Inghams Group Limited (ING) Earnings Call Transcript & Summary

[Presentation] Good morning, everyone. And on behalf of the Board and management team, welcome to the Inghams 2023 Investor Day. On behalf of Inghams, I would like to respectfully acknowledge the Gadigal people of the Eora Nation, the traditional owners of the land on which we meet today. I pay my respects to elders past, present and emerging. For those of you who have not yet had the pleasure of meeting, my name is Helen Nash, and I'm the Chair of Inghams Group. In the front row, we have three Board directors with us today, who I'd like to introduce to you briefly. The first is Mike Ihlein who is a Non-Executive Director and Chair of the Audit and Finance Committee; next to him is Rob Gordon, the Chair of our Risk and Sustainability Committee. And of course, we have Andrew Reeves, our CEO and Managing Director. Also in the front row, we have most of the members of our executive leadership team, many of whom you will hear from across the morning. It is great to be back together again in person and to have the opportunity to discuss with you in more detail our strategy and plans for the business moving forward. Inghams has a rich history spanning over 100 years, but it is my firm belief that our best years are ahead of us. The business has prevailed through some extraordinary challenges in recent times, but we have put those challenges behind us and return to growth. Fiscal year '23 established a strong operational and financial platform. And as you have seen from our recent guidance release to the ASX. This momentum has been maintained, and we have started fiscal year '24 strongly. This performance is underpinned by the progressive return to normal operating performance levels across all facets of the business, and in particular, the ongoing recovery in our farming performance and improvements in labor and supply chain conditions. Importantly, the outlook for the business is positive and the operational investment decisions we are taking position us well for the long term. As you will hear from our management team, we have identified and are pursuing a range of growth projects, which we expect to deliver significant shareholder value over the next few years. Here is a brief outline of this morning's agenda. Andrew will open with a presentation on the market positioning and strategy of Inghams; Gary will then cover financial performance and capital management; Seb and Clair will discuss brand, customer and consumer; Anne-Marie will present on our network strategy; and Ed will provide an update on the New Zealand business. Following each presentation, there will be an interactive Q&A session, which Andrew will moderate. On behalf of the Board and the management team, I hope you find today to be informative with valuable insights into our plans and outlook for the business. And with that, I now invite Andrew to take to the lectern and get us underway. Thank you very much.

Good morning, everyone, and welcome today, thanks for giving us your time. As Helen noted, we've come through a number of quite challenging years. It's been quite difficult with the disruptions that we've had to navigate. And it's been really great in the last 6 to 9 months where we've got back to something that looks like a normal operating cadence and a very stable environment and we've been able to get out of firefighting mode and crisis management and then start to really focus on our strategic agenda and the growth path forward. And so hopefully, that's what we'll be able to share -- that's what we intend to share with you today. So this [indiscernible] measure is a sizable enterprise. We're employing thousands of people across Australia and New Zealand at 90-plus sites. At any time, we have 230 contracted growers, raising in the order of 33 million birds and we purchased 1.5 million tonnes of grain to feed and raise these birds, meaning that we're processing something in the order of 5 million birds per week and that is servicing obviously either a large and a very growing market with how many we've got there. There's been [ 40 kilograms ] per year. If we think about how we're advantaged in this marketplace, our vision is to be the first choice for [ INZ ] poultry. Now that translates to being the preferred partner for our key stakeholders with whom we engage. For example, customers and consumers, our suppliers and our investors. And of course, that means we have to consistently do the best job we can to meet their specific and often quite unique needs. We describe our purpose not by what we produce, but the outcomes that we create. Deliciously good food for a variety of occasions, which is most often at the center of the plate. And we do this in the best possible way, which references running a sustainable business, a performing business and with particular emphasis on the care we show for our people and our animals. We think there are four areas where we create a particular advantage. The first one, of course, is our fully-integrated national network, which stitches together a bespoke set of poultry assets operating together and at scale with a group of Tier 1 customers. We're certainly innovators in the segments of the market that have the best and most attractive growth prospects. And these are the areas that return superior margins and that we have the capability to support and promote. The business has deep technical expertise and know-how throughout the value chain, which we can apply to multiple value creation opportunities. We have a deep belief and commitment to operating to the highest standards in all aspects of our operations, and these are foundational to our long-term success. So we think that translates into quite a compelling investment proposition. So we take these things a little deeper and look at those. We think we've got a platform that's going to provide robust and attractive earnings over the longer term. We are [indiscernible] which translates to efficiency in a large and growing market. We produce a portfolio of offerings that service of popular and favored protein of choice. Our customers, with whom we have deep partnerships and relationships, value and prioritize poultry. For any of you who've been watching television lately, I'm sure you'd have seen the enormous amount of promotion that McDonald's have been putting into their new McCrispy burger, for example. That's a great example of our customers prioritizing poultry. We know to work with them, and we know how to execute well against relevant consumer insights that create valuable growth. And we're industry leaders in crucial areas of safety, quality, animal welfare and sustainability. Our disciplined process of consistent and continuous improvement lowest costs and unlocks capacity. And the team that you'll be seeing throughout today have the right capabilities and experience to successfully navigate the strategic path we've laid out. And finally, we have the financial strength and flexibility to invest in the right strategic assets to grow our business in a growing market. And the chicken consumption has grown consistently over 30 years to very high levels of per capita consumption and household penetration. In fact, in Australia, for example, something like 70% of Australian households consume chicken 3 times a week. Population growth, which will be further stimulated by the anticipated increases in immigration from countries chicken, where chicken is already a very popular choice should underpin stable and consistent market expansion. Chicken is in Australia, the most affordable animal protein. And even with the most recent uplift in prices, the relative gap to red meat still remains significant. And this one applies in New Zealand, however, pork and chicken are much closer. Chicken is certainly a popular and favorite protein and is frequently shopped, not just due to its price advantage. It has established a reputation for being healthy, highly versatile meal solution, and it can be prepared in many ways to provide variety, flavor while being convenient and widely available. And of course, as we've mentioned many times, it has a very sustainable carbon footprint that we estimate is 5x lower when compared to other animal proteins. While most of you familiar with our business already know that we have a geographically diverse and extensive network of operations across Australia and New Zealand, and they're supporting both markets directly, where we trade with shares above 30%. For biosecurity reasons, both markets have limited or no imported poultry products. So we're not subject to competition from outside our domestic competitors. This coverage means that we're really well positioned to service a wide range and type of customers with any of our products from our portfolio and in some instances, such as with Waitoa in New Zealand or the free range in Australia allows us to promote prominence as a part of a product's appeal. Such a network supports resilience and flexibility of sources of supply when required, an example that we were able to call on during the recent industrial action in South Australia. And obviously, this was trusted and survived the disruptions of the whole COVID pandemic. It further assists our management of biosecurity and agricultural risk, where we can isolate or contain disease or again, provide alternative sourcing arrangements. And of course, it's a platform that provides wonderful support for our long-term ambitions for growth. We're vertically integrated. We control and operate all of the critical activities across a vast site supply chain. And we're going to apply our deep technical knowledge and know-how to extract the best performance and the outcomes from each part of the chain. From a capital point of view, in the most recent investment, we think in the last 3 to 4 years has gone into what you might describe as the upstream elements of the value chain. So where we've made sure that we're ensuring that we have enough capacity to raise the birds to keep pace with market growth. So for example, a new feed mill in Murray Bridge, [ standard ] art hatcheries in Victoria and WA, a new breeder triangle coming on stream as we speak, in Northern New South Wales. And while not a direct investment, the establishment of three new state-of-the-art distribution centers in Victoria, South Australia and coming on stream in January, Western Australia. In coming years, the investments, and we'll talk to this today, the investments in our value chain will be more targeted the processing segments of the chain as we further enhance our capacity to meet market demand for growing product types and do this as efficiently as possible. If we go back and map our growth since the time of listing, in both markets, we've been able to grow ahead of the market. And we believe in Australia, where the growth rate has been closer to 3% rather than 2.5% in recent years, we will continue to expand at that rate, something akin to GDP plus population growth. And as I said, in recent years, it's been a little bit higher than that long-term trend. It's a slightly different story in New Zealand, but this is because of a number of factors, including how Tegel completely failed -- completely failed, following an failed export strategy had to flood the market, and there was no longer a factor, of course, that's gone. And then we went through the very severe restrictions imposed on some channels through the COVID lockdowns. And I'm sure that when you listen to Ed talk about the ambitions here as for the market today, you'll see that we have the potential to grow ahead of that long-term average. One of the attractive, very attractive elements of our business, we have a very diversified customer base. And we like to think about this market structure in a number of ways. Primarily, there are three macro channels where the volume moves in significant proportion. Retail, which is primarily dominated by supermarkets where our biggest customer, Woolworths is, being the largest players and we're essentially servicing at at-home consumption occasion. The other two channels are focused mainly on out-of-home dining and all the forms that comes in. QSR, which is dominated by the big global players like McDonald's and KFC, are historically fast-growing as they relentlessly invest in new store openings and drive high-impact marketing campaigns. We're a grouped wholesale and food service together because primarily they service customers who provide product for the balance of the market, such as small retail, such as barbecue chicken shops and butchers and specialist retailers as well as the hotel, restaurant and cafe sectors. It does mean we have a significant variety and diversity of trading relationships that would vary depending on aspects like volume, the size of business, service levels that are required, whether or not we get exclusivity of products, promotional programs and whether or not we contribute to unique and bespoke product development. What [ confident ] you're going to see from the detail in the presentations that follow, is of our team who are very ambitious for Inghams as demonstrated by the growth that creates value. We aim to increase the share of our volume that comes from higher value higher-margin products. And this will drive our goal to take the business to a position of delivering sustainable double-digit margin in the coming years, a growth trend, which has now been established in terms of margin in our recent results. Our priority is to invest in understanding consumer needs with insight that we can execute in partnership with our customers to be and bring relevant propositions to life in a way that meets our most important consumer needs. Again, you will see some examples of that today. The insight is the product of really rigorous and large-scale research that takes a long-term view of the growth trends and the most attractive trends in the market for us to pursue. Our customers very willingly buy into these insights. And they work with us to seek to understand how they can best tap into the opportunities that these trends represent for them. We have distinctive capabilities that provide differentiated and valuable product options and a constant theme is maximizing the whole utilization of the bird and driving the best mix outcomes. We would demonstrate where our insight is driving relevant innovation in key growth options such as free range, value enhanced products and further process products and how customers are supporting these initiatives. Our customers have long-term and deep relationships with us and relying us to work with them to design and implement a range of products, they and us determine will best suit the consumer needs and keep pace with emerging trends. Our network capabilities have facilitated the growth and sometimes even market entry of our customers. This is supported by our capacity to maintain and evolve our network and supply chain to grow with our most important customers. We placed significant emphasis and priority on operational excellence and the notion of continuous improvement. It drives against the need to be relentless about ongoing efficiency, which supports both our returns and our competitiveness. Inghams license to operate will be determined by many factors, but none more than our ability to provide secure and safe food supply. While promoting and practicing demanding standards of animal welfare and pursuing a long-term commitment to running ever more sustainable operations. In our business, we have emphasized the importance of our cultural journey as much as our strategic journey. A long heritage of a family-owned company set on by the short-term private equity thinking does not necessarily promote the capabilities, leaders or behaviors that create an agile and sustainable future. This business needs different capabilities to grow at the form than just the ones that got us to listing, and we have been actively building those capabilities. Since listing, this company has established a long-term and sustained improvement trends in the safety for our people. This is not just a moral imperative but one that supports a high-performance workplace and retains experienced people, driving continuous improvements in efficiency, utilization, yields and waste are supported by an inclusive culture that engages people and encourages them to bring forward ideas that promote progress and advances in all of our processes. The success of our continuous improvement activities relies very heavily on tapping into the experience and observation of our frontline leaders. So goes the leader, so goes the culture, so goes the culture, so goes the company. The quality of leadership that our people experience every day is the single biggest factor in their positive engagement and the effort and contribution they put into their jobs. We invest heavily in the development and growth of our leaders because this will be a source of competitive advantage in their quest for talent and ultimately, the performance outcomes will deliver. We have published and committed the business to a sustainable agricultural road map out to 2030, including multiple targets in relation to the care of our people and our animals, climate action and safe food supply. In the medium term, most of this effort and commitment that we have made is what you might describe as being inside our gate. And the things that we have most direct control over and that we're most readily able to impact. These details, we have been very deliberate about outlining and publishing in recent annual reports, and we've committed to both evolving and shaping those targets with and where possible with necessary investments or as particular new and novel solutions arrive, and we will invest in those. With that, I'm going to hand over to Gary Mallett, our CFO, to talk through our capital management process. And following Gary, we'll be happy to open up for some questions.

