Freightways Group Limited (FRW) Earnings Call Transcript & Summary

[Foreign Language] Good morning, ladies and gentlemen. I'm Mark Cairns, Chair at Freightways, and it's my pleasure to welcome you to our 2024 Annual Shareholders Meeting. It's great to see you again, and a warm welcome to those people joining us online also. With us today are my fellow directors, Mark Rushworth; Peter Kean; Abby Foote; David Gibson; and Fiona Oliver. Abby, Fiona and I are standing for reelection and will address the meeting later today. We'll shortly be hearing from our Chief Executive, Mark Troughear. And 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 a sausage roll at the conclusion of the formal business this morning. Also here are the company's auditors, PricewaterhouseCoopers and the company's external legal advisers, Mayne Wetherell. 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 of the atrium, and in the unlikely 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 request that you please take this opportunity to switch your mobile phones off or to silent, please? I'd now like to 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 provide an overview of the company, 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'll then introduce the formal resolutions as outlined in the notice of meeting. The financial statements for the year ended 30 June are set out in the company's annual report released to shareholders in August. The company also released its first climate-related disclosures earlier this week for the year ended 30 June 2024. As set out on our meeting guide, any shareholder or proxy attending the meeting or participating online is eligible to ask a question. Can I please ask that shareholders give their name on speaking or asking questions and confirm if they are a shareholder or a proxy holder. Roaming microphones will be available. Please wait for the microphone prior to asking a question to ensure that your questions are conveyed to everyone present, including those shareholders online. If you are attending online, please select the Q&A tab on the right half of the screen at any time and then type your question into the field and press send. Please note that you can submit questions from now on, but I will not address them until the relevant time in the meeting. We may amalgamate similar questions -- sorry, questions of a similar nature. If at the end of the meeting, you don't feel that your question was addressed or you'd like to discuss it further, please contact us via the investor contact on our website. Should you require any assistance using the Computershare online platform, you can type your query in the Q&A tab in the same manner as typing a question, and one of the Computershare team will reply to your query via the chat function. Alternatively, you can call Computershare on (0800)-650-034. As usual, all of the resolutions put to shareholders today will be decided by way of a poll, and the polls will be administered by our share registry Computershare. The results of the polls will be announced by the Stock Exchanges after the close of the meeting. If you're attending the meeting virtually and eligible to vote at this meeting, you'll be able to cast your vote under the vote tab when the resolutions are put. Once the voting is open, the resolutions will allow votes to be submitted. To vote, simply select your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply change your vote. You have the ability to change your vote up until the time I declare the voting closed. In order to provide you with enough time to vote, I'll shortly open the voting for all resolutions. Persons attending the meeting who are not shareholders, proxy holders or corporate representatives of a shareholder may not vote. I now declare voting open on all items of business. The resolutions will now be opened in the vote tab. Please submit your votes at any time. I'll give you a warning before I move to close voting. And I will remind everyone again of these two processes when we come to votes on the resolutions later in the meeting. I'd now like to speak briefly to some of the highlights of Freightways 2024 year. I think most people will agree that the last year has been a challenging one against many economic headwinds. Against this backdrop, I'm immensely proud of what our Freightways teams have achieved. The macroeconomic context, particularly in New Zealand has seen a significant number of companies retrenching and business activity well below the previous year. Many sectors of the economy have been significantly impacted, but the diversification of our businesses has proven its worth, allowing us to achieve solid revenue growth. Australia has fared slightly better than New Zealand, and it's pleasing to see the benefits of our growing geographical diversification, where 35% of our revenue is now generated in Australia. Labor shortages continue to impact early in the year with almost double-digit labor cost increases for the second year running. The good news is that this trend has now eased, and we're finding it considerably easier to recruit for open positions and the wage pressure has returned to historical levels. We have continued to invest in our operations. We commissioned two state-of-the-art sortation systems at Allied Express in Melbourne and Sydney that will allow us to manage significantly larger volumes at greater levels of productivity. After many months of delays, we finally received the approval to operate our medical waste facility in Victoria. And we also opened our new temperature-controlled third-party logistics or 3PL facility for Big Chill in Ruakura Hamilton. These investments position our business as well to benefit from any economic recovery in the future. As previously mentioned, in a difficult macroeconomic environment, especially in New Zealand, we achieved a solid 8% growth in revenues to $1.2 billion. This reflects a full year of our latest Australian acquisition, Allied Express, but also the growth of our Express Package businesses, driven by price increases and market share gains. Our earnings before interest, tax and amortization or EBITDA grew at a slower pace to $149 million, representing a 2.5% increase. Two main factors influenced this, labor costs increasing by more than 9% in FY '24. And secondly, the impacts of our investments were expensed on the cost line, whilst the full revenue benefits will only be captured in the coming financial year. Our new temperature-controlled Ruakura opened last October and was a net cost during the year. Our new medical waste treatment facility in Victoria was also impacted by delays in receiving the EPA license that is now fully operational. Finally, our net profit was down 6% to $70.1 million with our interest expense increasing during the year, largely due to increased lease liabilities. Our businesses are well positioned to benefit from the economic recovery we expect to see in New Zealand, along with our continued focus on winning new business at sustainable pricing. Reflecting these results, we declared a final dividend of $0.19 per share, bringing the total annual dividend of $0.37 per share, stable on the prior year. When setting the dividend, the Board is cognizant of the expectations of our shareholders and also of our balance sheet capacity. With debt currently close to the maximum level we're comfortable with, the Board declared the dividend at 75% of our earnings. Freightways has just released its FY '24 climate-related disclosure statement. A significant amount of work has gone into this document after 4 years reporting under the Task Force on Climate-related Financial Disclosures, or TCFD, framework. The cost and effort required is not insignificant for Freightways, which operates a number of businesses in different geographies with lean corporate teams. We're committed to continuing to work on ensuring the quality of our reporting and more importantly, ensuring that we support our contractors who generate the majority of our emissions to transition to lower emission vehicles. Mark Rushworth will retire as a director with effect from the end of this meeting after 9 years on the Board. I wish to personally acknowledge and thank Mark for his time and commitment to Freightways. Mark joined our Board in September of 2015. Back then, Freightways had revenues of $505 million and EBITDA of $88 million. As Mark is retiring, the company has grown its revenue 2.4x, whilst the EBITDA has increased by 1.7x and market capitalization, almost doubling with the share price increasing from $5.27 to last night's close of $9.75. So thank you, Mark, for your 9-year service to Freightways. This November New Zealand couriers would have been delivering for Kiwi businesses for 60 years. A remarkable journey that began on November 5, 1964, evolving from modest beginnings with just two vans to now being New Zealand's leading courier company, a part of a publicly owned Kiwi powerhouse Freightways, with a team of over 15,000 committed logistics professionals with branches nationwide. A business that continues to thrive and lead the way in a world increasingly impacted by e-commerce, 60 years of dedication and growth in the courier industry. I'll now hand over to your Chief Executive, Mark Troughear. [Foreign Language].

