to build. So that's the balance sheet. Secondly, we restored profitability and cash generation. NPAT returned to a profit of $7.7 million compared to a loss of $104.8 million in the prior year, and the business generated $30.3 million of positive free cash flow. Revenue grew 10.7%, but gross profit grew 38.8% and we took $12.2 million out of operating expenses at the same time. Operating cash flow increased to $40.3 million, supported by lower inventory but more importantly, significantly stronger trading performance. These results represent our significant financial reset. We now have a much stronger financial base from which to improve the quality and consistency of performance and from which to drive profitable growth. We have also strengthened financial and operating disciplines including much more rigorous capital allocation, inventory management and cost control. Thirdly, we restructured our share register. The recapitalization brought important changes to our share register. We welcomed 3 new major shareholders, each with an ambitious long-term perspective on Comvita, including Fraser and Neave as a strategic shareholder. F&N brings substantial consumer, market and operational experience across Southeast Asia, a region where we see considerable opportunities for Comvita going forward. This relationship has the potential to bring value well beyond the capital that has been invested. Our teams are already working together to explore opportunities across supply chain, manufacturing, distribution, digital pilots, science and packaging, to name a few. Finally, we have brought together an experienced leadership team, which is fully prepared for future growth. Under our CEO, Karl Gradon, we now have an experienced leadership team in place across our key commercial, operational, financial, marketing, science and people functions with the energy and to grow our company. We are instituting greater strategic discipline and clearer accountability for our new team as we move from stabilizing the business to delivering a significant performance improvement in performance. In summary, the progress we made in FY '26 gives us a much stronger foundation, but it is the foundation, not the destination. We recognize that of our considerable success and market is translating into shareholder returns. And that the progress achieved within the business has not yet been substantively reflected and the experience of our shareholders. Closing that gap between our revenue performance and our net profit line is a high priority for the Board and for our management team. The Board's expectations for this next phase are clear. Firstly, focus. We need to make very strategic and deliberate choices about our markets, channels products and opportunities where Comvita can create the greatest value and direct our resources accordingly. Business models and channel strategies that served us in the past are no longer necessarily the right ones in a fast-changing global environment. Resources need to be reviewed and reallocated in real time to achieve the greatest return for our shareholders. This also means continuing to simplify the business, improve our productivity and our cost efficiency, strengthen the management of inventory and capital and ensure that revenue growth drive superior earnings and cash generation. Secondly, execution. We need to ensure greater commercial rigor, tighter accountabilities and a single-minded delivery against the priorities and commitment that the Board have set. Third, capability. We need to support and empower our leadership, our organization and our governance and ensure we have the capability on our team to execute those choices effectively. Rebuilding shareholder confidence and total shareholder returns remains the important key measure of our success. That will require sustained improvement in performance, earnings and cash generation, not just for 1 year, but consistently over time. We are committed to transparent reporting and to delivering superior outcomes and returns and thereby earning your support over the long term. Ultimately, the next phase is about converting the stronger foundations that we have built into much improved performance, rebuilding shareholder confidence and creating long-term shareholder value. Thank you for your persistence and patience to date. Board capability for the next phase. The next phase also requires the right capability and experience around the Board table. Following the recapitalization, the composition of the Board has continued to evolve. The recent appointments of Michael Chye, Julia Xu and Peter Nathan have further strengthened our FMCG capability and enhanced our operational and consumer experience in our target offshore markets. Today is the first opportunity, since the recapitalization in May, for shareholders to determine the composition of your Board. And a number of resolutions later in this meeting will give you that opportunity. I encourage all shareholders who have not already done so to exercise their vote accordingly. In closing, Comvita is operating in FY '27 from a materially stronger position than it did a year ago. Your Board made clear commitments to you as shareholders at that time, which have been delivered in full. We are now translating those improved foundations into stronger performance and into significant increases in shareholder value. Karl Gradon will now take you through the market environment, our strategic priorities and the progress that management is making and putting these priorities into action. Thank you.

