Macquarie Group Limited (MQG) Earnings Call Transcript & Summary

Hello. Welcome, Paris. Good afternoon. Welcome to Macquarie's first EMEA investor tour. A big thank you for all of you for making the effort to come, most of you from Australia. So hopefully, there's enough coffee for you. So before we get started, just a couple of pieces of housekeeping. If you could turn your phones to silent, please. And you'll see on your chair, there's a black bag there with some goodies. There's an umbrella in there, just in case it happens to rain, thought of all possibilities. So today, after a short video, you'll hear from our CEO -- original CEO, Rachel Palmer. You'll hear from Alex and the rest of the team and anyone with a fireside chat with Verkor. So with that, we will play the video. Thank you very much. [Presentation]

Good afternoon, everyone. It's a pleasure to welcome you to the EMEA investor tour. And as Sam mentioned earlier, this is the first in-person investor tour to EMEA. My name is Rachel Palmer, and I'm EMEA CEO, a role I took on in September 2024, in addition to leading the corporate operations group in region. I've been with Macquarie for 2 decades now, and I'm one of the many mobility stories that you'll hear about at Macquarie. Having joined in Sydney in finance, I spent close to 12 years in Sydney in a variety of roles, before moving to New York, where I was Head of HR for 3 years. Another opportunity arose for me, which saw me relocate to London, and I'm now starting my fourth year or into my fourth year in region. We're very excited to start the week here in Paris, which underscores the commitment and opportunity we see in the Continental European market. We first opened our office here in 2010 and in February -- sorry, in late 2022, we moved into our new offices in Paris, nearby on the Champs-Élysées, bringing together our CGM, MacCap and Macquarie Capital businesses for the first time in Paris, further reaffirming our commitment to the French and European markets. Paris is now our largest office in Continental Europe and continues to grow as we expand business here. We can also draw inspiration from our location here today. Just a few weeks ago, President Macron hosted a global AI summit, just across the street, where world leaders came together and discussed the investment opportunity and investment need driven by AI and related technologies, not least in Infrastructure and Energy Solutions, which is a theme we will revisit throughout the week. And, of course, last year, the elite athletes of the world gathered for the Olympics. You can be rest assured that we have not added breakdowns into our agenda. Our multiyear journey in Europe started in 1989 with small offices in the U.K. and Germany. Since then, we have grown to 21 locations and 2,882 staff, achieved through organic growth and acquisitions. In 2003, we entered Austria and Ireland. In 2012, we expanded into Spain and the United Arab Emirates, with our regional head count reaching 1,473. By 2016, we had expanded to Zurich, and the following year, our CGM business acquired Cargill's Petroleum business, giving us boots on the ground in Geneva. That same year, being 2017, we acquired the Green Investments Bank and an office in Edinburgh. And in 2020, Dublin became a key location for Macquarie post Brexit. It's now the home to Macquarie Bank Europe, also internally referred to as MBE, and it provides our CGM business with the license to operate in Europe and continue to serve our EU clients. Most recently, in 2023, we opened our office in Milan. In the group's last full year results, EMEA contributed 23%, driven by strong and growing presence across our CGM, MacCap and MAM businesses. Despite the substantial growth over the years, we continue to see ourselves as a relatively small player in a large market with abundant opportunities to continue to expand and grow, both geographically and into new parts of the economy. Our market here spans from South Africa to Norway and the Middle East to Ireland. It's incredibly diverse. And so I hesitate to summarize too much, but there are some common themes that have been highlighted across these markets, which have helped shape the agenda for the week. Energy Security and Decarbonization, perhaps more than anywhere else, these remain headline concerns and opportunities for policymakers, clients and communities in region. Digital Infrastructure, as President Macron's AI Summit showed, European countries are competing in the race for digital leadership and in investing in community connectivity. Social Infrastructure, these are key areas of focus for our MAM and MacCap businesses, as they partner with the public sector to help them access private capital in an environment of growing demands and often increasingly tighter public finances. While the region has a clear runway for growth, we do face into some headwinds that can also present opportunities. In terms of market uncertainty, we see subdued growth in more mature markets. While the region has some bright spots like Spain, Greece and the Middle East, this is offset by the more mature or large economies of the U.K., Germany and France, who have all set national growth agendas and are looking to the public sector, often infrastructure investors to help drive and enable that agenda. Like others, the region has seen many elections and changes in government over the years or over the recent year and is also facing and managing the wider disruption and human cost related to conflicts in the Middle East and Ukraine. This is resulting in a level of political and geopolitical uncertainty. In addition, governments around the world are adjusting to the new U.S. administration, which may create impacts or have impacts on trading relationships. And finally, in terms of regional regulatory complexities and the evolving landscape, this does create some additional challenges. However, as we are seeing, there is now more than ever stronger appetite and focus on the role that regulation can play in