Good morning, [Foreign Language] morning. I quite like this venue. I think it's a bit more intimate than Eden Park. I think you fit perfectly. You looked really good from where I'm sitting up here. This might be a keeper, I think. There's a good deal of Freightways team here today, so I encourage you later on to seek some of that team out because they really are the ones that have helped deliver the results for Freightways over the last number of years. Particularly over this last year, which has been pretty tough. So I'll stand up here and talk a bit about what we're doing, but these are the people here that you should either shake a hand, give them a thank you or quiz them if there's something else that you'd like to know. What I'll do today is just talk briefly, a little bit about Freightways strategy. I'll just pick off a few of the key initiatives that we have through the business, provide a brief trading update for quarter 1 and close with some comments around the outlook for the business. We operate in each of the activities we have under what we call a 3-horizon framework. So the first horizon is the original network or the original business that we set up. And so in the courier business, for example, that was our B2B business. That was New Zealand couriers 60 years ago, delivering between businesses, setting up a branch network, a line haul network and freight network, delivery nationwide. That was our first horizon. The second horizon in each business builds off the infrastructure we have and looks to really scale quickly. So in courier that happens to be targeting the B2C markets, which have grown really quickly over the last number of years and where we predominantly compete against the state-owned enterprise, New Zealand Post. The third horizon we establish are those businesses that will be small initially, but we think have the potential to really grow well over the 5- to 10-year horizon. So that's the methodology we think about in each of the activities we operate on Express Package, temperature control, information management and waste renewal. Each of them has three horizons. And we think by doing that, we can keep growing the business well. We will keep providing jobs and opportunities for our teams. And we won't hopefully be like a number of businesses that you see laying off people because activity is falling here, there and everywhere. That's the fundamental model that the team here execute across the businesses that they run. Just going to talk to a few points there. These are by no means an exhaustive list of the strategies we have within each business, but there's some of the more relevant points that we're working on currently. So with an Express Package in business mail, one of our key projects for Horizon 1 is developing a new billing and pricing system that will enable us to price in a more sophisticated manner than we do today. But the reality is that much of our pricing today is driven off the old prepaid tickets that started 60-odd years ago and that have lasted pretty well through to today, but they didn't give you a whole lot of flexibility in the way that you charge for an item. If that item was bigger if it needed a signature, if it needed an ID checked, if it was going further across a city, like Auckland, which has expanded radically over those years, we need a better ability to charge incrementally for the extra effort that we have. And so we will put effort into a new billing and pricing system that will allow us to do that. The Horizon 3 activity within Express Package business mail is growing our oversized freight. We used to call it ugly freight. We now call it big and bulky, but these are bits of flat-pack furniture. They're the primes, they're the bikes, the car seats. Anything that's bigger than a typical courier item, usually between 25 and 60-odd kilos. And we think there's a real niche for that in New Zealand. What we like doing is winning niches going out and trying to really claim that niche. And so we believe that's a niche we can adopt here and grow quickly. In Australia through the acquisition of Allied Express, we have the market leader in that niche. And so we can learn off the airline business here for the New Zealand operations and keep growing and scaling the Allied business over in Australia. Within Temperature Control, again, within the first horizon, another key IT initiative for us is putting in place a new transport management system, which gives our customers real-time courier-like visibility for fresh, chilled and frozen food going through the network. It will give us rich data. It will help us make better decisions, but it will give our customers a real advantage in terms of tracking their volume and making it more efficient for them to deal with us. In terms of the second horizon within Temperature Control, we established a third-party logistics warehouse down in Ruakura last year. That opened up on the first of October last year. Phil and the team have done an outstanding job building the volume through that new facility. It was a slight drag on our profit last year as we were slowly building volume. But the team have got that to a point that it was breakeven around July and now it will add to the profit of Freightways. Demand for it has been exceptional, and the team have done a great job inducting new customers into that facility. Within Information Management, our first horizon is to keep driving market share gains in all of our businesses winning share of the opposition is a key strategy for us. We're pretty competitive mob. We like to win. We like to take business off the other guy. And that is the key strategy with Information Management. The way we're doing that a little bit differently is we do a great job with digitization of paper and what that's helping us do is win archives coming into the warehouses. The Horizon 2 is that digitization business, and that has grown from really small beginnings, both in Australia and New Zealand to become a really significant part of that Information Management division. We have done many large-scale projects where paperwork has come in, we digitize it, we lift the data off the paper. We interpret it and we hand it back to a customer. We pick it up, we process and we deliver it. And we're making a real name for ourselves with the TIMG brands in both countries. In Waste Renewal, I've harped on a bit about how long it's taken us to get an EPA license in Victoria, not for our fold, but bureaucrats over there or like bureaucrats anywhere it seems. But we eventually got that license on the 7th of May and have been operating processing our own medical waste there as opposed to having to get a competitive process for us. So we