Thank you very much, Bridget, and welcome to everyone to today's forum. As Bridget has outlined, FY '26 was about stabilizing the business and restoring stronger financial and organizational foundations and the team can be very proud of what we have achieved. Now it is time to compete hard and win, growing in markets where Comvita can lead, running a leaner and sharper business and turning both into real value for shareholders as we go. We have an operating model challenge to solve. We need to be able to ensure profits can withstand every phase of the market cycle. We are driving a significant change agenda across Comvita to make this happen. You will rightly judge us on results and returns and ultimately, that is how our performance should be measured. I will cover 3 areas today: the market and category environment in which we are operating, the choices we are making in response to these and the actions underway to build a more focused, efficient and profitable Comvita. An important part of preparing Comvita for the next phase has been strengthening our leadership capability. We have now got a team of experienced leaders in place across key commercial, operational, financial, marketing, science and people functions with a much clearer ownership of delivery. As a leadership team, we are aligned across a deliberately focused strategy and a simpler way of working across the business. This means operating as 1 Comvita with clear priorities, our global capabilities working together, faster decisions and a clear focus on delivering results. This team is built to win with the right skills and the right backgrounds and deep experience in some of the New Zealand and the world's leading consumer businesses. Many of them have joined in the last year, and I'd like to thank them for the energy and pace that they have brought to Comvita. As I look and turn to the external environment, the Manuka honey category is continuing to change across demand, competition and supply. First, demand is broadening North America is now the largest Manuka honey market, and growth beyond China is creating a more diversified base of category demand. This is positive for the long-term development of the category, but the dynamics differ materially by market. North America offers significant opportunity, while China remains important but is operating in a more challenging consumer and channel environment. Secondly, our competition is intensifying. Much of the recent volume growth in the category has been concentrated in the lower grades, while increasing price transparency and digital competition are contributing to greater commoditization. We are, therefore, competing not only with the other Manuka honey producers, but for consumer attention and spending across the wider health and wellness category. Thirdly, supply is tightening. Industry hive numbers and inventory levels have reduced making reliable access to high-quality Manuka honey increasingly strategically important. This is a marked change from the oversupply of recent years. Comvita enters this environment from a stronger position. We have normalized our own inventory levels and established a stronger and more strategic approach to procurement, production and supply planning. Together, these changes reinforce the need for sharper market choices, stronger brand and product differentiation and the strategic allocation of our honey supply. That changing environment is shaping where we will compete to win and where we will direct our resources. These category dynamics are not uniform. Conditions vary considerably by market, channel and product, and these further highlight our focus on responding with greater precision and where and how to invest. We are not applying one global formula. And North America category momentum is strong and consumer penetration remains relatively low. At the same time, e-commerce competition is intense and the business has historically had exposure to individual customers and channels. Our focus is, therefore, in broadening our distribution, building consumer awareness and developing a more diversified customer and channel base. Using proprietary science-based claims that set us apart from other brands, we will play an increasingly important role. In China, consumer demand is softer, consumers are increasingly value conscious and parts of the category are becoming more commoditized. Importantly, Comvita remains #1 in Manuka in China, with more than 50% market share. Our focus is on defending our premium leadership, improving our channel mix and innovating in premium grades, formats and propositions that meet evolving consumer needs. We must look hard at our reach to market and adapt to evolving consumer needs as they happen. Across Asia and our other markets, conditions aren't even, but there continue to be attractive premium wellness opportunities. Here, our focus is on prioritizing the markets with the strongest potential and strengthening our effectiveness of our partners and improving our channel economics. We saw that work pay off last year in Singapore and Korea, where we optimized our retail network, grew digital sales and expanded into other channels like Travel Retail. In the Middle East, we formed a new strategic partnership with one of Saudi Arabia's leading pharmacy retailers. The common test across all markets is that investment must create value. We will invest hard where Comvita has a genuine opportunity to unlock credible, profitable growth and in doing so, build a broader and more resilient earnings base. Equally, we should look to exit channels where we do not see sufficient value. While considering the external environment is demanding, Comvita is now in a position of strength. Comvita has a combination of assets and capabilities that can be leveraged for competitive advantage and are difficult to replicate and our premium positioned brand that can sustain any potential increase in raw material pricing better than most. We have a trusted global brand, premium New Zealand providence and established leadership in the Manuka category. We have deep science intellectual property and research capability, giving us the ability to strengthen our differentiation and extend Manuka into benefits and formats not yet seen. We have an integrated supply chain extending from forest to hives through the premium finished goods. This supports quality, traceability and reliable access to premium honey and we have a well-established market capability across China, North America and Asia with direct retail, digital and partner-led routes to consumers. Individually, these are significant strengths. Our opportunity is to bring them together with real focus and intent and turn them into growth and profit. That brings me to the 4 priorities driving our work across the business. The first is winning in priority markets and channels. We are sharpening our priorities across markets, channels and customers and directing resources towards the opportunities capable of creating the greatest value. As I have outlined, this does not mean pursuing growth everywhere. It means matching our investment and approach to the role, opportunity and economics of each market. The second is strengthening our brand and innovation. We are making Comvita's premium differentiators stronger and clearer in every market. Our innovation will be increasingly consumer-led science backed and focused on the needs of our priority markets and channels. This includes making better use of our sites and intellectual property and becoming more effective at taking successful propositions across multiple markets. The way consumers shop is also changing fast with AI agents now searching, comparing and buying on consumers' behalf. We are prioritizing agentic commerce [indiscernible] Comvita is the Manuka brand, those assistants and agents choose. Comvita is well placed to capitalize on the shift. AI agents look for trusted, verifiable [indiscernible] and our UMF certification, accredited laboratory testing and traceability from hive to shelf give us a genuine competitive advantage over competitors in this environment. We are the only ones in the entire sector that can lay claim to all these attributes that AI will assess. The third is simplifying how we operate. Our current operating model has not delivered the outcomes we want. So we are changing it. We will need to be bold in our decisions to drive the outcomes we need. Tweaks will not be enough. We are stripping out complexity and duplication across processes, systems and our cost base to lift our productivity and support faster but better decisions. This is not simply about cutting costs, it is about building a leaner, more scalable Comvita with clearer accountabilities and stronger execution. The fourth is optimizing capital and supply. We're applying more rigorous return thresholds to investment and aligning honey procurement, production and inventory decisions more closely with forecast demand and our risk profile. The progress made in reducing inventory and restoring balance sheet strength is now embedded in how we manage the business rather than a one-off reset. We can't control every external condition, but we are not waiting for conditions to improve. We're getting on with the work and each of these priorities about one thing: growing Comvita profitability and increasing shareholder value. Let me give you a few examples of what work looks like on the ground. We would like to share more, but we operate in a highly competitive industry and some of our more important work needs to stay confidential until it is in the market. One example is [indiscernible] this is proprietary Comvita gut health science claim that sets us apart from all of our competitors. We are now working on how we can use it to create differentiated consumer propositions around Manuka honey and have already shown that this resonates very well with our North American consumers. No other Manuka brand has the proprietary science-based supports gut health claim in the largest Manuka honey market in the world, the U.S.A. We are now taking these learnings and rolling them out around the world. It is a good example of taking a scientific asset that we have created internally and turning it into commercial value. We're also looking at emerging global health trends, including the rapid growth of GLP-1 medicines and the increased focus they are creating around gut and metabolic health. These are areas where our science and natural health products may have a relevant role to play. Another is inventory. We ended the FY '25 year with $89 million of inventory. We closed our FY '26 year with $79.9 million. That is real cash that was sitting in our warehouse. Inventory days on hand are now back within our target range with better alignment between the honey we buy, what we manufacture and what our customers and consumers need. That may not sound very exciting. But over the past few years, I can assure you we get quite excited about having the right amount of honey in the right place at the right time. We are starting to see some exciting opportunities emerge from the relationship we have with F&N. Our teams are already working together in practical opportunities across areas such as distribution and innovation. It is still early days, but there is real potential in what 2 organizations can do together, and there is a clear positive intent to deliver mutually beneficial outcomes. Also very proud of the progress we have made in staff engagement this year. Our Net Promoter Score improved from negative 1.1 in FY '25 to a positive 0.9 in FY '26. And that is significant and encouraging progress, although now there is much more to do. We're also investing in our people and building capability for the future, including reintroducing beekeeping and other apprenticeship opportunities that give our people the chance to develop skills and build careers within Comvita. And finally, there are products like the one we're about to share with you. Our 100% Manuka Lozenges have been one of our most successful new products, they are a simple example of taking something that Comvita is very good at, Manuka honey, putting it into a format that is convenient and relevant for consumers. So rather than talk about them, we're going to pass some around the room. Apologies for those of you that are online, you can go find them on comvita.com. Feel free to share their goodness with the world. I personally love this product, by the way. We have a pure Manuka honey and a black current for you to try today. Please do try one. With some formal business still ahead of us this afternoon, they should help you keep going through the next part of the meeting. These are just a few examples. There is much more to come with new products, partnerships and market opportunities and development, and we look forward to sharing more when we are able. I'll finish with an outlook. We're 3 months into FY '27. After the first quarter, trading is in line with our internal targets. We are in a strong financial position. Group sales for the first quarter are up on the prior year, and excluding foreign exchange impacts, profitability is in line with the prior year. This is being achieved while we progress a significant program of change across the business. Premium pricing, tight cost control and foreign exchange tailwinds are all helping to offset pressure on honey pricing. We are looking to provide FY '27 guidance ahead of or with our half year results announcement in February. And I want to be clear about why we are not providing it sooner. Shareholders have told us plainly that this business needs to change materially. We agree. As already mentioned, over the coming months, we are making significant decisions on our markets, our channels and our operating model, decisions that will reshape Comvita's earnings. It is right that our guidance reflects those decisions rather than comes ahead of them. By the half year, you will -- we will also have much clearer visibility on the external forces that influence earnings including conditions in our key markets, foreign exchange, geopolitical developments and the Manuka honey season. We are watching this closely, and our balance sheet gives us the flexibility to respond as conditions evolve. On dividends, our position follows directly from our strategy. We raised capital to reset the balance sheet and fund the changes that will rebuild earnings. And that is what we are using it for. At this stage, we do not expect to pay a dividend in respect of 2027. Dividends will return when earnings, cash generation and the balance sheet support a sustainable dividend and the emphasis from me is on sustainable. Our ambition for this business is big, and we are moving at pace to deliver it. We will take the quick wins as they come, but our real focus is long-term sustainable growth, and that will take time to translate into shareholder returns. Ultimately, our job is to turn this work into stronger financial performance and that is what my team and I are accountable for. We have already changed our ways of working significantly over the past year. We are pursuing continued improvements with rigor and urgency, and I look forward to updating you on our progress as we evolve and reset our operating model. On that note, I will now hand back to Bridget to move into the formal part of the business of the meeting. Thank you, Bridget.

