Infratil Limited (IFT) Earnings Call Transcript & Summary

[Foreign Language] Welcome to Infratil's 2022 Investor Day. I'm Jason Boyes, the Chief Executive of Infratil. And as usual, I'm joined here by Phillippa Harford.

Good morning, everyone.

Our fabulous CFO. We're really looking forward to talking you through our investments and what we're thinking about them today. There's a lot to get through, and it's a really exciting time for us. I'll go through the agenda and how the day is going to flow in a second. But first, I'll hand over to our long-standing and very experienced Chairman, Mark Tume, to make some welcoming and introductory remarks. Over to you, Mark.

[Foreign Language] I'm Mark Tume, Chairman of Infratil, and on behalf of the company, it's my pleasure to welcome you all to our Investor Day. And thank you all for making the time to be with us today. By way of explanation, that short Maori included an acknowledgment of those that have passed before, which I thought would be pertinent as this month marks 10 years since the passing of the company's founder, Lloyd Morrison. [Foreign Language] The Investor Day is an important event for the company as it gives stakeholders a chance to hear from our senior executives and from our investee companies, some of whom will be presenting today. It's a chance to question and comment on the company's strategy and direction and provides a great feedback loop to directors and to our senior management. Normally, we would try and hold the Infratil Strategy Day before the Investor Day. But unfortunately, these aren't normal times. And I have had it pointed out that if you want to know when there's going to be a COVID restriction being put in place, for whatever reason, look to whenever Infratil organizes an event, we've had 100% strike rate for the past couple of years. And it has been an eventful few years. I think that AustralianSuper's approach in late 2020, which despite recent headlines I can assure you was taken extremely seriously, did result in a pile of work from the Board and its advisers. And as part of that, gave us an opportunity to reflect on the Infratil model through another lens. You will appreciate our desire with any investment is to have meaningful influence, but our preferred approach is 100% control. So by design, we have a very concentrated portfolio of investments that we manage very deliberately with an ownership mindset. So it makes sense that our management model would incorporate deep operational expertise alongside strong portfolio disciplines. It's important to us that we have the experience of those folks that have run and are intimately familiar with operating assets and that this experience is embedded into our portfolio management approach. You'll be hearing from some of those people today. So we've divided the sessions up to cover renewables, digital and connectivity and health care segments, without -- starting with Jason. Now there are presentations from Vimal Vallabh, MCO Global Head of Energy; Will Smales, MCO Lead for Digital and Connectivity; and Peter Coman on health care, Peter is the MCO Joint Head of Australia and New Zealand. I've said it many times before, and I'll repeat myself, it's all very well having great strategy, but the difficult part is always the implementation. And it's a hard graft of successfully operating businesses, those day in and day out decisions that go to build an operating whole. So we're very fortunate to have a bunch of talented people doing the daily grind. And today, you'll hear from some of those doing all of this heavy lifting. There will be presentations from Paul Gaynor at Longroad; Jason Paris at Vodafone; and Greg Boorer from CDC. We've also included panel discussions, including Ingmar Wilhelm, Chief Executive of Galileo Green Energy; Assaad Razzouk, Chief Executive of Gurin Energy; Chris Munday, Chief Executive of Qscan; and Terry McLaughlin, Chief Executive of Pacific Radiology. As a Board and a management team, we're really excited about the position the company finds itself in today. And despite our decades of strong performance, I know I speak for the Board and management in saying we think our best years are actually in front of us. So thanks again for joining. Back to you, Jason.

[Foreign Language] Thank you for that. I agree with all of those comments, and I really can't wait until we can do this again in-person. It gives us so much more opportunity for you to interact, particularly with the management teams who travel from offshore and meet them in person and form your own judgments, we can see that every day, obviously. It has meant, as Mark said, I flip through to the agenda that we have switched to a pretty tight and focused set of presentations today. And to give you a bit of a guide, I think there are really important presentations from Paul Gaynor at Longroad; Greg Boorer at CDC; and Jason Paris of Vodafone because that is the area where we see the most difference and get between the way the listed market is valuing those assets and the way we see the value of those assets, particularly in unlisted markets, so really do pay attention to those. The panel discussions are designed to give you an overview of the earlier-stage growth investments. And the other thing I'm really looking forward to in those is letting you see how the executives from those different teams interact, and what a truly kind of global view we're getting in renewables now and an Australasian view in health care. And it will give you a sense of how we see the scale of those positions and businesses growing globally over time, which I'm going to talk to a bit more as well. There'll be opportunity for Q&A at a couple of spots. We're going to do them after each of Paul Gaynor, Greg Boorer and Jason Paris' presentations. And so you should have a screen in front of you, where you can text through those Q&A. And as usual, they will be handled by Mark Flesher and Matthew Ross here in the room in Wellington. So we'll hear their voices from time to time there. We'll also have Q&A at the back end in our wrap-up session where we can answer any questions that have been left outstanding from during the day. We'll try to get through them all. But as usual, if we can't, we'll come back to you kind of in-person afterwards. So I think that's the main things to think about during the day. One thing I think Mark didn't mention is that after lunch, in addition to you hearing from Vimal, Will and Peter on renewables, digital infrastructure and health, we'll get a chance to hear from Paul Newfield, the new CEO of Morrison & Co. Well, obviously, he's been around here for a long time. And you can hear about how Morrison & Co is growing to support Infratil's growth that I'm going to talk about with Phillippa next. So I think with that preamble, let Phillippa and I talk through how we're seeing the portfolio positioned today and where we think it will grow. It's always good to start, I think, restating a few things about Infratil. We're an infrastructure investment company, and we have significant investments in digital infrastructure, renewables and social infrastructure. We've been around since 1994. And over that 28 years, have an enviable track record of 18.6% returns to shareholders per annum. It was a little bit better before the start of yesterday, but it hovers around that level and has done for a really long time. The other key statistic on this page just to keep in mind is our forecast investment for this year is $1.3 billion. And you can see where that's gone in a minute, but you should take away that we're expecting that cadence to continue into the future. We're very positive about the outlook for the portfolio. Our approach is to invest in a portfolio of businesses, targeting returns to shareholders of 11% to 15% over a long-term period. We measure it over a rolling 10-year period. And Infratil asset has strong defensive characteristics, exposure to growth driven by sort of long-term megatrends, what we call Ideas That Matter. The key ones that we look at are at the bottom of this slide. And critically, opportunities to reinvest in those businesses to continue to grow, which is why we call them platforms, platforms for reinvesting further capital. That's really important given the wider context I'll talk to. As I've said, we blend those lower-risk investments that generate cash with higher risk and higher returning development assets to meet those target returns. And one of the really important things about Infratil and one of the reasons we've outperformed for so long is the flexibility of the mandate and our ability to move early into next-generation infrastructure before the mainstream, and we continue to scan for those new areas. So although we've got these ideas that matter on the page today, they have changed over time and they will change again. It's the approach that stays consistent throughout. Let's look back on what we said last year and what we did, it's a good way to start. There were sort of 3 or 4 key messages last year. The first was that we were undertaking a strategic review of renewables. It's hard to imagine that hadn't happened, but it was only that long ago. We also said that we would rebuild scale in renewables. We saw lots of opportunities there. In health care, we have just made our investment in Qscan, and we saw that growing and also interesting opportunities in digital infrastructure that we spoke about. If you flip to what we did, obviously, Tilt Renewables was successfully sold, generating that return -- stellar return of 35% per annum for our investors, one of our best investments ever. Rebuilding and renewables, we established our Asia renewable development platform, Gurin Energy, which you'll hear from soon, with a commitment of USD 233 million from Infratil. We also shifted Longroad's strategy, so Longroad Energy is the U.S. renewable platform, towards scaling that business, and you'll hear more from Paul Gaynor later about why we think that's a good idea and essentially it involves retaining more of the projects it's developing, so that will as well over time. Galileo Green Energy, our European platform, made good progress on establishing and growing itself as well, and you'll hear from Ingmar later. On the digital infrastructure side, we committed that GBP 120 million, GBP 130 million to Kao Data centers in London. It's a data center business there that focuses on high-performance computing needs, but has the ability to grow beyond that as well. And then in health care, we had Qscan and we added Pacific Radiology and Pacific Radiology joined with Auckland Radiology and Bay Radiology. All through the year, it's been a busy year, which took about $400 million of capital from Infratil and has created not just the largest diagnostic imaging service provider in New Zealand, but together with Qscan, it's one of the largest now in Australasia. So an incredibly busy year doing what we laid out this time last year. So where has that taken the portfolio today? You can see we're invested in essentially 12 assets spread across our 4 key sector focuses, and we've also introduced some geographic diversification with the additions of Gurin, in particular, opening up in Asia but also Kao in the U.K. for that digital infrastructure piece. There's a traditional set of pie charts. What this shows you is that we have high conviction on digital infrastructure, that's grown during the period with those additions and good performance, but also Tilt coming out of the portfolio. But you can also see there in the top pie charts, the growth back in renewables, that's still beginning and the growth in health care over the period, which -- both of which we expect to continue. In the bottom set of pie charts, you can see that geographic diversification. I mentioned 2 coming in. Both of those things, we expect to continue over the next year and going forward. What this shows is how we blend that kind of range of lower, middle and higher risk investments to produce our target return over the long term. This is showing that development investments really reduced as a portion of the portfolio because we're making early stage investments in that area that we expect to grow over time. So you should see yellow on my screen, that 13% grow back to a more balanced part of the portfolio over time as those early-stage investments, Gurin, Galileo, Kao, mature. We also think that as that grows, there will be room to grow that core cash-generating base a little more as well and add to that to support those growth investments because they tend to absorb cash. And you can see that part of the pie chart reduced a little over the period, again, with the exit of Tilt Renewables. So those are the kind of 2 tendencies I would call out if you're thinking about the risk profile of our assets as a result of what happened over the last year. Let's stand back and talk about the portfolio strategy and the wider context we are seeing that feeds into what I'm going to tell you about where we think the portfolio is going over the next year. I think there are 4 key messages in the wider context I want to talk to you about. The first is that the long-term mega trends that are driving our chosen sectors of digital infrastructure, renewables and healthcare are all still very early. They have not run out at all. Everyone knows we're going to be building renewables, for example, for many years. The growth in the use of data is not abating. And we are an early investor in the healthcare sector and populations will continue to age for a long time beyond here. So we're early there. The other thing that's maybe not as obvious to everyone on this call is that the long-term tailwinds for infrastructure investment that have been around for a while are continuing to grow incredibly rapidly. So the amount of money that is focused on investing in infrastructure, the things that we've already invested in is growing massively over the period. And we continue to think that, that will grow in the future. And that's a lot about where these investors want to invest, in less correlated assets, which infrastructure ticks the box on. It's actually quite good right now. As people think a lot about inflation, they tend to be less exposed to inflation. It is the fastest-growing alternative equity investment class in the world and that's an important thing to bear in mind. The third key message here is that sustainable investment is growing at least as rapidly, if not more. And our investments in renewables are particularly well placed there, but also our approach for a long time, I think, is very consistent with that, and Phillippa is going to talk about that in some more later as well. The fourth key message, if you think about the wider context is really about Infratil and how well positioned we are with our early moves in these really hot sectors. The good news is that the valuation of those investments has definitely increased. On the -- by the same token, there's more competition for investments in those assets. But what we have with our high-quality early positions in that space is an ability to continue to reinvest in those internal pipelines without competing with other investors all the time for new assets. And it's incredibly valuable in the environment both because you don't have to compete, but also because of that wider context, the rates of return you're getting for that internal reinvestment is extremely strong. And it gives us options to enhance those returns by realizing infrastructure you have manufactured or embedded infrastructure in those assets while retaining the platform itself. So those are the 4 key messages, big mega trends in our sectors and in infrastructure, particularly and sustainable investing and our early positions are serving us really, really well through that period. So if I look ahead, we see conditions for continued strong growth across all our 3 key sectors. In digital infrastructure, we're already at scale in ANZ, but you should listen really closely to Greg Boorer's presentation, and see how confident he is in the strong organic growth ahead of them and how differentiated we continue to believe his business is from the general market. Should listen closely to Jason Paris' presentation too, obviously, to gauge progress in their transformation, but also he'll talk about their work assessing network capital release options separating out their passive mobile tower infrastructure because we see those sorts of assets trading at valuations much higher than private markets or unlisted markets than the listed markets are giving it credit for. On renewables, they're poised to scale with that reinvestment I talked about. You should listen closely to Paul Gaynor's presentation, really important strategic shift and also confidence and increased cadence for their business in terms of developing more and more projects more quickly than we've seen in the past with all those tailwinds everybody knows about in renewables. We're really supportive of that plan. We're looking forward to Infratil increasing its size of its investment to support that. He'll also talk about that we are assessing room for a minority investor to join that to give us more options as that platform grows to what could potentially be a very significant North American business. We also see opportunities in Asia in renewables because it feels less competed today than our other kind of key markets for renewables, Europe and the U.S. In some ways, it feels like those markets felt 5 years ago. So our early starts there could give us some opportunities to grow quickly by acquisition. And in healthcare, because we're still an early investor in that space, we see a lot more options to grow and scale through bolt-ons for Qscan in the same way that Pacific Radiology has partnered with Auckland and Bay in New Zealand. We see opportunities to introduce teleradiology as a way for those 2 businesses to work together and potentially work with radiologists in other jurisdictions to provide coverage across all time zones. And we continue to evaluate adjacent sectors in healthcare. We had a good strong look at cancer care last year, which moved away from us. But there are other opportunities like that, that we see. So strong growth across all those 3 growth sectors, and as I mentioned, room to add further cash-generating assets to support that growth as we go along. So I think I'll pause there and hand you to Phillippa, who's going to talk about a few things.

Thanks, Jason. Good morning, everybody. So as Jason said, I think one of the things we first wanted to land on and it really is a really important topic for Infratil and that is our approach to sustainability. So if we think about the portfolio and indeed where Infratil started, our first investment was Trustpower, that was way back in 1994. So clearly, our commitment to renewable energy has been long-standing. And it's fair to say that sustainability is something that we've generally done implicitly. So what both MCO and the Infratil Board have been working on is a process for the last 12 months where we're looking to document our sustainability strategy. And the reason for doing that is we want to be able to clearly communicate to the market, to our shareholders and to indeed the kind of communities that we operate in, what our goals are from a sustainability point of view and how it is that we're going to look to measure ourselves and be accountable for that. So we've been working through that and we've actually established what we would call medium-term goals from an ESG perspective. Clearly, the bigger thing about that is also communicating that with our portfolio companies and listing their support in meeting those goals. In that regard, we're actually progressing well in that all of our portfolio companies last year participated in what's called the [ group ] survey. That's enabled us to set a benchmark and measure where we are tracking at the moment and how it is that we can look to improve our performance. And I think it's worth noting that extends to the kind -- the way we decide what investments we are even interested in holding, how we hold those investments and operate them, how we look after our people, how we behave in the communities in which those businesses operate and also how we exhibit good governance. So as you'd expect, the goals that we're establishing cover all of those things. And in terms of next steps, what you can expect is that our FY '22 annual report is going to outline what that strategy is and also detail what our medium-term goals are. And we're really excited to have made this step. I think it's fair to say none of that will come as a surprise in terms of the areas that we've been focused on, but it will be good to be able to communicate that well and to hold ourselves accountable as we go forward. So that's next steps on sustainability. So turning now to capital availability. And as Jason said, one of the biggest things that happened to us in the last 12 months was the disposal of Tilt. As you can imagine, the receipt of those proceeds has had a significant impact on our capital position. We started out with $1.1 billion of cash after that disposal, having repaid all of our bank debt. So that was a really strong position to be in. But at the same time, we also took the opportunity to look at the group and to test whether our banking funding lines were still fit for purpose for what the Infratil group had now become. So as a result of that, we went to a full refinance of those facilities, and we're pleased to say that we've now refinanced about $750 million of core. We have term facilities of an additional $150 million. And in doing so, we've also reset the covenants of the group to better reflect what Infratil is today. So when you put those 2 things together, we've now got about $800 million of cash to deploy. That's come down from the $1.1 billion which we would have last talked about, and that's primarily because of our investment in Kao Data and also Asian renewables and the PRG partnerships, where we get lifters gearing at levels of about 9.7%, which is well below our 30% target. So I think our message at this stage is we've got a very strong capital position and a lot of flexibility in terms of where we might invest that capital. So then moving to guidance. We're -- our message today is very much just that our guidance range has narrowed. We previously had guidance of $500 million to $530 million. We're narrowing that to $500 million to $520 million. Although we are noting that we expect to be on the bottom end of that guidance range or towards the bottom end, the overlay in that regard is, as you would expect, there continue to be some pockets of our portfolio that are impacted by COVID, particularly Wellington Airport and our Diagnostic Imaging businesses. You'll have seen perhaps this morning that Trustpower also released a minor update to its guidance range, reducing the bottom end by $5 million, so we've also taken that into account. But on the upside, it's just worth noting that RetireAustralia is bringing through a really strong performance for the year. And there's a pack that you'll see in the Investor Day that I encourage you to have a look at, but the highlight is that the resales and sales for that business are now in the range of 490 to 520 units for the year. And to put that in perspective, that's up from about 340 in the prior year. So a pretty stonking result. And then just to close off the guidance part with regard to dividends. At the half year, we had indicated that we were confident that we could have a modest growth in cents per share dividends. We've obviously -- we assess that in terms of where we are for the current period and our forecast view. And it's pleasing to say that we continue to be of the view that that's achievable. Just as a guide, the interim dividend saw a 4% increase on the prior year. So that was a good move. And then finally, the last part for me is inflation. And actually coming into this presentation, a number of questions had been received about how the group was poised to deal with inflation. Our overall view is that whilst clearly, there are different businesses and different pockets of businesses which are affected in different ways by inflation, we believe that the portfolio as a whole is well positioned. Now if we were to try to unpick that a bit, we've got on the revenue side, quite a material part of the revenue of the group is actually cushioned by contractual mechanisms to increase our revenue in the event that inflation comes through. So clearly, though, that doesn't apply across all lines of revenue. In contrast, we've got some areas whereby there may well be competitive pressure, which limits our ability to pass through inflation. And we're mindful of that, but we also believe that there will be operational efficiencies that those businesses can achieve that we'll hope to mitigate it. I think there's a couple of years that are worth just calling out very quickly. One is workforce costs. We're well aware of the labor market and the constraints, particularly given the closed borders for New Zealand at the moment. We do think we'll need to respond to that. But we're also aware of the fact that we would like to be the employer of choice, and we think that our businesses can offer employees a real opportunity for growth given the caliber of those businesses. And I think finally, the only other thing I'd touch on is there was a question around capital expenditure and the impact of inflation. Certainly, in the near term, those businesses have anticipated those pressures. I think it's fair to say that the supply chain constraints have been well signaled over the last year to 18 months anyway. So what that means is in the near term, most of our businesses have those costs locked in or they have pretty much anticipated inflationary pressure and therefore, built that into the assumed costs. So that's about it for me, Jason.

Thanks, Phillippa.

Thank you.