now pick up process and deliver medical waste in that state. And we have a great opportunity to keep growing there. So in terms of the first horizon, that plant will generate efficiencies and it will enable us to grow the medical waste business. The third horizon within waste renewal is a really interesting one for us. It's a small part of Freightways overall business. But what we aim to do there is pick up, process and deliver hard-to-recycle items, items that otherwise would have gone to landfill. And we now have a whole range of innovative solutions where we pick up packaging material, textiles, e-waste. And we find a way of collecting it, processing it and then having it going to recycling streams, keeping it out of landfill. And there are many thousands of tons of products now that we are picking up through that Shred-X business, and keeping away from landfill and having go back to a home as a circular loop product. So really proud of what we're doing in there, and I think it's an opportunity that has great tailwinds in the future. I wanted to give a brief update on ESG. We review materiality around once every 5 years. We talk to shareholders, customers, suppliers, a whole range of stakeholders. And we seek to determine what's important to them and where we can move the dial. And so these four areas here are the key areas that Freightways focus on. You can read more about that in the annual report. I won't do that to death here. But good health and well-being is a really pivotal one for us. We employ or contract over 6,000 people, and making sure they go home happy and healthy every night is really critical for us. So we have a whole raft of initiatives through the businesses, through the brands, through the branches around improving safety and keeping our people safe each day. Decent work and economic growth. This has been really important for us for the last 5 years. We've had a real focus on lifting courier pay, making sure our contractors, and we have 2,000 of them across New Zealand and Australia, operate sustainable runs, runs that don't turn over every 5 minutes because you can't make a buck. And again, the team have done a great job at lifting that courier pay year-on-year, such that if we look through those New Zealand fleets today with around 1,100 couriers, I think we're advertising for two runs. And so that's quite remarkable. That's symptomatic of what we have done to build that pay, build the working relationship with contractors and make sure that's a real win-win for us because that is the origin of our business, when you go back 60 years. SDG 9 is around innovation and infrastructure. And again, there's an awful lot we do here. We run a lot of businesses where we don't have a lot of customer contracts, particularly in transport. It's pretty rare that customers other than the larger ones signed a contract committed for 10 years. You're as good as your last delivery. You're as good as your last customer service experience. And so what's important for us is to keep that churn as low as we can. And we have successfully done that. I think it's the reason the company has been so resilient over this last year and really tough economic environment, we have kept the vast majority of our customers, and we have won a good deal of new ones, and that has helped make up for an economy that's gone backwards and customer volumes that have gone backwards because of the trade, and so the team have done a great job in making sure that churn is low, but we're attracting new customers through the innovative solutions we provide. In terms of climate action, as Mark mentioned, we released our CRD report. So the first one this year. It's -- it was no mean feat. It was a hell of a lot of effort for the team to accumulate the data that is required by legislation to go into that report. So I've done an outstanding job there. In there, we talk about the emissions across Scope 1, 2 and 3, and we absolutely have ambition to reduce those emissions. We're mindful of the technology. We're mindful of our contractors investing in vehicles that can do the job. Those vehicles aren't quite there yet, but we monitor them, we trial them, we test them and we keep an eye out for the vehicle that will do the job that will carry the weight over the kilometers and for the time you need to operate your run efficiently and effectively. And it will come. It's not quite there yet, but it will come. In terms of trading update, I can barely read those numbers there. So I'll take them off here. In terms of operating revenue, so this gets consolidated across Freightways for the first quarter unaudited figures revenue up 7.2%, EBITDA up 11%, EBITA up 8.5%, NPAT up 4.1%. In this environment, I think that's a pretty commendable result. And again, I think as one of our managers often says, people would love to have our problems. The revenue growth, as I said earlier, really driven by market share and price. So the service we provide enables us to get a bit of price out of our customers. And the market share gains winning customers off our competitors is a really important part of propping up that revenue. In the New Zealand economy today, we haven't really seen any green shoots. So we're not up here standing today and saying, hey, everything is about to turn around. Interest rates have dropped. But we think it will come, and we certainly don't see it getting any worse. We've had positive improvement in margin across both divisions. And that was a key objective for us in this year. Labor costs this year will be up around 3.5%, and that's a far cry from the previous 2 years with tight labor markets, really high minimum wage increases, extra 5 days sick leave, extra public holidays, all of those types of things contributed to 10%, 10% labor increases over the previous 2 years. So we're back to normal. We're back into a normal rhythm and at 3.5%, we've been able to get a little bit more price from our customers over this period. Corporate costs slightly higher in this quarter and a lot of that to do with the CRD reporting and the help we have needed to get to where we've got to today. In terms of each division, and Express Package and Business Mail revenue growth is 6.7%. And really pleasingly, EBITDA and EBITA up 9.9%. So there is evidence of that margin expansion -- from 12.4% to 12.7% that we are seeking through efficiency, through winning volume, through getting the right price. That's a really commendable performance, as I said, in these pretty tough times. Those initiatives have been around efficiency, rightsizing the fleet, making sure that the teams we have are operating at full productivity. They're well trained. And given that the late market is a little bit