Thanks, Karl. I'd now like to turn to the formal part of the meeting and the resolutions. At each item of business, I will call for questions relating to that item. We are committed to providing all shareholders with a reasonable opportunity to ask questions and to express their point of view. In the interest of all participants, please keep questions concise and relevant to the business being considered and ensure that comments remain respectful and dedicated to the matters under consideration rather than focusing on individuals. There will be time for further and broader Q&A as part of general business. We will respond to questions in the room before turning to questions from online participants. For those of you in the room, please hold up your voting or nonvoting investor card and wait for a microphone, which will come from the back. Before asking your question, please state your name and advise whether you are a shareholder or a proxy holder. For shareholders or proxy holders joining online, please click the Ask My Question button at the top or the bottom of the web page. I'll now open the floor for any questions relating to annual reports, financial statements and other reports. Are there any questions from those in the room? Are there any questions from those online? Thank you. If no questions online, we will move on. Are there any further questions? Thank you. So we now move on to the ordinary resolutions. We have 10 resolutions for you to consider today. Resolution 1 relates to the appointment and remuneration of KPMG as Comvita's auditors. Resolutions 2 to 6 are for the election of Directors: Mike Sang, Michael Tai, Peter Nathan, Julia Xu and Kosit Suksingha. Resolution 7 to 9 are for the removal of existing Directors: Robert Major, Gregor Barclay and me, Bridget Coates. Resolution 10 is for an increase in the Directors' remuneration. Given the large number of resolutions, we recommend that shareholders read all of the resolutions carefully to make sure that they are clear on what they are voting for and what they are voting against. It's a little more complicated than normal. In terms of the voting procedure for the 10 resolutions, please mark your voting paper with for or against. If you wish to abstain from voting on the scheme resolution in front of you, please mark your voting paper abstain. Online attendee should submit their electronic voting card received -- which they received when online registration was validated. If you are eligible to vote and have not yet validated, click, get a voting card and enter your shareholder or proxy holder number. On completing your selection, click Submit Vote at the bottom of the electronic voting card. And if you require any assistance, please call the helpline. As mentioned, we will call for questions in relation to each of these resolutions. In relation to Resolutions 2 to 6 for the reelection or election of Directors, each of the relevant nominees will be given up to a maximum of 3 minutes to speak before the Q&A session for that resolution. So there will be Q&As after the finish of the candidate speaks and then we will vote accordingly. Note, Peter Nathan, is currently overseas with a prior commitment and is not able to attend, but we will be playing a prerecorded message from him and there will be no question-and-answer relating to this resolution. We will also play a prerecorded message from Kosit Suksingha, who is not here in person, but is available online to answer questions and so we will take questions with regard to Kosit Suksingha if there are any questions from you. In relation to Resolution 7 to 9, which our shareholder proposes for the removal of certain Directors, a spokesperson for the relevant shareholder or shareholders making the proposal we'll have the opportunity to speak to their resolution for up to 3 minutes. And then the relevant Director will have up to 3 minutes to respond before we move on to Q&A for that particular resolution. Mike Sang, an Independent Director and current Chair of our Audit and Risk Committee, will manage the proceedings for Resolution 9, which relates to the shareholder proposal for my removal. We will now move through each of these resolutions. I will now put the first resolution to shareholders. Being the resolution that the meeting record the reappointment of KPMG as the auditors of the company for the current financial year ending 30th of June 2027, pursuant to Section 207T of the Companies Act 1993 and that the Board be authorized to fix KPMG's remuneration. Are there any questions in relation to this resolution from the floor? Are there any questions online? Thank you. There are no questions online. Please cast your vote on Resolution 1, KPMG. Resolution 2. I will now put the second resolution to shareholders being the resolution that Mr. Mike Sang, who retires by rotation and is eligible for reelection, be reelected as a Director of the company. I will now ask Mike Sang to speak in relation to his nomination. Thanks, Mike.