enabling growth. The last time we presented to investors on the region, we spoke about our intention to broaden and deepen our activities in the region. From the map, you will see that our activity now spans most markets in Europe and the Middle East. While we are active in South Africa, we are less active in other parts of Africa. We have a strong presence in well-established markets, like the U.K., Germany, France, Italy, Benelux and the UAE. These markets have been the backbone of our growth to date and continue to offer opportunities. Simultaneously, we are expanding into newer markets, Eastern Europe, Greece, Portugal and Saudi Arabia. These regions present exciting opportunities for our teams and allow us to further diversify our footprint and offering in region. This presence has been driven by increasing numbers of staff on the ground who are there to identify need and opportunity, which in turn drives client activity. We also drive growth through new activities and transactions with some of the recent highlights noted on this slide, and you'll hear many more mentioned from our teams over the coming days. While each business, sorry, in region pursues its own opportunities, where we see a collective concentration or interest, we bring these teams together to further collaborate and strengthen connectivity so that we can better enable the client needs. This connectivity happens through country forms, which are well established in the U.K., France, Italy, the Middle East and Iberia. In terms of the financial overview, as you know, we report our financial results down global business lines. However, we have consistently committed to sharing and providing visibility of regional contributions for operating income. This slide shows the EMEA businesses share of their -- the respective global business income contributions, and it also shows the significant growth in underlying revenue streams. From 2019, the region has achieved a CAGR of 10%. EMEA has been a consistent contributor to the group, which has been through our teams evolving and growing their offerings to meet the diverse needs of the client base. During the 2022 briefing, 3 strategic areas of focus were identified, and these remain as true today as they did then. In region, we continue with the Macquarie tried and tested approach of growing patiently through adjacencies. In decarbonization, for example, you'll hear that our teams are investing in companies supporting this sector, like ONYX wind turbine monitoring and ZITON, a specialist in offshore wind operations and maintenance services. You'll also hear lots about our push into the digital ecosystem and investment in data centers, and you'll have an opportunity to visit the Virtus data center on Wednesday. And you'll hear about how we are using our financial expertise to support the upgrade and delivery of new social infrastructure projects, whether that's roads in Norway or healthcare in Spain through our investment in Viamed or housing in Ireland and the U.K. As mentioned earlier, we are also continuing to look for opportunities to extend into newer markets. And finally, you'll hear about how we are responding to client needs, bringing innovative solutions and our entrepreneurialism to further grow into private capital and push into venture capital, private equity and growth equity. So looking at what's next for EMEA. As you know, and as I mentioned earlier, we organize ourselves down global business lines. However, we recognize that geography really matters. Our way of approaching this is to bring our regional leadership teams together. And in EMEA, we have identified 3 strategic pillars, which will help enable our teams to continue to deliver for clients, communities, stakeholders, and importantly, for each other. The first of these is the work we are doing to drive regional growth. Our business groups are organized in global business lines, and they manage and develop their business relationships directly, often protected by strong information barriers. However, within those boundaries, we still have opportunities to collaborate across groups to ensure that we are meeting client needs most appropriately. To support this, as mentioned earlier, we've set up the country forums, which allow us to get into a better level of local detail. In addition, our teams collaborate on shared themes. An early example of this is the work that we've done collaborating on energy transmission solutions, and that work continues. Secondly, we continue to invest in our people, culture and connectivity to ensure that we have an inclusive culture for all at Macquarie and that we continue to be recognized as a great place to work as recognized by Glassdoor. Our people in region have identified that they come from over 125 cultural identities and they speak over 60 different languages, which reflects not only the diversity of our people, but also the diverse needs within region. We also invest heavily in bringing people together and creating forums for connectivity, often done through town halls and staff engagement events. One important aspect of our culture continues to be our risk culture, which is underpinned by our strong risk management framework. A key message that we often talk to staff about is that it's all of our responsibilities for us to speak up if something doesn't look or feel right. With a large team in a highly dynamic and competitive environment, we continue to focus on how we attract and retain staff. Since 2022, we have hired 137 directors, and we have seen 148 people transfer into the EMEA region. Just shy of 60% of those transfers have come from Sydney, and a further 17% have come from our shared service centers in Manila and Gurugram. This not only benefits the business in terms of knowledge and connectivity and a consistency around culture, but it's also given our staff really enriching career pathways and opportunities. We also leverage global connectivity through mobility. And as I shared earlier, I am the beneficiary of this mobility