looser. You don't have as much churn in Freightways positions in some of those roles where you can really suffer from productivity if you don't get it right. Pricing is up around 5%. And again, I think that's a really good result and just trying to claw back some of those cost increases we've had over the last couple of years. Item count pretty much flat quarter-on-quarter if we exclude the Temu volume that we had for 6 months last year. And again, same customer volumes down 5%, market share has really made up that 5% gap. Over in Australia, we have to say things are a little more rosy. That economy is certainly going at a better rate than we are over here in New Zealand. Allied benefiting from continued growth, both organic and winning new business. We also put in two large sortation systems in Sydney and Victoria, and that's starting to give us benefit as those seasonal volumes grow. Big Chill have delivered revenue and earnings growth in this quarter, which is great to see. Again, they suffer from customers typically with higher value perishable goods, salmon, think high-value dairy products. where the demand is a bit lower from customers, but have done a really good job in growing both transport revenue slightly and most importantly, 3PL revenue significantly. Within the quarter, Project Evolve, I talked to you about in terms of billing and pricing, we expensed around $750,000 within that quarter. So I think when you look at the quarter's results, a bit of margin expansion and tackling a large project, and pretty impressive. In terms of Information Management, revenue growth of 10.6%, EBITDA growth of 19% and EBITA growth of 21.9%. And again, really good movement in EBITA margin from 12.1% to 13.3%. In many ways, this is a bit of a return to normal. The reality was that first quarter last year was really tough, really tough as we established that Victorian facility but couldn't have the volume flowing through it. So we have the cost of establishing and having the building, doing the setup. But because of that license, couldn't have the volume flowing through at that time. The volume is now flowing through, and that positive Med-X performance has been a real boon for us. Equally last year, paper prices fell. So at the start of that economic cycle we came into the paper that we sell from document destruction services. The prices for that came down. They have been stable this year. The digitalization work that's coming through TIMG both New Zealand and Australia, is as expected, and it's a good level up on last year. And the only other comment I'd make is that last year, in this quarter, we had the tail end of a very large New Zealand government digitization project, which I can't tell you about, I don't think, except it was involved in counting everyone on what's suburban. And so the tail end of that came in that particular quarter. In terms of outlook, look, the economic climate is clearly still pretty tough here in New Zealand. We expect that the rest of this half will still remain relatively subdued in terms of same customer volumes. But we're hopeful that we get some modest increases in the second half. We're hopeful that as the OCR rates come down, as we talk to customers who are maybe not feeling quite as gloomy about life, that we start to get a little bit of organic growth, hopefully, in the second half of the year. As I said, Australia, certainly more buoyant. They don't have any OCR cuts on prospect prior to Christmas. But again, that economy is going at a good level better than us. Our focus remains on restoring those margins. Our focus remains on lifting those EBITA margins through both divisions through this year and next. It's a real focus for our teams, for their strategies and the key initiatives that we are rolling out. Really pleased with the investments we made last year. So even though they were a bit of a drag on last year's result, having a big third-party warehouse, which is slowly filling as a drag on you, having a medical waste facility that you can't operate until you have that license as a drag. The sortation systems, as you get more volume, you get a benefit from it. But those three investments will pay off for us this year. And I think it was good to do them. It was bold to do them, and I think that time will pay off for us. We still have a very active merger and acquisition pipeline. So we are constantly looking at businesses, both in New Zealand, but more often in Australia now, in particular, where the transport market is large, it's really fragmented and there are a lot of niches to play in. And so the pipeline is good. We're looking for opportunities that are either synergistic or complementary. So, just finally, I'd like to thank the experienced teams of people around the country that New Zealand courier is celebrating 60 years this year. But there's a good number of employees and contractors that have been around and are still in that business that have done over 40-year service. And again, these days, that's pretty remarkable. It's something to be really proud of. So the team is not only the people in the room, but the people everywhere from Perth to Sydney down to Hobart up in Darwin and from the far north down to Invercargill in New Zealand. Those teams are people are the people that have helped deliver that result this year. I'd also like to thank Mark Rushworth, 9 years on the Freightways Board. Mark is pragmatic. He's an engineer by trade. He's a problem solver. And he's been a really valuable presence around the Freightways Board table over those 9 years. So Mark, we thank you, and wish you out a rosy tonight. Just finally, there's one other member of the Freightways' team, I'd like to acknowledge here today, and that's Devon Buckingham. And Devon retires this Christmas after nearly 3 decades, around 3 decades in this business. He's been there around half of that 60-odd years. Devon is one of those characters of Freightways that makes working here a real delight. He is a management style that makes him easy to deal with at all levels of the organization, no matter whether you're a brand-new freight sorter coming in or whether you're a Board member sitting around the table upstairs. And that's -- those are really valuable commodities. He's run the cutter at NZC as General Manager for the last 6 years. And we have a bit of a mantra about how do we move to a better place, how do we shift that legacy? Well, Devon has definitely done that. He's done a great job with the culture, the performance and the profitability of that business over that period of time. So, chat Devon on sausage roll when you see him later on today. But thank you, Mate. You won't be a stranger to the Freightways family.