[indiscernible] Look, I'd just like to say thanks for the opportunity to my name forward for this position. I think Comvita is a really great company. It's for people with a massive passion, both for the industry and Comvita itself. And it's a company that appeals to me personally for its connection to New Zealand and also in many ways to our rural economy, which I've had a lot of background in. As you know me know my background is in a variety of industries, but inevitably, it's been kind of working on building and improving businesses through many of the challenges and many of the things that Karl talked about today as well as M&A activity and other type things, both as the CFO and CEO. And I think my experience brings is very relevant to what we want to do with Comvita that, honestly, from a heart level, I'm really attached to the company and I think its history and its people are fantastic. So both from a motive and professional perspective, I'd like to put myself forward for your consideration. And thanks very much for listening to me for a few minutes.

Thank you, Mike. Are there any questions in relation to this resolution from the floor? Are there any questions relating to this resolution from online?

There is. How will your reelection, Mike, drive long-term shareholder value?

I think Karl has made a few comments that reflect my way of thinking. I finally believe that there's very really a silver bullet in any type of situation. And that building a company for the long term is about getting the basics right. You need to have a motivated and engaged workforce. You need to understand your comparative advantages and how to turn them into competitive advantage. You need a rooflessness, on simplicity and efficiency. You need to drive, you need to link your reward structures with actual achievements that actually add shareholder value and you need to do it day in, day out, month in, month out on and on and never take a granted. So I've got no simple answers for you other than the belief that it's about getting the basics right, understand yourself and invest where you've got competitive advantage over our competitors.

Are there any further questions online?

Yes, you have a question.

My name is [ Chris Brown ], proxy vote for the NCSA Shareholders' Association. Just my question around the -- Michael, with regards to your skill matrix. The Board's identified Karl spoke of weaknesses in the current leadership team, and I have assumed that was also regarding the skill matrix of the Directors -- current Directors. Where do you feel you fill the gaps?

Look, obviously, Chair of all and the rest, that's clearly the one. But my experience is both as a CFO and a CEO, so I think I bring an understanding of the challenge of the executive team as we work through the type of challenges in the businesses we're trying to build. I mean the things Karl's talked about, I've got experience off both as a Director and an executive. So I think that affinity with what we're trying to achieve in my personal experience is just important generally. But in terms of the specific skills then, I've obviously got agricultural experience from my previous experience, I've run IT and whatnot before as a CFO. I've obviously got extensive M&A experience. I understand about the investment and the capital returns and the risks and that type of stuff and how to think about these things. So it's both from a technical, from a finance and investment and M&A type activity, but also just from the personal experience of some of the challenges and things that we need to progress to be successful. You guys realize I'm going to be interview right answering all these questions for

Michael, you haven't mentioned the word governance in your small speech. Can you tell us, please, a little bit about your experience in governance and where you sit on the continuum, you think?

