Freightways Group Limited (FRW.AX) Earnings Call Transcript & Summary

[Foreign Language] Good morning, ladies and gentlemen. I'm Mark Cairns, Freightways Chair, and it's my pleasure to welcome you to our 2025 Annual Shareholders Meeting. It's great to see you again, and welcome also to those people joining us online, hopefully. We'll talk some more about that shortly. On the stage are my fellow directors, Peter Kean; Abby Foote; David Gibson; Fiona Oliver and Grant Devonport. David is standing for reelection, and Grant is standing for election following his appointment by the Board in November last year. They'll both address the meeting later today prior to the vote. We'll shortly hear from our Chief Executive, Mark Troughear. Also on the stage, we have our Chief Financial Officer, Stephan Deschamps; and our General Counsel and Company Secretary, Nicola Silke. Other members of our executive are also present in the room today and happy to chat with you over morning tea after the conclusion of the formal business. Also here today are the company's auditors, PricewaterhouseCoopers and the company's legal advisers, Mayne Wetherall. We have a quorum of shareholders, so I declare the meeting open. Firstly, a few housekeeping matters. The bathrooms are located on the first floor atrium. In the event of an emergency, please evacuate immediately through the fire exit doors and gather at the assembly point in the car park behind this building. Could I please request that you switch your mobile phones off or on to silent, please. Lastly, we'll be making an audio recording of the meeting, which will be made available on the Freightways website. I'll now run through the structure of the meeting. I'll begin with procedural matters and then summarize some of the company's highlights over the last financial year. I'll then ask our Chief Executive, Mark Troughear, to give an overview of the company, an update on strategy and current trading performance and provide commentary on our outlook for the remainder of the financial year. Following Mark's presentation and any questions relating to the management of the company, I will then introduce the formal resolutions as outlined in the Notice of Meeting. The financial statements for the year ended 30 June 2025 are set out in the company's annual report released to shareholders in August. The company also released its climate-related disclosures last month. Now we are having a few issues with the Microsoft platform globally, and there are some issues with the online platform and being able to ask questions. Mark, do you just want to give any details? It's sort of up and running, but unstable at the moment.

Yes. So Microsoft have had a massive outage. That means you can't play Minecraft or if you're online, you can't vote. So for those who haven't voted online, the many thousands of you, What we'll ask you to do is to e-mail Computershare. So the e-mail addresses [email protected]. That will be up on the NZX, the ASX and the Freightways website, and you can indicate your voting intentions by e-mailing Computershare directly and indicating whether you're voting for or against the various resolutions. So that's only for people who are voting online because that platform is down at the moment.

Okay. So questions will be moderated by Nicola Silke, our Company Secretary. If we receive multiple questions on one topic, these will be amalgamated together. Any questions not answered in time will receive an e-mail response after the meeting. Voting today will be conducted by way of a poll on all items of business, and I now declare the voting open for all resolutions. Okay. So before I turn to the group's financial and strategic performance, I want to pause and acknowledge the tragic loss of one of our Shred-X team members in Victoria, Australia in December 2024. On behalf of the Board, I extend our deepest sympathies to their family, friends and colleagues. Any loss of life in the workplace is deeply distressing, and it reminds us that safety must remain at the heart of everything we do. We're determined to learn from this tragedy and to strengthen our commitment to ensuring that every person who comes to work within the Freightways Group returns home safely to their loved ones at the end of each work shift. I will now speak briefly to some of the highlights of our 2025 financial year. The macroeconomic environment has remained difficult for a third consecutive year. But despite these headwinds, the company achieved another year of revenue and earnings growth. Allied Express in Australia again performed strongly, where the economy has proved more resilient than in New Zealand. Our New Zealand business has also continued to increase market share from competitors backed by a superior service proposition. Cost pressures on our business abated somewhat, allowing us to recover margins across most of our Express Package businesses. Despite the economic headwinds in New Zealand, we achieved a 7% growth in revenue to $1.3 billion and an impressive 13% growth in net profit to $80.1 million. With our interest expense reducing, strong cash flow generation has allowed us to pay down debt, bringing gearing to the bottom half of our target range. With a stronger balance sheet and perhaps some positive thinking that the New Zealand economy was starting to turn the corner, the Board resolved to increase the dividend by $0.03 or 8% to $0.40 per share, remaining within our normal dividend policy settings. This slide shows the dividend trajectory over the last 20 years. With exceptions during the global financial crisis and COVID, Freightways has endeavored to maintain or increase the dividend every year as we know how important this is to many of our shareholders. To conclude, I thought it would be useful to illustrate Freightways' impressive growth story over the last 20 years, with revenue increasing fivefold and growth accelerating since 2021, reflecting the successful integration of business acquisitions in both New Zealand and Australia. Over the past several years, Freightways has delivered an upper quartile total shareholder return, supported by a reliable dividend stream and steady share price appreciation. This reflects the consistent earnings growth and disciplined capital management, outperforming many peers in the transport and logistics sector. In the 2025 financial year, Freightways' total shareholder return was an impressive 49.7%, assuming that dividends were reinvested. This ranks Freightways in the upper decile of the NZX50 constituents, demonstrating the company's sustained ability to create shareholder value whilst navigating challenging periods of economic volatility. In closing, I'd like to thank my fellow directors, our Chief Executive, Mark Troughear and his management team, who have continued to lead our team of 6,100 employees and contractors with an unwavering focus of moving you to a better place. But particularly, I'd like to thank you, our shareholders, for your belief and support of our company. I'll now hand over to our Chief Executive, Mark Troughear. [Foreign Language]