Thank you.

Thank you, Mark. Are there any questions, comments or discussion in relation to the financial statements, presentation or management of the company.

Good morning. My name is John Blundell John. We're a shareholder, and we've been that way with my wife for nearly a decade. I have never attended a meeting here before. So if you'll just bear with me for a minute. The reason I haven't been to a meeting is because I have nothing to add. The reason being that this is one of the best managed, best governed companies on the NZX. And I think we all have a great thank you to the team, Mark 1, Mark 2, management for what they've delivered over long time frames without putting a foot wrong. I've seen Fletchers foray into Australia 9x, the outcome has always been the same. Air New Zealand bought NZ, it was in solvent when they bought it. The list goes on and on. It's an equities graveyard. And so I've held off coming to a meeting for a year or 2 to see how successful Freightways has been in Australia, where I have to say the growth opportunities lie. Because we've been in a year or so, we've had returns, IRRs in excess of 8%, gross cash flows of over 7%. And we've got a company that is growing dividend yields by over 5% for the last 9 years compound. So really, I could go on. But in a way, it's just a question of summing up and saying thank you very much from, I'm sure many shareholders for the wonderful performance the Board and management have delivered, and I'm sure, going forward, with the disciplines, the segmentation that you've delivered, the acquisitions, I won't have to speak to you for another decade if I'm still here. Thank you.