Look, obviously, an executive, you've been working with governance for decades. I think probably the 2 points I'd make about my own experience is Chief Executive Holdings. We ran a governance structure for all our investments and all our Boards. As the group Chief Executive, I was responsible for the selection of all our directors toward our boards and monitoring their performance and working with those Directors to ensure they align with what the shareholder expectations were. So we've got a lot of experience from that side of it. During that time, I was also on various Boards, inevitably, to be honest, Holdings Board only would put me on where there was trouble. So my kind of 7 years with I was dealing with the trouble situations, the challenges we had where we're doing strategic resets or where we're just extensive financial pressure. So a lot of experience dealing with the hard stuff through that period. Since then, I've had 6, 7 years on various Boards, generally, with that kind of M&A investment-return shareholder connection hat that's been a strength of mine. When it comes to governance, I very much believe that there is not a one size fits all, and you've got to adjust it for the situation when you're in. I very much believe that you've got to have trust and confidence in your executive team, but at the same time, you've got to also be able to verify that belief in that and that the trust and confidence is something that is in and built over regular interactions over time. I strongly believe in building a boardroom culture that there's room for distension, there's room for discussion and debate. To do that, you've got to build the confidence in your executive team to actually disagree with Directors and be able to put their things forward. So for me, good governance ultimately comes around to having the right people in the room when mutual respect with an ability to debate to disagree. But when you reach and make a decision, then you need the unity to everyone to fall in line with that decision because otherwise, you're pulling in different ways. So a long-winded answer, but I hope I answered some of your questions around it.

[ Graham Edwards ], Mike, that's a nice story. Where were all those skills in the last few years when Comvita had the troubles?

Well, yes, if we're going to push the boat around, I'm happy to ask. Some of the issues -- I've been here for 3 years now. Certainly, the situation that I found the company to be in was different than what I thought it was when I joined. The unraveling of some of the issues was the work of a lot of people in the likes of Bob and Bridget, Brett and others. the situation we're in, where Comvita essentially bid on a path of growth at the same time the market softened and the price of honey fell, it's just a tricky situation. So in my view, and I'm happy to stand beside it, we worked through that as well as we thought we could at the time. When I sit here in hindsight, what I do everything the same, no, you never do. But the company was under extensive financial pressure. It wasn't a situation that was created by the Directors on the Board that were addressing a lot of the challenges. We're here today still in existence, we've still got the opportunity again to move forward. So I could answer this 2 ways. I regret some of the way we did things. I think you always learn from prior experience. You always wonder about your decisions when you're under pressure. But ultimately, it was a tough situation, and we got through it, and so I'm happy with that.

Quick question. When you were part of how did you deal with the Dennis Watson fiasco? [indiscernible]

Yes. Look, we -- I don't know if people followed time, we had a pretty good decade over that period. We exceeded all our financial and financial measures. is a very demanding owner. It has a lot of metrics, matrices, expectations that you need to be met in a portfolio. And the long story short is we got most of our investments right in that one wrong. It was a combination of partner issues, but also it was a result of the industry -- just got a glut of honey. We've got significant pressure on it at the same time as we had an unstable partner. And when you put external pressure with internal pressure, we had a situation that was phenomenally difficult to manage. Ultimately, we managed to work our way through it. But it's -- from an investment perspective, I would say, in my 20 or 30 years, that's the only one I true you regret.

[indiscernible]

Yes, yes. But we also made $1 billion at the time I was there, so...

Thank you. Thanks very much. Are there any further questions online? Could I ask you now to cast your vote on Resolution 2. I will now put the third resolution to shareholders being the resolution that Mr. Michael Chye, who is appointed by the Board as a director to fill a casual vacancy with effect from 22nd of June 2026, be elected as a director of the company. I will now ask Michael Chye to speak in favor of his nomination. Thank you.

Thank you, Bridget. Good afternoon, fellow Directors and shareholders. For those who have not had the opportunity to meet, my name is Michael Chye. I joined the Comvita Board following investment in the company. I currently serve as the CEO of BeerCo Limited and the Chief of the product -- beer Product Group for Thai Beverage Public Company Limited where I oversee the beer businesses and brands across multiple markets. Over the course of my career, I've held various leadership and Board positions in the food and beverage industry with extensive experience in -- firstly, in finance, in investments and in managing consumer businesses, particularly in Asia. Since joining the Board, I've had the opportunity to gain a better understanding of Comvita, it's people and the business. As a Director, I see my role as bringing my experience and judgment to the Board, providing constructive challenges and oversight and working with fellow directors and management to guide Comvita's strategy and performance, always acting in the best interest of the company. If reelected, I look forward to continuing to contribute my experience, particularly in commercial development, regional markets and business operations as Comvita works towards building a stronger and more sustainable business. Thank you for your support. That's short and sweet, right?

Yes. Thank you, Michael. Are there any questions in relation to this resolution #3 from the floor? Are there any questions online?

Yes. Michael, how will your election drive long-term shareholder value?

I think long-term shareholder value is -- can be driven on my part by sharing my experience, my expertise. And I think, to some extent, also facilitating the potential synergies that can be gained through the working -- Comvita working together with Thai Beverage. It's quite a large group. We've got quite a large route to market, especially in Asia, which is the fastest-growing region in the world today. We see a lot of opportunities there. And hopefully, that will be converted into real opportunities and real results. I hope that answers the question. Thank you.