internally. We continue to invest in the development of our people and platform to keep pace with the evolving needs of technology, AI, digital and data. We now have over 50% of our people who are using our generative AI platform on a day-to-day basis, and we continue to see this increase over time. We have also, like other organizations, continue to see productivity gains, both globally and regionally. The final pillar here is how we look to strengthen stakeholder engagement. Our stakeholder engagement begins with strong engagement with our regulators. In addition to that, we have open and constructive dialogue with policymakers, and this is to ensure that we better understand their priorities, but also where possible and where helpful, we are sharing the role that we can play as private sector investors in terms of helping them meet their mission. One of the most recent examples has been a visit to the [indiscernible], where we were also joined by members of the Macquarie Group and Macquarie Bank Boards. And we spoke to the new government there about their need and priority around housing. And last, but by no means least, as a proud Macquarie -- a member of the Macquarie Group Foundation Committee, I'd like to take an opportunity to highlight the work of our staff in relation to philanthropic efforts and social impact. This is led, first and foremost, by staff on the ground who have the opportunity to give time and money to the investments or the communities and community charities that mean the most to them. You will have seen in the video some of those highlights. In 2022, we also set up our social impact investment fund where we provide catalytic first investment or investment first catalytic grant making to organizations that are breaking down barriers to employment. Through this, we provided our first U.K. investment fund or grant opportunity to U.K. enterprise Redemption Roasters. Redemption Roasters are breaking down or reducing reoffending in the U.K. through coffee and coffee shops. And we use Redemption Roasters coffee beans in the Macquarie offices, so you'll have an opportunity to taste their coffee on Wednesday and Thursday in the office. So hopefully, this has helped paint a picture and given the insight into the activities we are doing in EMEA. You'll obviously have throughout the week an opportunity to ask questions and get into an extra level of detail from our business groups. But before then, I'm delighted to hand over to Alex Harvey.

Firstly, thanks, Rachel, for opening the European investor tour. Fantastic presentation of what we've been up to in Europe for the last over 35 years. And well on to you, obviously, it's a big job stepping up last year to lead the region. There's so much that's going on in this part of the world, and I'm sure over the next couple of days, people are going to see how exciting it is in terms of our business in this part of the world. So thank you very much. I also wanted to start by welcoming everyone here. I hope I -- we really appreciate you coming. We know it's a big effort, particularly for those that have come from Australia. We hope you find the next couple of days useful. We're sure you will. Obviously, we did the tour to the U.S. a couple of years ago. And I think one of the things that people found in that tour was that you often hear, obviously, from Shemara and I that it's not often that you get to hear from the people who're actually doing the business in the region. And so what we've tried to do over the next few days is really give you access to the people who are actually doing the business on the ground here. So hopefully, you'll find that very useful. But overall, from my perspective, obviously, thanks for making the effort. We know it's a huge amount of time that you're committing to the next few days. I wanted to do a little bit -- a few things over the next 20 or so minutes. So I want to provide a bit of context for just how the group is positioned and how we think about the strategic positioning of the group. I want to spend a bit of time talking about how we want to talk to the market about the business and some of the sort of evolutions that we're going to make associated with our disclosures. And hopefully, it will be useful for you to get a better understanding for the group. I think everyone will be aware, we put out an announcement this morning that updated our '25 guidance, so I'll spend a bit of time on that '25 guidance. And then we've left some time at the end for questions and answers. So hopefully, it will be about 20 minutes towards the end of the session. So maybe just to kick it off, and again, many of you in this room, obviously, will know the group well having invested with us for a long period of time. But I thought I'd just maybe set the scene a little bit of the context. So we regard ourselves as a global financial services firm. Obviously, we're offering asset management capabilities, digital financial services, finance, advisory risk and capital solutions across the capital structure. We've obviously been going for a number of years now, over 55 years now, 20,000 employees around the world in 31 different markets. So a very diverse business, and I'll come to that in a second. Now one of the things that's very important when we think about the business, the strategic direction of the business is all led from within the organization, from the people who are actually out there engaged with clients and engaged in communities all around the world, identifying opportunities, where we've got some expertise to bring to the table to work alongside clients, to work alongside governments, to deliver solutions that make a difference in communities in which they operate. Part of the organization, obviously, is turning this idea of people who've got an idea into a reality and helping them actually turn that idea into a reality. Now, as a result of that, of course, the business has -- we think one of the benefits of that model is the business is well positioned in