That's really helpful. And I think some of the papers that you've seen released and some of the speakers later on will talk about that inflation theme a little bit more as well. And I should listen up for that. It is a question we're getting a lot of at the moment. And I'm really looking forward like you are to releasing some more on our sustainability approach at the half year is kind of inherent in what we do, but it's good to be progressing our approach. Okay. One other thing you mentioned, actually, which was a really important one, I meant to mention in the intro was there are actually really good detailed papers from almost all the companies that have been uploaded with pics today. There's some real gems in those, particularly the ones that aren't presenting today, I'd encourage you to go and have a look at them. Some of our panels might refer to them, but in case they don't, they're definitely worth a look. Okay. Let me try and wrap up how we're thinking about the portfolio now. There are 3 key messages really and 1 addendum that we always talk about. It's impossible to overemphasize how well positioned Infratil is given that wider context I talked about with multiple growth options, long-term tailwinds and a really strong balance sheet enabling us to take advantage of that. Three key messages. Number one, infrastructure is one of the hottest asset classes and the sectors we're in are one of the hottest subsectors of the infrastructure asset class experiencing long-term trends that are not abating and are still really early. That means we continue to see capital flowing in and more and more reinvestment opportunities across all 3 of those areas. So that's key message number one. The wider context is really positive. Key message number two is really that with that early position, we're uniquely placed to continue to grow in those sectors at attractive rates of return because we can reinvest inside existing platforms without competing. And we also have multiple options to realize some of the infrastructure we're managing or embedded infrastructure to enhance returns if we want, we don't have to, but if we want. So strong mega trends, early positions placing us well. If I then stand back, key message number three, and think what is the market missing? If that's a question people want to ask, what do we think the market is missing. And we continue to see material valuation gaps between the way unlisted markets are valuing 3 particular assets from the way listed markets are currently within the Infratil portfolio. And they are CDC Data Centers, which is continuing to see strong organic growth; Vodafone, where we see the value of, for example, their embedded infrastructure, trading at much higher multiples than the listed market gives it the credit for. It's actually progressing quite well as well. But that is a real source of valuation that we see. And you'll hear Jason talk about how they're going to address that or thinking about addressing that. And we also see Longroad as a real big source of difference in valuation because you'll listen -- you'll hear from Paul there, strong growth outlook and a real uptick in cadence. And private markets are valuing the ability of these platforms to continue to grow with those tailwinds a long way ahead of where listed markets are currently valuing Longroad in and of itself. They've got a really strong 5-year plan, and we know our independent valuation really only takes into account 1 year of that. That doesn't happen in unlisted markets. So look out for the consequences of that flowing through over the next period as well, those valuation gaps. So sort of sub-bullets after those 3 key messages that you should be taking away, CDC, Vodafone, Longroad and the mega trends. We do see room to add more core cash generating assets to support that development over time. So look out for that. And we will continue to stay focused on one of our key sources of outperformance over time, which has been our flexibility and capability to move early into sort of emerging or next-generation infrastructure. And we're always scanning for the next big thing today, and we'll continue to do that in the future. So we reserve the right, and we think we have done it well to change the portfolio again in the future if we see the sort of outsized returns we've seen in the past possible by doing that. As always, though, we never get ahead of ourselves, we're remaining patient and disciplined in our investment approach and the way we value things. So that's it from me. I think we are going to Vimal next and he's going to introduce the next renewables section. So thanks for listening in, and I'll come back at the end of the day for a wrap-up. Over to you, Vimal.

Good morning. Thanks, Jason. Good morning, everyone, and thank you for joining me today to talk about renewals over the next hour 15. I'd like to take you on a journey on Infratil's position for renewals, talk a little bit about the -- start with talking about the markets that we are operating in, the state of Infratil's portfolio in renewables. I'll talk to you a little bit about some of the new ideas we are working on and then have Paul Gaynor talk to you about Longroad and some of the details on the U.S. market. And then close with a panel discussion with our CEOs of our platforms, Paul, Assaad and Ingmar. This morning, I was reflecting on the 2021 year in renewals and the state of the market. And I was reminded of the story from the 1990s and it's relevant today given where we are and where I am in Europe and what's happening here. And it's a story about John Major meeting with Boris Yeltsin. And I think the question -- the story goes John Major asked Boris Yeltsin if he could describe the Russian economy in one word, and his response was good. And intrigued by this, John Major asked a follow-up question that was, well, perhaps you can ask -- perhaps you can describe the Russian economy in 2 words. And those 2 words were not good. And that's something of an apt description for where renewables were -- was in 2021. And the sector has been hit by some of the inflation effects that we're talking about across the world, higher CapEx costs in a lot of the construction side of the market. We suffered supply chain disruptions as shipping was dislocated, and we're seeing record high energy prices across Europe, driven by some of the geopolitics that's happening here. Having said all that though, 2021 also saw a record investment into the renewable space, over USD 366 billion was invested, the highest ever and the bulk of that went into wind and solar. We also saw increased commitments from governments to support renewables across the globe and across the markets. And we saw upward revisions of forecast for the deployment of renewables supported by those government conditions. And if I look at the 3 markets we are now in and talk about some of those activities. In the U.S., we saw a change in government in 2021. And with that change in government, we saw a change in sentiment and more commitment to climate change, addressing the issues of climate change and addressing more investment into renewables, and that's translated itself into various attempts to get infrastructure bills through Congress, where we expect renewables to play a fairly prominent role. At a state level, we've seen continued reinforcement of legislation which supports the deployment of renewables. And if I switch over to Europe, although we've seen a recent spike in energy prices across the continent, much of that driven by gas and the geopolitics in and around that gas, we've also seen that the response from a lot of the markets here and their view that is a need for the continent to become more energy independent and secure its energy needs through increased commitments into renewables. And the product of that has been various legislation initiatives by the European Union to support increased deployment of renewables and growth in the European markets. Now if I turn to Asia now, out of the key markets, the countries are increasing their renewables targets. As Jason said earlier, I very much feel that Asia is maturing in its policy and legislative approach, and it's probably 5 or 6 years behind where Europe and North America are but catching up quickly and using their experiences to leverage themselves and catapult themselves into deploying more renewables faster. We've seen new targets in South Korea. We've seen Singapore [ adding a tender for ] 4 gigawatts of new renewables. And we've seen Southeast Asia undertake a policy review that will help improve the penetration of renewals in those markets. India alone, in that part of the world, has committed to deploying 450 gigawatts of new renewables over the next decade. And that's on par with what the U.S. and the European Union have targeted in their own markets. And to put that in context, New Zealand, I think, expects to deploy somewhere between 2 to 3 gigawatts of new renewables over that period of time. So if I maybe turn to the Infratil portfolio and talk a little bit about that, 2021 has been a fantastic year for us. We had a great exit with our Australasian platform, Tilt Renewables. We established Gurin Energy to focus on Asia in the same way that we established Longroad and Tilt 6 years earlier. We strengthened the team and the pipeline in Europe through GGE, and we've continued to deliver the strong growth in pipeline in North America through Longroad. So Infratil and its partners have established a broad and diversified exposure to the sector in renewals. We now have between the platforms, 2 gigawatts of operating assets in wind, solar and hydro. We have 18 gigawatts of pipeline between all our platforms. We cover 3 large regions that are now -- that now have exposure in 27 different and distinct markets. And if we exclude China from the calculations, that covers 80% of expected growth in the world for renewables. We have in the deployment and the establishment of our platforms had a deliberate strategy of having them as devolved and managed locally. They're designed to be flexible and responsive to changes in market conditions. And as we've seen over the last 12 to 24 months, that can happen quickly, and we need to be responsive to those changes. And by the establishment of our platforms, we've actually -- we are poised to benefit from the increase in the renewables transition and the energy transition to renewables, I should say. And quite excitingly for us, Galileo and Gurin are on the same journey as Longroad and Tilt but with Tilt and Longroad having a 6-year head start for us, but the markets are equitable in size and the scope for growth is equitable in size. So prior to joining the IFT family, all of our CEOs have run leading and sizable platforms in their markets. Paul Gaynor was at First Wind, one of the leading development businesses in North America. Ingmar Wilhelm worked and led the growth in Enel Green Power. And Assaad Razzouk ran Sindicatum Renewables for a decade in Asia and grew their platform. So as Infratil, we have assembled a team of some of the highest caliber CEOs to deliver growth to our platforms, scale and value for IFT shareholders. And you'll hear more from them, all 3 of them, in the panel discussions, which will follow. So turning our attention to some of the new opportunities, our focus to date has been the rapid growth of the renewables space and increasing our diversification and reducing our risk exposure across that space as that sector emerged. But there are adjacent sectors that are also a byproduct of that growth of renewables. So commercial and industrial scale renewables is one of those spaces and all of our platforms are looking at positions in that space. And as you would expect, as we expand renewables across the globe, we are also expected to see an expansion of the transmission and distribution spaces as the grids rewire to accommodate new generation. We also expect to see growth in storage solutions to meet the challenges that renewables pose to grid stability. So some of that is being undertaken from within our platforms, but there are also opportunities outside our platforms to look at that space. And we will be exploring these themes across the geographies we cover and seek the right entry points at the right time for some of these growth initiatives. So for now, I'd like to hand over to Paul, who leads our Longroad Energy platform, which was established in 2016 to take us through where the Longroad business is and where the U.S. market is currently operating. Thanks, Paul.

Great. Thank you, Vimal, and it's nice to be here again this year. I think this is my fourth IFT Investor Day. So great to be part of it again, and happy to report out on Longroad. If you could just go to the next slide, please. Okay. So again, for those of you who are not familiar with our company, let's just give you a quick 30,000-foot overview. We are a vertically integrated developer owner operator. We do wind, solar and storage. Since inception, we have developed or acquired 3.2 gigawatts. We've actually sold 1.8 of that and retained 1.4 of that. And that's -- remember that 1.4 number that's going to feature prominently as kind of an anchor point as to where we go from here, and Jason mentioned the strategic shift. We do have a great near-term pipeline, 4.5 gigawatts over the next 5 years -- sorry, next 3 years and then another 3 gigawatts after that. So we're targeting reaching 8.5 gigawatts by 2026. We do have 145 people all over the country. We also are owned 40% by Infratil, 40% by New Zealand Super and 20% by the management. And from a return point of view, we've had an attractive track record so far. Next page, please. Again, keeping it at 30,000 feet just to give folks a sense of the scale of the U.S. renewables market, if you add up wind, solar and again, just onshore wind and just -- and solar without residential -- and storage without residential, you're talking about a 40 to 45 gigawatt market per year. We'll talk about our -- so obviously, that's a big market, and we'll talk about our track record and how much of that we think we can capture going forward. Next slide, please. Phillippa talked about this. Vimal just talked about it. There's no question that the last 12 months have had an impact on our business as well as other industries around the globe. We are not insulated at all from the inflationary impacts. This is just a sample of some of the key inputs you see in our business, steel, shipping obviously, massive increase in shipping container cost and availability. Lithium, we are doing a significant amount of storage deals at the moment and buying, trying to buy battery capacity. Lithium has gone up as well as the price of panels. So we'll talk about what does that mean for my -- for our pipeline on the next slide, Slide 5, please. So 2 points to make here. I think the first one is the global supply disruption has definitely slowed the pace of our expectations in 2021. If you see the -- what we've had said -- we said 12 months ago, we thought we were going to do 1.8 gigawatts across 12 projects. Over '21 and '22, we did not do that. We did 2 projects in '21. There's still a fair amount of work that we're working on in the rest of the portfolio. But the deals did -- some of the deals did slide to the right in terms of timing so that they could get reworked from a global supply chain impact perspective. None of those projects has been terminated, so that's good, and we're in conversations now with both sides of the deal, right, all of the input side as well as the people, customers who are buying this power to make sure that the economics and the parameters work for both sides. So that's point one. Point two is where we sit today, have been going through that crunch on inflationary impacts on the supply chain, we think we're positioned really well for the next 3 years. We're saying 4.5 gigawatts, about 1.5 gigawatt a year of identified projects and we have signed contracts on what I would call the new cost structure. And what's that -- what has happened, not -- again, not on every deal, but on a good chunk of our portfolio is that and the people who are -- the companies that are buying this power are adjusting their expectations as to how much it's going to cost. They themselves are experiencing their own inflationary impacts and therefore, the cost of buying renewable energy should -- is really treated no differently. So we've had some success in readjusting everybody's expectations, including our own, around economics and power pricing and contracts. One of the big things we did in 2021 was I think we made a tremendous amount of progress on the storage front. We've hired a couple of dedicated people to our team, and we also signed a strategic supply agreement with a lithium supplier for about a 3 gigawatt hour portfolio. So that was a very positive event. If you go to Slide 6, looking at the last 12 months on pipeline growth. So if you look at the left side of the page, significant growth in total pipeline, right, from 7,700 megawatts to almost 13,000 megawatts. We've also added -- if you can see there, we've also added a lot of storage. Now that's some stand-alone storage, but a good chunk of it is paired storage with our solar development projects. The other thing you'll notice is we had a little bit of wind. We didn't have a lot of wind pipeline. Probably 12 months ago, we didn't have any wind pipeline just because of what was happening in the -- on the legislative front with respect to the incentives. We've definitely cranked that up this year in 2021, for sure, and we continue to do that 2022 and beyond. So in terms of just the sheer scale of the portfolio, we're in really good shape. More importantly, I look at the right-hand side of the page, and this is kind of where the portfolio is. You can see a good chunk of our portfolio is in high-value markets, markets like California, Arizona, Nevada, Los Angeles, you will get a little bit in Hawaii and New England. So again, relative to -- when you talk about pricing levels and profitability levels, deals are typically a little bit more difficult to do but they typically have higher per watt profitability levels. So we've done, I think, a great job of rebalancing our portfolio to these high-value markets. All right. While we move to Slide 7, so this shows us what does our pipeline look like today. As I've mentioned before, 13 gigawatts, you can see a lot of it -- 13 gigawatts across 13 states, a good balance of solar and storage. And you can see a lot of those red circles there are combined solar and storage development assets. So that continues to be where a lot of the interest is from a procurement point of view and a lot of the activity -- and that's what's driving a lot of the activity on our side. So of the 43 projects that we have, 23 of them are solar and storage projects between now and out to 2026. All right. Let's go to Slide 8, please. So there's a bunch of words on here. I think Vimal talked about a handful of these. Maybe just talk about a couple of them. So the first one is the industry tailwinds. So there's a lot of talk about Build Back Better. Build Back Better didn't happen. We're optimistic that some form of Build Back Better or at least the climate portion of Build Back Better gets reintroduced in the next couple of months, hopefully. We're not banking on it. All the numbers you see in here assume it doesn't happen, but that would be a great in terms of taking the -- adding more tailwind to this business in the U.S. so it'd certainly be helpful. The market in terms of acquiring renewables and buying renewable energy from the utility sector, from the corporate sector remains at an all-time high. You can see there, in 2021, even with all of the dislocation in the global supply chain, 31 gigawatts of contracts were put in place. So again, I think the point there is we don't need the new legislation or Build Back Better to make our numbers work or to make our plan work. Obviously, it would be better if it were in place or something like it were in place, but the market, even without that, the market is robust. The second point is just on having access to -- again, in the context of this global supply crisis, making sure that we have access to suppliers, OEMs, so panel suppliers, batteries suppliers, trackers, EPC contracts, wind turbine manufacturers. So all having purchased much of this equipment over the last 20 years, we have great relationships on that front. And one of the -- and you'll hear me talk about this when we talk about kind of the rationale for scaling up. And then the last one is -- the last point here, competition is higher, right? There's been a massive influx of capital coming into the renewable sector and -- but specifically into the U.S. renewable sector, that has resulted in a competitive -- an increase in competitive intensity -- so that's one of the things and themes that we're thinking about is how do we make sure that Longroad is best positioned from a competitive point of view. And that leads to Slide 9. So this is the strategic shift that Jason referenced in his remarks. Again, historically, we've been a develop-to-sell shop. As you can see the numbers there, we've -- a little bit more than half we sold of what we've done so far. And what we're talking about doing now is turning that business model from that develop-to-sell to develop-to-own. Not saying that we would never dispose off assets. But certainly, it would be a -- from a strategic shift point of view, it would allow us to build scale to maximize our competitive position. So some of the benefits, buying power on panels, turbines, trackers, batteries, operating ballast to maintain a larger portfolio and a larger pipeline so that we can go after bigger opportunities with a bigger balance sheet. Owning more assets even with our relatively modest OpCo that we have today, we have done a good job of kind of squeezing and optimizing either operational performance or financial performance. So therefore, owning more of these assets allows you to do that more over time. And then in the unlikely event that growth tapers, you've got a kind of a bigger boat to be -- in the ocean end. So you can see that, if we do what we are -- if we execute on our plan, we're at 1.4 gigawatts today. And if we do that roughly 1.5 gigawatts a year for the next 5 years, that gets us to 8.5. Now the numbers are -- we're going to just -- we're going to sell a few assets and there's one kind of -- there's one other adjustment in there. So may not exactly equal the math. But it just -- it will -- it's a big aggressive program, $8 billion in total capital. And what we're going to need to do is raise about $500 million of new capital in order to pull this off. And that's the minority position process that Jason said that we were exploring at the moment. You can see if we do all that, Longroad turns into us pretty different company in terms of our scale run rate. Based on run rate 2026, we would have about $500 million of EBITDA. Next slide, please. Investment thesis. So we've been working on this thesis for a while with our Board. We've been doing a lot of work on what's happening in the market, where we -- where our strengths, where do we have some vulnerabilities. And I think we've got a lot of conviction on our ability to be able to hit this plan that we've just laid out. So in terms of our ability to hit 1.5 gigawatts a year, we certainly think we can do it based on our -- the deals that we've identified and our existing pipeline. We're going to continue with our M&A process, which will also allow us to have some -- even further growth options. Number two is the market. Can the market continue to demand 40 to 50 gigawatts a year? And can we maintain our historical market share? We certainly believe so. I mean we've seen the numbers that I laid out before, one firm's view, but there are others that have even a more rosier view. Our historic market share has been 3.7% since 2018. This -- you do not have to believe that we're going to increase our market share at all in order for us to be successful. In terms of profitability, can we maintain our -- our historic levels of profitability? We've had high profitability so far. Can we maintain that as we go forward? And we believe the answer is yes. One of the reasons is, and the most important reason is we're focused on these higher-value markets where you have higher profit levels. Some of the deals -- most of the deals have increased degrees of difficulty, and therefore, the competitive intensity, it's still high, but it's not as high as it is in some other markets which have kind of easier development features. And then the last point, the team has -- in terms of the thesis, the team has a significant investment in Longroad and remains aligned with the shareholders, myself and my 3 partners own 20% of the common equity. We have a unique incentive program on our growth side of our business, which is one of the most competitive in the U.S. market. That has allowed us to have a very high retention rate in a very tight labor market. So just to wrap this up, where we've got our strategic shift is, it is definitely supported by our existing investors. We've had a lot of discussions with them. So we have initiated this process to seek a new minority investor and to see what kind of options that, that would allow us to do in terms of building out our business. If we go forward with the transaction or the deal, we would expect it to be done midyear. Next slide, please. To give you a little bit of confidence that the market is robust in terms of interest, here are a handful of projects and platform deals that have happened in the last -- since March of '18. If you look at the top row kind of from Invenergy going to the right, you'll see that there's been about 1 deal a month since October, September. So the market is -- we think the market is pretty deep. We think that there's a lot of interest. And we think that we have -- if we can just flip to the last page now, we think that we have a great position with our operating company. We have a fantastic position from a growth perspective. We have the team and the track record to make it happen and that team -- most importantly, that team is aligned with our existing shareholders to make this strategic shift. So thanks very much. That's all of my comments, and I'm happy to either take questions or go right into the panel.

Hi, Paul, it's Mark Flesher here. We do have some questions. And in some cases, I will amalgamate them. But just a reminder for everyone on the call, if you do want to place questions, just put them in the box and send them through. So the first question, Paul, is around, given the growth in your sort of sector and industry, how have you managed to retain staff and probably more importantly, how do you think you'll retain staff, incentivize them going forward?

Yes. So we have -- on our -- in our development business, we have what we call it, a development bonus program, it's aptly named. But it is a unique compensation structure in the industry. We share a portion of the profits that are actually realized on specific development projects with the team. And in the 5 years that we've done it, we've paid out a significant amount of money, probably -- I'm going to guess probably 10x the amount of money that, let's call it our next likely competitor would pay. So it's about $30 million we paid over the last 5 years. So it's a pretty significant retention feature.