Thank you. There are no further questions, please cast your vote on Resolution 3, Michael Chye. I will now put the fourth resolution to shareholders being the resolution that Mr. Peter Nathan, who was appointed by the Board as a director to fill the casual vacancy with effect from 20th of July 2026, be elected as a Director of the company. We will now play the recorded message, the prerecorded message from Mr. Peter Nathan. Thank you.

Hi. My name is Peter Nathan, and I'm seeking election as a Non-Executive Director in your company. I bring skills and experience, which I believe will be very beneficial in assisting with the growth of Comvita. I have a deep background in fast-moving consumer goods, as I have over 30 years experience working in a range of executive roles with Colgate, Pamolive and Gillette and more recently, the A2 Milk company. in my executive roles, I've gained valuable insight into many of the markets that Comvita operates in currently, as I've been resident in Australia, New Zealand, Taiwan and Malaysia and have been a very frequent traveler to China with over 40 market visits. My experience with the Company does have significant parallels with Comvita as both operate in health-related categories and provide functional benefits but do not rely on strong health claims despite some very compelling supporting evidence. I have the unique experience being a key player who built a brand and business from scratch to a global powerhouse of revenue of approximately $1.4 billion in 14 years as my role as CEO Asia Pacific of the Company, a role that managed all the profitable markets within the business. I have a deep experience in the management of all of the sales channels that Comvita operate in as well as functional experience and a compelling track record in the consumer marketing disciplines of market research, brand development, PR and consumer communication. More recently, I transitioned to company Board roles where I Director within the FMCG Waste Management and metal sectors. This has given me valuable governance experience. I'm really very excited about the opportunity that Comvita has to build shareholder value at this critical time by optimizing our performance in the key markets that we operate in. I am a great believer in the key principles of focus and simplification, and I look forward to assisting the broader team in this endeavor. Thank you very much for your consideration of my election to your company.

Peter is not available for questions, so please, would you cast your vote on Resolution 4. I will now put the fifth resolution to shareholders being the resolution that Ms. Julia Xu, who is appointed by the Board as a Director to fill a casual vacancy with effect from 20th of July 2026 be elected as a Director of the company. I will now ask Julia Xu to speak in relation to her nomination. Thank you, Julia.

Thank you, Bridget. Fellow shareholders and stakeholders, good afternoon. My [indiscernible] I drafted and redrafted, but I thought I'd rather just talk to you. For those of you who don't know me, my name is Julia Xu, Managing Director for New Zealand, which has been a shareholder for Comvita for the past 15 years. Today, I'm asking for your continued support and trust in me to continue to serve as a Director of the company. So let me tell you a little bit about myself. I grew up in Shanghai, went to the states as a teenager into a working-class neighborhood in Queens, New York. It wasn't very easy, but I figured it out. I think the immigrants tenacity has instilled in me -- has been instilled in me since a very long. I went to -- I worked in New York Tokyo and Hong Kong in finance, went back to business school, joined Deutsche Banking Hong Kong, covering Greater China's consumer companies. And then I joined as a CFO for a U.S.-listed renewable company. After I left the executive role, I joined its Board and still I am the audit chair today. 15 years ago, Mr. Xu brought me to New Zealand to establish New Zealand, and build a business as an entrepreneur between China and New Zealand. And I think this is the bridge I bring to the company. I do have quite a bit of understanding of the Chinese consumption market. So serving Convida is actually personal for me. We have been the shareholders for the last 15 years. And like many of you, we have seen the ups and downs of the company. And we never left because we believed in Manuka Honey as a core part of daily wellness and in the Comvita brand and also in New Zealand as its true home. I think directors, Board members are accountable to shareholders, large and small. Creating long-term shareholder values will always be at the front of our mind. The challenges Comvita faces today are real, and we must change whether that is in terms of the cost structure or winning new consumers globally. So I ask for your trust and support today to continue to serve as a Director of this company, and I will work hard to earn your trust. Thank you.

Thank you. Are there any questions from those in the room, please? Are there any questions from those online?

Yes. Julia, how will your election drive long-term shareholder value?

As I mentioned, I think long-term shareholder value will always be the front of our minds. But let's start small, just as Karl has indicated, we need to change, whether it's in our cost structure or our route to market or understanding or bring more consumers globally into the Manuka world. I think we can take incremental small changes with a long-term aspiration of making this company a global brand.

There are no more questions. That being the case, please could you cast your vote on Resolution 5, Julia Xu. I will now put the sixth resolution to shareholders being the resolution that Mr. Kosit Suksingha, who has been nominated to be a Director by an equity security holder be elected as a Director of the company. We are now going to play the prerecorded message from Kosit Suksingha. Thank you.

Good morning, Chair President, Bridget, Directors and fellow shareholders. My name is Kosit Suksingha, and I'm honored to have been nominated by Limited or F&N for election to the Board of Comvita. By way of introduction, I have spent much of my career in the consumer and beverage industry with experienced planning business operations, supply chain management, distribution, digital transformation and corporate governance. I currently serve on the Executive Committee of Thai Beverage Public Company Limited, or one of Southeast Asia's leading beverage groups. I'm also Chief of its spirit product groups and Chief Digital and Technology Officer. Previously, I led Thai Bev nonalcoholic beverage business and held senior responsibilities in supply chain management and route-to-market operations. I also serve on the Board of various Board committees of F&N's and its listed Malaysian subsidiary, This role has given me variable experience in overseeing business across different markets as well as strong appreciation of the governance standard and account gate and responsibilities expected of Directors of publicly listed company. What attract me to Comvita is its strong heritage, trusted brand and expertise in natural product. Comvita has built a very distinctive position in the global market, and I believe there are opportunity to build on the strength and further develop its business. If elected, I hope to contribute my experience in consumer products, operational efficiencies, distribution and digital capabilities to support Comvita's continued development. I also see opportunity for competitors and even to share knowledge and explore area of collaboration that could benefit both organizations. I recognize that serving on the Board of Comvita carry responsibilities to the company and its shareholders. I would approach this role with commitment and open mind and their willingness to work constructively with my fellow directors and management. Thank you for considering my nomination. I will look forward to the opportunity to contribute to Comvita continued success.