Good morning. I love the passion of the people in the videos and you can see that as we play a couple during the day. Showing quite an increase in our earnings since second half of '22. I'm sure we spoke to many of you at that time, so it's far more pleasing trend that we've seen through that time. And part of it has been the success in being able to pass on those inflationary cost pressures through the time. You'll see a gray bar there. That's how the guidance that we put out in our trading update a couple of weeks ago now. And I think, visually, what it shows is that I think we've broken out of those halves and we're at actually sort of above that traditional level. And what we'll see today is it's just the plans that we have to continue to grow from there throughout the rest of the day. We've made substantial investments since the IPO, and Andrew called out a number of the things earlier. We slowed down a little between '21, '22, '23. That was principally around supply chain challenges and COVID. I'm trying to get into the various sites. So we'll be having a catch-up from that. And we've previously talked about at the full year results in August that we're spending about AUD 100 million in FY '24. And then I think what you'll see with that catch-up, but also with all the plans that are outlined today, particularly by Anne-Marie and Ed later on that will have elevated CapEx over the next few years because we've just got good opportunities and good returns that we can deliver from those. We have done a fair bit of upstream investment, which Andrew talked about, there has been investment in our primary and further processing facilities, but that will be the emphasis coming up over the coming few years. And you'll see that our ROIC has been heavily influenced by our earnings over that period of time. So I know it gets a lot of attention around the capital side of the calculation, but earnings is a really key driver so you see that flooding through. So speaking a little bit about our capital management, management and the Board are very conscious of allocating capital in the very best way that we can. So we need to look after the base business. We've got to take advantage of the poultry tailwinds and growth. And then we've got to also use it to be driving that efficiency. So we'll look to retain our balance sheet strength to allow us to take also those strategic opportunities that may present themselves to us. So our framework remains relevant, and you've seen it before. We've slightly expanded our sustaining CapEx and our investing CapEx into separate limbs on there. You'll recognize that we haven't hit that 75% to 90% of depreciation over the last few years, which again is back to the just difficulty we had at getting into some of our facilities and getting equipment into the country. And then as it flows through, and I'll talk about a couple of those other things further on, excess cash will either have strategic investments or ultimately return to shareholders. So we're thinking about capital allocation across four categories. And it's really important that we have a spread of investment across those first three. We've provided a rough range about that. So we can't not do -- stay in business CapEx or ESG-related spend. We'd all love to just do high-growth ones, and that's where the big returns come from. But the core growth also sits in there, and that's how we meet our ongoing demand of our consumers and customers. And we need to invest in our core growth to meet those demands. Stay in business and ESG is usually the case that the return on those will be less than our WACC and sometimes it's negative if we're replacing a fully depreciated asset with a like-for-like then under the ROIC formula will be a negative result. We've got a capital base and no change to earnings and some depreciation coming through. The core growth, we expect some more align with those sort of normal returns, WACC a bit about WACC. And then with high growth, if you think, say, for example, automation, and we're expecting plus 20% returns. And Anne-Marie and Ed will have some examples later on, which are significantly higher than that. And then the strategic investments, which really come about when the opportunity presents themselves and we recognize that sometimes, there will be a compelling case that we need to do that. We're constantly scanning for what those opportunities could be, and we'll bring them to the table when they do make sense. Examples of that could be some strategic properties within our network, so you know that we've got a large lease portfolio and one day, it could be the possibility of grabbing some [ pay ] strategic side or two back into our network, an acquisition of other business that's complementary to poultry could add significant value and something that we had [ fluked ] out in the past and we'll continue to look at into the future. And then as we grow one day, we're probably going to have to take that step change in our processing facilities. So Anne-Marie will talk about, and that's not tomorrow. And there's a number of things that we can do. But one day, we're going to have to look at taking that step change in processing capabilities as well. We're currently concluding in the extension of our debt facilities, out to FY '27, and we continued to be very well supported by our banks, and thank you. There's a couple of them in here today. So thank you for your support. Over the journey, our leverage has stayed within our target range. So we're targeting between 1% and 2% and our net debt levels, you can see we've managed to manage with discipline, manage those net debt levels through the earnings variations that we have over time. And I'll just finish up with shareholders' returns. We've given back AUD 550 million of returns to shareholders since the IPO. And dividends, we've managed to stay within our dividend payout ratio all the way through that even in FY '22, when there was a challenging period for us, we still managed to have a dividend in that period as well. So with that, I'll invite Andrew back up, and I'll take a seat.

So happy to take any questions that might have come through.

[indiscernible].

Yes, you're right. It wasn't a mistake. We just certainly have an ambition to grow our margin and we're thinking EBITDA margin which has been [indiscernible]. So if you go back to our previous best result, which was FY '21, we were around 8% and we've obviously dipped through to the last couple of years. But if you look at the results since then, we've been getting back on that trajectory, and that's our ambition in the future years to get that up into double digit.

I think specifics on double digit is a very [ bad mix ] of business for?

Yes, it's four key things. This is focused on cost efficiency, which we do all the time. It's where we can make those high-value investments, which typically help improve the cost and margin, is absolutely is next, and that you'll see some great examples of that today, that's crucial. And again, the pricing discipline. Lastly we have [indiscernible] customers and pass on costs. So those four things are required. The other big drivers of that growth.

Just one more. So just in terms of the ERP system, [indiscernible]. No, why was it abandoned or [indiscernible].

I think I need your phone for questions on that [indiscernible]. So back in December '20, let me get this right, '22, we said that we're pausing the investment that we had in the ERP project. That was really came down at that point in time due to the financial conditions, but we haven't failed in long time for that and also last time for the change that will take through the organization. Going forward, the reason we were doing it is, yes, we do have some legacy systems and one day, we do need to replace those. But fortunately, in legacy systems, it's their bespoke and they're actually really fit for purpose so that's great. The growth path that we had now, but one now we do need to replace those. And, presently at the moment, we're going through and going [indiscernible] alternative to the plan we had before. Can we do it in a more effective way as far as how we would have changed through the organization, depressing risk and also to do at a lower cost than what we previously planned. Thus used to come into the future.

Just interested in terms of the margins and aspirations, that are the same. The [indiscernible] that are over 10%, at the moment [indiscernible]. Do you need to set a certain market dynamic continuing throughout 10% or anticipation [indiscernible] prices coming back, et cetera. Just wondering about the other, looks like [indiscernible].

I think digital markets at the moment, but we're not -- we're thinking about this long term throughout the cycles. So it's our thinking, our planning, our aspirations to get that margin, even if we don't have those most favorable conditions. So that's how we're thinking about -- so we only think it's quite doable from where we are. Given the market, historically, that's been, well I think it was ups and downs. It's been very stable, it's been very rational, both in Australia and New Zealand. And if you think about some of the investments we're making that we have got control of, like in automation, they're very much contributing to that margin expansion, for example. So don't go ahead. So we're confident we can get there.

And just in this backdrop [indiscernible] like U.S. [indiscernible]. Are you seeing any early benefits of that you think in policy of Australian. [indiscernible] you're seeing any benefits? And how does that find your business much in the market?

Yes. Well, obviously, it does from point of [indiscernible]. It means our customers are prioritizing poultry. So poultry in retail is the second biggest Fresh category. We've seen Woolworths came -- we've talked about earlier. Woolworths came to us earlier this year said we want to prioritize poultry, we want to promote poultry. Can you up your volumes, which we were able to do. They've recently expanded space for poultry and increase range. I made the reference to McDonald's McCrispy, but McDonald have made a global commitment to grow their chicken business, and that's certainly translating into Australia and New Zealand. And of course, KFC is core of their business. So it's very much in this cost of living -- this difficult cost of living environment, poultry is very advantaged in that environment and customers are readily inclined to that. There's a little bit of just to make an observation. At the moment, and there is a certainly strong growth in retail and QSR. So QSR is a bit softer at the moment as they have some challenges with foot traffic. But we're seeing a compensating growth in retail, and we're reasonably comfortable with that swing.

Just going on to me the other 10% number, looks like this year you're going to be south [indiscernible] is this something that could be realistic to get into [ '24 ], do you think? [indiscernible].

Guidance? I think I should be doing that. Clearly, we'd love to get there as quickly as we possibly can.

[indiscernible]. There's a significant step in profitability that it guide for the first half relative to what we've seen over the last 8 or so.. Can you just talk us through what's changed in the last 6 months? And why you think that's the correct normal operating cadence for business and why is there a bunch of one-offs that's AUD 200 million [indiscernible].

So there's not, Gary told me out here, there's not a lot of one-offs in any of those ones and they're pretty clean earnings. I think you've got to take out that FY '22 number because it was just abnormal because it's just new to the stock, but we went through 6 months of half that workforce wasn't available, massive supply chain disruptions in New Zealand, we had major customers who were closed. It was incredibly difficult. So that doesn't really represent a stable benchmark or run rate for our profitability. If you go back to the previous best result, before that, we would be thinking about our growth on that, which was [ 2 out of 9 ] [indiscernible] that's mostly 16. This year, we're getting back to -- sorry, FY '23, we're moving back towards that and hopefully we'll exceed that in the year ahead. So we think that is a sustainable run rate because of the market conditions that we're talking about, I think our ability to secure price to cover cost has changed in recent times and the investments we're making in our network and the cost-out programs are all supporting that. So we feel that there is a sustainable runway of earnings growth. I probably should also point out our New Zealand business has and Ed will talk about this on [indiscernible], it's certainly is keeping up its EBIT run rate and will be a more material contributor to our longer-term EBIT as well.