Thank you. Next question is around the pipeline. So of the 8.5 gigawatts you've got there, how much of the land and interconnection is secured at the moment?

Yes, I don't have the numbers off the top of my head, but it's probably at least 75% on the land and probably closer to 80% to 85% on the interconnection.

Thank you. Next question is around the capital raise. In terms of just timing, when do you expect that to be completed by?

Yes. So it's mid-'22, we launched the deal into the market about 2 or 3 weeks ago. So we're running a traditional kind of 2-stage process. So if that all goes according to plan, I would expect to have some closure to that process by midyear.

Thank you. There's a series of questions around storage. So one of them is around is the 5 gig of storage, does it assume any tax credits? And there's a follow-on question around are there separate tax credits for storage contained in the Build Back Better bill. And then actually, if you answer those, then I'll come back to you with a couple of follow-ups on that?

Yes. So on the second one first, there was a -- well, there is a stand-alone ITC, investment tax credit in the Build Back Better legislation, and it was 30%. If -- so -- but obviously, that didn't happen. We are not pricing -- I think the more relevant answer is we are not pricing a 30% -- a stand-alone ITC into our economics now because we have absolutely -- it's a big driver. It's an absolutely big driver, particularly as you have some of these solar and storage projects have very big batteries. So taking a stand-alone ITC or making a stand-alone ITC storage assumption is an aggressive one. So we're not going to make that assumption until it actually -- until that law actually passes. So that's how we're pricing deals now.

A couple of questions on storage IRR as to why they're higher than just a straight renewable development.

I'm not sure why they -- if that's -- if I said that comment that they were higher.

That's fine. Maybe moving on to just in terms of partnerships on the storage side, how you're finding that in terms of opportunity?

I think there's -- on the -- if you mean partnerships on the supply side, I'd say that it has taken us a long time to get comfortable. I think there's a lot of great companies out there that are doing some really interesting things. But in terms of having comfort with suppliers that have creditworthiness, that have technology that works, that have contracts that work and then have kind of a risk sharing attitude in terms of what risk are they taking versus what risk are we trying to lay off to the power buyer that universe is very narrow. And I'd say we spend -- that's what I think we spent a lot of time on in the last 12 months to make sure that we -- that, that whole thing, it's stitched together really well. Because you can certainly sign a great contract, but that contract, that supplier may not provide the right availability assurances that you need in order to sign a storage -- or a solar and storage contract, for example, with your PPA counterparty.

Thank you. A question on the introduction of a shareholder, and it might well be also a question for Jason, who's here around just what level are you looking to sell? And what sort of investor are you looking for as a partner?

Jason, do you want to take?

Yes, do you want to get to me?

Yes.

Yes. I mean I'd talk about that. So we think it's a minority interest. There's actually -- if you look at their plan and the amount of capital that's required, there's plenty of room to bring someone in and also take further capital from the existing investors who are looking to support as well. So it will be a minority. And I think we'll be clearer as the options come in, as Paul said, from the market and we assess what we get.

Thank you. And a question -- a general question just on IRRs on individual projects, Paul, and what sort of gearing levels you think are appropriate going forward with rising interest rates?

Yes. Well, we're certainly doing more -- we're locking in more of our interest rate exposure for sure. I mean over the last 24 months, we've been doing more of that. And as we price deals, we're putting in, I'm not going to say a lot of cushion, but we're putting in kind of more cushion than before to deal with kind of fluctuations in interest rates. But once the interest rates are -- once the contracts are signed, the interest rates are locked in. So we don't have to -- and the financial closing happens, we don't have to really worry about it from that point out. In terms of gearing, we've got -- again, it depends on the tax equity structure. But if you think about having like 30% equity, 25% equity, maybe 30% to 40% tax equity and the rest being some kind of either probably back leverage on the deal. So you've got -- adding tax equity and debt, you've got kind of 75%, 80% of the capital structure.

Thank you. Next question is a little bit more general around, I guess, alternative engines, do you see nuclear as being an opportunity or a threat?

It's certainly not an opportunity for us. And in terms of a threat, no. I don't think so. The cost of nuclear in the United States is remarkably high relative -- I mean, just not even in the -- its multiple orders of magnitude relative to the cost of new wind or solar these days.

Thank you. And again, just back to the introduction of new capital or around valuation metrics, can you give a feel, and this might be one for Jason as well, I guess, given our taut experience around how to think about valuation metrics for platforms currently, from either on experience or recent sale announcements?

Yes. So that's a good question. Like, we saw pretty substantial multiples didn't we on the taut sale which we've talked about a lot, particularly that when we announced current -- last year, anywhere between 28 and 36x depending on the markets you're looking at. We are not seeing multiples come back anywhere that we're looking at renewables in the world from those sorts of ranges. So I don't think it's got back. And what I was trying to say in the intro, if anything, the interest in our sectors has got more and more as there's just more and more capital looking to invest in these areas. So I think those taut multiples are still pretty relevant today.

Thank you. A couple of general questions, just around the risk profile. One around do you see yourself taking more development risk in terms of there's just more competition? And then at the other end, around do you see yourself moving to increase sort of merchant pricing in your -- given versus PPAs?

Yes. Well, I don't think that we see us taking more development risk. I mean we take a -- we have a good portfolio and a good allocation of risk across our development company as we speak. So it's not a question of taking more. I think one of the things we could do with more capital is maybe chase some bigger transactions, maybe do something a little bit more strategic with that capital on the supplier side than maybe lock in prices. So those types of things I think, would be helpful and would help us make sure that we're winning on the PPA side. And then the second question, Mark, was?

Thinking about the development cost risk, do you see for yourself moving up that curve at all?

Development costs? No, no. I don't think so. I mean we're going to be -- we're developing a little bit more from a volume perspective. So I would expect the volume of -- I guess the answer is, if you want to look at that -- from kind of what we've done over the last 3 years to what we're expecting to do the volume of dollars would increase for sure, but not in a way that would really alter the -- and I wouldn't say that's a rationale for the capital raise either. It's really more about just kind of bulking up across the whole platform, not just development.

That's great. Well, that does bring us to the end of the Q&A part. So I know you're staying on, Paul, but I'll hand it back to Vimal to introduce the panel and take it from there. Thanks, Vimal.

Hi, everyone, again. So I'm pleased to lead our panel discussions with the CEOs of our renewable energy businesses. And I want to give an opportunity for Assaad and Ingmar to talk a little bit about their businesses as well. And so perhaps my first question to the panel is about the business over the last year and 2 and the highlights and achievements that the platforms have accomplished over that period. And maybe start with Assaad, given you are the, I guess, the youngest of the platforms in our portfolio. I think you're on mute, Assaad.

Thank you, Vimal. Right. So Gurin Energy is 7-months-old. And so to me, the #1 achievement really is the fact that in that very short period of time, we have managed to get a team working through 9 markets, identifying about 7.5 gigawatts of pipeline and working through these to push forward 2 gigawatts of pipeline in a very short period of time, in multiple markets that are very different, obviously, in multiple ways. But that's what Asia -- that's the opportunity in Asia in a nutshell and our, I would say, key achievement to date.

Perhaps Assaad, you could talk a little bit about some of the markets that you're -- built this pipeline in?

Yes. We look at the Asian market really in 3 buckets. So the first one is developed Asia. And there, I would put Japan, Taiwan, South Korea and Singapore. The other one is Southeast Asia. And for us, it's mostly investment-grade Southeast Asia. So that would be Indonesia, Thailand, Vietnam and the Philippines. And then the third bucket is India. From a growth or rather opportunity perspective, India, as you said, Vimal earlier, has 400 gigawatts of anticipated pipeline over this decade. The rest of these markets that I named combined are at about 100 gigawatts, but the opportunity there is that we should be able to see that 100 gigawatt rise to 400 gigawatt over the course of the decade by operation of kind of 4 major underlying trends in those markets. The first one is climate action and the fact that every single country is under increasing pressure from its own public really about climate. The second one is Net Zero legislation, which is increasingly a feature in our markets. The third one is the fact that big multinationals are pushing for green infrastructure, they don't want to set up manufacturing plants if they aren't able to buy renewables. And then the fourth one is that we are seeing coal plants closed -- closing, nuclear taking a step back, LNG becoming super expensive and, therefore, the renewables setup is kind of well established as a growth pattern. And these markets are reacting to that landscape in different ways, but there is a very deep need for development capital in a market which is 3 to perhaps 5 years really behind where Europe and the United States are at the moment.

Okay. Thank you, Assaad. Same question for you Ingmar. Business highlights for the last 12 months and achievements in Galileo?

Yes. Thank you, Vimal. Galileo is now 2 years old, right? So at the age of 2, I would say, we start walking on our own feet. First of all, we can say that the investment thesis on which we have founded this venture is valid as it was on day 1, notwithstanding some turbulent 2 years. We're building a competence driven. And I think increasingly fast-moving development platform for projects that we then also want to very flexibly finance. It is coming with a predominantly greenfield approach in an expanding market. Europe is on a very positive trend. Again, in terms of adding renewables to the energy mix that was much less so the case over the last decade. And finally, yes, we're building geographical and technological diversification covering a set of technologies, very similar to what the colleagues are doing. So wind and solar onshore, I think that is a given, but then we also add storage, increasingly storage to our pipeline efforts. We're also embracing the opportunity to develop wind offshore, France and a couple of the countries here in Europe. So there's a broad mix in terms of countries. And then country-wise, we've expanded our activity from 4 countries that we were active in a year ago to now 6. We've added Germany and Spain, in addition to Ireland, Italy, Sweden and the U.K. And we ramped up the pipeline from roughly 1 gigawatt where we were 1 year ago to now over 3. And yes, we are working predominantly with joint development agreements. So we are originating, selecting, then contracting good co-developers, often entrepreneurs working locally in the various regions and markets. And we had 4 of them a year ago, and now we are counting 11 of them. So yes, I think there is a good momentum with the team that we've been able to complement over the last 12 months. So when we met a year ago, there were 5 people on board. And I'm very happy that since then, we were able to complement the team with some further people having done business development really at the global level. Our Chief Development Officer, he's done the global business development role at Sonnedix. Our COO, Katy Hogg. She has been the global wind developer at a company from Germany called BayWa. And in addition, we've got, for example, Eduardo Gonzalez Solá, he is a Spanish colleague, and he has been doing all the PPA origination work at a global level for the Spanish company, Acciona. So there is a, I think, very international and diverse team coming together, very complementary sets of networks and also cultural backgrounds. I think they fit perfectly to our investment thesis and truly core team. So these are, I think, a couple of the main milestones that we have been putting behind us over the course of the next 12 months.

Thank you, Ingmar. Maybe staying with you, perhaps you could talk about some of the key trends you're seeing in the European market that are affecting the business?

Well, as I said, a very dynamic market, renewables on an upward trend again. We are, of course, looking into the future with a time objective that is around the year 2030. We have now a commitment out there to reduce emissions, carbon dioxide emissions by 2030 at a level of 55% compared to 1990. And the major contribution to reaching that objective is evidently producing power electricity from renewables and push the electrification of the sectors just close to the power generation sectors for both transportation, but also then the heating market into higher degrees of electrification. I think all of these trends are very solid and they are also supported, as you said in your introductory remarks, Vimal, by legislation coming from the European level, from a country level as well. But we all know that this market is, in particular, driven by developers originating competitive projects and then by a, I would say, sheer unlimited amount of capital, both equity and debt, that is changing a sustainable investment in a very large asset class, infrastructure like and with a client base that is, of course, enormous. There are 500 million people in Europe. 300 million electricity customers, 60 million of them are businesses with a lot of additional demand for green power. So all of that is, I think, very valid and intact, yet we are facing bottlenecks. For example, interconnection is really an increasingly evident scarce resource across the continent. And any new plants will reach into the other 2030s. So I mean major upgrades of the transmission systems will reach into the next decade. Therefore, they will thrive to do more and to do it, yes, quicker than I think many people thought. A lot of competition, not only from the utilities and from very large funds, but also from oil majors. They have now strongly entered the market, are on a buying tour across Europe. And yes, we are applying our recipe -- our special recipe to this market and do this in a very competitive market. One final remark with regards to the current energy crisis. I think we have now all well understood that this is finally a result of a geopolitical crisis, redefining the security requirements of the West against the East, in particular, of course, from Russia. Russia being the main supplier of gas to the whole of Europe with a level of over 30%. In Germany, the dependency from Russian gas is 50%. And yes, this has led to unheard price levels. The highest we ever encountered since we measure wholesale power prices. So over the last 20 years, it has -- the prices have never been higher. Now the prices are so high that they aren't sustainable, and they will go down again. That is, I think, sure. But at the same time, it is presumably also clear that the new price level will be higher than the one that we were used to until, say, mid- of last year. And this has a evident positive impact on the development perspective for renewables because simply the -- competing our supply solutions have become, yes, less attractive.

Great. Thank you, Ingmar. A question for you Assaad. Key trends you are seeing in your markets?

Well, as I said, I mean, I think there's 4 drivers in almost every market. The first one is Net Zero legislation. The second one is climate action. The third one is multinationals pushing for green infrastructure. And then the fourth one is the cut in coal power, which is very significant, and in nuclear in some markets. And as a result, listening to Ingmar -- as a result, I mean, I think in Asia, generally speaking, in the markets we're in, with the exception of India, which is on a -- in a different dynamic, we're about 2, 3 years behind these European trends. And so as a result, on the ground, renewables penetration, for example, is much smaller in almost every country, has a lot more room to grow. And the mobilization of capital is not yet dominant for sustainable energy the way it is in Europe and all companies, for example, aren't yet playing a major role in many of our -- in almost all our markets. And so the opportunity for greenfield development is there, provided you are able to sift through a large volume of potential transactions and select the right ones. And the reason is, I mean, for example, there aren't as many solar panels deployed as there might be in Continental Europe. We haven't got much of an offshore wind industry to speak of. And even in terms of onshore, wind penetration is very, very low. Yet you're talking, in some cases, about extremely wealthy countries. So Japan, Taiwan, South Korea and Singapore and in other cases, about countries that are blessed with natural resources in terms of solar and wind. So I would summarize the trend as a -- really, it's a motor-driven escalator, that's the renewables trend. And you have to get on it because it's not probably going to sputter along the way because of these dynamics that I described.

Great. Thank you, Assaad. It's a good answer. So I'd like to bring Paul into this conversation a little bit. And obviously, Paul, you built a pretty successful company over the last 6 years at Longroad from scratch, literally. And I've seen you on their journey, but I'd like to understand from you how you've managed to do that in a deep liquid capital market like the U.S. And it's a question, I'd like to ask the other 2 CEOs as well. What gives you an edge in a market that is becoming quite competitive? And what do you think is going to keep you on top? Maybe start with Paul.

Okay. Well, that's quite a question. So I'd say what's going to keep us on top. So I think that we have a couple of things that are working for us. Number one, the people that are -- that work for Longroad have been together for a pretty significant period of time. So -- just as an example, I've known one of my partners, Michael Alvarez since 1998. I've worked with them since '04 -- or sorry, '06. And then my other 2 partners, Charles Spiliotis and Pete Keel have -- I've worked with since '07 and '06, respectively. So we've been through call that 15 years of working together as a team. And we've been through a lot, like a lot of good things, a lot of bad things. We went through -- we took a company that was private equity back through a global financial crisis with a lot of help from our private equity investors. So I think we've seen a lot of things. I'm not saying we've seen everything, but we've seen new turbine vendors we've seen -- that kind of emerging wind turbine vendors. We've seen emerging solar panel manufacturers. And that has really shaped our view as to what -- how we're thinking about going forward in this market and now with Longroad. So I think part of staying on top is making sure that there is agreement among the managers of the company that this is what we're doing, and this is why we're doing it, and it actually has some kind of market rationale. I'd say the second part of it is that we've had a good track record. I think people have in terms of suppliers dealing with us, providers of capital, investors, lenders, tax equity investors, people that we bought projects from, people that we've sold projects to. I think we have a good reputation as a high-quality outfit that is very practical, not emotional. We don't have religion on a lot of things. We're just trying to make sure that we're doing financially rational and making financially rational decisions. And I think that served us well. Again, just going back to the financial crisis, we've -- every single dollar that we borrowed, either with invested capital or debt, we paid every single cent of it back with all the interest and so forth. So I think that, that reputation is helpful because what -- when you're talking about -- and for now we're talking about kind of market facing, if you're facing the market and you're talking with utility X, Y, Z, that utility wants to make sure that the project that you're proposing to them is actually going to get built that you actually can buy the turbines or the panels that you can have a storage solution that is commercially viable and -- technically and commercially viable that you can access capital. Because if you don't -- if you -- there's 1,000 ways for these things to die. And if you don't have -- if you can't check all those boxes with some real conviction, then you lose credibility on the customer side, right? And the minute that happens, then you are in a tough spot. It's really hard to come back from a bad experience with a power buyer. So -- and I think we've had a great track record on that front, too. So I'd say it's continued to focus on the high-quality projects. Continue to kind of make promises and keep promises and continue to treat people the way that we want to be treated and without a motion or any kind of just practical and arm's length commercial basis.

Okay. Thank you, Paul. Assaad, I know that you're, again, still emerging as a business. But what do you -- but you've been in the region for a very long time. So I'm interested to hear from you what you think is going to make Gurin different in the markets you're operating in?

Well, as with Paul, I mean, I think my partners and I have been working together for a decade across these very markets in Asia. It's -- so from a team perspective, I mean, I think we're starting from a pretty solid base and many others, many others in the company, I'd say over 15 people have also been working with us for several years. So from that perspective, the kind of on-the-ground experience in development across multiple Asian markets is there. But we're not working in one country and -- or an economic block. So in some ways, our challenge is quite different. There isn't a dominant financial institution, for example, or -- and you've got to go local in every single market. And so looking forward, we -- first of all, because of the nature of our markets and the fact that United States and Europe are, as I said, 2 to 5 years ahead, pick a number, I think there are many lessons and -- that we can learn from our co-platforms, so to speak. Because what they've been through is probably what our markets are going to go through in terms of maturing to far more competitive liquid renewable energy market. So I'm quite looking forward to that part of the Infratil synergy between the platforms because I think Asia can benefit tremendously from Ingmar and Paul and their team's experience across the board. And then the other thing is the flexible capital approach. There are too many markets to realistically build a business in each one. So you have to be able to come in and out of a market when it makes sense. And as market conditions change and invariably short of a massive global shock, they will change differently in at least some of our markets. And so there will be opportunity to have a locally built effort in a market and then move to another market without having any obligation because of the flexible capital to kind of put a flag in every country just because you have to put a flag in every country. So I think the combination of team with experience, synergies with companies that probably have the executive teams that have gone through very similar experiences, but might be 2, 3, 4 years ahead in terms of their markets. And then finally, the flexibility of that capital should -- well, put us in a pretty good position. So I've got a pretty confident team that's looking forward to delivering profitable deals that make sense this year and next and so on.

Right. Thanks, Assaad. Ingmar, Europe?