sectors that we think have an attractive tailwind, not because somebody in the center has said it makes sense to be involved in these sectors, but because by self-selection by people actually seeing the opportunities, they've positioned themselves in the organization in sectors with structural advantage. Obviously, on the board here, you can see, 4 that we picked out, infrastructure, commodities and energy, digital banking and technology, 4 sectors that are strong themes that are driven across the organization. Now what we obviously do is we invest and establish those early foundations, so that experimental period, where people are actually learning and adapting. And over time, as the opportunity presents itself, we obviously grow our exposure. And you can see over the course of a long period of time here, we've grown our exposures to these sectors over multiple decades. So very medium-term focus, patiently, adjacently growing as the opportunity emerges. So one of the things really important to understand about the group is that the strategy is delivered the bottom of the organization or the body of the organization rather than from -- rather than the top down, really important in terms of how the business is positioned, and it makes it very adaptable in terms of the type of business that we operate. Secondly, of course, it's a very diverse business, and we talk a lot about the diversity of the business. We express the business at the moment through 4 operating groups. You can see on the left-hand side of that chart. Now when we talk about the business, we obviously talk -- we always talk about the business in terms of the 4 operating groups, as those who've been to our many results announcements, we always start with that page that talks about the 4 operating businesses. Why do we do that? Because each of the businesses are actually different. They offer -- they have a different proposition, different customer base, exposures to different risks and different opportunities. And we think it's very important, as you think about the group, that people understand the drivers behind each of the 4 businesses separately. And obviously, from an overall group perspective, we've aggregated together from Macquarie Group viewpoint. But in terms of understanding the business, it's really important to understand the dynamics that each of these operating groups actually face on a day-to-day basis and the opportunities to grow. So firstly, we present the group in terms of those 4 operating businesses. Secondly, it's very internationally diverse. If you look at FY '24, 66% of the income came from activities outside Australia. Now that's been as high as 75%. But last year, it was 66%. So it's very internationally diverse. And so the impacts that each of those businesses are exposed to differ in terms of the businesses they're involved with around the world. Really, really important in terms of the way we think about the underlying stability and growth of the business. Now we don't obviously set top-down objectives in terms of the proportion of income coming from any part of the world. It's a byproduct of the success of the businesses that drive that portfolio allocation. So very diverse in terms of the type of businesses and the opportunities they're exposed to and very diverse in terms of the geographies. The third piece, which is very important, is this idea of dynamic capital management. And it's there on this page here, but one of the questions we get a lot is, well, what's the right risk return for the group. Now, of course, we don't have one risk return for the group. We have a risk return that's appropriate for the business or for the activity that the operating group is involved with. And so the returns we're getting from our banking business in Australia, the BFS business, the return on equity we're getting there is obviously very different from the return that Michael Silverton and the team are trying to achieve in Macquarie Capital. And that's very important. So we allocate capital based on the risk return that's achieved across the individual opportunity that the operating group sees. So that's the first thing. Second thing is, you can see slowly over time, the capital allocation to the businesses has actually grown. And that's reflective of the point that Rachel was making, slow, patient, adjacent growth. As we learn, as we adapt, as we evolve what we're doing, as we see the opportunity expanding, we add capital to the businesses to enable them to generate the returns that we think are appropriate for the risks that the business are actually taking. And the third piece of the capital, of course, is it's very diverse. And we've talked about this before, across the group, the duration of capital is quite different, and that's very important because the duration of capital dictates how you can respond to the different conditions. And you'll hear about that duration over the course of the next few days. And then finally, in terms of capital allocation, one thing is very important is we're happy to move out of propositions. We're happy to move out of particular exposures, where we don't think we have a comparative advantage. Most recently, a few weeks ago, Michael Silverton and the team made a decision to strategically exit our exposure to the debt capital markets business in the United States. We've been in that business since 2008. So far, in terms of activity, we formed a view over the course of time that we didn't have a comparative advantage. We didn't have an edge that allowed us to successfully deploy capital into the debt capital markets business. Obviously, advisory business is quite well built out there, and Michael will talk about that later in the week. We pulled the capital out of that business and reallocated the capital and the funding to our private credit business, which has grown really nicely over the course of the last year. So we're quite dynamic in the way we think about capital usage over time. So those 3 factors really contribute to this