You talked about the final productivity and performance so that the [indiscernible] changing through?

It hasn't changed materially. Again, we experienced in the back end of the first half of '23, we had some filing problems which where a legacy of COVID, which had an impact on [ fertility ], which meant that there was a short user supply. But if again, if you look at our farming practice across both the markets over the long term, we maintain incredibly stats when it comes to fertility, mortality, hatchability, they are very good numbers. And we're back on those trends. Now we got through that disruption. And again, if we can maintain those. There's no reason we can't because of the facilities and expertise we have, that should not be a problem for us.

Question about [indiscernible] is that enough to get [indiscernible] in size in terms of automation, things like that, to get there?

I actually repeat myself. There is four things I went through. We've got work on the later those 4 [indiscernible] year in, year out and all contributes to that growth.

And then my second question is just around the price of the unit in around [indiscernible] is great in terms of its value [indiscernible] prospect.

So we're not seeing any particular change away from normal practice. As I said, our biggest customers is prioritizing poultry, is expanding space, but not particularly doing it with heavily discounted product. So [indiscernible] we're quite confident that, that pricing trend can be maintained. If you look at, I won't give you the exact number, but we disclosed that at the half, but our average selling price has continued to improve across the first half.

Mitchell from Bank of America. I'm just wondering, you [ on capacity ] [indiscernible]. I guess it will be [indiscernible] more space sort of more of chicken. Are you able to meet that demand it with very [ leasing ], I guess, productivity levels?

Yes, we are and we had. So we had customer service levels to Woolworths are unbelievably high from P&L. Really I think there are [indiscernible]. So we do a very good about job about servicing our customer. When you look at our capacity, we've got capacity [indiscernible] in market growth and donate those sort of trends over the next 3 to 4 years and we'll talk to that as some of these things we're doing to maintain that capacity. As Gary alluded out beyond that, we're going to have to start coming up with some other solutions to expand capacity, and we're thinking about that. And when we know what that solution is, we'll absolutely share it with the market. But right now, we're very comfortable with having position from a capacity point of view.

So last one, so this is not [ baseball ], but I talked with a number of people about the stock in the financial markets. I worry about the volume position that Ingham has with it's each customers, [indiscernible] Many respond to that in terms of well you are in position is if you did have [indiscernible]. The [ study ] of companies have much superior motives than that do a very good job of negotiating with those big customers. I don't think a 10% margin is particularly gouging or extraordinary. I think it's -- it will be a good margin for our business relative to where we'd be. But there are businesses out there to work with those guys. We have a much better margins than that and they managed to sustain it. So now look I'm confident and once again, as alluded a bit earlier, One of the things we have really tried focusing on has been really building our capability inside the business of having people who really understand what's it's likely [indiscernible] for those big customers. And we have a variety of training relationships. And as again, as I said, they determine all sorts of things in that area. This is very different because you'll get to see clear talk about this later today, she's a great example, bringing talent in the business that really understands this type of environment. And we didn't necessary echoing that and I'm very confident that we know how to negotiate with those customers. And frankly, they are joining as well. You follow them. You can see what their margins are doing, they're certainly enjoying the growth of the category and how that's impacting their business as well. Is there any intention to expand the old [indiscernible], talk about acquisitions, and values.

I was asked this question yesterday someone said you're going into the pork business, I said empathetically, no. Look, at the moment, our strategic focus has been very much on the core poultry business because we've been -- that's where our expertise lies. That's where our strengths lie and we can see growth potential in core poultry. So that's really where our emphasis is going to change, what--what we are going through. In time quite possibly, there would be adjacent categories that might make sense for us to go into. But it's nothing that's all in the short term or medium term [ radar ].

Last one. It's a sustainability question. One of the issues that's popping up, mainly in Europe and the U.K. is around the impact of that and [indiscernible] and that has the impact on yield and cost per kilo. What's being said [indiscernible] how would you respond in business. What sort of change required around these [indiscernible].

I like this trend. Yes. I think that you're better positioned to answer that than me.

Yes. Sure. Look, the [indiscernible] is quite interesting one at the moment. You changed [indiscernible] actually withdraw from the [indiscernible] claim. And largely, we are seeing a different disease status rolling through the birds. We still maintain our antibiotic policy and that is the responsible use of antibiotics. So we don't use antibiotics pragmatically We use them to treat sick birds as we all would if we had a 6 pets or 6 children. So that position doesn't change for us, but it's an area that has a fair degree research going into which out of the states at the moment through the universities. One of our -- Susy Klein, who heads up part of our business is actually in the U.S. and have the, the benefit of visiting that research facility and has actually been engaged in it. So it certainly is a moving fit for us, but certainly, we will maintain our antibody policy, and that is the responsible use.

[indiscernible].

[indiscernible] So the depreciation policy [indiscernible] life of the asset that we're talking about. Generally, they're a longer term, for 10 years-ish probably on average, depending on what the investment is. So that gives you some guide there. Yes. And I think -- you might see a clearly depreciation is going to rise. And then you might see more than [indiscernible] next few years. So depreciation consequently go up with depreciation. If you went on [indiscernible] that would be probably okay.

[indiscernible] questions on the line? Okay? All right. Well, thanks, Gary. Thank you, I'm sure we will save some up. So the next segment on the agenda you've got.

Think we got a break now?

Okay, a break. How long are we breaking for?

[ 20 minutes? ]

Okay. Thank you. [Break]

My name is Seb Brandt, I'm the Chief Strategy and Planning Officer [ Success ] there, and I'll be shortly joined by Clair Stevenson, who's our Executive General Manager for Retail. Before I kick off, we'll just throw it to our Dinner Done ambassador, who will talk a little bit in a minute about [indiscernible] have done it. [Presentation]

So he's done a bunch of content for us, of which has been performing really well and helping us explain to Australian consumers one of our key demand space. It looks like. So our job is to talk to you about what's happening in the consumer landscape, what's happening globally, what does our product portfolio look like going forward? And then Clair is going to talk to you about how do we interact with our customers, how do we work with them to grow their businesses as well as ours and those of our shareholders. So as we look forward, and I think Andrew sort of mentioned this, we see the global and local poultry outlook has been incredibly positive and probably in the best shape it's been through a very long time. We've recently conducted a study, a very deep econometric study looking at sort of 10 years of ScanData, 10 years of ex factory data working with our key customers to understand where they see growth, global study to us, global growth forecasts overlaid with about 60 econometric variables around population growth, trends towards health and convenience and so on and so forth. So we've now got a really, really clear understanding of where we think growth is going to come from both at the consumer spend level, so how much do consumers spend on poultry and a consumer volume level. I will say the 60 pages too behind us that we actually did the 5-step category. So we now understand very well where that growth is going to come from for the next 5 years, by sub category. And if we think about what's driving that growth, as we look at retailers, and Andrew touched on this, Consumers see poultry as being very valuable. Now that doesn't just equal price. We think about value is what I get over what I pay. So what do I get? I get a versatile protein, I get healthy protein, I get one that's highly sustainable. And I get it at a price that's significantly more affordable than actually the other protein. So we look at that word value is what I get followed by what I pay. Secondly, and again, Andrew mentioned this, we've had pretty much every major retailer in Australia come to us in the last sort of 6 to 12 months, asking us to help them think about how they may get more space, more shelf facings and a broader range on their shelves. And that's an absolute privilege for us to help them do that. And lastly, I think our customers and us through deep consumer insights have really been able to bring a lot of innovation to life and that innovation is bringing consumer needs. So that's kind of what's driving retail. As we shift across to out-of-home, it used to be back in the day and particularly in QSR, but the next big thing would be a red meat style offering. Typically now, over the last 12 months, I would say that's actually shifted to the big hero launches that we've set in QSR and out-of-home. Actually have been poultry, which is incredibly favorable for us, and we have a very deep understanding both in the management team and R&D teams on what it takes to win in QSR. You're also seeing a lot more prominence in the menu. Again, used to be, they're called translates, in a lot of the big QSRs, but the middle pitch I would always be a [ big products ]. More often than not, we're seeing that as a poultry product now, chicken is really positive for us. And then lastly, I think the really interesting one is the premiumization out-of-home. So this is what we would call a whole muscle burger. And you may have read about the burger [ walls ] in the U.S., which is translated to Australia here. So we're working with our big out-of-home customers to create kind of the next big thing in the really high-quality muscle products. So that's kind of where we see going forward in Australia. As we look at globally, and I was fortunate enough to visit Canada and the U.S., and we also had teams go to U.K., Ireland and most of Western Europe. A couple of key trends happening globally. One is the strong [ category ] growth that we're enjoying here in Australia is being experienced overseas. Secondly, as those tailwinds around health versatility, and great value is also being experienced overseas. I would say that particularly in the U.K. and the U.S. retailers have invested heavily in the shopping experience of anything being able to easily navigate, being able to easily find products that they want to need even to the point of having coffee shops and actually many QSRs within some supermarket environment so people can kind of chow down on some nuggets whilst they're shopping, which appealed to me greatly. I would then say it was a little bit supporting from a kind of global [ triples ] as hoping to see the next big thing in innovation. And actually, what we realized is the next big thing in innovation is happening in Australia, and it's happening through [indiscernible] with our customers. So we feel really confident in our innovation ability post that global study. So if you move from global to what's happening in Australian poultry consumption. So we consume about 45 kilos per person per year, so almost a kilo a week. And when I go to dinner parties, I'm going to tell people that, they say no, I don't, and they actually pump them through their week and you go, what did you have on Monday night? What did you have on Tuesday night? Did you take the kids to McDonald's through the after sport on Saturday? They very quickly realized, as Andrew said, that 70% of households have chicken 3 times a week, slightly less in New Zealand around 40 kilos. So both really strong, but also we drink for growth. We see free range as the fastest-growing category. So free range is growing at around 20%, both on a volume and value perspective and also consumer seeking convenience growing sort of around 11%, 12% in those highly convenient products, which we'll talk about also. So if you net all that out, we see volume growth of around 3% and value growth at around 3.8%. So what does that mean to Inghams? We have a very, very deep understanding of consumer needs. We have a very, very deep data set. And we've been able to commercialize that, and I'll show you a really great example of a case study of how we've been able to do that in Australia. We have two key demand spaces, and we'll talk about that in a minute what they mean, but Dinner Done, which is getting on the table 7 nights a week and then RaiseRight, which is [ code for free ranch ]. We have a very, very strong and large innovation team who understand well what consumers and shop as need. And you'll hear from Anne-Marie later on also that we have made significant investments in capability and capacity to meet these needs. We are making them last month today, next month and over the next 5 years, and she'll outline that for you. So we talked a little bit about demand spaces. So what does that mean? So if you look at the very top of the chart there, there's about -- there's just shy of 9.3 million households in Australia. So 95% of all households buy chicken at least once a year. Now that's a very, very high number for such a big category. And typically, you wouldn't see numbers not north of the '90s. So Andrew, we're working in a very, very favorable category. To give you a price point, only 98% of houses buy [indiscernible]. So I'm not sure if they are stealing it from somewhere or I'm not sure what is happening with the other two, but so we're close up there. The next row then is the timeless category drivers. Why have people bought chicken since the start of time? So one is value. We talked about that. What they get what they pay. Two is versatility. Poultry has this wonderful attribute that I can take chicken out of the freezer, go to work, and I'm pretty sure that I can put together whatever is in the fridge and whatever is in the cupboard and I'm going to be able to deliver something with some of the more expensive red meat, it's just not possible when people kind of scared of ruining a good meal, we see chicken is being incredibly versatile. Taste is really you run into someone who says they just don't like chicken. It has a broad taste appeal. And then, of course, health, particularly compared to some of the red meats. But that's kind of category drivers. We need to then move deeper, which is into the why. So when we do consumer segmentation studies, there's typically 6 questions we ask is, who, what, when, where, why and why not? This goes very deep into the why. So why the consumers buy chicken? So 41% of people buy chicken because during the week, particularly adjust on Dinner Done. Probably not ordering in cooking at home, got a family on a single household, double household. And there's a significant amount of poultry goes and meets those needs far more so than any other protein. As we move across the page, Food connection might be later in the week, perhaps kids sports finished, first time the family is connecting into [ impress ] the crowd, which is probably more of a Saturday night. Maybe it's a dinner party, maybe it's a barbecue, chicken place less there that might be more sort of more of the lamb kind of demand spaces. Lunchtime heros is a real interesting one. This is where people are either consuming chicken with a sandwich or a subway or more often than not, actually, they're taking the leftovers from the night before and mom or dad who's going to work in an office like this one actually gets kind of a free additional meal. So that's one less meal to produce for the week. And then probably the second one I really want to call out is RaiseRight so making good choices from ourselves and the protein that I consume. Consumers are very passionate about the welfare of animals. They understand that a happy chicken is a healthy chicken, tastes great. And so we have 20% of our needs sitting in that spot. And then, of course, the last one is the green protein which is we know that of all the land proteins were the most sustainable in terms of their impact on the environment and what it cost us to feed them in terms of feed conversion and whatnot. So consumers understand those needs, but we're going to really go down deep now on Dinner Done and RaiseRight, which, as you can see, it's just north of 60% of all need space. So just an example of how we use this data and how we plan to improve margin. We have improved margin, how we plan to improve mix. So if we just take a classic Breast Filets. This is the biggest outside of the barbecue chicken. This is the biggest selling SKU in all of retail chicken. So breast chicken and [ profat ]. This is your everyday chicken, incredibly high welfare and also by the [indiscernible] so call that index 100, and this works for both countries and mainly with the retail focus there. We move that into a free-range chicken. Consumers are willing to pay 35% more for that same plastic tray, two breasts, the free range. But we're moving them to what we call our further process range. So that's an Inghams trend there. So breast, still 100% breast, we've turned that into a product worth what you saw with [ Manu ] earlier. That's again, a 35% premium. We now move into our sort of value enhanced area. So this is basically a chicken breast that we have cut off using a DSI machine, which Anne-Marie will talk to you about later. We've marinated for you. So we've taken away cut up, and we've taken away marinate for you. So this is going straight from your packet into your pan barbecue Air fryer, however you just cook it. 90% premium, and you can see on the very bottom row, these categories are starting to really accelerate versus the last 10 years so incredibly strong growth. When you go to the far right, and we talked about Dinner Done, which is kind of the further process and the value enhanced columns. We talked about RaiseRight, which is the first column. That far right-hand column. We've cut it up for you, we've marinated for you and it's free range. So it sounds like it's Dinner Done and RaiseRight. And you can see there are a significant price premium and kind of really 40% [indiscernible].