Europe is a continent, on the one hand, I would say, less challenging in terms of various levels of development stages. As Assaad has just described, yet it is 40 more or less countries in one continent and building in a single team, the diversity of Europe through people coming from, say, the different angles of the continent is something that we have started to implement. However, and I very closely listen to what you were saying, Paul, of course, it also means that we are not yet as united and as aligned as you presumably were when you started with Longroad. So there is an effort to be made by myself in the first place, also by my colleagues in building one united team of people with very broad experiences, yet we are now applying our competencies and experiences for the first time together to a new company. We are united already around one thing that the opportunity is, in particular, driven by our ability to originate local developers coming with project ideas or even projects. Most of them are greenfield projects. And to be a good partner to them, good partner means that we are not a capital provider, not the big company, not the controlling entity, but we are like-minded developers to them. We speak their language. And the agility and the speed of action that these people are used to, this is something that we want to use to the maximum extent possible, yet providing freedom, I would say, freedom within a phone. And the phones, of course, are consisting of the guardrails of how we want to develop business and how we pay attention to the competitiveness of projects, how we remunerate success, how we will be originating offtake solutions and also financing the projects. So the -- I think there's a good level of complementarities between what we bring to the table compared to what our joint development partners in the markets can do. And yes, when we've now -- when we are now counting 11 of these agreements and so pushing the partner end to 3 gigawatts, I think there is a momentum that we have created together. So that is perhaps the first really joint achievement of this new team.

All right. Thank you, Ingmar. As I mentioned in my opening comments, we've deliberately built platforms in a devolved structure to allow us to respond to local market conditions and changes in local market conditions. And Assaad had talked a little bit about how we can enter and exit markets depending on the condition of those markets at any point of time. And that's a commonality across the platforms in their respective markets. But there is, again, some commonality across the platforms on areas where there could be collaboration or can be collaboration, if they're not already collaborating it where there may be future collaborations. Some of the activity we have started to work on is on global offtakes, cybersecurity policies, systems and in the future, procurement in the near term. I just wanted to get your views as CEOs of these platforms on how you think that as a family or part of the IFT family that these -- what other opportunities there are for the platforms to work together? And how best to benefit from our global reach? Maybe we start with Paul?

Yes, I think you mentioned the ones that we've started at working on. I'd say the only other one at the moment that I know that we've spent some time on is on the cybersecurity issue as we own -- start to own more and more, operating wind projects and solar projects that cybersecurity risk becomes a real -- it's a real risk for sure. And I know there is expertise among the 3 organizations and with you and your team to try to share that. So that's -- I think that's been helpful in terms of giving us some institutional comfort.

Assaad, thoughts on how we leverage that family?

Yes. So there are 3 partners at Gurin Energy alongside Infratil. It's Bob Driscoll, who's the COO; and Michael Boardman, the CFO; and myself. Between the 3 of us, I would say we are incredibly aware of the fact that we are the new kid on the block, so to speak, and won't hesitate to ask when we need to tap into something that we might think that Paul and his team or Ingmar and his team know that perhaps we don't quite know as well in Asia. And we've already exhibited that, Vimal. So I just want to give a concrete example. So in Southeast Asia, for example, but also in North Asia, joint development agreements, which is what Ingmar was talking about, were really a currency because the markets just hadn't really seen them. And we've already, in effect, through Ingmar's help, adapted the joint development agreement as an additional tool into what we're doing to connect with developers on the ground in multiple markets where they're suitable. There are markets where they're still not suitable, but where they are, we're using them. So that's a very practical example of value, I would say, already added. But in any case, knowing Bob and Michael and myself, I mean, I think as these opportunities come up, we won't hesitate to try and leverage the collective wisdom around the table. And sometimes, it's as simple as a phone call. Other times, it might be talking about procurement, for example. It's hard to predict. And so from my perspective, the most important thing is to just have an open mind about it and to ask when you don't know, which is, I think I've made very clear, we certainly intend to do. So...

Okay. Thanks, Assaad. Ingmar, thoughts on there?

Well, there's perhaps one topic I can add to the table, which is normally dealt with at a local level or at the country level. However, there are many, I think, aspects which are interesting and good to know for all 3 platforms, and that is about procure or the sale of power, so offtake solutions. One thing is relating to these companies. Several of them are international, if not globally, active companies, and they will be buying power finally with programs that go across continents. And I think it will only be good to know who is, yes, out there and what type of products, for example, we are experiencing and sharing some of that understanding among us. Secondly, I can also think that the way to then structure finance on a more complicated or more diversified offtake solution can be again something that we might be sharing here across the 3 of us, I see this as an increasing competence-driven franche that we are exposed to here in Europe, where the banks are struggling with it and where there is no, I would say, solid competence yet built, but a diversified offtake solution finally, meaning that, say, 2 or even 3 PPAs per project or per cluster of projects with different counterparties and different products, different tenants, different indexations pulling that together and yet making it reasonably financeable. I think this is also an area where we might be exchanging our user experiences and, therefore, help one another.

Great. Thank you, Ingmar. Probably last question for you, Assaad. I had it set through to me. And I'll just read it up to you. How do you think about appropriate hurdle rates in Asia versus the EU and the U.S., given the varying regulatory geopolitical and more specific country risk. How do you factor this into your capital investment decision-making? Sorry. Assaad, you are on mute.

Well, yes, sorry about that. Yes. Well, look, I mean, I think our mandate is clear and in line with what Jason referred to at the very beginning of today. So the goal is to deliver U.S. dollar returns that are within the band that Jason referred to or indeed above. Now that translates in very different ways in our markets. And so riskier markets might require our thinking through multiple different factors. For example, currency, which is a feature in some of our markets, more so than others, but also the overall return that we are; aiming for through a combination of what a project's total return on a hold-to-maturity basis might be versus what our return -- the return we're looking at, which is that project on exit. And so the answer really is always the same. It's -- you've got to go downstream, understand the risks at the very initial stages of developing a project because that's where the richer premiums sit. And you've got to do that in all markets really pretty much because of that differentiated risk profile and the differentiated currencies across the board. I mean I could go on and on, Vimal, but I think that's just to give a flavor of how we look at that particular layering of risks.

Perfect. Thank you, Assaad. So closing out the session on renewals. I hope everybody has had an opportunity to get a feel for the work we're doing across the globe and the extent of the platforms and the growth opportunity that the sector and the countries and the markets we're in provides for Infratil, its investors and capital deployment opportunities. So I'd like to thank the panel, Ingmar, Assaad, and Paul for answering the questions candidly and hand over now to Jason for closing comments before lunch.

Thanks, Vimal. Mark, do you think we've got another question?

We just -- generate a lot of good questions. We're not going to obviously get to them all, but one that has come up 2 or 3 times, and we might get you to answer this. And then for the other questions, we will get back to people with answers. But one of the questions around Europe and Asia is the -- given what we've heard around Longroad in terms of the change in strategy, what is the primary strategy initially certainly around -- is it develop and hold or is it develop and sell?

Yes. So our business models across the platforms is one of flexibility. So when the opportunity arises in a market, and we feel that the risk outweighs the reward we will sell and otherwise, we will hold. Yes, we -- on Longroad, we are starting to accumulate more assets than we are selling. But in Asia, I think we maintain that flexibility. So we will continue to build megawatts in that markets as it makes sense. But if there is capital chasing operating assets and are prepared to pay good prices for them, I think, we sell. So we keep the model fairly flexible.

Thank you.

Great. Thank you, Vimal. And thank you, Mark. I mean, wow, how can you not be impressed by the experience and capability on display there? I think it really does give you an insight into the global scale that's being built. Couldn't agree more with Vimal's comments about the experience and capability of the CEOs, but also the teams that, that then enables us to attract. One number really blew me away as well was Paul Gaynor reminded me that they've been basically 4% of the U.S. market for a number of years now, and that's after China, the biggest renewables development market in the world, which is pretty incredible achievement. So I guarantee you, if you want to know how to start a renewables investment business and make money, you could probably just watch that presentation a couple of times, and it's all there. It's a shame to put it up on the Internet, but it's good to show you what we're up to. So thank you. I know it was really late with you were as well, Vimal, Ingmar, and Assaad, very late. Thank you for spending so much time and being so candid. We'll be back at 1:00 after lunch. We'll kick off with some words from Paul Newfield and then go into digital infrastructure. Talk to you. [Break]

Welcome back, everybody. I hope you managed to grab something to eat and stretch your legs. We are into the afternoon session, and we're about to talk about digital infrastructure soon. But first of all, lucky enough for us, we're happy to have Paul Newfield here, the new CEO of Morrison & Co, who's going to give you a bit of an update on what's going on here and how that fits with what you've heard about him and what you'll hear later on as well. So over to you, Paul.

Sure. Thanks, Jason. Thanks, everyone. I always think, as investors ourselves, yes, you use management presentations as much as a chance to get a sense of quality of management team, breadth of management team as you do the content itself. So we thought it would be useful for you to understand a little bit more around Morrison & Co, the team behind Infratil. A good place to start right is right at the beginning. Morrison & Co and Infratil together, we're the pioneers of global infrastructure investing. I think when Lloyd set up Infratil, it was the second infrastructure fund to be listed anywhere on the planet. And Jason talked earlier today about that 18% in change track record since 1994, which genuinely everywhere we go in the world, you don't come across a better, longer track record than that. And so that strong track record of Infratil and Morrison & Co, over the years has attracted more and more institutions who want to coinvest with Infratil. And that's really been great for Infratil because today with Morrison & Co, managing $20-odd billion of capital and having a bunch of institutional relationships around the world, it does a few things for Infratil. First of all, it opens up co-investment opportunities that create different investment chances that just wouldn't fall normally to a New Zealand-listed company. If you think about Canberra Data Centers looking after such secured data loads for the Australian government, you just don't get to do that as a New Zealand-listed company, unless you're co-investing with, in this case, the sovereign wealth fund of Australia and the pension fund for government and military employees. And you look throughout the portfolio, you will see those co-investments and just how valuable the coinvestors have been to Infratil. The second thing it's done for Infratil is it's allowed us to grow the team that generates investment opportunities for Infratil globally and manages those opportunities. So today, we've got over 150 people working for Morrison & Co, literally on every continent bar Africa. And that team throws up opportunities that just you wouldn't have seen before in Infratil. And I'd say, to be fair, I don't think there's another New Zealand-listed company that gets to see the range of investment options that the Infratil Board gets to see, which means you don't do all of them, but you try your best to do the best. And I think that does show through in the track record. Now we were early to the space. We definitely don't have infrastructure to ourselves anymore. So what I wanted to do today was talk a little bit about how we are seeing those capital flows into the infrastructure sector. What it means for Infratil and how we, as Morrison & Co, are trying to stay ahead of the game? I think I've been putting up charts like this one since one of the -- maybe 2010, 2011 on that chart. So it means I'm getting old, but also, I think when we put up one in 2010 or '11 and said there's $200 billion of assets under management in the infrastructure sector that seemed like a big number. Today, there's pushing on USD 1 trillion of capital. And this is just an externally managed unlisted infrastructure funds. There's a whole lot more capital sitting directly in the hands of pension funds, super funds, insurance companies who are investing directly into infrastructure. The forecast is that this number is going to double over the next 5 years. And at that point, unlisted infrastructure funds will be bigger than unlisted real estate funds. It will be the biggest sector in real assets, which is quite phenomenal when you think about it. As Jason said this morning, within that hot sector, Infratil's in 2 of the hottest subsectors. So last year, 25% of total infrastructure fundraising went into renewables-focused funds. And then the other 75%, you can bet that a large portion of that capital was in strategies, et cetera, they would also look at renewables. So renewables, we went into a 1994, certainly, the whole world is looking for today. Digital infra, a much newer sector in infrastructure. So this is things like data centers, telecommunications towers. Back in 2015, the total U.S. capital deployment by infrastructure funds and digital infra was USD 300 million. When you think about it in 2016, we put over $1 billion into CDC. So that was kind of scary if we thought about at the time, bigger than the entire U.S. market for digital infrastructure. Roll forward to 2021 and U.S. central funds put over $24 billion into the sector. So digital infra super hot sector, we were early and certainly, I think Infratil investors have had the benefit of that. So the question then is what do you do in the face of that? What does it mean for Infratil? I think the first thing is good news, right, which is the assets that Infratil already owns, as you've heard a bit about today are more valuable than ever. I think unlisted investors envy them and certainly, what people are particularly envy us all is the fact that they allow you to keep reinvesting in the growth as you've heard about today. The second thing you have to do, though, is stay ahead of the game and make sure that as you're reinvesting capital, you can continue to do it at those high returns we've seen historically. So I'll talk a little bit about how we do that. I think -- the simplest thing to say is we do it by doing exactly what we've done since 1994. The first pillar is investing wisely in ideas that matter. So for us, that means spending a lot of time on research, productive origination to identify those sectors that will solve big long-term problems for society over multiple decades because when you find those businesses, you do get to reinvest in the growth. You've heard a lot about the options for that today, and you'll hear some more later today, renewables, digital, health care. You can be comfortable that within Morrison & Co, we're doing a lot of much broader work pushing the horizons and Infratil gets to see all of those ideas whether or not they end up fitting the Infratil portfolio. The second thing that I think has been true since the beginning of Morrison & Co is we try and assemble a diverse, some people might say, eclectic, quirky set of perspectives around every asset, every deal, every problem. And we're trying to get those people talking to each other in an environment where they trust each other, they respect each other, but they have different views, and we try to get to the truth underneath that. So you see a team that has sector specialists who might have spent their career in energy or digital or health care. You see functional experts in strategy, legal, tax, areas, increasingly things like sustainability technology. You have straight great deal doers. You have operating executives. You put all of those people together and you just get a different outcome from what you see from a more traditional investment firm. I wanted to run through a few specific examples across the team and talk about how we're taking that model globally with us and into new sectors. First of all, to talk about the U.K. highlighted on this Page 3 of the probably a dozen people we have in the U.K. team now. Who is Rachel Drew? Rachel and I worked together in the '90s. Rachel was the first person who introduced me to Lloyd Morrison. She predated me at Morrison & Co. And when we set up the London office, she was one of the first people we sent across. She's an operating executive. She understands difficult change management, but she also really understands our culture. And so it was really important for us to have someone who brought that Morrison & Co DNA. Soon afterwards, we hired Vincent Gerritsen, Vincent's Dutch -- worked for the largest Dutch pension fund and their direct investment strategy, speaks multiple European languages when -- then was a partner in a European infrafund. So he brings that real European perspective, but fits with the culture and style. And most recently, Kate Mingay joined our Board. Kate started her career at Goldman Sachs and UBS as an infra banker, became very senior in the U.K. government's infrastructure arms and is now a non-Executive Director for a number of water energy transport businesses. So really brings that connectivity. North America, we've really gone from the same playbook. Will Smales, who you know, and you'll hear from later today, moved over there, took the family, brought the DNA, brought the investment approach. She's an outstanding investor, knows what Infratil needs to do great deals. And then we hired Perry Offutt as our Head of North America. Perry was most recently head of UBS' North America's infrastructure business. Before that, he was a Managing Director at small Australian firm called Macquarie in their U.S. infrastructure team. And before that, he ran the investment banking and infrastructure for Morgan Stanley across the Americas. So you see the kind of caliber of people. I think today, we're already up to about 6 people in that team. But again, that blend of our DNA and investment style with the best of a local market. We also really value sector capability, as you know. So Will McIndoe, on this page highlight in yellow was probably one of the greatest talents in the Lumo business and the drivers of that success. When we sold Lumo, we kept Will. He went over to the U.S., as we set up Longroad, was embedded in that team, making sure we really understood what was going on in that market. He then helped us set up all of our platforms in Europe, Asia and done a lot back in ANZ. And most recently, and I'm very pleased to say Deion Campbell has joined Morrison & Co. Deion was one of the senior execs at TrustPower and the brilliant CEO at Tilt. Made enormous amount of money for Tilt investors, for Infratil investors and he's just a good human being and great thinker. So he's just joined our team to help them all drive that global energy strategy. I can tell you similar stories in the health sector, you will meet John later today. I'm not sure if you get a chance to meet Lou. But in both cases, serious operating executives with the same kind of strength that you expect from Morrison & Co in the sectors we've been in for a long time. And in the functions, you probably think of us mainly as deal doers. This is our sustainability team, John, Christine and Olivia. They work across all of our businesses in the portfolio, making sure that we can keep up with those high and increasing expectations that Infratil investors have of our sustainability strategy. Those are the only picture I wanted to put up for you. Probably the last comment I'd make is to go back to where I started. Infratil, Morrison & Co were pioneers in infrastructure investing. For us, we are inheritors of a fantastic track record created by great investors like Lloyd and Marko. I think back when Jason, Will and I, in 2016 were new to the Morrison & Co Investment Committee, I was new to the Chief Investment Officer role. We said to each other, let's make sure we actually build on and enhance this track record. We believe we could do better deals than the predecessors had. We probably didn't tell them that. And when you look back at the 2016 vintage, you get CDC, Tilt, Longroad and new student accommodation. I think we genuinely can say we have enhanced the track record we inherited. And when you look at the team that we've built around us, the view is we expect the next generation to keep enhancing and improving on the track record as we move off into the sunset at some point. And on the topic of your -- people who come after doing a better job than you, now it's probably a good time to hand over to our new Chief Investment Officer, Will Smales, who's going to talk through our digital infrastructure strategy. Thanks.

Thanks, Paul. Good evening, everyone. I say good evening. I'm coming to you from New York, as Paul suggested. It's a cold night out there in Manhattan, there's snow on the ground. So I'm envious of you in New Zealand. Look, I think I have the most enjoyable part because I get to introduce Jason and Greg later, but also talk about this amazing transformation that's going on in our economies around the world related to digital infrastructure. And even if you look at that first slide, those who have some perspective an Eagle Eye can say that's actually not one of Greg's data centers. And actually, it's in England's green and pleasant land. And it's a signal of how Infratil in the sector has grown and look beyond our immediate borders. And interestingly there, you can see 3 gen sets. KO data in the U.K. was the first to run all of their generators on hydro-treated vegetable oil. And Paul mentioned John and Olivia and Christina and the sustainability team, and Greg will talk about it later. It's a real focus for us with our assets and particularly data centers as they're large consumers of electricity. So not only running on renewable energy, but also looking for opportunities where you can reduce CO2 emissions, nitrous oxide and particulate matter into the environment, which is what KO was able to do. So as Paul said, Infratil was early into digital infrastructure and the investment in CDC was a large investment for Infratil at the time, but a very, very important investment. You can see since then, there's been in the investment in Vodafone New Zealand, KO data at the end of -- middle of last year. And it's worth noting that Infratil does have an investment in Clearvision, which is a way for us to get very early visibility on the technology changes that are impacting all of our infrastructure assets globally. The digital infrastructure interest is accelerating, but it's accelerating because there's a big trend pushing it along. And there are many investable ideas in this sector. And I'll talk about how this ecosystem hangs together in a minute. So what's going on? What's driving this? You'll see on the left, digital infrastructure or communications initially was a communication tool, voice, talking to people on the other side of the planet or in your neighborhood. It really then transitioned to be a fundamental entertainment. But if you move forward to today, actually, the communications infrastructure, the digital infrastructure underpins every element of our economy. And that trend was only accentuated by the lockdowns during the pandemic. So those of us who homeschool obviously felt that, but also telehealth and finance and commerce, all industries that are now totally dependent on the digital economy. And what that does is it shows up in an incredible trend. And you can see on the graph on the right, yes, here, it's mapping global data traffic across fixed and mobile networks. That is a proxy for data that are stored. They're stored in data centers like CDC. It's a proxy for the compute that's required to process all that data. And then it's a proxy for the networks that need to be built to transfer all this data. And you see that the term there is EB, which is an exabyte. For those of you who haven't come across that term, that's 1 billion gigabytes. So we're now using these terms. And to put it in perspective, someone has hypothesized that all the words ever spoken by humans on this planet only equate to 5 exabytes. So you look at the number there in terms of the absolute increase in exabytes of 269. And just remember that number because when we move on to the next slide, we'll try and put that into perspective. So I think we know in our own use that this wave is hitting us and which is why as Infratil has been investing in this sector over the last few years. The real question we then ask ourselves is where are we in this journey. And I can use an American term because I'm in the U.S. at the moment. But I think we're at the bottom of the second. So there's 9 innings in a baseball match. I think we're right at the very beginning of this. And traditionally, people have been very poor at forecasting growth and traffic across data networks or storage. And you'll see here on the top there, there is a forecast provided by Ericsson Mobility, and you'll see the total number there of 620, which is nearly double the number you saw on the previous graph, which is over a shorter period of time. So the forecasters are saying, we've got this trend continuing, and they inherently have a track record of underestimating. And why is that the case? It's because often the use cases for our networks and our data, we don't even know yet. So when you start talking about ideas like digital beings, neural network, simulated worlds, digital twins, these are the things that we're starting to see and understand the use cases, but there are so many more that haven't even hit us yet. So when you think about these trends, there are accelerated growth in workloads. They're increasingly distributed in multiple places. They're increasingly complex networks, and there's more and more use cases for data. So where are we looking as Infratil and Morrison? the digital infrastructure is a connected ecosystem. And you'll see today on that graph there, you'll see some logos of Vodafone and CDC and KAO. You'll see that we're touching parts of this ecosystem across our businesses. Clearly, Vodafone today -- we have a huge wireless network, and Jason will talk more about the level of investment that's gone into that network. But we also have a strong fiber network up and down the country. We have metro fiber. We also have a fixed infrastructure to the home in the form of an HFC network. So we're touching multiple parts of this ecosystem. CDC is known as a data center company, and -- but Greg doesn't talk a lot about the amount of transmission and connectivity embedded in that business, whether it's cross-connect within a data center or CDC's own proprietary networks between its campuses. So we're touching different parts. And I think you should expect from us over the coming years that not only will we continue to build out Infratil's exposure in all parts of this ecosystem, but we'll be looking to do it in different markets. So obviously, strong in Australia and New Zealand, but increasingly looking further afield into the Europe and North America and Asia. So I'll leave it there. And I think -- now I have the opportunity of passing over to Greg. Most of you will know Greg. But obviously, it's been a great journey working together. He's a true entrepreneur. But what's really special about Greg is he's been able to build and scale CDC as it's grown, and it's had really strong growth. And inevitably, he's in lockstep with the Board in terms of understanding the resilience, the next level of capability he needs to bring into the business. He's very focused and competitive, but that focus, I think, is a real advantage, and it's why his customers know that he's constantly focused on what they need. So Greg, on that note, I'll pass over to you. So Greg, just checking...