Good morning, everyone, and welcome to the AGM on behalf of the management team here and the many people around the Freightways network across New Zealand and Australia. Firstly, I'd like to thank the team for the FY '25 performance. It hasn't been easy times, particularly in New Zealand. We've been through probably 2.5 years of recessionary impact. But the performance of many of the people that you'll meet here over morning tea and that you can see in the room has been exemplary in driving the businesses, winning market share and moving each of their businesses to a better place. So a big thank you to the team here, and they will go on, in fact, they have various teams across New Zealand and Australia. I'll give a bit of a trading update on Q1. But firstly, just talk a little bit about Freightways' strategy. In Q1, in particular, we've had pleasing revenue and profit increase. That's been driven by really continuing to win new customers in every line of business that we have. That's been really important while we've gone through the headwinds of the New Zealand economy. And what's nice to see is that because of the service quality of each of our businesses, we're able to win new customers off the competition and help buffer the effect of economic conditions. We've had a really strong focus on efficiency. So what we try to do is build density and build efficiency within all the runs we have, no matter whether it's a document destruction run over in Australia or a courier run here in Auckland. What we aim to do is get more items into that run that bolsters courier incomes, but it helps the efficiency of the business as well. And generally, in this year, we have managed to get pricing, which is in line or maybe slightly above the level of inflation. That's enabled us to pay our people more and cover those various costs we have within the business. I think where we stand today, we can say the New Zealand economy is no longer a headwind. It does feel like we've ridden into that wind for around 2.5 years. I wouldn't say we have the wind at our back yet, but we're sitting in that nice neutral territory where it's no longer hard to make progress. In Australia, I think the economy has slowed slightly, but the nature of our businesses mean we are much less tied to economic performance in Australia. The reality is in Australia, we occupy a number of niches where those niches are going well despite the state of the economy. And we're a much smaller business in Australia in terms of overall market share. In New Zealand, because of our market share, we naturally feel the impact of the economy on our companies. Another highlight for us in September was releasing the climate statement, and that talks about the group's emissions across New Zealand and Australia and as well as our focus on transition planning for the years ahead. Just want to talk a little bit about the blueprint. This is really the piece that makes us tick and links all of the brands and businesses we have together. Fundamentally, what we're involved in is picking up, processing and delivering over 100 million items every year. They might be letters, packages, bins of destruction or medical waste, archives, could be data we're picking up, processing and delivering to customers through businesses like data, print or TIMG. So that is the common link through express package, temperature controlled, information management and waste renewal. There's 4 key things that if we can do well, we can be successful. So the first one is really being efficient. The reality is when you're handling over 100 million items, if you take or held up a little bit at each stage of that network, you lose your efficiency and you lose your profits. And our teams are very good at maintaining that level of efficiency through the business. Second thing is that everything we move matters, whether it be a medical file that's sitting in an archived warehouse that needs to be delivered to a hospital within 2 hours, whether it be a package, urgent medical supplies, et cetera. Everything we do really matters in terms of timeliness. And so that's critical to maintain service levels, keep the customers we have and attract new ones to us. Loving our customers. It kind of sounds tight, but reality is for many of us that have been in this business for around 30 years, we still see the same customers that we had 30 years ago. We still have a relationship with those same businesses that we might have called on as a courier or a sales rep or as a manager 30-odd years ago. So loving your customers and really making sure that they feel part of the family is a really important part in our business. Customers judge you by your last delivery. If you don't do it well and if you don't recover well, you run the risk of losing a customer. So really looking after them and loving them as we talk about, is critical to our business. And then the last one is just being a little bit entrepreneurial, having a bit of innovation and thinking about different ways of doing things every day. And I think that's one of the things that the team of people here really thrive on is every day having a new challenge and thinking about how do we solve that particular problem. The common principles, I think, apply across all the Freightways businesses if I travel around branches and companies, I see these same 3 traits everywhere I go. It's a really high level of ownership. People take ownership for the business, for their people, for their performance, for maintaining customers. There's really high levels of ownership that go all the way down