Thank you, sir. I wish all questions were like that at AGMs.

Beryl Plimmer, I'm a shareholder and also the NZSA rep at this meeting. Thank you. You are a very successful company. And we appreciate that -- you've alluded to cash flow constraints. Obviously, that's partly the economic environment that we're in. How do you see that going forward in the next year or so?

Well, like Mark Rushworth, I'm an engineer personally. So I'll get Stephan to answer that, Stephan Deschamps.

The way I would answer that is we don't see any constraint. We want to keep managing our balance sheet in a very conservative way. So we will keep doing that, but we've never had issues finding cash to fund investments that are accretive and we believe that will still be the case if we need to.

Are there any other questions from the room? Sir?

My name is Richard, a long-term shareholder. I haven't been to an AGM before Freightways, for some reason, I'm not sure why. But also, I'd like to complement you it was lovely to come to an AGM where I've seen precise detail the first 3 months of the year, how it's doing. Most of the discussions about looking forward, I get tired of coming to AGMs and already hear about is what's happened in the past, which is in the annual report anyhow. So I would like to congratulate you on that.

Thank you, sir. Any further questions from the room? Nicola, are there any online questions?

Just one question from John Williams. Does management -- is management able to share a time line for the implementation of the new charging system?

I'll get Mark to answer that.

So the new billing system we're rolling out over 2 years, a number of stages that we will roll through, we expect to get some functionality out of that after the first year, but we expect that we will be on time and on budget within 2 years, and Matt will make sure that happens for us.

No other questions? No other questions from the floor.