That's a rookie error, I was on mute. So I was just saying thank you, Will, for the warm words of introduction, and thank you, Paul, earlier for setting the scene. I didn't realize you had someone on every continent in the world outside of Africa. So early adoption in Antarctica. So it's good to see that we're working ahead of the curve in that space. Today is my second favorite day of the year after the anniversary of the last time Wallabies beat the All Blacks in Eden Park. So -- and I always do enjoy catching up with my friends at Infratil and all their wonderful investors as well. We have had a terrific year, and I'll just work out how all this clicker works. So we're all good. So hopefully, you can see the presentation squarely on the screen, mine is a little bit skew-whiff, but I'm getting a thumbs up. So I think we're in good shape. So we're going to cover the overview of what we're -- what we've done in the last 12 months or so, which has been terrifically exciting. And then on top of that, we'll provide an outlook, and we'll finish up with questions. It's a bit shorter and snappier this year. So we'll keep it relatively high level, but happy to delve into any of the detail via the questions at the end, of course. So if we think about the performance in the last 12 months, and it's been really, really successful in terms of another year of growth. But more importantly, it's been a big year of investment. But for the people that are on the line today that haven't necessarily known a lot about CDC, we've been around for 15 years. We have 3 major shareholders in Infratil, Commonwealth Superannuation Corporation, and of course, the Future Fund of Australia. And we also have a significant shareholding by management, which is really important. There's sort of some pillars there of differentiation that we sort of really focus on, the higher levels of availability, which is really important. The criticality of our facilities has never been more important. And in terms of relevance to the market, we've never been more important because of those high levels of availability. We are seeing, and we probably haven't spoken about it too much in the past, but a growing sort of ecosystem of interconnectivity around our facilities, both between facilities, but also within the facilities between all the different types of client classes that we look after. And that's not actually listed here, but that's another key differentiator for CDC in the sort of current commercial data center space. There's often a number of organizations that will focus purely on hyperscale, another that will focus purely on enterprise. And then another very small class of data center operator that might do a little bit with government. I think that's one of the really key strengths of our business is that we do cater for all of those different client types, which actually makes us far more defensible, but also more powerful when it comes to future operating models and interconnectivity, and the safe and secure transmission of data, and the leveraging of data for higher purposes from each of our different client types, which is really fascinating in itself. The -- what we have seen in a post-pandemic world also is a greater degree of focus from governments around the world, not just Australia and New Zealand, but other governments as well around data laws, data protections, a focus on sovereignty, and sovereignty in terms of self-reliance. And the pandemic has opened up a lot of people's eyes to what might happen or what could potentially happen in the future, and countries want to have a belts-and-braces approach to protecting their critical systems and have both jurisdiction and legislative control over their own data so that they would be safe in any event. And that's the new legislation in New Zealand, Australia, around national critical infrastructure elements. But if you look north to Indonesia, it's exactly the same. They have similar rules and regulations around the sort of homing of their data, if you will. The optionality piece, it's never been more important. It was one of the key pillars. Being an IT guy that started a data center business, I generally hated data center people because of how inflexible they were and how lack of optionality there was in our ability to accommodate changing technology over time. So architecture is still unique relative to the market in that we can adopt or adapt to changing technology where clients can implement new technology over and over again into what has historically been very, very nondynamic buildings, if you will. And that's, again, another wonderful point of differentiation. And Will talked -- touched on it earlier, and there was a whole sort of hour, 1.5 hours on sustainable energy in the panel earlier this morning, which was terrific, and I couldn't agree with everyone's comments. It is one of the key pillars of our business model, which is the sustainability where we are moving very, very quickly to a zero-carbon energy consumption model. We are already at a zero-water consumption model, and we are very close to having a zero-waste outcome and all these things will be audited and certified in the future. So very excited with the positioning that we are currently. So if we go to the next slide, this gives you a sense of the journey thus far. There you go, the clicker. This gives you a sense of the journey thus far. And what you can take away from this is that we've been around since 2007, so 15 years. Infratil joined the journey in 2016. And from that point, we have really, really accelerated in our development, our growth and our maturity as a business. And the examples of that are the fact that our data centers that we're building today are bigger, we're building more of them concurrently, currently 4 under construction, and we're filling them faster. And that's sort of a trend that I do envisage to continue for the foreseeable future. And there's a few sort of highlights there when we started in 2007, it was about 5 staff, and now there's around 180 to give you an example, and we're very, very close to more than 260 megawatts of commissioned capacity that we've developed with a huge runway, which I'll touch on earlier. And please keep in mind that all of these slides are, I think, already on the web so that you can have a look at those. We'll go to the next slide. In terms of achievements this year -- actually, I might have been the clicker, and if someone could go to the next slide for me, thank you, wasn't working so well. In terms of our achievements this year, so what we wanted to talk about last year is that our aim was to sort of differentiate into a deeper and differentiated customer base, and that is enterprises that are specifically around what we classify as National Critical Infrastructure. So there's 11 different industry segments in Australia that are classified as National Critical Infrastructure. And these are the types of organizations that if they were to be disrupted, it would be -- the impact to the citizen, the safety and security of the citizen or indeed the economic well-being of Australia or New Zealand would be equivalent to if the government was disrupted. And so -- and they have -- those organizations have very similar characteristics and requirements of government. And so it's actually really beneficial to sort of co-locate a lot of these organizations into our ecosystem. So we've already won quite a number of enterprise clients that are really key organizations, for example, the financial services sector, and that continues to be a focus. And noting that all the growth to date has not included that element of the addressable market, which is very exciting for future opportunities. Our existing clients continue to grow, and that's a wonderful thing, given the fact that we have the largest government organizations in Australia, and hopefully, New Zealand in the future. We have large scale hyperscale providers, cloud providers. We also have the most important managed service providers that deliver their services out of our facilities. And all of those organizations are growing. Their data is growing, obviously, at different rates. But when your existing client base is growing, combined with new growth from new clients, which we've added over the last 12 months, it paints a very, very exciting picture for what we've been doing in the last 12 months and what the outlook certainly looks for. In terms of development, as I mentioned, we've had 4 data centers on the go, 2 in Auckland and 2 in Australia, 1 in our Eastern Creek campus and 1 in our new Hume Campus, south of Canberra, Hume 5. And they are all on track, notwithstanding the immense challenges of COVID, lockdowns, construction shutdowns, all of the increased and more onerous working conditions on site with regards to separation, mask wearing, all of those things. And all I can do is thank all of our construction partners for really leaning in to this very, very difficult period and helping us staying on track with regards to our development timeframes and for the most part, cost, which is amazing given the supply chain challenges, particularly of our larger pieces of infrastructure that have very long lead times. But given the relationships that we have with global suppliers and our very, very early forecasting, locking in price and ordering, we haven't been knocked around too much by those supply chain challenges nor the additional shipping costs and whatnot that people have touched on earlier in today's presentations. I guess the final one in terms of development, we're getting a little bit more sort of bullish with regards to geographic expansion. And we've talked about Melbourne previously. I'll talk about Melbourne more, but we are prepared to, and are certainly demonstrating our appetite to invest in land, which is becoming increasingly difficult to find of the right characteristics and size and locations to ensure that CDC has a runway for growth into the future and that we'll never disappoint any of our clients with not having the capacity as and when they require it. Now next slide, please. In terms of the financial side of things, we flagged this last year with regards to a modest growth in revenue and earnings this year. But what we have been busy doing, as I've alluded to, from the development discussion, is investing in the capacity in the business and that will deliver a step change in revenue and earnings growth over the next 2 years, which is incredibly exciting, and we'll continue that kind of trajectory that we've been on for 15 years, which is terrific given the size of the business these days. And you will get a sense of that from a graph later on in the pack. The other important element is that our wonderful sort of banking syndicate continues to lean in. And this year, we've had a major refinance process undertaken where we secured debt funding to prosecute the vast majority of our plans that we'll speak to today, which -- and having that sort of financial horsepower at your disposal is excellent. However, we've also negotiated superior terms and conditions, covenants, et cetera, et cetera. And the important thing of that with sort of the inflation drums beating is that we do -- we are sort of hedged to a very large degree around movements in that space. So I'm very, very happy that we certainly won't be capital-constrained with our ambitions to match the business plan. And as we alluded to, we work very, very closely with the Board, and we're sort of hand-in-glove in those sort of aspirations. The next couple of years, whilst we are on track for the guidance for this year, we'll talk more about future forecasts and things like that. And we are on track for a significant uptick in revenue and earnings growth. And the vast, vast, vast majority of that is already contracted, just awaiting the capacity to catch up. And it's not a trivial thing, building capacity, as you can imagine. And finally, the most important sort of element in this whole operation is the people side of things, and we have put a lot of effort into growing our team and selecting the right people, taking our time to get key people in key roles, and I'm really, really happy with the mix of talent that we have, noting that we're now around 180 people, but forecast to grow to somewhere in the vicinity of 250 people over the next couple of years. And we are continuing to be sort of an employer that people look to and really want to work for. And we work hard, like a lot of the portfolio businesses to recruit the best and certainly retain the best as well along the way. Next slide, please. Just to give you a sense of where we're up to in terms of development, with the 2 facilities in Auckland, we've actually upsized them slightly due to the demand. So we previously talked about 10 megawatts. We certainly are upsizing those facilities in order to accommodate the growth that we are seeing. And we're also making -- we've made more land acquisitions around those facilities to -- in order to ensure that we have a runway for growth over and above the capacity that you -- that we've announced or that you can see on the screen today. Sydney, that's the largest data center we've ever built, EC4, and that's on track to be commissioned, and that's a 54-megawatt data center. But more importantly, it's largely spoken for in terms of a contracted outcome, and we already have plans in place for the next round of development at that amazing campus in Sydney, which is 15 hectares in size. Similar story, Hume 5 is a long way through construction, due to be completed this -- mid this year, and revenue-generating. And then the plans will be to continue that growth trajectory, and we have significant landholdings in Canberra to continue that growth story. I'll talk on Melbourne in a moment, so -- but needless to say, our existing client base plus new clients in the public and private sector are really, really excited about CDC moving into Melbourne given that -- and given the success that we've had in Sydney and the fact that there's nothing like CDC in Sydney nor Melbourne, I think the characteristics of the business model should see us be as successful as we have historically been in other geographies. We'll go on to the next slide, please. In terms of financial performance, this is a terrific sort of slide, which just shows the trajectory, and as I said, on track for this year. And we do envisage that, that sort of trajectory will continue for the foreseeable future. And one of the most important things to take away from today is the fact that not all data centers are -- data center operators are sort of equal. Just because you have data center and operator in your title doesn't mean that you are going to be relevant or trusted by the most important organizations. And the types of clients if you look through each data center operator to who their clients actually are, I think the mix of clients that I've discussed earlier plus the quality of the clients that we have really set us apart, not only in Australia and New Zealand but also on the global stage. And if you look at that bottom point there, 20 years of weighted average lease expiry, so 20 years, and that's increased from 14 years this time last year. So that gives you a sense of the longevity and the position and relevance that we hold in the market. If we go to the next slide. In terms of our outlook. Next slide, please. Our client base continues to grow, another sort of analogy. But I think we're really at the American analogy. We are still at the bottom of the hockey stick with regards to cloud adoption and the penetration of cloud throughout organizations, but also combined with that focus on sovereignty and national critical infrastructure by government, I think -- and obviously, security and sustainability. All of those features and with our average client with their data holdings growing at 18% per annum, it's sort of -- it puts us in a wonderful position for the foreseeable future. And we -- after we develop, which is really an execution challenge now, we've developed and commissioned the capacity that we've already contracted. We'll be even more ambitious with regards to what we can leverage those -- this sort of client base and the key characteristics of our business and points of differentiation into what we can do bigger and better in other geographies. So if you just go to the next slide, that gives you a sense of what capacity we are operating today, 164-odd megawatts of capacity, largely contracted. And then we are adding more than 100 megawatts of capacity currently, but we do have a runway land secured for an additional 400-odd megawatts of capacity, which we are actively pursuing and into various stages of the development cycle in that space. And so that's the sort of current snapshot, and who knows what it'll look like in 12 months' time. But certainly, that sort of new site selection and development is becoming increasingly important to maintain, to remain in step with the ambitions of our clients. We'll go to the next slide, Melbourne. Melbourne, the second largest data center market in Australia behind Sydney, and it's our first foray into that market. And we have landholdings in Melbourne now that will enable us to do up to 150 megawatts of development. And obviously, we'll be drip-feeding capacity to match anticipated capacity or capacity demands from potential clients. And as I've mentioned earlier, we've had a huge response to our announcements that we're going to Melbourne from our existing client base, but also new clients. And again, when you think about the types of clients we do and how we look after them and what we do and what they do, that's going to be a very strategic sort of opportunity through a number of these organizations. The first phase will be available in the first months of calendar year 2023, and we're already full speed in terms of development application, approvals and investment to that end. So very exciting. And like Sydney was a step change for our business from just Canberra, I think Auckland will be as well and has been, and so will Melbourne in the fullness of time. So we'll go to the next slide. So our focus is more of the same. More of the same will be customers, focusing on our existing customers, growing the customer base. The organic growth in our business is to die for. It is very, very strong. And then layering in new clients on top, and there's a whole huge pipeline of opportunity in that space. We'll complete the development and look at new development opportunities over the next 12 months with those key -- those 4, the commissioning and revenue generation of those first 4 data centers that are currently under construction being key to that. People will continue to build the team. And financially, I've sort of already alluded to the fact that, that sort of annual -- compound annual growth rate we anticipate will continue for the foreseeable future, which is very, very exciting. And again, given the size of the base business these days. And so I've sort of rushed through because we've had a little bit less time this year than other years, but I'm happy to take everyone's questions at this point.

It's Matt Ross here from Infratil HQ. Thanks for your presentation today. You've left plenty of time for questions, which is what the people want. I thought I'd just start off. There's a couple around the strategic framework and certification. I wonder if you could provide some comments on that? What are the benefits you're seeing for CDC? Are you seeing any of that show up in market share?

Yes, definitely. So the hosting certification framework was a framework implemented by the government to enforce the security ownership standards on data center operators that wish to do business with the government in the first instance and potentially progressively with organizations of national critical importance to the functioning of Australia. And so it's very thorough in terms of owning land, plant, buildings, the whole operating model, giving key guarantees to government around change of ownership and cost to help government move should there be a change of control, which is deemed unsatisfactory in government's eyes. So it is really, really important. And when you look at the list of providers, there's actually quite a range of providers, but most of the data center -- all of the data center operators, except for CDC and perhaps one other have just had very, very small enclaves. So more or less one data hall or a cage or a small series of racks within their facilities certified so that they can accommodate most likely cloud providers that do business with government or key organizations in Australia. CDC is the only organization that has all of our facilities, every single one of them, and not just on enclaves, every single data hall, every single piece of capacity is fully certified at the very, very highest level, which makes us the most attractive partner for government and for any organizations that take security and sovereignty seriously. It is already manifesting itself nicely with regards to key organizations, contacting us off the back of our clear differentiation in this space as opposed to us undertaking business development activities. We're actually getting quite a lot of inbound inquiries. And in the data center business, you don't write a lot of contracts, but each one you do write is quite significant. And so that reversal of the business development sort of continuum is very exciting. So it's a very -- it is definitely positive, noting that it is very onerous, and the ongoing compliance is a big overhead. However, the dealings that we have with government and key hyperscale clients that we already have a high compliance overhead in our business. So we're very, very fit with regards to dealing with that ongoing compliance and regulatory burden.

It's a little bit of a follow-on question. Are you able to provide some comments about your architecture and building format that perhaps distinguishes CDC from your peers?

Well, if I did -- if I told you that, then I have to kill you. So it's very -- that's part of the secret sauce. And we have listened to our clients for the last 15 years. Every single data center has improved in our approach to resilience, in every form of resilience you can care to think about, and obviously, from a security perspective. And there's nothing like CDC facilities nor the degree of security cleared personnel that work in and around our facilities. So it's not one thing or the other, but there's a huge list of probably 100 different factors and elements that we have improved and sharpened our expertise in and applied all of that to our architectural and design thinking around our facilities and operations. And operationally, it's very, very important to get all these things right. Otherwise, it doesn't matter how good your building is. And we've pulled all of those 100 or more elements together to be significantly differentiated from the average commercial data center operator, yet be able to deliver the same or similar sort of pricing outcomes as a result of the enormous scale that we do enjoy. So in life, you don't often get to have your cake and eat it too, but you certainly do at CDC.

And in terms of, I guess, the development you have underway. Obviously, we've heard a lot about inflation. Are you able to provide some comments just around what you're seeing in regard to your construction costs for the upcoming builds? And perhaps any comments around the supply side -- I mean, any constraints you've seen there?

I think the track record of CDC really sets us up well in that we are -- and we are very loyal as in terms of the construction partners that we work with, but also the major data center infrastructure suppliers that are all global kind of brands, and we're very -- we have been very, very loyal to them. And as a result of that, we do have incredibly preferential treatment with regards to pricing, but also more importantly, logistics and supply chain. And so whilst it has been an additional construction management overhead, we haven't had too many issues in supply chain or a significant uptick in cost due to the early engagement with those suppliers and helping their forecast for their production lines, et cetera, et cetera, which then enables them to do things for us, which you can't necessarily do in an ad hoc or tactical fashion. So those strategic investments and relationships have turned out to be quite positive. We are seeing an uptick in labor costs in and around our facilities, and we're working hard with all of our partners and subcontractors in these spaces to ensure that we get the biggest bang for our buck. But overall, thank goodness, we're not actually seeing a huge uptick in construction costs, and it's been manageable to date and fingers-crossed it remains that way.