story that you've all been part of in many cases for many years. And that's that 55 years of unbroken profitability, really important in the context of a financial services organization. Given the volatility of financial services, this is a chart we're incredibly proud of. And it's a chart that reflects all those points I just made, the bottom-up nature of the strategic planning, the diversity of the business and the dynamic allocation of capital over time. So really diverse business driving that consistency of profitability for a long period of time. And, of course, driving that outperformance in comparison with the benchmarks that are referenced in the chart. Net profit over the course of time since listing up a compound 13% per annum. The other thing in terms of the contact setting, of course, is the stability of earnings. And again, this is very important, and we'll come to this in a second when we talk about how we communicate the story to the market. But the stability of earnings for us has been really important because it obviously provides a base upon which we can continue to grow. It provides a base upon which we can continue to provide the optionality that we see from particularly the market-facing businesses across the organization. So again, we're proud of this lack of volatility from an earnings viewpoint through time, and you can see it against various peer groups. So that provides a bit of context. And that context obviously is what has set the agenda for the European expansion you're going to hear about over the next couple of days. And it's the same, obviously, as we've used in the U.S. and elsewhere around the world. Now secondly, I want to talk a little bit about how we frame our earnings story, how we present the Macquarie story to the market. And again, many of you in the room have been part of the Macquarie business for a long period of time. So hopefully, this is quite familiar to you. But one of the things that we've tried to do with our presentations and our communications to the market is we try to be very consistent. We've tried to enable you to compare the performance of one operating group between one period and the next period very consistently over time. We're trying not to modify the story very much. The medium-term story hasn't changed materially for a long period of time. So that consistency of the story, really, really important. Second thing that we think is important in terms of communicating the message is this idea of transparency. And one of the things we try and do is we try and provide those short-term outlook factors, we try and provide you with information as to what's actually driving the performance of the underlying business. And the information that we provide in terms of what's driving that the performance of the underlying business. That's the same conversations that I'm having, the same conversations the executive committee is having, the groups are having with their teams around the real drivers of the performance of the business. So transparency and consistency has been a very important part of the story that we've been telling now for many years. Since 2011, we've described our businesses, bifurcated our organization, if you like, into annuity-style businesses and market-facing activities as you see on the slide. And that demarcation, that bifurcation of the business has served us well. Obviously, that underlying earnings story, that stability of earnings coming through from the annuity streams, we think has grown over time, and I'll come to that in a second, but that stability of earnings, together with the market-facing optionality provides an attractive proposition for investors to be part of. That story has served us really well. We continue as the business evolves to try and evolve the way we talk to all of you. So, yes, one of the things that we have done, obviously, is these investor tours. We started the investor tour with the tour of the U.S. a couple of years ago. We're now doing our tour to Europe. And again, as I made the point before, one of the reasons we're doing that is instead of hearing the top down, instead of hearing it from Shemara and I, as part of our set pieces every year, you actually get time to spend with the people on the ground actually doing the work and talk about why do we have an edge in this particular sector, how are we building clients, how we're providing a service to governments all across the region. So we've evolved in terms of the way we communicate. We are going to evolve our disclosure a little bit over the coming periods. And one of the things that's driving that really is we spend a lot of time in recent times talking about these underlying income streams, not just the businesses, but the underlying income streams and how those income streams are coming out across the group. And one of the things you will have heard -- many of you have all heard me say before, is when we think about the income streams across the group, whilst we like the characterization of annuity style and market facing, we think that's too dichotomous. It's much more -- from our viewpoint, much more of a continuum of income across the way. Obviously, on the left-hand side, you can see the annuity style income, and I'll come to that in a second on the right-hand side, the market-facing activity, where those business performance is much more correlated with the conditions they're experiencing. Then there's a bunch of income in the middle of that page, that income characterized underneath the light blue. And income characterized underneath the light blue, the underlying exposure has exposure to market factors. But by virtue of the scale of our activities or the maturity of the activities or the size of the customer base that income, which was -- has market-facing characteristics, moves to the left, and we think there's a predictability and a regularity in that income, which served us well. And we want to try and bring that out in discussions over time. So you can see with performance