As there are no further questions, I'll now move to the formal resolutions to be considered at this meeting. As mentioned earlier, all voting on resolutions will be conducted by way of poll. For the online voting, please follow the instructions of the virtual meeting guide that was provided. Again, a reminder that any eligible shareholder or proxy attending the meeting remotely is eligible to ask a question. Please select the Q&A tab on the right-hand side of the screen any time, then type your question and present. The results of the polls will be advised to the stock exchanges later today. Proxies have been appointed for the purpose of this meeting in respect of approximately 73 million ordinary shares. As was indicated on the proxy form, where a proxy discretion has been given to me, I intend to abstain from voting those proxies in relation to my reelection and vote the other proxies in favor of the remaining 3 resolutions. I also note, as set out in the proxy form that directors standing for election will abstain from voting discretionary proxies in respect of their own appointment. As requested by the shareholders' association -- sorry, the New Zealand Shareholders Association, we will not disclose the voting of proxies received ahead of all shareholders voting on them today. Ordinary business, one, as the first resolution relates to my reelection, I'll vacate the role as Chair of this meeting and ask Peter Kean to chair the meeting for the duration of this resolution. I'll now hand over to Peter.

Thanks, Mark. As noted by Mark, the first resolution relates to the reelection of Mark Cairns. Mark was appointed as a Director of the company in 2021 and is retiring by rotation, offering himself for reelection. The Board unanimously recommends that shareholders vote in favor of Mark's reelection. He is considered by the Board to be an independent Non-Executive Director. I would now like to invite Mark to address the meeting.

Thank you, Peter. Good morning, again, ladies and gentlemen. Back in 2021, I was delighted to be given the opportunity to join the Freightways Board. I was subsequently elected Chair in 2022 following Mark Verbiest's retirement. You have details of my experience and qualifications in the notice of meeting. I'm a civil engineer by profession and a fellow of Engineering New Zealand. I also hold an undergraduate degree in Business Studies and Master's Degree in management on a chartered fellow of the Institute of Directors. I've previously been a Chief Executive for 16 years at NZX listed Port of Tauranga and prior to that Toll Owens Limited. So I understand the demands and stresses placed on Mark Troughear in his role of chief decision-maker for his family of 6,000 people employed at Freightways. I'm also currently a Director of Auckland Airport and recently retired from Meridian Energy after completing an 11-year term on Meridian's Board. I consider that Freightways is an excellent company with an outstanding senior management team and that we have a great future. In summary, I'm well qualified and experienced in the transport and logistics sector including having significant exposure to capital markets. Most importantly, though, I'm passionate about this company, and I seek your support today to continue on the role. [Foreign Language]. Thank you, ladies and gentlemen.

Thank you, Mark. Are there any questions or matters for discussion concerning this resolution to reelect Mark Cairns as a director. As there are no questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote. [Voting]

I will now pass the role of Chair of this meeting back to Mark Cairns.

Thank you, Peter. Ordinary business, Resolution 2, the reelection of Director, Abby Foote. The second resolution relates to the reelection of Abby. Abby was appointed as a Director of the company in 2018 and is retiring by rotation, offering herself for reelection. The Board unanimously recommends that shareholders vote in favor of Abby's reelection -- she is considered by the Board to be an Independent Non-Executive Director. I would like to now invite Abby to address the meeting.

Thanks, Mark. Good morning. I'd like to offer my greetings also to our shareholders, members of the Freightways team, my fellow Board members and representatives of some of our key stakeholders who've joined us today. I'm seeking your support for my reappointment to the Freightways Board for a further term. I've been a member of the Board and the Chair of the Audit and Risk Committee for 6 years now, and it's been a privilege to govern the company over that time. Next year will mark 20 years since I took on my first role as a Director of a listed company. And during that time, I've built significant experience as a Director of predominantly listed entities. My governance experience covers a wide range of areas, including strategic development and implementation, significant transactions, stakeholder engagement, risk management, health and safety and ESG-related issues. Currently, I am also a Director of KMD Brands. During my time on the Board, we've seen a great continuation of the Freightways journey with key aspects being the increased diversification of our portfolio through the acquisitions of Big Chill and Allied. Adapting to the COVID operating environment, and more recently, demonstrating the resilience of the business to the challenges of the current economic conditions, where the diversification of our business, along with the team's commitment to strong service and business outcomes has helped to absorb some of the downward pressure we all experienced. As we continue to look for opportunities for growth, I'm particularly focused in my role as Chair of the Audit and Risk Committee on ensuring that we are strengthening the core platform on which we're building, making sensible investments in our people, systems and processes to enable us to grow further, whilst continuing to perform in the way that you would all expect of us. This year, we had a particular focus on building our understanding of our climate-related risks as part of our move to produce our first climate disclosure. I'm committed to continuing to contribute my experience along with that of my fellow directors to help Freightways continued growth. I'm committed to high standards of governance that contribute to long-term value for our shareholders. I'd be grateful for your support today for my reappointment, and very happy to answer any questions you may have.