So moving, I guess, on from development and construction to demand customers. Just wondering if you've got any comments you can make or what you're seeing in regards to demand trends across your 3 customer segments, so hyperscale, government, NCI?

Yes. So government continues to surprise me with the way that they continue to grow. And when I say surprised me, their response to -- for example, their response to the pandemic required certainly an uptick in the capacity of a lot of their own infrastructure. And we are still winning new government clients, and also our existing clients are growing organically at a reasonable rate, which is terrific. The market for -- in the enterprise space, again, it's new for us, and we have been very, very successful in every tender that we've gone for in that space. And we see that as a huge opportunity in the future, particularly in Sydney and Melbourne, given the fact that we've never really focused on it. And as soon as we have focused on it, we've been successful in really hotly-contested tender -- various process that we've been involved in. The cloud, you just have to follow the results of all the major hyperscale cloud providers. They continue to grow. And I believe that they are still in the early stages of their maturity, and we'll see continuing growth in that space. And cloud, whilst it is -- hyperscale cloud, whilst it is very, very attractive, it is also -- it is not straightforward to, one, win these clients and also to maintain healthy relationships given that they do have the incredibly high standards. And so we have a strong track record of continuing to service them really well, and they are very, very happy with CDC, and they continue to grow, and we'll be working hard to ensure that stays the same. But it does mean that it is harder because trust takes a long time to build up. It is harder just to sort of walk in and start being a partner of a cloud provider without a track record.

So I think this sets up quite nicely for the next question. And we've actually had this come through quite a few times. And it's really about the extension of WALE from 14 years to 20 years. In terms of what's driven that, is that renewals of existing customers, new customers coming on, a bit of both? And is there any guidance you can give around how long some of those new contracts are?

Yes, definitely. So it's all of the above. And so we have had in the last 12 months a terrific response from our clients that we're getting close to the end of their initial terms of their contract, and some of those initial terms have been 3 years, 5 years, 10 years. Probably -- the average is probably 7 or 8 years across our client base that have started to do the renewal process. And the renewal process has gone very smoothly, which we're pleased with. The huge increase, however, is around new contracts, and those contracts being for 10 or more years with significant extension periods or options attached to those initial terms. And we're very, very pleased that -- with that 20-year figure. And I actually didn't -- I was surprised at the number. But it's -- yes, and that's off the back of, again, new contracts that aren't yet revenue-generating because we're building the capacity to accommodate them.

Are you seeing any extra pressure on the pricing on those? Or is what you said before around the kind of demand for your services kind of holding up that pricing?

Yes, I think there's always pricing conversations, but to date, we haven't seen a huge amount of pressure on pricing because of all of the points that we talked about previously, there is not another data center operator that looks or operates or conducts itself the same way as CDC. And then the mix of clients and the interconnectivity and interaction, and the type of data that we're dealing with, makes it very, very attractive for all of those parties to be inside the ecosystem. Not necessarily the same data center, but certainly the same set of standards with robust and secure connectivity between all of the different facilities, and then all the different segregated data halls within each facility.

Yes. Just a couple more. This one on Melbourne. The early economics of that at the moment. Is the margin build cost looking similar to New South Wales if we put kind of inflation factors aside for a second?

It might be a percentage point or 2 higher in Melbourne to undertake construction activities, but I don't see it being materially different to what we're doing in Sydney. And again, because of the scale of what we're doing, we have very, very good price certainty and noting that we've now successfully or just about successfully delivered 13 or 14 data centers in the last 15 years. So we're getting very, very good at the development aspect of this business. And again, we are much more hands-on with -- through the development process and the way that we develop our buildings, which gives us far greater certainty around quality, security, cost and outcome through more of a shared-risk model with our construction partners.

Great. And just one to finish up with, Greg, we talked last year around the kind of historical CAGR holding up in terms of FY '23 EBITDA. I know we're not giving guidance at this stage, but is that still your expectation?

Yes, I'd be really sort of -- I would sort of be nervous about giving any guidance without the Board approving the budget, which should happen soon. But I think your assumption is accurate.

Great. Well, thanks again for your time, Greg. Incredibly insightful. I'll just pass over to Will for any closing comments there.

Thanks, Matt. Yes, we sometimes walk past big numbers like 50 megawatts at Sydney EC4. I mean that is a very, very large data center, and it's sandwiched right next to another very, very large data center with a vacant piece of land, which again we'll have a huge data center on that. And your point, Greg, about it will underpin significant portions of the Australian economy when you think about the government and hyperscale activity that will be in there as well as national critical infrastructure. So thanks, Greg.

Next, I'd like to introduce Jason Paris, the Chief Executive of Vodafone New Zealand. A couple of points for Jason. He is amazing at bringing an organization on a journey, and there are some really exciting things happening in Vodafone New Zealand, some of which he'll talk about today. But it does require transforming an organization that had been a subsidiary of a large global parent for a very long period of time, and Jason is amazing at doing that, and he'll talk about towers today, but that's just one of many, many, many projects that are on the go. It seems strange to say it sometimes when you have a big organization in New Zealand that's touching so many New Zealanders that Jason is an entrepreneur, but he is and he attracts an entrepreneurial team around him. And it's incredible to see the change in the team. And hopefully, you get to see more of the team, but they really are an entrepreneurial team who aren't just looking to do things the conventional way, they're looking to reinvent industries that they're operating in and deliver exceptional service to clients. And that's probably my third point. Jason feels his customer outcomes personally. And I think that's really important in an industry that has not had a great track record of looking after its customers and to have a CEO who's out there, really understanding what customers want and feeling the outcomes and caring about them makes a huge difference. So welcome, Jason. I'll pass over to you.

Thanks, Will. [Foreign Language] Everyone. And I've got a couple of my fellow entrepreneurs joining me today. We've got John Boniciolli, who's coming in from Sydney. He's our Chief Financial Officer. And also Lindsay Zwart, who is our Enterprise Director, is going to talk to you about ICT. And, well, it's correct, I do feel the customer experience every day, and I'm delighted that it's getting more and more positive. There are definitely some dark days. And the work that the team has been doing over the last couple of years are definitely making -- seeing us make some great progress. And in terms of where we're at as an organization, we're really happy with where we're getting to. We're on track with our transformation. We're delivering what we said we would, and we've got a pretty solid foundation to move forward. So everything from organizational health improvement, unlocking our value from infrastructure, stabilizing our IT, improving our customer experience and getting some way to improve trading performance, although I'd say that's a mixed result that I'll touch on later on. It means we're -- we've got a pretty solid foundation to move forward with. If you look at our financial performance over the last couple of years, we've performed well relative to industry here in New Zealand, but there is much more room to improve. So if you look at our year-on-year EBITDA performance, it is excellent. But when you look at our CapEx ratios, when you look at the EBITDA percentages that we're delivering compared to some of our industry peers and other markets, and in this market here, it gives me confidence that we've got still a long runway of efficiency to be gained and topline improvements to be won. So when you look -- I'm just looking at this screen, kind of keeps on dropping off, here we go. So when you look at where we're at, we're just transitioning, I would say, into kind of Phase 2 of the strategy. Phase 1 was really focusing on getting our backyard in order, about operational efficiency, about cost out, and creating room for us to make some investments that were probably deferred or delayed for too long under Vodafone Opco ownership. And I'll have to say that's with the support of 2 awesome shareholders who not only bring a belief and a confidence to the organization, but serious expertise as we look to especially utilize our strong infrastructure assets. I wanted to give you just some market context, first up on some of the themes and how we're looking at them. Clearly, COVID is one of them. We're really proud of how we've navigated through that as an industry and as a company. We've coped with the increased data demands with the fact that people are now working and learning from home more than they ever have before. So we should be really proud as a country about the resilience of our networks and how we've coped. We got hit pretty hard in COVID when it first launched. I think that's because of our strength in prepaid and our exposure to that seasonal working segmentation, that inbound traveler segmentation and our strength in overseas roaming, but we've cut our costs to offset that. And although we are looking forward to borders opening and roaming returning and seasonal workers coming back into this country, we are, again, navigating through it pretty well. We have had some supply chain issues like our CDC. We've done a good job of working with our partners to try and anticipate, especially from a network and an IT perspective and get ahead of the game. But we've got a lot of demand from our enterprise clients on key upgrades, as they all look at launching their own digital programs, and there are some logistical issues that we'd love to be able to navigate through faster in the coming 6 months. And then lastly, bad debt hasn't been a problem for us. John and his team have done a brilliant job, actually our whole organization has done a brilliant job of making sure we care for our customers and keep them connected, and we've managed to mitigate any bad debt risk. From a market structure perspective, I'd describe it as competitive but sensible. Each player looking to grow revenues, grow ARPU. Clearly, the big move that is likely to be -- probably likely to be approved is the 2degrees and Vocus merger. On balance sheet, it's a good thing for [indiscernible] and the industry. And a side point, Mark always done a lot for Vodafone and a lot for 2degrees. He's a very formidable competitor, and we wish him well. And we've got also a lot of respect for Mark Callander and his team, and we know that they'll do a great job. But from a market perspective, we expect again that merger to ensure that our competitive intensity is there. But ultimately, we don't see too many changes in regards to our own strategy based on what's happening there. We are accelerating our ICT from a market strategy perspective. We're a late entrant into some of those ICT areas, and Lindsay will talk about that later on. And that means that we're getting better-than-market growth, which we're excited about. And then we get really excited about those trends that Will outlined before. We do see this as bottom of the second and in the position that we've got New Zealand with our passive and active infrastructure and the 2.5 million New Zealanders that trust us with their connectivity for their lives, homes and businesses. We take it as a privilege, and we think we've got a lot of runway to go in terms of where we're heading from a market -- long-term market value perspective. When you look at data growth, again, I'm not going to touch on this too much, but we continue to be in demand industry -- being more demand for our products and services, and we just need to make sure that we monetize those. On-net, we'll talk about that again in a minute. Happy with our on-net momentum driven by 4G in the main. The 5G -- our 5G network upgrade is happening. We've done a good job over the last 12 months to continue to enhance that. But the price of the 5G modem doesn't come down as quickly as we would have liked. And so we think it's probably still 6 to 12 months away before we can really accelerate 5G on-net in a -- at a really commercially sensible way, but that hasn't stopped our ability to migrate customers on-net. And as Will mentioned before, it's not just our mobile on-net that we've got a strong position in, it's also our HFC network and our fiber assets in the market. Some of you may not remember that we're the second largest owner of fixed infrastructure behind Chorus in New Zealand, and that's definitely a strength that we want to utilize. In terms of ICT growth specifically, so I mentioned we're seeing significant revenue growth for us over the last 12 months, and Lindsay will talk about that further in a minute. And then lastly, I'll finish off our presentation on our network capitalization. So releasing capital from our network assets. Our industry has got some tailwinds on mobile infrastructure, and we expect our fixed assets to follow that trend. So with experienced infrastructure owners in place, we are very well-positioned to maximize our infrastructure for us, for our customers, and for New Zealand. When you look at our strategy and -- because that slide changed, that's not coming up on my -- here we are. When you look at the strategy moving forward, you'll see there's some pretty familiar trends here, which are remarkable simplicity remains, network forward remains, and high-performing culture remains. As I mentioned upfront, we're transitioning into our second phase of our strategy, where we maintain and build on all the gains we've made over the last 2 years. And those gains have been driven by a high-performing culture, and I'll touch on that. The quality and the experience of our people has just been awesome to see over the last couple of years, as we navigate through the pandemic and get this organization into shape. Simplicity is ongoing, just for basically removing the complexity from the organization and improving our customers' experience, but dramatically reducing costs at the same time. Complexity equals cost in an organization like ours. And you're seeing that those financial results, when they're mainly being delivered through cost, is driven by us simplifying our business. And then, of course, our infrastructure assets, making sure that we lead the way on utilizing our infrastructure assets and providing world-class technology solutions to our customers. And then we're complementing that with an even greater obsession with our customers and being very specific about which markets we want to win in. The reality is when you're being the best at what your customers love, that is about removing complexity from their lives, making sure that they're connected where and whenever they want to be, that those products are available to them, that they've got great service when they need it, and that they're getting good value. And delivering the best to our customers also means remove cost from our business. So we see this as a win-win when our experience improves and our costs reduce. And then you'll hear a lot more from us over the next 12 months on being very deliberate about where we target. So utilizing our infrastructure assets, reducing our costs and focusing on on-net postpaid mobile, the SME segment and ICT. Those are the areas that we believe we have a very clear differentiation in place to maximize our topline growth to complement the great cost efficiency and simplification programs that we've achieved over the last couple of years. In terms of -- just waiting for this to move through. Okay. In terms of our approach to -- sorry, guys, I wouldn't mind if you could take over the slide presentation because it's just not working on my app, if that's okay. So I'll just say next slide, if it's okay to you. Look, in terms of our strategy, I've already touched on the -- we're on Phase 2. I think the most important thing I want to talk about here is the capability improvements we've made. Will mentioned in the opening here, there are a lot of programs at work -- at play and to achieve our turnaround. So -- and you've heard me say before, we're not shortage of opportunities. The biggest issue for us is the sequencing and execution of them. And so I'm really happy that we've got improved capability within the organization to give us confidence to execute our strategy. That flows through in terms of our cultural results. So we use an OHI tool, which measures organizational health, compares us against another 2,000 odd other companies across the globe against key metrics that correlate to key market performance and providing superior shareholder returns. Many of us -- of the telcos in Australasia use this tool, and our results and progress have just been simply outstanding. So our focus on our people and the results we're getting onto in terms of leadership, clarity of direction, the accountability with people in the organization to know exactly what they're responsible for and then have the ability to execute has really, really come to the fore in the last couple of years. And then, as I mentioned before, we've got one of the most advanced flexible working models in the country. And so we've been able to respond and navigate through COVID really well. Next slide, please. From a customer experience and from a cost perspective, we're doing really well. You've heard me say this before, at our last Investor Day, we had the highest CX or customer experience since records began, and we've been improving on those since then. It's still not good enough, though, still too many customers who are not getting answered -- their queries answered fast enough or fixed first time or being transferred. And we've got much higher exploration still in terms of making sure that customer experience is a strategic advantage for us. And therefore, we have got ongoing sales and service improvement programs in place. Our IT is the most stable. Again, the technology team is doing a great job at stabilizing our IT platforms. But in parallel, you know that we had a IT modernization program underway. We're migrating 100,000 of our customers off legacy fixed products, and we intend for our first drop of our IT -- new IT platform to be in this calendar year. And then we've still got room for improvement in terms of digitization. 60% of our customers are using our app regularly, but that means 40% of customers who can self-solve and self-sell issues via our app means there's another additional opportunity for us. The last 2 years have been really driven by a lot of cost efficiency, and it's something that we're really proud of. We've had Matt Crockett in the organization, who's been leading this program of work for us. He's ex-Spark, ex-Fletcher, ex-Optus. And Matt will tell you that this is the most successful transformation of this type that he's been a part of, and we're really proud of that. I think not just because of the gross cost results that we've been getting through cost reduction, cost out, cost avoidance, it's also because of the owner's mindset we've brought into the organization. Every single person across the organization has an owner's mindset on whether that dollar should be invested and what does that return, and what does that change mean for our customers, for our shareholders and for our people. And that approach and changing culture has really unlocked some significant OpEx and CapEx efficiencies that we've been able to reinvest into future capability and products to really drive the next wave of cost reduction, the next wave of simplification, the next wave of infrastructure, monetization and topline growth. So we feel that the investments that we've made over the last couple of years will set us up well for the next 3 to 5 as we look to, again, maintain those gains and build on them. Next slide, please. And then finally, before I hand over to John on the numbers, our operating performance from a network and trading perspective. I mentioned before, our networks have coped really, really well. And we've got a clear path forward on our mobile and fixed infrastructure in terms of higher utilization and capital release. We've done a great job from a security and a capacity perspective. We've been building out and upgrading our 4G, 4.5G and 5G capacity, and that's been very well received, especially in the regional areas where we're growing our regional share and our enterprise, SME, and consumer segments in the areas that we've upgraded. And as I mentioned before, those that upgrade will ensure that we create more capacity for 5G, which will further underpin our FWA expansion. And then from a trading perspective, look, I think it's been a mixed bag. Some areas that I'm really happy with -- faster-than-market growth in ICT. We've got a very clear plan now moving forward on contracted mobile performance driven through our endless plan, innovation and our device strategy. But off-net broadband remains tough as those retail price points come down, as the input pricing comes up. It makes it difficult to make money in that segment, which means on-net becomes even more attractive. And we did have some challenges in SME as some of our competitors look to steal some of that market share with some price discounting. But we've negated that after a few months and stabilized our performance. Our churn in SME has never been better now. We've got that under control, but it's definitely a key focus area for us moving forward. And I think that trend is reflective in the numbers that JB will take you through now that actually our underlying performance has been delivered through efficiency and now what we're looking to in Phase 2 as that network monetization and wholesale improvement right across our trading results. JB, over to you.

Thanks, JP. Good afternoon, everybody. Next slide, please. Firstly, as noted, we are on track to deliver within the FY '22 EBITDA guidance range of $480 million to $510 million. The table on the right-hand slide provides a high-level summary of the financial performance. And all these numbers in the table are on a pre-IFRIC Software-as-a-Service accounting basis, the estimated impact of which I will touch on in a moment. Starting with mobile revenue. During FY '22, we've seen continued improving mobile postpaid trading performance with strong connection growth and improving ARPU trends as we migrate more of our customers to remarket plans, including through prepaid to postpaid migration. The prepaid market continues to be disproportionately impacted due to the border closures, noted, what [ Jason ] said, the historically high exposure to the travelers and seasonal workers market within prepaid for Vodafone. In H1, you will have seen that our mobile service revenue was flat PCP as the decline in prepaid was offset by the growth in postpaid. In H2, we are seeing a modest return to mobile services revenue growth driven off the back of post-pay. Fixed broadband in the mass market continues to be under pressure due to the highly competitive nature of the market. We have strong ICT fixed revenue growth and FWA growth, which partly offsets the decline in legacy fixed service revenue. Other revenue grew 17.4% PCP in half 1 '22 largely off the back of higher device revenues and is due to the lower device sales revenue in half 1 '21 as a result of the acute COVID lockdowns and impacts on retail trading and supply chain in the corresponding period. Other revenue will be higher in half 2 '22 versus half 1 due to the seasonality of vendor device releases and sales through the H2 peak trading period. Moving to costs. Our cost base reduced 1.7% in half 1. Our direct cost of sales increased broadly in line with our revenue growth largely due to increased device revenues within other revenue, as I just noted. Our indirect and overhead costs continue to decline on a net basis, and our cost-out program is on track and is delivering net cost reductions in FY '22. This is also enabling reinvestment into our strategic programs. And as a result, EBITDA margin expansion is being delivered through both improved trading and net cost-out. Turning to CapEx. H1 FY '22 CapEx was $221.4 million. But please note that this number included spectrum costs associated with the 20-year license renewal of our 1800/2100 spectrum license effective 1 April '21. Therefore, H2 CapEx will be lower than H1. And finally, on debt. In October last year, we extended Vodafone's bank debt maturity profile with our banking syndicate. We took advantage of attractive pricing, simplified the terms and extended our bank facility maturity. In terms of guidance, I've noted already the guidance has been -- guidance range has been maintained. However, this guidance did not include the potential impacts of the April 2021 IFRIC clarification on how to account for software as a service expenditure. Whilst we're yet to finalize these accounting impacts, it is expected that circa $30 million of previously capitalized expenditure will now be recognized in operating expenditure in the statement of comprehensive income for the year ended 31 March '22. This will only be partly offset below EBITDA and NPAT by lower depreciation and amortization in-year. Moving to the next slide, please. Look, whilst we're yet to determine our FY '23 CapEx envelope, our CapEx program for FY '23 will be prioritized across 6 key areas: continuation of our digital technology platform upgrade, targeted ongoing enhancements to customer experience, targeted improvements to support training, compliance investments and system separation from Vodafone Group, core network capability enhancement as demand for our network services continues and spectrum investments. We are yet to, as I said, to finalize the total CapEx on the left for '23. However, excluding spectrum, I'd note the following comments. One, we expect the levels of capital investment in network mobile coverage capacity to be at similar levels, increased investment in network and IT reliability, ICT growth and selected fiber investments. Our IT technology platform upgrade investment continues to address our legacy complexity, although likely to be at a lower spend level and lower CapEx in one-off IT programs such as Vodafone Group separation as much of this has been done and delivered in FY '22. Thank you. With that, I'll pass on to Lindsay.