Sorry, [indiscernible] clarifying questions. Just -- the index, is that the retail prices that you [indiscernible]?

Retail Price and what consumers are willing to pay.

Continued growth that's stored [indiscernible]?

Yes. However, that 10-year growth, we rolled into that model that you saw on Page 1 to kind of predict what we think is going to happen over the next 5 years. Sorry?

[indiscernible].

No. We're not done for that. So as you can see, consumers are willing to pay for it. We're able to do it, helps improve our mix, helps improve our margin, okay. So just want to go deep into two. One is Dinner Done. So Dinner Done is an incredibly painful thing for Australian households. And actually I think if you all kind of think about what's today? Today's Wednesday, what are you going to have for dinner tonight? Here we go again. Most people have 7 meals, only 7 meals on high rotation. I think if you were to write down what you typically have, you're going to find you probably have 6 or 7 meals on a high rotation and it kind of gets boring. We believe that Dinner Done is a significant unlock and one that poultry can do perhaps better than any other protein. So Dinner Done is a chore, we are a great product that meets time for, we're versatile, where great value, we talked about were healthy. And we've got just an also 10% market growth in this space, so products that we add value to that help get Dinner Done. However, typically, the solutions to Dinner Done in Australia and New Zealand have been just kind of a suite of products. We think about that more as whole proposition. So a proposition that has both the convenience aspects, perhaps it has an environmental aspect, perhaps that has a welfare aspect, and we communicate it and we communicate it on shelf and we work with our retailers to build whole propositions. And a great example of a proposition is the product on the top right if you look at that at a moment. Traditionally, also, we've really looked just at flavors. Let's just do a new flavor of X. We've now got a team set up within our organization to mind data insights to work with customers, to work with consumers to deliver breakthrough innovation that makes multiple needs. For example, cooking bag, for example, pre-marinated, for example, boneless. And then lastly, I think, typically, this sort of section can be a little bit hard to shop. So we work internally, both on our brands and our retailers' brands and packaging and navigation to help people understand perhaps how long does it take to cook. So really big callouts on the front of [indiscernible] says 15 minutes for example. And we believe our understanding of consumer insights gives us an advantage over our competitors. So what does it look like going forward? Anne-Marie will talk to you about our automatic [ lead to bonus ]. Unfortunately, gone are the days of the kids fighting over the drumstick. Australian consumers have more gravitated towards breast and buys. So what do you do with drumstick mate? We now have a way to get that off the drumstick very quickly and turn it to a far more higher value items that we're able to charge more for and the consumers willing to pay more for. Cook-in-bag technology is another significant platform we're working on where so if we've taken out the cut-up for you, we've taken out the marinade for you, you can actually just slide it straight out of the bag into however you're choosing to cook at so you don't need to touch it if you don't wish to. So we see that as a significant term value add. And then, of course, healthy, clean-label marinades, rubs and flavors. We will continue to -- sort of break up that kind of 6 or 7 mill rotation and help consumers solve needs. And this is all really important because it does 2 things. It helps our customers grow their business and helps us grow shareholder value through margin expansion. And we talked about kind of that boneless bird up there. So we basically take the bones out of [indiscernible], you cook it in 40 minutes in any vehicle of your choice, roughly consumers are willing to pay twice what they do for [ RSPCA ]. And then we talked about the breasts [indiscernible] and lot of them. So that's how we plan to grow Dinner Done, and we plan to improve our mix and improve our margin. The last one that I'm to talk about is RaiseRight So -- or free range. So making good choices for me and the protein I consume, 20% of consumer needs. And this is a really interesting one, when you talk to Australian consumers and you say, "Would you like to buy free range? 68% of them say, "Absolutely, I would like to buy free range. And the category is in strong growth. We talked about this 22% growth on volume and value. However, when you really ask, I mean this is actually panel data, and then we [indiscernible] data, 8% of people only buy free ranch and 35% of people sometimes buy free range. So our job is to grow that 8% closer to 35% and the 35% closer to the 68%. And again, this will help us grow margin and improve mix. So how do we do that? Typically, I think the free range approach, particularly in Australia has been very attribute led and kind of putting tickboxes on products. Really what consumers want is a far more emotional experience. So I want to know where the farm is. I want to talk about -- is it local? I want to know the providence of it. And so we are working with our retailers on their brands and on our brands to sort of create these meaningful stories. And you can see that Marion Bay had the opportunity. It's one of the most beautiful places in Australia. We have a chicken factory down there in Tasmania. And that has an incredible providence story as does, and it will talk about what's over in New Zealand. Secondly is coming through at the point of purchase and free ranch can be a little bit difficult to find. So we're working with our retailers where we can and our own brands to try to really call out where free range is shelf stripping and making that shop experience significantly easier. And then lastly, as a reward reinforce the way the retail environment has grown in Australia, the both major retail -- all major retailers have incredible data sets now. Shoppers more would easily say, we noticed you bought free range 8 weeks ago, you haven't bought it since, here's an offer or an incentive to come back into the [ fault ] [indiscernible] start to create that flywheel turning. If we look up to how we're going to unlock this notion of from somewhere, so consumers want to know whether chickens coming from so one of our brands the Free Ranger, we've recently started to call out Southeast Queensland and Mornington Peninsula, we've seen a significant volume uplift based on helping consumers understand that kind of more emotional side. Secondly, as we talked about value enhanced and further processed. So if you think about the far right-hand side of earlier, when we roll up all those attributes together, we're able to charge more and more. And then lastly, as you know, we just start thinking about our estate, our total business and do we have enough farms to support this growth. So we're working now to make sure that we can support free range growth in the next 5 years. So as I just finish up on the right-hand side there is how we monetize these consumer trends, and we talked about that 30% to 40% premium for tray pack, free range and then down on the bottom, the breast steaks. So in summary, we have a very deep understanding of consumers. We've got a proven ability to commercialize what consumers want. But we've got deep R&D and innovation capability and we've got strong relationships with trusted suppliers to help them grow their businesses. And with that actually, I'll call out Clair to talk to you about how we are going to continue to work with our trading partners and business partners to grow the category.