So no questions or matters for discussion considering this reelection to reelect Abby Foote as a Director, nothing online. As there are no further questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote. [Voting]

Ordinary business, the Resolution 3, the reelection of Fiona Oliver. Fiona was appointed as a Director of the company in 2021 and is retiring by rotation, offering herself for reelection. The Board unanimously recommends that shareholders vote in favor of Fiona's reelection. She is considered by the Board to be an Independent Non-Executive Director. I'd now like to invite Fiona to address the meeting.

[Foreign Language]. Good morning, everyone. It's always good being last. I'm not sure who organized that, but I'll find out later. So apologies if I repeat anything that my colleagues have said, but I guess it's a test that we are all on the same page in many ways. So that's a positive for you. I'm delighted also to seek reelection to the Freightways Board and continue to work with this very committed group of people. And at the time I joined the Board in 2021, I mentioned that there were many attractions to joining the Freightways team and principal amongst those were its focus on people and customers. And it's very pleasing to have witnessed over the last 3 years, the Freightways team in action and seeing it fulfill that promise. It does put customers at the center of everything it does and its people. And by people, I mean, employees and our contractors I looked after. As Mark, our Chair has already commented on the last few years have been eventful and unforeseen events have created very stark differences in our operating years. And we continue to face really tough economic conditions and perhaps attributable to the aftermath of COVID or perhaps it's the geopolitical and macroeconomic factors that we still are facing in this business. Feels the impact of those early, of course. And as well, we've had at home the extreme events with the weather and pretty clearly critical regulatory issues like contractor status. However, this team, notwithstanding these challenges and opportunities has really impressed me with their determination. And shown a high level of agility adapting to the changing and changed environment and have always remained future-focused. There's more, of course, that we want to do in our businesses, and there is more, of course, we need to do. And Abby's already commented on the particular need to tackle the risk to the health of our climate. But I do believe we have the strategies in place for now and a way of working that makes us well placed to tackle this. Our success has been on treating people fairly, delivering superior levels of service, considering the impact to our stakeholders and their impact on us and applying rigorous discipline to managing capital. These are all critical building blocks that I believe we need to continue to focus on. In my role as a director, I continue -- I undertake to continue to bring my commercial investment, legal and wide governance experience to be -- I would like to think that I can also benefit the already astute and effective oversight of this company by this Board. And I'll ensure that my focus, which I know is shared by this Board and other management team members on delivering valuable and sustainable returns to you, the shareholders. I would welcome your support of my reelection and happy to answer any questions you have.

Are there any questions from the floor. No questions online. Thank you, Fiona. As there are no further questions on this matter from shareholders, I put the resolution to a vote, please mark your vote. [Voting]

The final Resolution 4 relates to consideration for 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? Anything online? Okay. As there are no further questions, I put the resolution to a vote. Please mark your vote. [Voting]

Thank you, ladies and gentlemen. That concludes our discussion on the items of business today. After a brief pause, I'll close the voting system. Please ensure that you've cast your vote on all resolutions, and I'll now pause to allow you time to finalize those votes. [Voting]

Okay. Voting is now closed. Thank you for voting. Votes will be counted by Computershare and the results will be advised to the stock exchanges later today. Now I got into trouble last year that I closed without a last call for questions. So if I could give last call, if any shareholders wish to raise any questions, comments or discussion with related to the presentations, the annual report and financial statements or any other topics concerning the governance and management of the company or any other matters that may be lawfully considered at the meeting. . Questions from the floor? Online, Nicola? Okay. Well, that brings an end to this year's annual meeting. To wrap up, this has been a solid year for Freightways in a relatively difficult economic environment. We'd continue to invest in the business, and I'm confident that we're well positioned to deliver strong results as the economies in New Zealand and Australia recover. I'd like to now thank my fellow directors, our Chief Executive, Mark, and his management team, who have ably led our 6,000-strong team with an unwavering focus on moving into a better place. But particularly, I'd like to thank you, our shareholders, for your belief and support of our company. I now declare the meeting closed and invite you to share some refreshments with the Board and executive. [Foreign Language].