through each company. We think commercially, there are many customers that we will walk away from and say, "Hey, that is not profitable. It doesn't work for our business, and so we won't be serving you." An example of that fairly recently was Temu, where we tried that for 6 months. And at the end of that period, really came away and said, "Hey, that's not doing as much for our business as it really should do. When they're prepared to pay the right price, we're happy to serve you." And then working as a family. Our teams where they can work as families really well and individual branches and brands and departments tend to perform really well. And so we do push that philosophy. If we can do all those things, we can move you to a better place. And the people we're moving to a better place are the customers that stay with us and ride on that service journey. They are our team members, many of which we grow up from the ground floor to become general managers and many of those people are in the room here today. It's moving shareholders to a better place that if you invested in Freightways 22 years ago, it was $1.60 and your share price has moved you to a better place. Your dividend, what Mark showed you previously around dividends and performance of the company, that's our attempt is to move you to a better place from that point of view. And then finally, for our community and that community these days is really heavily around the environment. How do we play our part in moving our community to a better place in the areas that we can take action around decarbonization. Just a few of the strategic initiatives across those 4 divisions. On Express Package, really, the key initiatives for us are to continue driving profitable market share growth in B2B, business-to-business deliveries and B2C, business-to-consumer deliveries. B2B is about 80% of what we do still. Think auto parts from Toyota being delivered to a mechanic before 8:00, sometimes about 5 in the morning, so they can start work. B2C are the items that you might have bought online when you don't have an Internet outage and are delivered to your door. We're expanding a couple of key hubs. We have key air freight and road freight hubs in Palmerston North and Christchurch. So those 2 centers are going through more than a doubling of capacity to cope with the volumes we have today and the growth we expect tomorrow. And then thirdly, continuing to scale up our oversize, the big and bulky, the ugly freight, as we used to call it, 25 to 60-odd kilos. A real big part of the Allied Express business in Australia that Betty and the team have grown really well and a burgeoning part of Carl Day's business here in New Zealand, where we're following the same blueprint and growing that here in Allied Australia. In Temperature Control, we're targeting opportunities to build out the network. There's a number of locations that we can build out and continue expanding into. But doing that profitably, doing it with customers that support us where we can take hold in another center like we have this year in New Plymouth. We have a number of other branches that we'll look at establishing over the coming years. We're also assessing future 3PL opportunities. So these are the large cool store warehouses that hold food products on behalf of customers where we pick and pack it and then dispatch it out when it's ready at a restaurant, a cafe or a supermarket. In Information Management, improving the utilization of the warehouses we have, so the sites we have around New Zealand and Australia. Our objective is to keep pushing the utilization of those facilities higher and also target high-value digitization activity. And that's where we have customers who ask us to digitize their paper records and provide it back to them electronically, pick up the data, process it and deliver it back to them. And then finally, in terms of waste renewal, our objective there is to optimize the network, assess the depots, find efficiencies through the fleet that we're running, doing medical waste, document destruction and high-value waste collection and then continue making gains in those markets like medical waste and high-value waste. Some really interesting stories around what that business does. Fundamentally, again, it's pickup-process-deliver. We pick up tons of textiles, we shred them and we deliver them to someone who can recycle them and keep them out of landfill. So if you want to know more about that business, going to have a chat to the big chap over there at morning tea time, and he'll be happy to avail you with plenty of stories about how that business is going. Turning to trading update for Q1. So this is the consolidated unaudited performance for the company from the management accounts. You can see that revenue and earnings growth have been achieved through quarter 1. That's been led in particular by a very strong performance in the Express Package and Business Mail sector with really good revenue growth. That revenue growth is from market share, and there is a bit of modest same customer growth now, which we haven't really had much of over the last 2.5 years. And then there's an element of pricing to cover those costs. We have had stronger growth in economy services than overnight air freight as an example. So more customers that are saying, hey, we will use a 2-day service, North Island, South Island rather than a more expensive overnight air freight service, Auckland to Christchurch. So we're certainly seeing that trend, which often happens in recessionary times. But nonetheless, that growth is contributing