fees or investment-related income from Macquarie Asset Management associated with their LP interest in the underlying funds. In CGM's case, the customer-facing activities, and in Macquarie Capital's case, the investment income that comes from our equity business. So all of that, we think, provides a really strong story in terms of the underlying stability of the group. You're going to hear about these income styles over the course of the next couple of days. Maybe just to foreshadow this, again, on the left-hand side there, you can see MAM and BFS, very familiar, I think, to people in this group. Annuity style income coming from our base fees on the asset management income, annuity style income coming from BFS, as we've grown our loan and deposit activities. On the right-hand side, from a CGM viewpoint, CGM, of course, provides financing and provides upstream lending against oil and storage, for the sake of example. It has a meters portfolio in the United Kingdom. It has a shipping business that you're going to hear about. And Macquarie Capital, over recent times, has built quite a significant exposure to private credit, $26.5 billion of private credit sitting in Macquarie Capital that delivers to us a net interest margin, very predictable, stable income through time. In terms of these middle categories, these are the underlying income streams, where the underlying exposure might have market characteristics. But by virtue of the size and maturity and scale of what we're offering, actually, the returns from this type of income are very predictable through time. So from a MAM viewpoint, performance fees again. So the performance fees arise, we typically invest over years 1 to 4. We're accreting value in the assets over the years 5 to 8. And then we're realizing assets in those funds from 8 to 12. The portfolio of Macquarie Asset Management Private Funds is actually quite large now. So the diversity of that business gives a real regularity to the performance fees coming out of MAM. We've talked about 50 basis points of AUM through the cycle, and we've maintained that guidance. As an aside, it was 58 basis points since 2018. So there's a real regularity to that performance fee, notwithstanding the fact that the underlying assets themselves are obviously focused -- are exposed to the market characteristics. Secondly, MAM invests capital alongside its other third-party investors in the funds, those -- that capital invested in infrastructure assets and various assets around the world, again, a very predictable, diverse set of income coming from that activity. From a CGM viewpoint, a topic that we've spoken a lot about over the last few years is the growth of the customer base, right, the growth of the customer base in financial markets, the growth of the customer base on the commodities risk management side. This customer base has been growing at a compound rate. I think Rachel put up the slide, compound rate in Europe of 7% over the course of the last 5 years. You'll hear more about that over time. But that customer base, we talk to on a very regular basis, almost every day, somebody needs to hedge an oil price, they need to hedge a gas price, they need to hedge an interest rate or a foreign exchange. So there's a regularity of dialogue with those customers, which is giving a dependability to that income. And that pervades across all of that customer franchise. And we saw that play out, I think, in the comparison of the '24 result in CGM to what we saw in '22 despite the lack of volatility in 2024, what we saw as a growth in the risk management income coming from commodities, reflected the fact that underlying customer base continues to deliver. And then from Macquarie Capital viewpoint, we've talked a lot about the equity portfolio, that equity portfolio now $6 billion, up 50% from the first half of '24. That portfolio has delivered us a return over time of 23%, and Michael and his team will talk more about that over the course of the week. It's a very diverse portfolio, 4 equity strategies coming through. They're a very diverse portfolio, which we think, at the level of maturity that portfolio is in today, gives us a repeatable regular level of income coming through the group. Then on top of that, of course, you've got the market-facing businesses, the market-facing underlying income streams. Again, you'll be quite familiar with these, I think, as well. Again, if you look at the asset management business, one of the things we've been doing over the last few years is transitioning our renewable energy platforms from the balance sheet to third-party hands. That's obviously an exposure, which is subject to market conditions. We think we're creating value in those portfolios. The timing of realization of those values depends on when we can get the best value for shareholders. So that's got a market-facing attribute to it. If you think about the CGM business, if you go back to '22 and '23, the CGM business in its inventory management and trading line had a very strong period of time. And we obviously described that as an exceptional period of time in terms of volatility. We saw the energy markets here. I'm sure Erti and others will talk about this, but energy market dislocation provided a really strong opportunity for CGM to deliver outsized returns over that period. And you can see that expressed in the inventory management and trading line. And then from Macquarie Capital, obviously, you've got a market-facing component in terms of its advisory business. The advisory business is obviously well established in lots of markets around the world, the home market in Australia, well established in the United States. You're going to hear a lot about the European footprint over the course of the next couple of days. So a well-established advisory franchise in lots of the major markets around the world, but advisory is very correlated with market activity, right? When confidence is low, typically M&A doesn't occur. When confidence is low, capital market activity