Thank you, Kosit. Are there any questions for Kosit from the people in the room? Thank you. Are there any questions online?

There is. How will your election drive long-term shareholder value?

Yes. Good afternoon, shareholders. This is 3 a.m. in France. So I'm a bit -- a little bit dizzy, a little bit. But I would like to answer it this way, that first, I think I would -- I believe strongly in the quality of the product of Comvita. I think the company carries a very strongest brand in the market. The second one is because Comvita new season, I think, to our belief, carry a strong opportunity to be a very strong global products. And we believe that the capability of our business, mainly Thai Bev, which operate regionally in the Southeast Asia could be a strong contributor to drive Comvita brands to southeast market and also to other parts of the world through our strong holds in the route to market, especially in Southeast Asia. So that's the belief that we think a combination of our strong footprint in multinational areas can help bring Comvita to the world. Thank you.

Thank you. Are there any further questions online?

There is. Do you have sufficient spare time available to do the Comvita role justice?

Well, I think the short answer would be yes. I'm not so sure if some of you know, I spent the last 10 years in my career traveling back in forth between Thailand and New Zealand. So I think I do have a lot of love and also patients in working with a new company like Comvita. I think that -- and I would certainly contribute lots of my time with Comvita to make sure it's a success for our business. Thank you.

Thank you. Please cast your vote with respect to Resolution #6. I will now put the seventh resolution to shareholders being the resolution that Mr. Robert Major be removed from office as a Director of Comvita Limited pursuant to Section 156 of the Companies Act 1993 and clause 29.1 of the Constitution of Comvita Limited with effect from the close of the 2026 Annual Meeting of Comvita Limited. I will now ask a representative of PHC Investments to speak in relation to their shareholder proposal for the removal of Robert Major as a Director.

[indiscernible] I'm here representing PHC Investments. Chair, fellow shareholders, I speak on behalf of PHC Investments Limited, and I want to begin with an acknowledgment. 12 months ago, Comvita faced considerable financial and operational challenges. Bridget Coates assumed the Chair during a particularly difficult period and took responsibility for repositioning the company. At last December's meeting, Bridget committed to repositioning the business before shareholders meet again. She has delivered on that commitment. Comvita has completed a $40.5 million recapitalization, welcomed Fraser and Neave as a strategic shareholder and reported a $7.7 million profit following a loss of more than $100 million the previous year. Bridget, on behalf of PHC, thank you for your leadership and the progress achieved. The company is now entering a different phase and with that comes the opportunity to consider the Board best suited for its future. Comvita has already attracted new Directors with relevant consumer brand and international market experience. PHC believes there is an opportunity to build further on their capability. It is in this context that PHC has proposed Resolution 7 and 8. These resolutions are not intended as personal criticism of either Director or their contribution to the company. They concern the principle of a fresh shareholder mandate. Both Directors received their current mandate in December 2025, sharing a period of considerable financial uncertainty and from a shareholder register materially different from today's. Since then, the company has been recapitalized, returned to profitability, welcomed a new cornerstone shareholder and substantially renewed its Board. Our preference was for both directors to retire and offer themselves for reelection allowing shareholders to determine whether they should continue in office. As that approach was not adopted, the removal resolutions provide the mechanism for shareholders to make that decision. Looking ahead, PHC would strongly support the appointment of additional independent Directors with proven consumer brand and international market experience, complementing the existing Board and supporting Comvita's next phase of development. The company has made substantial progress. The question now is whether the Board overseeing its next phase has the confidence of shareholders who own the company today. That is the purpose of Resolution 7 and 8 and PHC encourages shareholders to support them. Thank you.

Thank you, Neville. Are there any questions with regard to -- yes.

Thank you for your introduction to the resolution. And I think it was rather just generous to the rest of the Board for singling out Chair Bridget Coates for the turnaround success because I think, obviously, the prevailing Board have been in position for that full year and have all played a role in that turnaround as well as management, of course. Why should we trust you -- as individual shareholders in this business, why should we trust a new entrant to the register, one that has put forward a resolution to overturn a decision made by shareholders collectively at the last AGM to appoint these people to the Board? Why should we trust a investor that's put forward their own person to represent the Board at the expense of the independent Directors that represent the vested interests of all shareholders, not just a single shareholder? Why should we trust someone that's putting forward a resolution that a company that did not make full disclosure around divested interests of PHC during the time of the Board approving the placement of shares to PHC and did not make a disclosure at that time about the vested interest of a backer an investor in PHC that was a former adviser to the Board, the same adviser that was in position at the time of the takeover bid by Florence? Why was that not all disclosed? So why should we trust you and your resolutions to have these 2 hard-working independent Directors removed from the Board?