to good revenue and earnings across the business. Really effective cost control. And as I said, those price increases that we have levied generally are helping offset inflation in most businesses, not in every case, but in most cases. Slightly higher corporate costs. We will have an air fleet transition near the end of this financial year, and we will start to shift from 737-400s to more fuel-efficient 737-800s. So in terms of operating revenue, up 8.6%, EBITA up 11.9% and NPAT up 22.5% for the quarter. For the Express Package Business Mail sector, revenue growth of on 10% EBITDA and EBITA 14%, 14.7%, respectively. The Allied Express, Post Haste and DX Mail brands have had really strong growth. They're market-leading in their niches. What we do is have brands that aim to own a niche. So each of those brands are there to own a particular part of the market, specialize in that market and do that job particularly well. And those brands there are niches, which probably go a little bit better in these economic times, and they're winning. They're #1 in their niches. And that's why we're getting that really strong growth out of those businesses. Same customer growth in this quarter was 1.8%. That might not mean much to a lot of you, but for many, many years or for the last couple of years, it's either been negative or flat. So actually having our same customers just growing slightly, I think, is a signal that those headwinds that we've been writing into for so long have now turned around and it's a little more neutral. The increase in margins is particularly pleasing, so from 12.7% up to 13.3%. And in fact, that would have been a bit higher had we not invested around $1.5 million extra this year in an IT system that will enable us to bill more efficiently and effectively price to a greater deal of granularity and introduce different ways of paying couriers. So the investment much needed in that billing and courier pay system, and had it not been for that one-off cost of $1.5 million in the quarter, which we expect to be around $5 million for the full year, those margins would have been higher still. The slide here just talks a little bit to the volume growth we have in the network courier business. So this is New Zealand Couriers Post Haste, Castle Parcels, Now Couriers, if you think about those brands that you'll see out on the road, the average daily volume growth was 4.5%. So again, quite a quantum up on what we've had in previous years, where it's effectively being pretty flat. That has come from a combination of 3.1% growth coming out of new customers. Many of those are cross-border customers. It's volume that we're bringing in through our freight forwarding business often out of China or other places overseas and then injecting into our courier networks for last mile delivery. The customers we've lost or in some cases, have closed down in these times was negative 0.4%. And then same customer growth around 1.8%. So the existing customers 100 items last year. This year, sent 101.8, just send a little bit more. Information Management, slightly more muted revenue growth here of 3.4%. EBITDA was up 3% and EBITA up 2.6%. The revenue here, growth influenced by medical waste growing at 9% per annum. So good strides made in winning market share, typically smaller customers to the medical waste facilities that we have across Australia. Document revenues up 4%, a bit of price, a bit of volume in there. Slightly lower digitization in Australia, and that's just because we had a project that finished during the quarter, and we'll have a new pipeline coming through, but not quite as much digitization in Australia in that particular quarter. We've had a number of initiatives at Shred-X in terms of improving its performance, improving its efficiency, getting the right price for the work we do, and we expect to see the benefit of that coming through in the second quarter this year. Also improved performance for our Lit Support business, which is part of TIMG in Australia and involved in servicing the legal fraternity with information management needs. So finally, just in terms of outlook and how we see things, it's slow improvement in New Zealand volume, but pleasing to see. In the second half of FY '25, we had about a 0.6% improvement in same customer volume. So it's nice to see that momentum building, but still relatively modest levels compared to what we would have had in historic times when GDP was humming along. Any positive economic momentum we can get really helps boost our efficiency and combined with pricing initiatives and some of the other things that the team are doing in the business to intensify the network should help expand margins in the year ahead. In the meantime, outside of what the economy does, our focus is really on improving service quality, making sure we are the choice in each of our niches for each of our brands that customers choose to come to even if we are a bit darer, and we typically are darer than our opposition. There's also a range of organic and inorganic opportunities. Those are flash words apparently for stuff we can do with our own resources and there may be businesses or merger and acquisition activity that we could get involved in. Most of our attention is focused in Australia. Most of it is focused in and around the transport sector. And we look at any number of opportunities every year to see if we can find a business that will fit with the Freightways way of doing things. That brings to an end of my presentation. I'll ask Mark to come back up, and you'll have the opportunity to ask questions.