diminishes. And so that business is very exposed to what that business does do for us, of course, it's the cradle of innovation. It's the idea hub for the group. And a lot of what the group looks like today actually came out of Macquarie Capital in past periods. We're going to spend a little time over the course of the next little while actually presenting the group to try and highlight these different styles of income coming through the group. We think it's important. Obviously, the focus that we've got and we have had for a long time is growing this annuity-style income. And you can see it represented on this page here with the dark blue at the bottom, the lighter blue in the center and the green. That annuity-style income over the course of the last 5 years has grown at a compound annual rate of 11%. The cost base over that period of time -- we have talked a lot about cost base. The cost base over that period of time has stepped up at a rate of 8%. So actually expanding the return we're giving to shareholders from this annuity income. The great thing about the annuity income, of course, it gives you a stable base on which to generate a good return for shareholders, but it also enables you to make those important investments in the market-facing businesses. The businesses are exposed to the asymmetric upside that comes when conditions are more favorable. So we're going to talk a lot about that over the course of the next few days. You'll get your chance, obviously, to ask me in a second, but also ask the presenters over the course of the next few days to talk about their business in the context of this stuff. But we are going to evolve our disclosures to try and give you more information around the stability of income together with the optionality that comes from the market-facing businesses. The final thing we're going to do in terms of disclosures, we're going to actually start to report our return on tangible equity. And one of the things that we've seen over time is that the peer group, the peer group that we compete in a lot of places with actually report their return on tangible equity. So we're going to start to do that. So you'll have a sense of, I guess, the impact that the intangible assets are having on the overall returns. Obviously, the benchmark for the group will continue to be a return on equity. So we're not changing the benchmark. We're not changing the benchmark in terms of performance. But we think in terms of understanding how the business is performing against the peer group, understanding how the business performs when you think about organic growth versus inorganic growth, return on tangible equity has some real advantages for that. So that's enough from me. Hopefully, you get a sense of the history of the organization, the context, how we're thinking about developing the business. We're thinking about developing the business based on that stable earnings base. And then on top of that, the market facing optionality. And we'll give you more information over time to help you assess our performance against this framing of the group. So maybe just to finish from me. Obviously, this morning in Australia, we put out an update to our short-term outlook. You can see there the update principally contained or was related to the Macquarie Asset Management Group. And in particular, we updated our net other operating income. We continue to expect that to be significantly up, mainly due to higher investment-related income. The change we made to the guidance was to amend it. Previously, we anticipated a high level of proceeds from the disposal of green energy assets. We don't expect that to occur in FY '25. So the Cero portfolio that we had been in the process of selling, we don't expect that to complete in FY '25. Obviously, we've maintained our guidance in terms of net other operating income. And that's reflective of the fact that throughout the year, we've been making the point that within net other operating income, there are a number of components, right? It's not just the disposal proceeds from the sale of assets that includes performance fees, it includes equity-related income from our LP interest. It obviously includes disposal proceeds from assets that we're intending to sell. And obviously, you would have seen this morning, that announcement came out in relation to the disposal of our Rotorcraft portfolio, which was announced -- which we signed toward the end of last week and announced this morning. Other than in relation to Macquarie Asset Management, there is no changes to the outlook for Macquarie Capital, the Banking and Financial Services business or the Commodity and Global Markets business. And obviously, the compensation ratio and the effective tax rate is consistent with what we've been saying for some time. That short-term outlook is subject to a range of factors. Nothing has really changed here. I won't spend time reading those factors themselves, but you can read them at your leisure. And maybe just to finish, again, as I said during the presentation, the medium-term outlook for the group remains very consistent. The idea of the group, of course, is to build a diverse business, to build a business that's based on our expertise and employing -- deploying that expertise in -- with clients and in communities and in countries where there's a real need to deliver outcomes across some sectors where there's significant tailwinds, we think, for growth. The balance sheet remains very strong and conservative in terms of the capital funding and liquidity position, and the risk management is central obviously, to the group. And Andrew Cassidy, our Chief Risk Officer, is sitting in the room. So if you want to get any confirmation of how important risk is, he's here to answer any questions you've got on how we allocate risk, but really, really important in terms of the way the group works. So thank you very much for your attention. I'm happy to take some questions from the floor before we have the panel session. Thanks very much.