Yes, would you like to speak to that?

We did make disclosure with respect to -- in terms of trusting us, we have a strong track record in achieving significant shareholder wealth. Peter Nathan, who worked closely with us with the A2 Milk company created billions for shareholders. That's what you should trust them. We are seeking new independent directors as part of this resolution, ultimately. So it's not that we are looking to position ourselves with a bigger nonindependent basis. We want independents on the Board with the relevant experience that can drive shareholder value. And we -- the trust should be in the track record of us achieving that.

Are there any further questions? Are there any questions online?

No.

Bob, I should let you speak.

Well, good afternoon. That's me up there. I don't is a potted fest of my career up there. I was going to say I won't repeat what you can read for yourselves, but seen as comment has been made about our international FMCG experience. But the headed Frontier's operations in the Middle East, Hong Kong and China, there was a total of -- I worked for Frontera for 28 years. And that's 15 years over 28 years, been living in overseas markets. And most of that time, I headed the operations in those markets. All of those operations had FMCG businesses underneath them. And while I'm not an FMCG functional expert, I sure as I know how FMCG companies work in overseas market and don't know what work to it doesn't work. So I'd regard that as a bit of an insight, to be honest. The other thing that's not up there is a place of residence. I live in an [indiscernible] and in fact, I'm the only director on the Board now that lives in the Comvita's home, as you know. Now I stood in front of you only 10 months ago at December last year seeking your support for reelection to the Board, which I received. Thanks very much. At that time, I didn't quite expect that I'll be back here so soon and yet here I am. But in very different circumstances. This time last year or this time 10 months ago, those slides showed a substantial loss. It was a serious loss. The company was in a serious position. We have bankers seriously on our backs. And when I spoke to you then, I made it clear that the Board understood the severity of the situation, and we had acted strongly to ride the ship. We've had in place at that time, we had in place the lead team that was almost totally different, one exception from the had preceded and we had a significantly different board. We'd worked to reduce overheads, we'd worked to reduce the footprint in various international markets. We had a cash flow positive organization for the first time in quite some time, and we had inventory well down. Now the results you see today come from the base that was laid then, the decisions and actions that we took at that particular point in time and all of it, not just Bridget, we took at that particular point in time. And it took an enormous amount of effort from the Board, from the CEO, from the lead team and from the all Comvita people, in fact, to get to the position that we're in today. Now I said 10 months ago that we aren't out of the woods. We're not out of the woods yet, but we've come a hell of a long way. and we know where we're going. With your support, with your mandate, I'd like to be part of the team that gets Comvita to where it needs to be. So thank you.

Thank you. Yes, [ Aaron ].

This has come down to a little bit of credibility, Bob. How much did Frontera China lose in your stewardship?

Frontera China [indiscernible] made a lot of money, actually. The losses came a bit later.

Are there any other questions? Are there any questions online? No? Thank you. Before we -- Greg, I'll ask you to comment. I don't -- you're not going to speak again are you with respect to Greg. So if we could just have your response with regard to Resolution 7, which is Bob Major, the proposal for the removal of Bob Major, if you could mark your paper accordingly for, against or abstain. Resolution 8. I will now put the eighth resolution to shareholders being the resolution that Mr. Gregor Barclay remove from office as a Director of Comvita pursuant to Section 156 of the Companies Act 1993 and clause 29.1 of the constitution of Comvita Limited with respect from the close of the 2026 Annual Meeting of Comvita. We've had speak already, Greg, could I invite you to speak, please.

Thanks, Bridget. Good afternoon, everyone. I think as we've all agreed, Comvita is a good company. It's a great brand. And I don't have any doubt that it has the potential to grant to a leading New Zealand export success story. I've really enjoyed the year that I've had. It's been tough, but I think we're well underway if we continue to execute the strategy in front of us. So as I say, I'm vested in the company and I really believe in its potential for success. In terms of background, I stood in front of you less than a year ago. You know that I'm a commercial lawyer, I have extensive governance experience across a number of industries, commercial and sport I've been involved in export companies for the best part of 30 years, starting with Industry. I've been 23 or 24 years as the Chair of start-up log export company. It's now the largest exporter logs out of Australasia doing somewhere between $1.5 billion and $2 billion worth of log sales every year, predominantly to China, but also into India. In terms of this company and my involvement, we've talked about the turnaround, both the returning of the company to profitability, it's recapitalization and restructure. We're well placed, as I've already said, to move the company forward and I would like to be involved in that process. I think I have the right skills and ability to oversee strategically the company as it moves through that phase. The growth potential in the U.S., obviously, continuing to do what we're doing in China and growing on that, plus the opportunity that sits in front of us in Southeast Asia. All of that provides a great opportunity for the company and that opportunity is real. One other point I'd make just before I go is the governance mandate. I'm New Zealand-based. I'm an independent Director and as well as helping the company meet its compliance requirements. We know that we've got 3 large shareholders, one strategic cornerstone investor. I think it's incumbent on me as an independent to whilst we welcome, obviously, the input that those cornerstones will bring to make sure that I challenge the nonexecutive directors and ensure that independent thought and processes support to the company as we move forward. So that's pretty much all I've got to say. Thanks for listening.

Thank you. Are there any further questions with respect to Resolution 8? Are there any questions online? Thank you. Could I now ask that you mark your voting paper for resolution 8, Mr. Barclay. I will now put the ninth resolution and then pass over to Mike, actually, I'll pass it over to Mike.