Great. Thank you. If we can hop to the next slide. Strategically, Vodafone sees market growth opportunity in I CT, particularly in the cloud migration, security and enhanced connectivity space. The key opportunity here is the EV EBITDA multiplier you get by adding ICT to your fixed and mobile services, Vodafone's opportunities to expand our services within our existing customer portfolio. Today, enterprise has more than half of New Zealand businesses on our mobile network. What we see within the market is customers shifting for greater demand in flexible workforce, thereby driving talent attraction and retention, consumption of software as a service and cloud adoption. And you heard Greg mention New Zealand is still nascent as it relates to cloud migration. And as a result, we see quite a large opportunity here. There's a greater focus from customers on risk and in particular, cybersecurity risk, and introducing this concept of a zero trust architecture aims to enhance the organization's information security posture. Our approach overall is to maintain the concept of one hand on the network. This reinforces our belief that our network is our core DNA and the services within ICT we deliver are tightly aligned to our network services, such as SD-WAN, network security, [ SaaS e-security ], SIP toll-free, IoT and cloud transformation. We see the ICT market growing at about 8%, and we expect Vodafone to significantly outperform the market. We'll grow our capability here by partnering with global hyperscalers, such as AWS and Microsoft, and selected the best-of-breed such as Palo Alto Networks. Where it makes sense, we'll acquire talent and resources from New Zealand market to help us support our customer growth. I'll touch quickly on our customer base. Security continues to be the fastest growth category in ICT, where we're supporting most major brands in New Zealand and the majority of central government agencies with their security and cloud transformation. In addition, we've moved customers such as Peter Baker Transport waste management through our AWS cloud-based contact center solution and assisted Bank of New Zealand and Tourism Holding with their Microsoft Teams migration. But what we continue to see is customers asking us for what we call whole of business transformation. And Pacific Radiology Group is a good example, where we've moved them from G Suite to Microsoft 365 and in the process of moving their organization to Microsoft Teams, their full infrastructure into the cloud with a cloud-based contact center solution, migrating them to an SD-WAN solution as well as the security infrastructure. We will continue to support our customers through their transformation growth and then tie back into our overall ICT growth strategy, as Jason mentioned. And with that, I'll hand back over to Jason.

Thanks, Lindsay. Thanks for moving to the next slide, team. So no surprises that the potential separation of our passive mobile tower infrastructure assets is on the cards. This is a trend that can be seen globally, where there's an increased focus on these assets shifting to an independent towerco-type model. We're in advanced stage of preparation for potential separation and capital release, but we haven't committed to a process yet. But if we do, it's likely to be in the near term. Passive mobile assets, another driver of competitive advantage and network differentiation. And on the following slide, which we won't move to yet, we've put a reference in there for anyone who's not as familiar on the delineation between passive and active mobile infrastructure assets. So we believe the main drivers of network differentiation are in our active network and our spectrum holdings, and this is a part of a network which ultimately controls the network experience for all of our customers. In terms of the assets that we have from a passive mobile tower perspective, we've got the largest tower portfolio in New Zealand covering 98% of the population, which means we've got close to 1,500 towers, which are concentrated in hard-to-replicate urban areas right throughout the country, to high-quality portfolio with strong cotenancy potential. That's because we have a high proportion of larger structures such as monopoles, and those provide significant capacity for future cotenancy. We're also committed to building additional sites to maintain our relative coverage and capacity position in the future. So if we did [ intend ] any process, Vodafone would look at build-to-suit commitments in line with our requirements for that increased coverage and capacity that we've talked about through the penetration -- through the presentation that our customers are after. And then of course, that future build program is underpinned also by the next wave of tower growth through 5G mid-band spectrum, which requires a much denser network grid. And we believe that a focused independent tower entity would be best positioned to meet that future demand. And then you've got the use cases of FWA, which I mentioned before, increased video consumption, gaming use cases and new applications like AR, VR and the metaverse. So an independent towerco is well placed to ensure that there's operational efficiency, safety and reliability, and our tower assets help to increase sharing of infrastructure across LTO and provide sustainable returns and a clear value proposition for potential investors. So with that, that brings to a conclusion management's presentation on how we've gone over the last 12 months, in fact, the last 2 years, and where we're moving into the future. And all of this is underpinned by a massively high-performing team. As I mentioned before, you've got John joining me and Lindsay. I mentioned Matt Crockett, but I've got a very talented range of execs in place that are driving this business hard and delivering great outcomes for our people, our customers and our shareholders. Over to you, I think, back to you, Matt.

Thanks very much, Jason. I think we've got time for a couple of questions. We've had some really interesting questions come through. I'm going to start at the 2 different spectrums of questions here. First up and just a quick one, previously, we've talked about trying to achieve the type of margins that your largest competitors do. I'm assuming that that's still the target of the business. Interested to hear if you've got any view around the timing and broad terms of when you hope to reach that.

As fast as possible. I think we've done a pretty good job over the last couple of years. But as I mentioned upfront, we've got a lot of room to grow. So if you look at our EBITDA performance from an annual perspective, I think it compares pretty favorable to our peers. But you're right, when you look at an EBITDA percentage margin, we've got probably 5 or 6 points to go, and I think our ambition remains to hit that in the medium term. And we've got a pretty clear path to achieve there. I think separate to any infrastructure monetization, this is about both getting more efficiency out of the business and top line trading by a relentless focus on customer experience. So just saying, yes, our commitment to that ambition remains.

And I think this is a really nice one to sum it up. So you've talked about gaming, some of the things around the metaverse that you might see customers use your network for. When you look globally, what are the main areas of innovation that you're seeing, whether it's households, business, how they access and use data services across networks?

I'll go back to what Lindsay said before. I think she highlighted security for us. I think that's a really interesting area, and all segments, consumer, SME and enterprise. But particularly in enterprise, we think we've got a pretty strong proposition in regards to that. And I think 5G plays to it as well. Lindsay and her team have already sold private 5G networks to a few of our key enterprise customers, and we see that expansion continuing. Lindsay, anything to add? No? Okay.

Thank you, Jason, for that. I think we're out of questions here or out of time anyway. I appreciate all those comments, and great to see JB and Lindsay as well presenting with you. Thanks a lot, man.

Okay. So I mean digital infrastructure is a pretty exciting area, right? Lots of common and interesting themes between those 2 presentations, even though they're in wildly different markets. And you can see why we're still looking for opportunities in other jurisdictions to continue the learning we're having on this side of the world. Next, let's move on to health care, which is our last segment for today. I'm happy to introduce Peter Coman, who's sitting next to me. He's the Chair of Pacific Radiology Group and also the co-head of Australia and New Zealand firm Morrison & Co. He's going to talk to you about health care and then run a panel discussion with the team. So over to you, Peter.

Thanks, Jason, and good afternoon, everybody. Today, I want to talk a little bit about the health care platform for Infratil, covering off the current market position. We were sitting with the current business investments we've made and with some of the growth opportunities for the platform going forward. The slide here gives you a bit of a snapshot of where we've got to thus far. Establishing the platform in health care is consistent with Infratil's approach to platform investing. We're looking for growing revenues, reliable revenues and opportunities to make reinvestments. The current deals that we've done with Qscan, PRG, Auckland Radiology and Bay Radiology give us that exposure. It's worth just recapping a little bit on the investment thesis for health care in particular. What we're attracted to is growing demand in the sector. We've got a need that continues to be unmet to a large extent. What we are looking for is a stable regulatory environment that we are seeing, and we see an opportunity to invest more capital into the space. I think this is ultimately the idea that matters most in many ways for Infratil. It's a space where there is some inefficiencies that if we can improve the investment in those areas and improve results, that will lead to better patient outcomes and better offering of health care for all of the participants. So we're very keen to keep building on the infrastructure platform that we've established in the space, and we've made a good start with both the investments in Australia and New Zealand. Moving on to the market piece a little bit. As everyone -- as we can see, we have an aging population in both Australia and New Zealand. Those 75-plus are aging a bit quicker than the rest of the population. And what we are seeing is that that's leading to increasing numbers of chronic diseases in our population. This is obviously an opportunity for our diagnostic imaging businesses to provide services to that cohort. And additionally, in the wider population, there's growing value-based decision-making from many members of the public wanting to make proactive decisions about their health care choices, and that will lead to more use of diagnostic imaging as well as they look to manage their own health care experience moving forward. In terms of expenditure, we're seeing the public sector continue to spend at a reasonably attractive growth rate in the health care space. We'll see a blip in expenditure in 2021, '22 as it relates to the COVID requirements. But I think even taking that to one side, there's still very stable, solid growth in public expenditure in the health care space, which is good for our platform. It'd be fair to say that I think that, that expenditure still won't keep up with demand, and our businesses have strong exposure to private investment as well. So that will be an opportunity for us to continue to grow our business in those areas. Turning to the business platform that we've established. We've established a very attractive setting thus far. Following on from the Qscan transaction in 2020, we've now completed 3 investments in the New Zealand market, being Pacific Radiology, Auckland Radiology and Bay Radiology. They have provided us with a very strong platform from which to grow and to consider other opportunities. This growth in the form of organic opportunities, there will be a need for further clinic expansion in both countries, and we're currently looking at those. There's opportunities for business transformation to improve performance in our current businesses, and there's organic growth opportunities when we think about the modality mix that's within our current business model. In addition to that, there's inorganic growth opportunities. In New Zealand, we've taken advantage of that through the Auckland Radiology deal concluded in November and the Bay Radiology transaction concluded in December. We will look to take advantage of inorganic opportunities in the Australian market as well as they may be presented to Qscan. I think the other area that is valuable for us in terms of our platform position is related to synergies. There's a lot of areas in the business that we will continue to look to extract those synergies going forward, areas around IT and procurement, how we're thinking about workload sharing and patient coordination as well as the learnings and development for our staff within the combined business model. Turning to where the combined platform is performing. This is the -- this is for 100% of -- on a 100% basis, but we have steady strong revenue growth. You'll see that the EBITDA margins in FY '22 -- or '21 into '22 will be impacted to some extent in the short term by COVID. We'll look to talk a bit more about the COVID impacts in the panel discussion. The other point to note is that we are focusing the businesses on participating in complex modalities as much as possible, where we know that there's stronger revenue growth and margin performance in those areas. The final point I'd make is that we have roughly around 270 radiologists now within the platform, which provides us with a very strong position. And the majority of those radiologists would now be shareholders in the combined business as well, which gives us a very strong position in the marketplace. Future health care opportunities. So within the current diagnostic imaging platform, we've talked about the opportunities to do bolt-on transactions. There will be potential for us to grow our diagnostic imaging beyond Australia and New Zealand. This is probably most prevalent around the teleradiology hub. If we can achieve a 24/7 model in that teleradiology, that will be an exciting opportunity for us, which would require us to think about diagnostic imaging outside of ANZ. In addition to that, we are looking at and we will consider adjacent health care sectors, whether that be cardiology, pathology, et cetera. Those businesses will have to demonstrate the same infrastructure characteristics that we have seen present in the diagnostic imaging space. And ideally, they will be closely enough aligned to our diagnostic imaging that will be able to extract platform synergies from those businesses as well. The final slide here today is just giving a bit of color about the opportunities to expand beyond our key geographies. We do see the potential to take our health care platform into Europe in particular and secondly into North America in time. As I said, the teleradiology platform is an opportunity we'd like to consider. The use of data and AI will be an increasingly valuable commodity in our current platform, and we will look at how we can extract that as part of our global expansion in the space. I think that covers my update thus far. I'd like to be able to bring in the panel now to have a discussion on some of the issues that we've got on the agenda. So I've got here the CEO of Pacific Radiology, Terry McLaughlin. Chris Munday is hopefully with us, who is the CEO of Qscan in Australia.

HI, Peter.

And finally, we've got John Livingston, who is Morrison & Co's sector specialist, also based in Australia. So welcome, everybody.

Thank you.

I think the first question I would like to ask is just the impact of COVID for both Qscan and PRG. And I'll start with you, Chris, if that's okay, to answer that question.

Yes. Thanks, Peter. Thank you, everyone, for the opportunity to speak today. I think it would be fair to say that if you reflect on the last 12 months, there's been a fair bit of disruption, which is always frustrating. We had a good start to FY '22. But the industry, the diagnostic imaging industry in Australia, certainly had significant disruption particularly in the second half of calendar year FY -- sorry, calendar year '21. And that's really shown in some of the Medicare data that we get. I know there's a graph that will be both available as part of the presentation available after this presentation that will show you just the impact we had in the second half industry-wide. Why is that? I guess the major contributors for that reduction in volume of scans comes from GPs. GPs are the biggest referral of diagnostic imaging, and GP volumes were down significantly in the second half of last year. Obviously, in Australia, we had a significant focus on vaccinations, which would have consumed a lot of GP time. We also had lockdowns, particularly in New South Wales and Queensland. So that leads to patients reluctant or unable to attend GPs. So that certainly impacted volumes. And then, of course, staffing clinics can be very challenging in that environment we've experienced. So -- and then Omicron really hit very hard in December and January. So they are the major challenges that impacted us. Supply chain challenges were also impacted. And of course, we had various border closures in Australia. We still have that in WA, albeit Qscan's less exposed over there. But overall, that certainly made for a challenging last -- or year-to-date, I guess. Pleasingly, though, Peter, that Medicare data I'm referring to shows that when we look at year-on-year growth, Qscan has outperformed the overall market in our key states. That's reflective, I think, of our continued focus on service quality, high-end and the resilient modalities that you alluded to in your introduction. And we also got a greater proportion of subspecialist radiologists. So our PET modality is a great example. The oncology imaging part of our business, very resilient, has been resilient throughout the pandemic and continues to be, and we've had good volume growth in that particular modality. What are we seeing right now? February '22 volumes, I'm pleased to say, are materially higher than January. It's always nice to come into a meeting like this having looked at yesterday's numbers, and I think they are the best numbers I've seen in about 10 weeks. So I think that's a sign that the Omicron case numbers are beginning to settle. And I'm hoping we'll see that increase in patient volumes from GPs now start returning to where we'd like to see it. But that's a bit of a summary of -- it's been a challenging year, but some green shoots right now.

Thanks, Chris. And Terry, you were about to embark on Omicron?

Yes. It's interesting to hear Chris' story because we're all sitting waiting for it to happen here in New Zealand, I guess. But, look, a very similar picture. We had a great start to FY '22. That got us through to about August when we had the country's second lockdown. So impacted quite significantly there for a month. We didn't see the big bounce back that we saw the previous year in 2020, but generally tracking okay with volumes. We did see a different pattern of referrers taking holidays. New Zealand has had a good summer, and I guess people have been locked up for a couple of years. And particularly Auckland, probably taking a longer break. So we have seen our referral volumes dip a little bit. And some signs around patient behavior, just in the start of this year, some people were not turning up. So for example, we do all the breast screening in the South Island of New Zealand. We had 20% of patients not turning up, a signal that people are, I guess, scared of the Omicron onset. We think we are prepared as we can be. We've got good access to rapid antigen testing through our reliable suppliers. That's going to be a really important tool for us to keep our workforce going to the extent we can. But look, we know, just as Qscan has experienced, it's going to be a new challenge for us over the next couple of months. We've got good supplies of personal protective equipment for our staff and patients. So look, it's hunkering down for the next couple of months really and hopefully come out the other side in a similar way to our Qscan of experience things.

Very good. Thanks, Terry. Moving on a little bit, it would be nice to hear from both chief executives about your business achievements and goals for FY '22 and how that played out. Again, I'll start with you, Chris, if that's okay.

Yes. Thanks, Peter. Yes, look, it's always nice to talk about the positives as challenging as the last 12 months have been, and we've certainly been very busy. So I guess I'm most pleased in terms of achievements that we have outperformed the market. That's always a great sign that you're getting things right and indicative, I guess, of some of our previous investments in the right places in this business, particularly in the right modalities, such as high-end, high-margin modalities and in our radiologists and our subspecialist expertise. We have had some challenges opening clinics. But despite some delays, we've managed to get a really exciting foothold in South Australia. That's our first clinic in Adelaide in the 5,000 square meter medical precinct down there. That's with a PET/CT. And that's another one that we've done in colocating with Icon Cancer Care, which has been a very good relationship for us since 2017 and enables us to fast-track our growth when we have these greenfield sites. The other site we've just opened has been in Western Sydney. We have 2 opportunities in Western Sydney. One we've just opened at Kingswood that's part of the Nepean Hospital medical precinct. So we're very pleased to have that up and running. And then lagging just slightly behind that will be our next site, which again is a comprehensive clinic with PET/CT in the Westmead hospital precinct in Western Sydney, which is, I think, if not the largest, then certainly one of the largest medical precincts in Australia. So I'm also particularly pleased that we've recruited a very experienced dual-trained radiologists for those sites. That's critical as part of our growth to have radiologists who are also med physicians full time running those. That is not easy. So we're very pleased with that achievement. Finally, we've got a site in Perth. It's been the most difficult with the border closures in WA, lagging behind the other states. So it's been difficult. [ Hoping to -- it'll ] open next month, again, in mid -- which is in the Northeast. Perth, again, a comprehensive clinic colocated with our [indiscernible]. So there's some real pluses there and sort of growth. And finally, we've got -- we're closing on a small, highly strategic acquisition in WA, which should [ close likely next week ]. I'm pleased we've managed to do that, again, in difficult circumstances with the border closures, but it'll provide us a real hub-and-spoke approach for growth in WA. Other [indiscernible] important to me are we've -- executive team, both [indiscernible] Chief Medical Officer, Gary Shepherd, who's joined the crew at -- of our radiologists. That's a really important part of driving [ talent ] engagement, recruitment and retention, which is a critical part of growth for us. And then secondly, our Chief Technology Officer, Simon Button, who's joined us, very experienced CTO. And that's very vital for us as we look not only across Qscan but across the individual portfolio in terms of how we can leverage IT experience for both [indiscernible] to maximize both in its location. So a number of very exciting achievements there and [indiscernible] from his point of view.

Over to you, Terry.

Yes. Thanks, Peter. So 2021 and 2022, really exciting years for Pacific Radiology. So a year ago when we were in the market looking for a new majority shareholder, Infratil quickly emerged as the leader really for a range of reasons: the view on shareholding long term; the willingness to coinvest with us; but I think most importantly, the ongoing doctor ownership model that they offered, which has been fantastic for us. So part of Pacific Radiology's sale process, we introduced 30 new associates. So it really bodes well for the future. Like any professional services firm, succession is the key issue, and I think that we've ended up with an excellent model there. Another reason that we were keen to have a lead investor was we had ambitions of becoming a truly national platform, and we're delighted to say that we've achieved that within 6 months of Infratil coming on board through the majority acquisition of Auckland Radiology Group in November and Bay Radiology in December. So look, we're confident we have put together the 3 preeminent diagnostic imaging businesses in the country, a true national platform, a fantastic outcome, great doctor buy-in. And in doing that, we've secured our shareholding future and radiologist pipeline future with the ability of those associates to become shareholders. So we're now focused on what's going to be our ongoing model to introduce doctors to shareholding in the future. We've had some good growth as well in terms of new clinics. So 3 significant new clinics opened in New Zealand, really advanced plans for another 3. So a bit like Chris now, sort of following all that, the need to come behind, speed it all up and make sure that we're organized to run this truly national business. And so some changes in our own leadership team as well are happening right now to gear us up to work across New Zealand and with our colleagues in Australia.