Thank you, Mark. Are there any questions, comments or discussion in relation to the financial statements or presentation so far? Yes.

[ Ricky Marangi ] just on behalf of the New Zealand Shareholders' Association. So I've just got some questions which relate to some of the shareholdings and some of the questions you probably have gone through with them Oliver more recently, but I'll say them anyway for the sake of everybody else. Will Freightways explicitly disclose that director share ownership is not compulsory?

Ricky, so I've met with Oliver. We don't actually explicitly state it, but the policy is it's encouraged for directors to own a shareholding similar to a year's director fees, but it's not mandatory. And depending on the type of director we're looking to fill, we don't make it mandatory. But I think we probably should be stating that, and we will do so in our next annual report.

Thank you, Mark. Just another question. The annual report includes a collective skills matrix. Will Freightways enhance the skills matrix to show individual directors' skills?

Again, I discussed that with Oliver, and I can't see any reason personally, but I plan to talk to the Board. So I don't see an issue with presenting in the next annual report, the individual skills matrix.

Thank you, Mark. You probably talked also about the IoD Future Director program and whether you might participate or not?

I do -- we do discuss it regularly with the Board. I participate on other boards where we do it. It's probably something that we discuss from time to time. At the moment, we decided not to do it this year, but it's something that's on the agenda regularly.

What's the total tenure of the audit firm PwC?

So we recently went out to market. So Stephan, what's the total tenure? So we did go out to the market and call for bids, but PwC were successful and we've had a change in lead order partner as is required. But sorry, I can't tell you exactly.

I think it's more than 20 years.

22 years, I think.

And last but not least, any indication on when Freightways will set defined emissions reduction targets?

We are working on that at the moment. So I would expect that within the next 2 years, we will have targets.

Freightways operates with a number of brands as a result of the growth over time and the niches that they occupy alluded to in his presentation. So is there a case now for amalgamating under one brand, the Freightways entity or overall overriding umbrella?

Mark, I'll get you to comment on that.

Yes, it's a good question and one that we consider from time to time. I think the reality is we have such equity in brands like New Zealand Couriers and Post Haste. These are really household names that are known so well. And it will be the same for Allied Express in Australia and Shred-X over in Australia. So there's so much equity in those individual brands. But probably more importantly for us, we do see the world in niches. And so what we do is sort of the opposite of our main competitor, New Zealand Post, who rumble everything up under one brand. In our opinion, maybe don't do any of those things well. What we really aim to do is to win each and every one of those niches. So New Zealand Courier's job is to win that race to get those items in your hand to start your business day. That's a different niche to Post Haste, which occupies more of a wholesale retail, and it's to replenish goods that you've sold the day or 2 days before. The niches may seem subtle, but actually, our customers fall quite naturally into those categories. And so we think it's important that we're attacking each niche with a laser focus. if I look at our profitability by niche and compare it to some operators in our industries, which take a complete one-brand approach to it, gee, I'd rather have our margins and our focus any day of the week. But it's a good question. We do consider it from time to time.

Thank you. Any other questions from the floor? It's on the presentation so far. So we've got the formal business, and then I was going to open again, but I'm happy for general questions now as well.

[ Gordon Wallace ], shareholder. You're talking about on the planes that you're going to upgrade. Do you have any problem getting them? And does it take long for you to -- how should I say -- could you just explain that a bit more?