Thank you, Seth. So how we execute this with our partners. And the most important thing we need is strong partnerships. And the essence of a great partnership is the ability to grow categories, great value and do that through insights. There are partners are already very clear on the attractiveness of this category. They understand the tailwinds that Andrew has talked to, we've obviously shared lots of data with them and they have their own data. So they understand the poultry category. We obviously understand that as well. And you're already seeing them get behind this category in market whether that's through more space in retailers. You've seen many, many more ranges being developed and put in shelf largely in that Dinner Done space. And equally, our QSR partners are getting behind this, and there's a real priority now coming through, certainly from a menu and an innovation point of view. And there's an element of premiumization coming through. But our job is to deliver those insights and create value for not only Inghams, but also our customers and, of course, our consumers. And the key areas for us that we're going to partner on [indiscernible] and Dinner Done and RaiseRight, which Seb has just taken you through. And the good news is that resonates really well with our customers, and we're already starting to build those partnerships. And the reason it resonates with them is because not only will it create value for Inghams by targeting those high-value segments. It obviously creates value for our customers. It's similar, you can grow their revenue, and it gives them differentiation when they can get customers through their stores or through their QSRs. And of course, as I've said, it creates value for the consumer by ensuring that we give them an unmet need. When we think about Inghams and our customer value proposition, this is a really important part of us turning up as a great partner. To ensure that we can support that growth, not only in volume, you have to have the ability to deliver at a national scale. We have to be able to deliver poultry to all consumers across the whole of Australia. And that is a really important part of a strong poultry partner. The other element that is critical for us to unlock those future spaces such as Dinner Done and create those products is the actual capability to do that. And that's about how do you produce those complex products that are specialized to deliver to those consumer needs. And Inghams sits in the far eye. That's our unique capability to be able to deliver on our own scale, but also the complexity that our consumers expect. And we're well set up to be the partner of choice when it comes to poultry. I've talked to you about Insights being the essence of a great partnership and the ability to create value. We've talked about the need to make sure that you can deliver at scale and that you have that capability. But there's 3 other elements that make a great partner. Now we know our customers, we know their strategies. We know what they need from our partnership. And the first one is the ability to deliver innovation. We can't just turn up with insights. We've got to be able to deliver those products for those consumers on time, at the shelf. They've got to be great products. They've got to be products that consumers are willing to pay for. And that is how we create value for our partners. It's not just product, it's going to be how do we support them on their ESG agendas as well. The second one, which is critical in this space, it's critical for all manufacturers certain of food. But when it comes to quality, it's about safety as well. When we deliver a product and it goes all the way through Australia, we need to make sure that product is safe and fresh and it's consistent for our consumers. The importance of that ability of national scale comes into the player quality, and our customers tell us that we lead the way when it comes to quality. And then lastly, we talk about animal welfare. This is becoming more and more important to consumers. Therefore, it's more and more important to our customers. And of course, it's important to us. And we will continue to lead the way when it comes to animal welfare, and we will partner with our key customers to make sure that we support them in their ambitions as well. And underpinning all of that is service. I think all of us would have heard the challenges through COVID, and it certainly wasn't unique to poultry. And what we learned through that is if you don't have great service, it can make it really difficult to have strategic conversations. You can't turn up with innovation, if you're not delivering it on time. So it's all about making sure that we can deliver on time, in full, safe quality product with good fresh shelf life to all consumers in Australia. We know our customers, we know our customers better than anyone else. And the good news is our partnerships are so strong that they know our strategies, we know their strategies, and that is how you form great partnerships by ensuring that you know how to create value for them. And lastly, I wanted to give you some insight on some of our relationships. We have been around for 100 years. And in that time, Inghams have developed a relationship of decades old from 30-, 40-, 50-, 60-year-old relationships. And with that longstanding relationships, comes the deep knowledge and understanding of each other's businesses, which is quite unique, certainly in my experience. And having that longstanding relationships gives us an advantage that we know their strategies, they know how to support us. So we actually know how to partner with our retailers and our QSR partners in how to unlock value. And equally, we can partner together to solve challenges and problems that arise when certainly in this industry. But it's not just about [indiscernible], it's not just about KFC and it's not just about McDonald's, -- although these are key partners for us. We have a diverse customer base, which goes across wholesale, export, other retailers, other QSR. And we've actually got some growing relationships emerging with ALDI, [ Hungry Jack's ] and Hellers and having the ability to replicate us a longstanding relationships with more customers is how we'll continue to create value for Inghams. So you've heard about our great insights. You know where we want to go to create value. We know how to partner with our retailers and our QSR customers and we're well set up to deliver the growth by having a natural footprint and strong capability to develop those products for consumers. And that ends our section. Thank you.

Thank you. So more than happy to take any questions that Seb and Clair might have stimulated for you there.

Just one thing you talked about customers in the [indiscernible]. So what about in [indiscernible] customer if we look across the customer [indiscernible] doing brand how are you trying to build [indiscernible] supply and the requirement [indiscernible] really does [indiscernible]? And how do you try to grab that customer building royalty [indiscernible] allowing you to have a strong position in [indiscernible]?

Yes. Well, I mean, clearly, the category is developed over decades, has got a very high proportion of retailer-owned brands, I mean, KFC, McDonald's, that have taken their brand to market. So as a category dynamic there isn't really operate the same as many other FMCGs. But where we have opportunities to build brands like Free-Range in Australia or they -- our complete freezer range or Waitoa in New Zealand. We're investing quite heavily in that, which is building that royalty with the end consumer. And of course, while we don't own the Macro brand, having exclusive supply of that brand because we set up a network -- a bespoke network to service it, and that gives us some -- certainly some security over that. Do you want to add anything?

Yes, I think just 2 things. One is where we have to follow-up in sales and [indiscernible], but work we have for content like that [indiscernible] we actually put a link in the volume to where the actual [indiscernible] for us, so we'll stand on the [indiscernible] with us [indiscernible] business allows us to actually quite consumers -- [indiscernible] online. And the second one is this whole campaign in retail, all the videos you see [indiscernible] behind me. What we think about is the 3 problem approach. So one is in total staff. So we want people to feel good about working at Inghams. Secondly, is that our customers. So we want our customers to which -- obviously, KFC and McDonald's to understand our desire is to be always good. And then we want consumers, which is more of the consumer-facing the thing that sort of [indiscernible] own smoke, and our own pace as well, that's more direct to consumer. So as we create our suite of assets, we've deployed them against each of our strategy. That's all.

[indiscernible] opportunity the [indiscernible] on margin. How do you get [indiscernible] value at and what percentage is [indiscernible] business, because there's a lot of talk obviously had [indiscernible] some [indiscernible] pull back. Where do you think that [indiscernible]?

Yes, so we just completed the 5-year volume projection by [indiscernible]. We see, well, a couple of things. One is we see value add or further process products growing significantly faster as a base, and we see that for less than the next 5 years. And Edward is going to talk to you about what we're putting in place to sort of [indiscernible] that.

Sorry, [indiscernible] a bit. Just on the percentage of penetration, where do you think [indiscernible] best in practice, [indiscernible] sure about that. [indiscernible] 800?

I don't know the answer to that. That question because I'm not sure if it's relevant [indiscernible]. What we're thinking about is how do we grow our share of that in our volume because it's higher value, higher-margin products. So that's where the focus is. And then the markets internationally, have quite different focus from that sense. I think it's more thinking about the market we're operating in and how we expand our share of that.

So just in [indiscernible] periods. But is there anything there [indiscernible] QSR, as it is [indiscernible]?

So we are -- we haven't talked to specific margins in channels because it's competitively pretty sensitive. But the channel -- the profitability in channels doesn't vary greatly. I guess the channel that's probably got the most volatility here has been the wholesale channel, where it tends to react to supply and demand. But I would say that we did in the last 2 years, you've seen a step-up in pricing in the wholesale channel that I think is structured with there for the long-term. So that's -- that's been -- in terms of thinking about the business, I think it's the ebbs and flows in the wholesale channel are probably the one that makes the biggest difference to margin.

[indiscernible] change or?

Well, so we've passed on quite a bit of price in that channel. And you go to people like MJ, this sort of for the processes. And they pass that on to their customers, and it's sticking. And so as we're not seeing the same, in recent times, we're not seeing the same volatility in that wholesale price than we historically have seen. And if we can get that to steak, it's going to be quite advantageous.

Yes. [indiscernible] when you talk about the revenue value growth of 3.8 to 3.1. [indiscernible] contribution of 0.7% sits very low.

I think the thing about that is the mix contribution. So a lot of the products we saw that we showed a higher value actually might have a buyout. So take the buyouts [indiscernible] so take the volumes bird, actually weighs less than whole bird [indiscernible]. So I would rather think about it as price [indiscernible] change.

You probably will be actually -- and keep them?

Yes. So you may see the same number of [indiscernible] to further processing where you don't have enough hands where [indiscernible], for example.

So just in funded index on free range in the Australian market, you're showing free range [indiscernible] here.

First -- sorry, [indiscernible] asking how you're thinking about the competitive environment over the next 5 years, do you see any that's coming into the market that's [indiscernible], for example, poultry is at a risk over the medium term?

I guess it's possible. I mean the market structure, we got ourselves and buyers, 2 major players. And then we've got regional players, Hazeldene, Victoria, [indiscernible] up in Queensland. Now that structure has been in place for quite some time. It often -- has often [indiscernible] one of those bigger players coming in. I would imagine given what they have to pay to take out someone like buyout or even in [indiscernible] is that they would then become a very sensible player on the other side of that investment given what it would cost them to buy into the market. So you would think rational global player like a Tyson or a JBS, would enter the market via an acquisition would then have to be very cognizant of the returns they're going to get, and you would think that would translate into sensible behavior.

More questions about the competitive dynamics [indiscernible] products. Does it get easier as you go forward and public value proposition becomes harder to stack base plans, is that something that's going to play out over an extended period of time where you do stuff we've heard on your sort of commitments?

Well, I guess, reaching our view is that we've got a position to grow in that in terms of supplier capability, the facilities, the infrastructure that we've got invested, I think Edward will tell us a bit more about how we think about setting up the networks and we become even more [indiscernible] at doing that because it's a fast-growing area. If we can gain share or gain more share of that business, do it more efficiently, there is going to be an attractive growth option for us. And as capital become a key winning criteria, [indiscernible] rather than spending capital. I think it's probably -- I don't see our [indiscernible]. They haven't think about [indiscernible] value enhanced operations, how you set those up so that you're maximizing [indiscernible] efficiency where a sensible or when you're doing deeper [indiscernible] for marinated products, you've got more efficient systems to do that. So I mean, I think we are really focused on our capability to do that really well. I'll let Edward explain a bit more.

As of the weaker contracts -- [indiscernible] principally negotiate at Inghams heads level on a national basis. Sometimes they divide up the business on state base or if they share a business that might be one converted in a certain region and what have you. But they are very much essentially negotiated contract basis. We're not -- we're past the days of stakes within your own individual [indiscernible].