Well, thanks, both. I think I'd like to bring in John now, if we can, just to start to talk a little bit about efficiencies -- scale efficiencies and opportunities to work together closely -- more closely between Australia and New Zealand. And also, John, if you could cover some of your thoughts -- early thoughts on the teleradiology space, please.

Yes. Thanks, Peter, and happy to be part of this discussion. Thank you. As you've alluded to earlier, you certainly have the opportunity across both businesses, which have, to some extent, teleradiology services out of each of them now. But as a combined business, the operating leverage that you'll be able to get, combined with the investment in technology, you have Western Australia's time zone right through to the Western or Eastern part of New Zealand to sort of cover. Just in the southern hemisphere, it gives us some extremely good cover. You combine that with the depth of radiology subspecialty, I think the larger the group, the more diversified and the ability for radiologists to have subspecialist skills. And I think it can't be forgotten that the formal college component of Australia and New Zealand is one. So any radiologist that's qualified in Australia and/or New Zealand has the ability to practice in each other's jurisdiction, which goes to a number of things, I think, that not only just feeds into the teleradiology space. It feeds into the development and recruitment of radiologists. So in New Zealand, they've got quite strong and deep relationships with training programs to register us through the college. And that exposure into the group, as does with Qscan, I think, gives the opportunity for, even in the short term, radiologists to exchange some time in other businesses to develop their skills. But more importantly, I think you can't think about teleradiology without the role that AI will play also into the future. So as -- again, with a larger footprint, I believe that AI will operate through an activity or a SaaS type of model. So you'll be able to buy -- you have greater buying power. But the surprising thing, and we can probably touch on this a little bit later, I think the world is somewhat surprised now with the rate of progression for AI. It's moving at a fast rate of knots. And given that a lot of radiology is normal, it will not only help streamline the service to get the outcomes for the referrers to manage their patients faster. I think it will also allow for better differentiation of these subspecialty disease states, which will be a tool that will assist radiologists in creating greater value for our referrers and patients. So that -- I think that's one thing without a doubt. And I think the other thing that we shouldn't forget about is the ability to collaborate on research with molecular imaging through PET and a lot of the things that we're seeing evolve at a fast rate of knots. And radiology is not new to it. It's just a question of which modality is the one that's growing the fastest. And I think molecular imaging, without a doubt, is one where the 2 businesses could definitely collaborate a lot more through research and data sharing, which will be a very powerful tool moving forward.

Thanks, John. And a quick comment from Terry and Chris on where you see the common opportunities?

Yes. Look, they're endless really, and it's how we go about tackling them. I think some of the immediate opportunities, we're starting to work on. So procurement is one of those. And so with Pacific coming into the fold, we've already seen clear signals to major suppliers, equipment suppliers that we're expecting the same arrangements across Australasia. That's already led to some change. We think there's ongoing potential to further enhance it from a wider group point of view. So that was a great first cab off the rank. John has already mentioned teleradiology. So Pacific Radiology has had a 24/7 service for a number of years. Originally, we had an office up in the U.K. to assist in that. We had a couple of radiologists to [ call it up ]. Got a bit difficult during COVID. We now have people in South Africa, the States and Europe. But looking at it seriously on a scale basis will really help us transform that fully. I think we've probably reached the limit of what we can do ourselves. But just emphasizing the collaboration opportunities amongst the doctor group, I think, fantastic. A lot of Kiwi doctors, Kiwi radiologists, like all professionals, spend time overseas. A lot of them spend time in Australia. And to be able to facilitate that within the group, I think, would be a super opportunity. And look, general sharing, you can't underestimate it. Learning about Qscan's experience with Omicron helps us get our head around it right. And some of those things, they're just good for the business really, I think, Peter.

Very good. Chris, I will keep moving. I do want to ask you to give us some color as to what you're seeing as your priorities in FY '23. So if I can pass over to you. And then, Terry, for you as well, please.

Yes. Thanks, Peter. I got a message that my sound might be a bit muffled. So let me know and I can always change headsets [indiscernible]. And so I'll just mirror those comments by John and Terry around synergies. I think there's so many [indiscernible] working groups set up across the portfolio to drive those that are exciting. I know from an L&D perspective of the staff, for instance, there's good opportunities to collaborate and really drive that. It's really important for me to make sure in a tight labor market that we retain staff. So that's probably one I'd add. So that is something we're focused on. [Indiscernible] in the war on talent, making sure we retain, I think, not only radiologists but clinical and clerical staff, so we certainly need to invest in that space in terms of providing the best in terms of online training. And just bringing additional human resources in that training space is one of the key things I want to focus on this year. We're going to invest from a technology point of view and will -- I think Terry and I will each have one eye looking across the [ Tasman ] on anything to do with IT as we convert in that space. We're looking at an orchestrated workflow solution as part of driving our national teleradiology services. So I think that's one work that you'll see Terry and I cooperating on as we sort of look into the long-term future. Radiology support group is something we've set up in Qscan to prioritize recruitment and retention of radiologists. We've had some success in recent times luring younger radiologists, and we'll continue to invest in fellowship programs [indiscernible] by having a lot of subspecialist radiologists as that will -- to attract the younger ones. So that's something we're putting a bit more [ structure ] around. A couple of new sites we're looking to open in Southeast Queensland and New South Wales over the next 6 to 9 months. And we'll continue to look at opportunities to expand. Particularly, I'd like to expand into Victoria and look for opportunities down there. As well as finally, we can introduce a paper in the leave plan, again, as part of our -- ensuring we are luring and retaining the best staff critical to our -- ultimately, to our growth. So another busy year ahead, I suspect.

Terry?

Similar themes, Peter. And both of us have hired people to lead our talent acquisition, and it's going to be absolutely key. I think that we both have the best employee value proposition and particularly for the radiologists, for the doctors. So we've made a good investment there. We'll continue to make investment. We want to be the recognized lead employer there. Integrating Bay Radiology and Auckland Radiology Group, look, they're both fantastic brands alongside Pacific Radiology. We want to achieve the best of both, their local brand presence, referrer relationships. But sitting in behind, having a good corporate machine that gets the best out of everyone, provides the support for everyone. Want to do some good work on demographic modeling and looking at the clinical opportunities. So we continue to plug gaps. That's always been part of our defensive moat. We'll continue to strengthen that. Like Chris, a lot of investment in IT. We got a bit of catch-up there in the security space and cloud. They're just things we're nailing very soon. Remuneration, just getting alignment across the group on that. It's really important. We take the view it's a basic hygiene factor. It's got to be right. It can't get in the way of good relationships. And there's always room for improved productivity, right? And I think our ability to benchmark how we go against our Australian cousins, again, will be really useful. But the way that we can -- the only way we can roll it out amongst our health workforce is what's the best for patients. And with the volume demand we have, part of our ability to meet that will be through just ongoing business improvements. So some of the themes, I think, Peter.

Okay. Very good. Thank you. I'd like just to pass back now to John. And if, John, you could talk a little bit about the growth potential in our health care platform, particularly around opportunities in ANZ with adjacencies and the potential beyond ANZ in the future.

Yes. Thanks, Peter. I mean we've already spent a bit of time talking about tele so I won't go back there. I think they're obvious and it's well underway. As Terry sort of alluded to, I think one advantage we've got in this part of the world is even though we have the opportunity to learn from each other between Australia and NZ, we still have some of the better workflow and productivity sort of outcomes in radiology across the world. So as we're looking to scale up into other jurisdictions, that knowledge that we inherently take for granted can be leveraged to take it up into Europe and, in due course, like you said, into the U.S. One thing that is a strong trend that is emerging in the sector is molecular imaging and PET and the role that we'll have in oncology as we've already well understood, for identifying the treatment cycles for radiation oncology and chemotherapy by way of example. But the real growth that's coming through is going to be around theranostics, neuro and cardiology and, I think, further advances in the technology itself. So the actual hardware technology will continue to evolve and get faster and more specific in terms of what it does combined with these other radiopharmaceutical agents and [ligand ], which is sort of like the traces that are used. And if we think about where that's sitting in the world, like oncology, for example, there's something like 1.8 million individuals in the U.S. will be diagnosed or have been diagnosed in 2020. Now in context, on an age standardized basis, that's something like a 70% growth since the 1990s. Now people aren't dying because we've got earlier intervention and treatment methodologies, but it's really leveraging off the real impact that these early intervention and diagnostic tools like molecular imaging have. So we will see a whole heap of growth in that area combined with an overlay of AI, which is going to improve the strength and diagnostic capabilities of our radiologists to focus on the sicker patients. So the growth in those high-end modalities will continue. And we talk a lot about molecular imaging, but there's still significant growth left in MRI. So you put that together -- and fortunate enough that with the acquisition into New Zealand, the guys over there have strong relationships, in fact, a joint venture with the cyclotron. So the possibility of leveraging off those deeper research components, I think, is pretty exciting, not just for us but just in a global sense. And then the other one we'll see come through, I think, is theranostics, which is instead of just diagnosis, we'll see a rapid uptake of treatment, and radiology will be a pretty important player in those sorts of technologies. But we're also seeing the new ways of using existing pieces of equipment. And a company called Ford Medical is using lung ventilation of historically fluoroscopy and CT scanners. So it's not going to require any further capital investment to expand our service offering across the group for some of these new technologies that are coming through. So I think it's -- the tailwinds are very, very strong. And as both Terry and Chris have alluded to, our job is to try to integrate the IT platforms and get best of breeds there to be able to sort of leverage that and also invest in the human capital to make sure we're well positioned to capitalize on those opportunities.

Very good. Thank you, John. I think -- and I'd like to thank the panel for the discussion today. Matt, is there any questions that you'd like to have the panelists answer?

Yes. One thing that would be good to touch on, Terry and Chris, there's a couple of questions that have come through here. Obviously, we've talked about it across our different assets. We're seeing inflation coming through. It's quite a fixed pricing environment perhaps and increasing wages and other costs. I'd be interested just to get your thoughts on how that may impact your respective businesses. And perhaps if we start with you, Terry.

Okay. Well, look, we're just bringing to an end our FY '23 budget so it's been very much top of mind. We're seeing inflation in New Zealand running around that 5% level. So that's been our kind of base assumption. If you look at how that's going to flow through to our business, on the revenue side, look, we do have some insulation from it. Some of our contracts are CPI-indexed. Some of the major funders, not necessarily fully CPI. So there's a bit of a buffer there. To the extent it flows through to wage inflation, like I said earlier, one of the things we're doing anyway is aligning our pay across New Zealand with the acquisition of those 2 other companies. So we had a separate but different issue there anyway, which we're addressing and absorbing our ability to pay that through some pretty modest productivity initiatives, to be honest. So we think that what we're going to pass on will probably exceed the inflationary pressures anyway. With capital procurement, not seeing the pressures here at an ongoing basis. Often that stuff is a bit of a sinking load anyway in terms of technology advancements. And with our project program, our new clinic program, they're well managed. We have fixed-price contracts. And we're actually just talking to our [ colleagues ] on this yesterday. What he's seeing is well-managed projects are exposed to it. There's a lot of selective reporting in terms of building inflation, for example, that doesn't necessarily flow through. So I don't want to dismiss it at all. We've got a 1-year horizon on it for now. I think we're all hoping this isn't necessarily going to embed as a long-term inflationary piece. But certainly for the next year, we think we'll work at it.

And just any thoughts from you, Chris? Sorry.

Yes. Look, not surprising, Matt, and not a dissimilar response to Terry, particularly on things like the CapEx. I guess the obvious difference between Australia and New Zealand is the Medicare funding that we have. That does provide us some insulation for this, with indexation was reintroduced by Medicare in 2020. So that partly offsets it. It doesn't generally run at the same levels of -- that we'd expect for inflation, but it certainly provides us some insulation. And in addition, the nature of our business with that high-end modalities, like PET, CT, MRI, does give us the ability to adjust with gaps. A large percentage of our modalities already have a gap on them. And we tend to be able to manage some of that inflationary pressure through increasing gaps. Particularly some of our clinic and regional areas where there's little competition, we're able to flex pricing if necessary. So like Terry, we've been having a good look at it. We've been realistic with our budgeting. But I'm reasonably confident we can manage it again looking out of that next 12-month time line.

Okay. Thanks for that, Chris. I think that wraps it up for us today, and I'd like to thank the panelists for your time, and I'll pass it back to Jason to conclude. Thank you.

Thanks guys. Thanks, Chris and John online. Appreciate it. Let's get settled. So it was a really great segment, right? Again, I can't wait to have the team here in Wellington or Auckland, and we'll get a giant couch for you all to sit on and you can really interact. And you can see so many common themes, right, between the businesses. And also what I was trying to say in the intro, just so many ways to grow given the tailwinds and the opportunities in the spaces that they're operating in. A few COVID headwinds, which we hope, Chris, you're through, and we're bracing ourselves for here in New Zealand. But the long-term value story, I think, is really, really clear. So we've got a few minutes to wrap up. I hope you're feeling okay out there. There's quite a lot of information received during the day. Phillippa and I will give you a couple of reflections, then I'll finish off reinforcing what I think are the key messages we want you to take away today. But maybe if I come off with some reflections. I think from Longroad, you saw a material step-up right in their cadence and confidence and profile in the U.S. market. I'm still quite stunned by that 3% to 4% of market share number Paul put up. I think you could see -- we know those platforms are valued ahead of the real estate markets in private markets, and you could see that come through in that minority investor process I've talked about. You also saw how we're building the kind of many versions -- or the next versions of that in those other markets and start to see how they can work together to form something quite unique globally actually and should be quite successful, I think. With CDC, I think key message there continues to see really strong organic growth rate through its differentiated offering. He mentioned how he's got his land secured for that enormous pipeline that he's announced now, which gives you a feel for how confident he really is and the conversations he's having with customers, which are everything. I mean the more we think about it and the more we look at it, it's hard to understand why does it trade at a premium to its comps, frankly, given the quality of what he built then and the track record he keeps turning up with every year. Vodafone, good progress on the core. You can see them extending into ICT in those areas that are experiencing similar tailwinds, to Greg, which is a smart strategic move and hard to not think they're going to be successful when you hear the depth of thought and the talent they have wrapped around that proposition. We're supportive of the tower -- mobile tower separation process. Jason did a nice job, I think, of summarizing the opportunity there. Again, we see those sorts of assets trading in private markets that sort of took like multiples, not the sort of 7x that we paid for that business. Should be a good day for Infratil shareholders to have that recognized, I think. And the last segment, Pacific Radiology and the Qscan Group. I think there are some headwinds, as I said, short term, but that long-term value creation is super clear and the numerous opportunities that we have to access it. I really like to just get the MCO folk on as well. You heard from Vimal, Will and Peter. I think they all did a really nice job of summarizing our kind of latest views on what are our key sectors. It's amazing to see them all around the world. Vimal was in Zurich, Will in New York and Peter here in Wellington. That is really how Infratil is thinking about life and how MCO is positioning itself to support producing kind of global exposures to sectors where we have high conviction on. It's really great to have Paul, right? I mean it's the first time Morrison & Co and Infratil have had different CEOs. You can tell both MCO and Infratil are in really good hands, I think. And you can see Paul continuing Lloyd and Marko's tradition of being [indiscernible] talent. It was great to see those faces up there, and we're really looking forward, for example, to having Deion here but also Rachel coming back to Wellington as well. It will be very good for Infratil and its investors, I think, long term. So what about you, Phillippa? What did you hear?

Yes. I had a couple of things, Jason. Thanks. First to note, we've got a really comfortable red couch in the foyer. So yes, I can assure you that the picture next year is going to be pretty cool with everybody sitting on our red couch. I think I'd just like to reflect on a couple of things from like an Infratil portfolio perspective. I started the day talking about how much capacity we had and I think as much as anything, the steps we've taken to create that capacity. And the reason we do that is we want to be able to respond to opportunities when they arise. And I think it's worth reflecting on 2021. That's certainly what we did. We executed Pacific Radiology, and we have Terry here today. We're very happy to be successful with [ car data ] and to start our Asian renewables platform. So when we sit here with $1.7 billion of capital to deploy, we're well placed. But as you would expect, we're going to be disciplined, and we'll choose widely or carefully, I should say. But the other thing is it was interesting listening to the presentations today and to hear about the platforms themselves and the significant opportunities that I've got to deploy capital. Some of them are more at the early stage. And in that case, we might be the ones providing that early capital for equity. One reflection is [indiscernible], having purchased land in Melbourne, certainly, when they purchased land in Sydney, that was done for equity. So it's even just interesting to reflect on the journey that, that business has been on, whereby its balance sheet now significantly supports its growth. And I think one of the key features of Infratil's success has been that we're both resilient and we're also flexible. So I think we should acknowledge the performance of the businesses over the last 2 years in getting through COVID. I mean we've thought about the way the diagnostic imaging business has done that. RetireAustralia has been an absolute standout. And Wellington Airport actually coming through COVID to the extent that it has so far, like it's just outstanding. And that really is part of -- to use Greg's phrase, that's part of our magic sauce. We've got a resilient portfolio. We've got quite a diverse portfolio. And the good thing is that those things can come together and support each other. So that's one of the things I really like about Infratil. And then just to finish off, I was really excited about the growth opportunities that they had and the choices that gives us around capital allocation. So I'm looking forward to what 2023 has to offer.

That's right. Great. Yes, I agree with all of that. I think it's a pretty exciting time actually. I was going to pause and see, Matt, are there any questions at the portfolio level?

Yes. We've got one about why our unlisted valuation is so much higher than listed ones. And I mean I guess you could ask the Boards of Spark Infrastructure and Sydney Airport that question, right? Those big infrastructure assets are increasingly being taken private. So clearly, there's a gap. I think for a lot of those investors looking at unlisted assets, infrastructure is super attractive, long duration, matches their liabilities. But also that ability to reinvest in some of these assets is -- trades at a really massive premium for a lot of these private investors who have experienced significant inflows over time. So the ability to take those inflows and immediately deploy them internally is extremely valuable. And we may see that close over time. These trends always shift and change, but it's definitely something we talked about on Z even, way back in Z days, right, before we IPO-ed that. We talked about it again. And I think we're just trying to be clear where we see exactly the same phenomenon happening in the existing portfolio today.

So really, that's the key message, I think, from today that I'd like to leave you with. If I look across the portfolio and listen to all of those growth opportunities, really, I do feel like valuation risks are skewed to the upside. I think there are some short-term impacts around COVID. But for Infratil and its portfolio, it is more about valuation. We look to create capital value over the medium to long term. And I do think those risks are skewed to the upside. We're trying to be super clear where we see that in the short term. CDC with its organic growth it's seeing; Vodafone should become clear through tower separation if they choose to go ahead with that; and Longroad, which should come clear over that 6-month period that Paul talked about with its confident plan. I'll leave you on that note. One last thing, though, thank you so much to everybody who makes this day happen. It's a heck of a lot of work. Thank you to the companies and our advisers. Thank you to the people who stayed up late overseas. Thank you to everyone here in the room and also to [ Sharon Langford ] actually who really works super hard to make all this happen and pivoted from live to virtual. Again, one day, we'll just stay live. But hopefully, it's next year. Finish up there. Thank you very much.