Mark, can you answer that?

We will more than likely just enter -- we'll enter an agreement with an aviation company to provide those aircraft to us. Availability of 737-800s is pretty good at the moment. If you've ever flown on Qantas from Australia to New Zealand, I reckon those 800s should be freight planes by now rather than passenger planes, terrible bloody things. So look, the availability of those aircraft is pretty good. Yes, conversion is, gee, probably about 6 months, I think been. So to convert a passenger plane to freight, it takes around 6 months, yes. So look, we're not concerned about the availability of those aircraft.

And I just want to also say fantastic report and amazing. That's all bloody amazing.

Thank you very much. Great question. Are there any further questions from the floor? One at the back.

[ Lindsay Rowntree ], shareholder. I'm just asking about Trump tariffs. Are they going to have any direct or indirect effect on the business?

Look, I don't think so. There's -- it's a very, very small amount of freight we have going out of the country. So there's very little we're doing where we're supporting an exporter selling into America. So I don't expect any material impact from that other than if it dampened overall economic growth for the global economy, that obviously will have some effect on New Zealand. But in terms of us directly, look, 99% of what we do, we pick up and deliver within the country. And then we have a lot of product coming in, in particular, from Asia into New Zealand that shouldn't be affected by any of Trump's tariffs. So yes, I sort of watch that with interest, but I don't -- it doesn't keep me up at night.

Any other questions from the floor?

Yes. [ Neil Hart ], minor shareholder. This is a general business question, but you mentioned the New Zealand Post and how inefficient they are, would freight rates be interested in buying their parcels if it was sold off by the government in due course?

I think we wouldn't be able to, in terms of defined markets, we would have too dominant position to actually acquire that business. Mark, do you want to add anything further?

I'd love to get my hands on it and fix it. But I think Mark is quite right. I mean the Commerce Commission wouldn't allow that in terms of concentration of market share. But yes, those rosters, I don't think it's too hard to fix what they've got. They just need to sort of open their eyes up to reading a P&L.

Just going to ask you, what is the split between New Zealand Post and New Zealand Couriers in that market?

NZ Post probably 50% at the moment. So they acquired a -- your taxpayer dollars were used to acquire another freight company, about the 10th one, I think they bought. So they acquired PBT around about a year ago. That was about 5% market share. So push them to, we think, about 50%. The Freightways business is probably early 40%. So their market share will be slightly higher, but I'll take our profit any day of the week.

Any further questions? Nicola, is there anything coming from online?

No, there's none.

Okay. No online questions. So if there are no further questions, I'll now move to the formal resolutions to be considered at the meeting. As mentioned earlier, all voting on resolutions will be conducted by way of poll, and the results will be advised to the stock exchanges later today. Proxies have been appointed for the purpose of this meeting in respect of 96 million ordinary shares. As we indicated on the proxy form, directors standing for election or reelection will abstain from voting discretionary proxies in respect of their own appointment. As requested by the New Zealand Shareholders' Association, we will not disclose the voting of proxies received ahead of the shareholders voting on them today. So the first ordinary business resolution is the reelection of David Gibson. David was appointed as a Director of the company in 2022 and is retiring by rotation and offering himself for reelection. The Board unanimously recommends that shareholders vote in favor of David's reelection. He's considered by the Board to be an independent Nonexecutive Director. I'd now like to invite David to address the meeting.

Good morning, everyone. It's lovely to see so many familiar faces from the Freightways family. I've been on the Board now for just over 3 years. It's been an absolute privilege to work with the current Board and management team. As both Marks have outlined in their speeches, the company is performing very strongly. Much of this is due to the hard work and dedication of our very capable management team supported by a very high-quality Board. It's our job to keep it going and on track and to make the most of the tremendous opportunities in front of us. If reelected, my continued focus will be on maximizing shareholder value. My career background is in corporate finance and strategy with over 25 years of capital markets and M&A transaction experience. I also bring strong governance experience over the last 8 years. I'm currently Deputy Chair of Goodman New Zealand and a Director of Contact Energy. With your support, it would be a privilege to continue to serve Freightways and be reelected as a director for a further term.