We thank you very much and that's it. We'd like to move on. [indiscernible] we'll take a brief 10-minute pause. And we'll come back with Edward. [Break]

[indiscernible] so not only do we have our national network. We spoke about the biosecurity controls that we've actually got in place, which are absolutely critical for a business-like Inghams. But we also have incredible technical expertise right across the business. And that starts from our farming, from our nutrition, our feed mills, when we look at welfare, we actually have the highest number of vets that we recruit ourselves, and they make sure that their fundamental job is to ensure that our welfare standards remain world-class and that's what they are. In terms of our unlocking innovation and making sure that we service our high-value segments, it's absolutely part of our know-how. It's something that we do incredibly well, and it's something that we can actually service at a national level that others can't. And that's something that we will continue to invest behind not only with the teams that we have in place across [indiscernible] portfolio but also across the manufacturing facilities that we also run. And ESG, our credentials in sustainability are unmatched in the poultry world. And it's something that we say with pride, from a welfare point of view, from an environment point of view, or from a social point of view, we hold ourselves in absolute stead from a sustainability perspective. We've set ourselves very ambitious 2030 targets. And these are the targets that we absolutely believe we can deliver, in addition to targets for packaging, targets for water, welfare, and we are the leaders in food safety in Australia. I had the fortune of also going overseas and benchmarking ourselves globally. So actually, was the U.K. and Europe tour. And this was a fantastic trip for us to actually go across to what we're doing to be some of the best players in the U.K. and Europe who service -- serving top tier customers in U.K., Europe and actually learn and make sure that we continue to stretch our thinking, challenge our thinking in terms of where we're going, what we're designing and what we have -- what our ambition really is. And when you look at it, we look at lots of similarities. So tight labor is very much a significant issue for the processes in U.K., Europe. And it was one of the key drivers for automation, particularly post-COVID. They experienced very similar things to what we experienced. And so it became a real driver to really look at how they could reduce their reliance on labor. Significant investments in automation. We saw lots of examples. We saw some that were further behind than us, and then we saw what was something that I don't think would ever work in Australia, but it was certainly one of the highest automated facilities that we had seen and was very much its own little village. An incredible investment and then we saw everything in between. So it gave us a really good broad range to actually have a look at. One of the key things that we actually identified was the plants are operating 20 hours, 6 days a week, generally. And that -- when you look at poultry facilities and you look at one of the reasons why we don't do 24x7 it's ultimately because we've got that clean down that we've actually got to do from a food safety perspective. But it really supported and endorsed what we're looking to do from a capital-light option to unlock capacity. Andrew and Gary have both spoken about what are some of the options that we've got within our facilities. One of our options definitely is that we can actually move more to this kind of model. It is a capital-light option but it certainly allows -- we operate 6, 7 hours, 5 days a week. So you can just see, just with that differential between the way -- between what we operate and what we saw overseas certainly starts to allow some capital-light options to unlock capacity. It gives us the confidence that over the short- to medium-term, we will have that capacity to meet the needs of our growing business. One of the other key findings was primary processing was designed for speed, really high-speed, heavily automated, still a heavy reliance on labor. I was hoping that I'd get over there, and I'd actually see these really high-speed automated sites and maybe 100 or 200 people. And I was basically disappointed, most of the sites still at 2.5 million birds, we're still recruiting 1,000 people, okay? So it's still -- there still is a reliance on labor. But what it does give you and what automation does give you, it certainly unlocks structural efficiency, but it also allows you to tap into a greater pool of labor as opposed to skilled labor. So it's really sort of given us food for thought and allowed us to really challenge and benchmark ourselves. And I am pleased to say that through all of the sites and the countries that we visited in our contingent that went to the U.S. as well, proudly, I can say that we absolutely do lead in animal welfare, in quality and in food safety. And our standards here at Inghams are certainly a lot higher than anything that we actually saw at states. Moving forward, so Gary spoke about our capital and our categories for capital. As we look at it and as we focus on our investments moving forward, we think about capital as it relates to operations in 3 different ways. We look at it to unlock capacity. We look at it to accelerate automation to drive structural efficiency gains in the business. And we look at it to unlock our capability so that we can continue to deliver into the value segments that will ultimately underpin the growth of our business. And across the categories, same business, core growth and high growth. You can see some examples in terms of what we have invested in over the past and then some of the things that we are investing in as we move forward. You heard Seb and Clair talk about value enhanced and what we -- rightly said, we are absolutely well positioned in this space to continue to grow with the value-enhanced segment as we sort of progress over the next 3 to 5 years. This is an example of a product that we produce. And one of the key things that we'll be doing as we move forward, and as Andrew spoke about, was we're actually looking -- currently, we do a lot of WA in our primary plants, we'll be looking at decoupling our value enhanced processes into an individual sites. It requires -- some of the products are required batch-processing that can be high in labor, but there are also opportunities for automation. And by unlocking the value enhanced production will really give us that opportunity to look at those automation opportunities. What it also does, though, it creates more space in our primary processing facilities and again, gives us the room and the space and the ability to look at further automating and simplifying our primary processing plants, and really achieving our goal, which is really building those sites for speed. A couple mentions through the presentation around [indiscernible] and there's rubber batching. And you can see here that the ROIC and the payback on these automation investments is actually quite material. And overall, when we look at what we're proposing, we're looking at automation, increasing our capacity and productivity by about 5% to 10%, potentially even greater but we'll also reduce our labor by 20%, which is quite significant when we look at labor being one of our most significant costs in the business. So there's a real focus in the business to design our sites to look at the opportunities for automation and really look at how we continue to unlock capability, how we continue to unlock the capacity, but most importantly, how do we continue to make sure that we drive the efficiencies to ensure that our [ CPU ] remains sustainable and competitive as we move forward. From a cost perspective, and Andrew spoke about in his opening around continuous improvement and our focus as a business on continuous improvement, so when we talk about driving efficiencies, and we talk about managing costs, automation and capital investment is certainly one lever that we've got available to us. However, the lever that typically is the capital-light lever, is also our focus on continuous improvement. You can see on that top line, feed and farming is our biggest cost base in the business. Something that we take very seriously from a welfare perspective, but this includes feed farming, feed mills, all the way through to delivering the birds to the primary processing plants. In this category, we absolutely have the expertise in-house we drive best practice from a feed mill farming perspective, and we ensure that what we're delivering to our primary plants really focuses on a very sharp and very competitive [ sense ] per kilo or [ sense ] per bird as it's delivered into the primary processing plant. These are just examples of the various levers that we've got across feed and farming and primary and further. These are the measures that we actually use to measure our performance. And really, as you can see from that, there's not one indicator there are multiple indicators right across the supply chain and something that we focus on is making sure that all of these are absolutely balanced to drive the best outcome and best performance. And one of the encouraging things is in relation to continuous improvement. We talk a lot about continuous improvement, and pleasingly, in FY '23, we delivered over $40 million in savings across 300 separate initiatives. So it's not that we're saying that CI or continuous improvement is a program that has been in for a year and out for a year, it's something that's actually part of our fabric. It's the way that we operate. It's part of our DNA. We continue to invest behind it. We invest in training our people. We invest in the programs and we invest in trying to continue to deliver opportunities. As I mentioned, a lot of these projects tend to be capital-light options. So we focus on process improvements. We look at waste opportunities. We look at cost savings, we look at driving out duplication throughout the processes. And that whilst it's been heavily centric on our operations part of the business, as we look forward to the next 3 years, we are looking at expanding that across the business. So that includes all of our support functions as well. In this case, we have 2 examples just to sort of highlight to you what some of those continuous improvement projects may look like. Because there are other benefits that we actually derived from a lot of these CI projects and then not just limited to cost savings. But in this case, if you look at the top picture, we have people physically moving -- chicken physically moving crates. And we put in a diverter arm. So just a conveyor that actually delivered the meat to the point of use. So not only did we get a labor saving, but we also got a safety benefit as well by reducing our manual handling through the plant. So that's just one example of the myriad of other examples that we've actually got underway. And pleasingly, we're on track this year. We continue to invest behind CI and absolutely will continue to be part of the way that we run our business moving forward. On that note, I will thank you and hand over to Ed.

Thanks. And look, as is the way, I'll start with a video. [Presentation]