Thank you, David. Are there any questions or matters for discussion concerning this resolution to reelect David Gibson as a director? As there are no questions on this matter from shareholders, I put the resolution to a vote. If you could please mark your vote. So the second resolution is the election of Grant Devonport. Grant was appointed as a Director of the company in November 2024 and is retiring and offering himself for election. The Board unanimously recommends that shareholders vote in favor of Grant's election. He's considered by the Board to be an independent Nonexecutive Director. I'll now invite Grant to address the meeting.

Thanks, Mark, and good morning, everyone. I stand before you today, both very excited but also humbled in seeking your support for my election to the Board of Freightways. I believe I'm very well qualified to add value to both the Board and in supporting management through both my industry experience and from over 25 years as a Chief Financial Officer for listed and unlisted corporates across Australia, New Zealand and the U.K. My industry experience with nearly 10 years at Toll Holdings in both New Zealand and Australia gives me not only expertise across both countries, but also significant understanding and working with the major industry players, both competitors and potential targets in both markets. My CFO experience provides expertise and leadership across both traditional CFO functions like financial control, performance management and reporting, treasury, taxation and Investor Relations, but even more importantly, through a wider CFO portfolio leadership in health and safety, which is a major personal passion of mine, business strategy, mergers and acquisitions, risk management, technology and large balance sheet financing transactions. While I have lived in Melbourne for 25 years, I remain a passionate Kiwi and certainly enjoy coming back across the Tasman regularly as I'm a Director of Auckland Airport as it moves through a generational capital investment program for both Auckland and New Zealand. Freightways has been an iconic New Zealand business since its inception in 1964, has a clear strategy for growth and is investing in technology, enhanced health and safety, sustainability and most of all, investing in its team. In summary, I'm very excited to offer the experience, expertise and leadership required to support management to continue to drive the stellar performance for shareholders and other stakeholders that you've heard from both Mark this morning. Thank you so much for your support.

Thank you, Grant. Are there any questions or matters for discussion concerning the resolution to elect Grant Devonport as a director? Okay. As there are no questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote. Okay. This brings us to the next resolution on director fees. This resolution proposes that the total quantum of annual directors' fee pool be increased by $85,000 from an aggregate of $965,000 to an aggregate of $1,050,000, such aggregate amount to be divided amongst the directors as they deem appropriate. The directors review fees annually to ensure the aggregate amount is available for directors' remuneration is adequate to allow directors' fees to remain aligned with market levels. Directors did not apply for any annual incremental adjustment to the aggregate pool of director fees last year. So the current fee levels have not been adjusted for 2 years. This year, the directors obtained independent market advice from Ernst & Young. A summary of Ernst & Young's benchmarking report is attached, including an independence declaration from the Ernst & Young engagement partner. The directors propose to apply an increase this year, which allows nonexecutive directors to be paid at approximately the median level of the peer group market data presented in the EY report and to increase the headroom in the directors' fee pool to give Freightways the flexibility to attract an additional Australian-based director if required by further expansion of the business in Australia. The increase in the aggregate fee pool requested of shareholders is 8.8%. In accordance with the NZX Main Board Listing Rule 6.3.1, the directors and their associated persons are restricted from voting on this resolution. The Board unanimously recommends that shareholders vote in favor of this increase. Are there any questions or matters for discussions concerning this resolution to increase the total quantum of the annual directors' fee pool? Okay. As there are no questions on this matter from shareholders, I'll put the resolution to a vote. Please mark your vote. And this then brings me to the last resolution on auditor's remuneration, which is largely procedural to authorize the directors to fix the auditor's remuneration. The present auditors, PricewaterhouseCoopers will continue in office under the Companies Act 1993. Are there any questions or matters for discussion concerning this resolution? As there are no questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote. Thank you, ladies and gentlemen. That concludes our discussion on the resolutions presented, and I'll close the voting very shortly, and Computershare will collect the voting cards from within the room. The votes will then be counted under the scrutiny of Computershare and the results released to both stock exchanges later today. So now just a last call if any shareholders wish to raise any other questions, comments or discussion, whether related to the presentations, the annual report, financial statements or any other topics concerning the governance and management of the company or any other matters that may be lawfully considered at this meeting? Okay. Well, that brings us to the end of this year's annual meeting. I now declare the meeting closed and invite those present to share some refreshments with the Board and executive. [Foreign Language] Thank you, ladies and gentlemen.