Good morning, everyone. I think as Anne-Marie said, and every speaker that has come before me had said, animal welfare is clearly important to Inghams. And from a New Zealand perspective, we obviously announced the market recently. Our move to became the first New Zealand poultry producer to be 100% SPCA certified. And it's something that we're proud of, both in terms of extending our strengths with regards to welfare, as well as, obviously, from a people perspective, providing our people with a reasonably proud to work at Inghams. To look at, my name is Ed, I'm the Chief Executive of our New Zealand business. And look, there's 3 things in particular that I think is worth touching on today, which isn't necessarily in the order of the slides. And the first is our learnings from the last 12 months. The second is the actions that we've put into place to become a kind of more resilient and a more profitable business in New Zealand. And then finally is obviously our strategy and some level of the comprehensive thinking that is behind some of our future choice making, again, all with respect to the New Zealand operation. Moving up here on this slide, I'll probably turn your attention to 2 things immediately, just given the questions that have come today. The first is our ambition. And over the next 5 years, we plan on doubling EBITDA Pre AASB-16 versus our historical run rate. And we think that the plan that we'll start to talk you through today goes a long way to showing how we're going to achieve that. The second is our strategic intent, which Andrew referred to upfront, but it is this idea of being New Zealand's first choice for poultry, and we're going to achieve that through a brilliant partnership-focused operational excellence and system-level innovation. And if I touch on those with a little bit more detail, I suppose, they've got all underlying beliefs or 3 core beliefs. And as Clair alluded to in her presentation, we believe that we can achieve far more through partnership than we can through transactional relationship. And when we talk partnership, we're talking partnership with our people, we're talking partnership with our customers and we're talking partnership with our suppliers. Our second belief, and this is really what Anne-Marie referenced, this is the idea of by focusing our operations on the things that create value for our customers and that create value for us, we're able to extend our value proposition and will become more profitable over time. And I think if you think about how you create double-digit margin, I think that's at the essence of it. And then finally, if this idea of system-level innovation or a belief that to properly differentiate yourself within the poultry business. It's about differentiating at a system level. And that is things such as introducing new welfare standards which fundamentally means that you're operating a different playing field relative to the other players in the market. I mean as to our strategy as -- first, we've got the intent in terms of how we're going to win, and this is what I'll talk through, so I'll touch on our briefly, but it's capturing the full potential of today, there's still an awful lot of upside that can come through our core business. Secondly, is investing in automation, not as a means to an end, not as an engine itself, but a means to an end. I think, certainly, from a New Zealand perspective, there is the increase in productivity that you get from automation investments. There's also the reality that we operate in the [indiscernible]. We're relatively isolated. And therefore, we need to reduce our reliance on scarce labor. And so I'll talk through that. And then finally, I think Warren Buffet, I'm not referring to myself as Warren Buffet. But Warren Buffet refers to this idea of the economic advantage or the mode of economic advantage, and we're creating our own mode of differentiation, and we'll achieve that in New Zealand. Firstly, we enjoy cost leadership. There's a reality that the main game is always the main game, and so we need to extend that cost leadership relative to the rest of the market over time. We're going to invest behind Waitoa. We've got the #1 free-range brand in the market, and there's a real opportunity there to extend that ahead. We're going to innovate packaging. And then finally, we're going to continue to raise the bar as it relates to welfare and attributes. And then the final note is just some of our strategic capabilities that we deem as sort of critically important to enabling that strategic intent. The first is capital discipline. We need to be spending more time thinking about how we deploy cash in a way that both sustains the core business is what makes the business more productive tomorrow. The second is business intelligence, I'll touch on that shortly because it's a learning from FY '23. And then finally is our go-to-market approach, and how we use or how we bring our products and our brands to the market in a way that maximizes value both to ourselves as well as to our customers. [indiscernible] front all of this is about really doubling that Pre AASB EBITDA as well as the coming New Zealand's first choice for poultry. If I take us back some 18 months or so, FY '23 was a pretty tough year. I think across ANZ, that I'll talk specifically to New Zealand. Q1 started with pretty severe labor shortages as well as a nationwide shortfall of CO2. Q2 we had significant cost inflation as well as continual supply chain disruption. Q3 perhaps more surprisingly, dealt with that flooding as well as cyclones and Q4 perhaps thankfully, brought some ray of light as it relates to the end of the tunnel. And I think there's little doubt in my mind that we're deal of our hand, but there's also some pretty critical learnings that we take from the period that will then put into play to ensure that we become more resilient as we look forward. I think I'm not sure -- I mean, I assume some people read -- Red Dollar as book on principles, but one of my favorite principles from that book is this idea of pain plus reflection equals progress. And I think the pain is what I've just gone through. The reflection is probably twofold. And the first is that an integrated network of assets is only valuable if you have the right people to run them. Andrew talked upfront about our investment in people as a business, both in terms of development of our leaders as well as improving our culture. In August of '23, we were operating in New Zealand with 30% vacancies across the board. And we are forced to subsequently reduce our processing numbers by somewhere between 10% and 15% for the full H1 period. Our learning is that over -- that in the short-term, we need to be more proactive with regards to a changing labor equation, and we need to really double down on these things of developing leaders so that they can create a stronger culture. In the longer-term, and that I'll talk to you shortly, is this idea of we need to reduce our reliance on scarce labor. And so our plan as it relates to automation, talk specifically to this idea of reducing our labor or our headcount by 20% across the next 3 years. Our second learning from this period of time is that if you don't have a clear understanding about the resources that are critical to your business and one of them regularly, then you'll be caught out. And for us, that was clearly CO2. It was our Achilles heel from an FP production standpoint, and we're forced to across the course of the year, reduce our production output by some 30%. And our learning is simply that we need to be more proactive with regards to picking up on weak signals from the market, and that's why we talked to this idea of a strategic capability being Business Intelligence. And Business Intelligence is really saying, how do we flex up a capability that looks at the market and takes weak signals, turns them into insight and fundamentally decision-making that both manages downside risk but also capitalizes on upside opportunity. I think all that said, and they are the key learnings, we certainly emerged stronger from FY '23 than we went into it. And there's a lot of things that we look back on and we're pretty proud of. We raised wages by 17%, to reset the people equation. We acquired Bromley Park Hatcheries, which provided us with end-to-end control of our farming network. It provides us with capacity for future growth as well as improved network resilience. We transitioned off CO2 at both of our further processing sites. We've fast tracked our plans to automate primary processing and reduce our reliance on labor. And then finally, we raised pricing by some 15% across the course of the year, which is fundamental to where we are today. And then -- and so we exited the year with a very strong run rate. And indeed, we've followed that through or carried that through to FY '24, and with the caveat of there's still 6 weeks to go until the end of this half, we're currently on track to do in the first half of FY '23 -- yes, FY' 23, what we did in the full year last year, which I think is -- exceptionally talks to the choices that we made across the course of the last 12 months. We've seen -- I think everyone's required at some point as a business, we are -- we have made the decision to sponsor this idea of global study tools to pick up on best practice operations and processes as well as bring back trends and opportunities back to Australia and New Zealand. I won't go through them in any detail. I thought it's worth -- did not go on material, that's 3 people from New Zealand did. But I think the learnings from our perspective and what you'll see flow through the strategy and how we think about strategy from a New Zealand perspective are up there on the page, and that's this thinking of traceability, provenance, which reference sustainable packaging, as well as there is a very real need for a short-term flight to value. When we zoom in on the New Zealand market, I think there are some pretty important differences that Andrew referred to upfront in his opening and are important to call out in a little bit more detail. The first is that chicken is being challenged for the mantle of the cheapest protein from a New Zealand perspective by pork. And I think the so what of that -- I mean, I watch by brand a bit to work out the -- but it is that on pricing alone, we are now substitutable. And it's definitely a difference between Australia and New Zealand, and we must, therefore, work harder to promote these ideas of sustainability, versatility, health and all of the other kind of relative advantages of New Zealand versus other animal proteins. The second thing that I want to call out is this idea that we operate in a very advantaged market structure. So within the New Zealand market, Inghams and Tegel occupy roughly 80% share of the market. I think perhaps more importantly, Inghams and Tegel are the only vertically integrated operations. So with the acquisition of Bromley Park 6 months or so ago, probably took the case a month ago. But with the acquisition of Bromley Park, Inghams and Tegel now supply all of the day-old chicks into all of the other processes within the New Zealand market. And the point of that is probably twofold. The first is -- only us and Tegel has the unique opportunity to differentiate through farming practices because we control the genetics and the upstream inputs into other processes. The other is that we can control our own destiny as it relates to growth within this market. Finally, when we zoom in further on Inghams, we see that whilst we have the same intent as the Australian business, different markets as well as different networks, quite frankly, necessitate the need for different strategic choices. And 3 things in particular I want to call out. The first is that our consolidated primary network, so we only have one primary operation versus Australia's 5 primary operations, means that on the one hand, we enjoy structural cost advantage relative to the other players in the market. So Tegel operate 3 primary processing plants, brings the third biggest to operate in the market also have 3, and they've both got about 3x the amount of labor. So we had structural cost advantage within the context of the New Zealand market. The flip side to that is that we don't have -- we can't look at things like decoupling [ BA ] from our primary operation. We don't have the optionality, and we don't want to bring complexity into our sole operation because that may impact costs. And that's where this idea of how do we differentiate upstream, I think really takes effect. The second thing worth calling out and probably to Ben's question earlier is we do have the #1 free range brand in the market. It provides us with an opportunity to talk directly to the consumer. It's commercially attractive. And it also really speaks to these ideas, as Seb referenced, around providence, animal welfare. And since we went carbon-zero with it, obviously, around sustainability and provides us with a real consumer brand to talk to consumers about our sustainability attributes. And then finally, as with the ones businesses and as AM referenced, we continue to be the leaders with regards to quality with regards to safety as well as with regards to animal welfare. Well, all of these, I think -- and if I bring it into a bit of a so what extensive -- when we think about strategy from a New Zealand perspective, there's 3 criteria that are worth referencing. The first is that we need to extend our strengths and our strengths are cost leadership, our strengths of welfare, our strengths of sustainability and our strengths of quality. The second is that when we differentiate, we need to differentiate at scale, and that will be through upstream innovation, which fundamentally flows to the rest of our product set. And then the final one sector is that we need to build a network over time that's resilient and has capacity to grow without adding unnecessary costs into our production processes. And if you think about how these have in some way or another come alive over the next -- over the last sort of 18 months or so, they're up here on the page. So firstly, we launched the first carbon zero product to the market, under Waitoa. This move allowed us to commercialize sustainability. We pass through the costs, got increased ranging and it provided us with this platform to naturally talk about the lower carbon footprint that poultry offers versus all other animal make proteins. The second one up there. We acquired Bromley Park, as I referenced before, this insured -- provides us with end-to-end control of our supply chain. It provides us with additional network resilience, and it provides us with much needed capacity to support future growth. And then finally, and the video -- pay tribute to this is -- at the beginning of this financial year, we became the first poultry producer within the New Zealand market to be 100% SPCA certified. And when I talk about differentiating at scale, things such as this is what I mean. It's this idea of suddenly we're not competing directly on commodity. We're competing on another playing field vis-a-vis our competitors. On SPCA, I thought the video probably did a better job than I did of talking about what the requirements are. You can see them up there. I think the important thing to note is that there's no significant cost in cost from Inghams' perspective or from a production standpoint. And this really goes to my second point, which is that I think you quite frequently hear this idea of welfare and to some extent, sustainability, our table stakes. And look I don't think that is the case. And I don't think it's the case because there is clear and we have enjoyed clear first-mover advantage with regards to both within the New Zealand market. So what are the advantages of moving first? I've got them up on the page, but we're allowed to codesign the requirements with SPCA and that meant that we are able to design it in a way that didn't represent a significant cost impost to us from a business standpoint. We're also allowed to differentiate at scale. It allowed us to market something new. I get a fair bit of niggle from Andrew around this, I got in women's weekly, which is early [indiscernible] highlight -- it's overreactive of -- that there was a reason to talk to the market about what we're doing. We strategically partnered, as Clair referenced, we've got these great long partnerships, very similar customer set to us and they provide the platform to launch this through to the market. And then finally, and as I referenced upfront, it was a reason for our people to be proud. And I think you can see that in the way in which people are showing up across our business. AM's referenced automation, our focus for automation is going to be Te Aroha, sorry, our primary processing facility, which has about 550 people. And as I said, we operate within the [ Waikato ] and labor is relatively scarce. The full automation program, which will be stretched out over a 3-year period is designed to lift capacity by some 12% across that period and reduce our reliance on labor by 20%, again, across the same period. I think importantly, and as I referenced upfront, all automation is about delivering an outcome and is not an outcome in sales. And for us, it's around productivity, it's around capacity and it's around reducing labor. And then finally, and similar to [indiscernible], you can see there's very attractive returns on the invested capital up there. There's very attractive ROICs. And ultimately, it will also make our workplace a safer place for our people to be working in. And then this is the final slide, and this is just providing, I suppose, in particular a little bit more detail in terms of how we plan on doubling that EBITDA versus our existing run rates. Well we've got 3 key levers. The first is operational excellence, very similar to ours. We've got a CI program. We've got an automation program, and we're also looking at how we're going to optimize our supply chain or our distribution model over time to reduce cost to serve into our major customers. And you see that across the course of the next 5 years, that would deliver $16 million to $24 million in underlying. Secondly, sustainability and welfare. We will continue to raise the bar to compete. We'll continue to use sustainability and welfare as a basis to differentiate, and we will continue to commercialize what we're fundamentally very good at, across the course of the next 3 to 5 years, that will deliver $3 million to $5 million. And then finally, brand and innovation, extending Waitoa leadership as well as really investing in tray packing capability and more sustainable tray packing will deliver in the vicinity of $4 million to $7 million across the next 5 years. I think there's 2 points and the question was asked earlier around opportunities in adjacent areas, et cetera. The first thing is that I think what this slide shows is that the main game is always the main game. Making our core more efficient through operational excellence. You can see there, it delivers outsized returns relative to the other levers that we have at our disposal. The second thing I'd note is that we have this real line of sight as to how we're going to achieve that financial ambition. And therefore, our focus as a team from a New Zealand perspective, and obviously, tying in with [indiscernible] is around how we properly execute against that. Without the user, how can we bring the benefit forward over time? Finally, we had these 3 strategic capabilities, improving discipline, capital discipline, [ AI ], is about ensuring that FY '23 doesn't happen again and improving our go-to-market approach will allow us to maximize the value that we create or that comes into us through our customer propositions as well as our pricing through the market. So hopefully, that provides a bit of insight. But Australia and New Zealand have exactly the same intent. There's just a reality that because of the market composition as well as the network composition, you've got slight nuances in terms of how you fundamentally win within your respective markets over time? And on that, I will hand to Andrew.

Thanks, Anne-Marie. It's very good. Again, happy to open up for any questions or comments that the guys just stimulated for you.

So can I just understand what [indiscernible] there was 2 different [indiscernible] growth levers. There is something you need to [indiscernible] on here in Australia. And the cost of [indiscernible] reducing by [indiscernible]?

Yes. So Craig, I guess what I was talking about was the range of the scale of automated facilities that we actually saw overseas. And what we're designing will be fit for purpose for our market here, our product mix and our growth trajectory as well. When we look at what this particular facility had, it was bills or whistles beyond what we would ever need in this marketplace here and it was fit for purpose for their market and was fantastic. But our focus is really on automating to drive out those structural efficiencies that we are really keen to generate and really make sure that our primary plants are built for speed and where we can automate on -- from a [ VE ] point of view, we'd certainly be looking at those as well.

Isn't that also given the size of the number of birds they process that we would never get to?

Yes, yes. I mean it was a very, very large facility. And as I said, it was fit for purpose for that environment.

I think what's being touched on, but it's made quite an investment [indiscernible] in the hatchery, both in Australia and New Zealand, what [indiscernible] move there? Is that about a lot of the [indiscernible] chain that you had the outsource [indiscernible] do you want more security and control there or is there something...

No, it's not -- that's been outsourced. The 2 hatcheries, we invested in most recently, Victoria and WA. Well, at first it's about capacity. So it's mainly we got enough eggs, enough chicks, ultimately to process. So that -- and they were replacing existing and old assets, and we replace them with the best available technology in the HatchCare, which also had a significant welfare advantage. So the chicks are getting immediate access to food and water. And that should translate into them landing on farm in a better shape and more efficient growth over time. But that is very much about a capacity issue, which is the same issue with the breeder triangle in Northern New South Wales.

Last one, just on New Zealand, there was a competitor take had to be focused on [indiscernible] putting that extra capacity that they had in that market. How would you describe the level of excess capacity?

Yes. So I mean, you're right, Tegel [indiscernible] until they let the stock exchange and change ownership. I'd currently described it, firstly, as a very rational competitor within the market. And I think that's reflected in the average sale price that we're getting across the New Zealand business. In terms of capacity standpoint, I think when we assess capacity, we think that there is not a lot of sort of primary processing capacity within the New Zealand market currently. And therefore, we don't see a significant risk of FY, whatever it was '18 or so, happening again in any short period of time.

And just I [indiscernible] target to double our EBITDA [indiscernible]?

Yes, that's right. And I should -- look my caveat is what's up there. I'm talking about management reports. So it's probably pre-royalty as a simple way of looking at it.

I think I did say, Craig, that the next number of -- number of years, New Zealand will become quite a material contributor to our EBITDA growth.

[indiscernible] actually quite New Zealand has [indiscernible] coming through. [indiscernible] very challenged [indiscernible] through. Do you see the market staying in [indiscernible] supply [indiscernible]?

I'd suggest that the outlook for growth is very similar to Australia. We'll target between that sort of 3-odd percent there thereabouts across the next 5-year period. As I said, I think the nuance as it relates to New Zealand. Is this -- our sales and [ table ] supply, the upstream day olds into the other processes. And I think what that inevitably means is that we've got more control over our growth prospects relative to the other players within the market, which means that I expect for the New Zealand market to also remain rational over the next period of time.

Also [indiscernible] Inghams said that [indiscernible] just if you can give us a further [indiscernible] on how you say -- the outlook for [indiscernible] second half is coming on as [indiscernible]. And then the second one, [indiscernible], just over the last x number of years, you had some pretty significant programs in the poultry [indiscernible] in terms of fee ratios. Do you still see much opportunity around that? Or is it more -- is it more learning around these -- to optimize profitability by [indiscernible] project?

So I'll deal with the first piece and then pass it to Anne-Marie. Look, clearly, global feed price. And that should be [indiscernible] for us are wheat and soy and they remain elevated. We're just looking at the numbers as recently as this week. There's been some improvement in wheat prices locally because we're at harvest time. There's a bit more liquidity. So that's nice, but so has jumped up again. So it's had a big spike up to do with South American supply conditions and U.S. demand. So look, at the moment, it's not the outlook is not a lot different from when we talked at the results. It's still elevated our numbers are assuming it's going to stay and stay that way for a period. And as we always say, you're guest is as good as ours on that one.

Yes. And in terms of farm performance, we're always looking for opportunities to improve farm performance. You -- with genetic improvement, there's always an opportunity to look for improvements. So we certainly haven't capped out, and it's something where we get the optimal feed and nutrition from a performance point of view with the bird. So to ensure the potential for improvement remains -- and really theoretically should remain in that sort of broiler space, providing we get that optimum mix between feed and performance.

You just want to mention the cost equation to that as well, in particular by [indiscernible] costs?

Yes, you can. So I mean, in terms of you can always go for accolades and look for getting the best feed conversion rate, for example. But if you're going to be spending $70 a ton to achieve a 2 or 3-point improvement in feed conversion, it's not necessarily the smartest payback. So from our perspective, we always look at what is the most economical way of feeding the bird to get the most economical outcome, in terms of that return for that base that comes off that bird. It's something we spend a lot of time with. I referenced the fact that we've got our own nutritionist who -- that is the sole role of formulating feed. It's a precision diet. It's scientific in nature, and it's -- we've got 4 different feeds for the different life cycles of the bird and it's imperative that we get that absolutely right. But we don't guide performance. We look at what is the best economic outcome for the business.

Just [indiscernible] all of the digital [indiscernible], what else is pretty attractive for [indiscernible]. What's the constraint? Do you have any constraints on capital of the market, so you get 30% returned of these areas, you must have been trying -- we just got to try on [indiscernible]. What's stopping you putting more money at the moment, the capacity is not just [indiscernible] to do with the productivity?

Well, again, we've tried to explain through there that we have a whole mix of capital spend from sustaining and replacement capital through the ESG and growth options. I think what the team have highlighted today is where we've got some really attractive growth options, which give us well above [indiscernible] and hopefully drive that return on invested capital. So you've got to still look at the whole mix. I don't believe we're capital constrained to do the things that we want to do at the moment, Gary alluded to the fact that there's been a little -- there's an uptick in the year ahead and probably next year, which is largely speaking to with both a bit of catch-up from COVID times and also driving into these attractive options. But I wouldn't want you to leave you the impression that all we've got is 30-plus percent in investments. And if we did -- if that was all we did have is, we'll be throwing a lot of money at it. Where it's appropriate, where it makes sense, we're putting money into those projects. But it is a mix.

Gary?

Never finished -- so concur, and it's not capital. It's actually -- we've got to think about how you implement those returns. So we've got same business that we need to do. All of these plants need to keep running, and all of these automations need the plants to stop to actually implement all of those steps. So it's planning for resources, it's planning for expertise. It's getting supply chain delivered and then it's actually planning for the implementation and the successful testing of that. So it's quite a detail forward look as to how we're going to sequence everything.

And your very second slide, you have an assumption on a longer run. And it has a period in New Zealand, where you're going to be extended decline in [indiscernible]? Can you just talk us through what was the [indiscernible] between those periods? And what's the risk loss in the many points did it say that [indiscernible] as opposed to that said in the past?

Yes. In the profile of the graphs that Andrew put out had, obviously, a pretty sharp spike followed by -- and exactly to Andrew's point, I categorize that as an irrational market being driven by the largest player in Tegel, driving up production and ultimately, that resulting in poor poultry economics. I think there's a reality within the market, and this was -- this is referred to in terms of how we win it, which is that it's always balanced on economics. How do you balance? How much you're processing with your relative return on that production volume? I think New Zealand got it wrong for a period of time, and we're now in a period of rationality. And I think that what you'll end up seeing over time is a rational -- like take FY '23 to some extent out of it because everyone was constrained from a labor perspective, I think you just draw back in line with a kind of historical growth profile, which the long-term average population growth is about 0.8% from a New Zealand perspective. I expect for consumption to be a bit above that in part driven by an improvement in price relativity because the carbon tax in particular, will come and impact [indiscernible].

And then so on that remain a cheaper [indiscernible]?

Yes. Look, I mean, the pork one is interesting. I mean, in part -- I mean, there's a question so why is it in line with chicken? It's because it's imported in. So I mean that's point number one. I suppose in terms of how we think about that, firstly, I think there's some work to do from a legislation perspective which mandates that external overseas operators are held to the same standards as domestic ones. I think the second is that we need to keep working and I had up there ops excellence, but we need to keep working on our own cost base. I think there's advantage that's created from being the cheapest protein and therefore, by price being a reason to divert to chicken. And the third is this idea of -- we need to continue to call out all of the other attributes that make chicken attractive. I do think if you look at the relativity both from an absolute as well as on a percentage basis between pork and poultry. It ebbs and flows based on the season. So it's not like there's a distinct difference, I suppose, from pork to chicken, the reality, as you'd almost call them like-for-like as we stand here today.

And that's still a significant advantage to red meats.

Duration of upwards, downwards, flat going forward?

So we wanted to quantify that because we talk about it a lot. I guess we wanted to communicate that it's a material number. And that certainly -- largely speaking, it helps us offset inflationary pressures, labor being a great example. So I won't put a number on it, but we have it embedded in our forecast, and we have embedded in our thinking. It's that sort of quantum that we're looking for.

The second question was just in reference to, I think [indiscernible]. I think it was Slide #5 [indiscernible]. I just wanted to ask you , it was the macro environment that the facilities around strike? If the size of the dots was representative of something to do with the size of [indiscernible] first half, second half was like recent growth relatively [indiscernible]. And just sort of what -- any inputs that we should draw from that?

I'm just having a look at the chart now. Thanks, Richard. I think it's showing because we're in bold red and everyone else is in a kind of a dotted color, probably misrepresented the size of the facilities. But yes, broadly, we are looking -- we are basically saying that South Australia and Queensland for Inghams are our 2 new sites with the balance of the sites being smaller than those 2 sites. And obviously, our key competitors in New South Wales, Victoria and Queensland. So pretty much [indiscernible] boards. So we are overall Australia from a poultry processing point of view, we are heavily indexed to the East Coast from a processing capability.

Are you under way in New South Wales and [indiscernible] states. Is there an opportunity to sort of gain volume on that basis?

Yes. Look, we -- so with Queensland and South Australia and a bit of Victoria, we actually -- that's -- we produce in those states and then export into New South Wales. So that we've got -- we've definitely got capacity and capability that we can service New South Wales.

We don't have facilities in New South Wales. [indiscernible]. Thank you. Great. Do we have any questions online? We don't. Okay. Well, I think, if -- thank you. So thank you again for your time today, and thanks for your questions. And hopefully, we've done a good job of answering those. I guess, what we've tried to communicate today that we've been through a challenging period, but we're well internally out of it. We're enjoying again, operational stability, and we're focusing back on our strategic agenda. And hopefully, what we've been able to tell you today, what we've reported in terms of most recent results and our outlook for the market shows that the business has got some real underlying momentum and is really performing, starting to perform well and hitting its strides. Hopefully, what you've also seen today is a leadership team that's quite ambitious for the business is thinking about how the business differentiates itself how it competes, how it can grow its margin over time through leveraging those opportunities. And hopefully, you've also seen that we've actually got some pretty tangible ways of thinking about how we're going to execute against that plan and deliver it, particularly with these very strong partnerships that we have with -- deep customer partnerships that we have. And just to leave you that final [indiscernible], in the sense that we think this business with a tremendous future and with great prospects, and we think it's a compelling investment proposition. And unless there's any further questions, we'll be happy to buy lunch. Okay. Great. Thank you.