One of the things with Macquarie is you've generally not paid goodwill. You don't have other intangibles like brands or anything like that. So does that focus, and I think the wording you said was we think about organic versus nonorganic, we need to think about ROTE. So effectively, you're saying that going forward, you're going to be prepared to pay goodwill and -- as you expand the business, and we should ignore the goodwill and look at ROTE. Because for many of us who have looked at the story for a long, long time, you've always told us no, no ROE, we don't like goodwill. We've never done it. And in the past, you haven't. So why the change in the story because our peers do it really doesn't cut the mustard?

Yes. So return on equity is still a driving sort of performance metric across the group. So nothing has changed there. There's a couple of things that are relevant from a return on tangible equity viewpoint. Firstly, principally, the growth, Jon, as you know, has been organic rather than inorganic. But from time to time, we have used our capital to acquire businesses, and Waddell & Reed is a good example of that. Typically, in the context of those acquisitions, we are buying intangibles. They are intangibles, so there's goodwill sitting on the balance sheet. One of the things that's -- what's really important, I think -- well, 2 things are important. Firstly, when we think about the performance of organically driven growth versus inorganically driven growth, return on tangible equity, obviously, provides a way to compare inorganic to organic growth, right? Because you're stripping out the effect of the amortization of the intangibles. So that's important for us. Second thing is when we think about our peer group around the world, obviously, we do want to be able to benchmark our performance against our return -- against their return on tangible equity as well in the same way that -- yes, it's a useful comparator, I think, for us to think about the performance of the group. But the most important thing, I think, in all of that is that despite the fact that we're going to report both statistics, the return on equity is still a benchmark by which we're going to be measured.

And just, sorry, on that, your compensation is going to be driven by what is known as ROE, not ROTE, yes, no change to that. Okay.

Andrew? Sorry, Brian, you go.

Alex, I understand, really good presentation. At the moment, we still get the divisional earnings, and we get this concept of impact down below. I personally would find it very useful if we could actually get the cash earnings allocated between each of the divisions because if you're talking about benchmarking, Macquarie isn't a single business. It's a group of businesses. It would be genuinely very interesting to be able to accurately measure that ROTE and the ROE on each of the divisions. Is that under consideration?

Yes. We obviously -- well, firstly, when we describe the group, obviously, we talk about the factors, Brian, rather than specific outcomes, right? I know you want the reporting on an NPAT basis down the group level. We do talk about the factors to try and get for the market a sense of the things that I'm looking at when I think about the projections for the business. The second thing, of course, there is a lot that's going on in the center of the organization in terms of transfer, pricing and in terms of policy frameworks, profit share, various other things that go on in the center of the organization that we don't allocate to the individual groups for -- frankly, for obvious reasons, for competitive reasons. And we think that's still really important. One of the things we do, do, though, I think, which is hopefully helpful in terms of driving the answer to your question, as you know, at the end of each of the presentations, we talk about the capital we have allocated to the groups, and we talk about the average return that, that capital is generating over the course of the year, right? And we break it down to annuity style, into market-facing businesses. The point of that actually is to enable you to work out what the net profit after tax is for each of those separate operating groups. And so we think we sort of preserve the competitive advantage that occurs from being able to house some things that we think are really sensitive in the center, but at the same time, giving you information that enables you to form a view as to what the net profit after tax is based on the capital we have allocated into the business.

And, Alex, how should we think about the fact that your accounting is very different to your peers in each of the businesses?

What do you mean that's different? What's it?

The performance fees.

Yes. I mean, well, generally speaking, we obviously just follow the accounting standards. So there's nothing particularly unique about the way we account for it. I mean, performance fees, from our perspective, we're using IFRS, as you know. In particular, they -- we recognize performance fees on a pretty conservative basis. Obviously, the test really is virtually certain, they won't be reversed. So we tend to be conservative in comparison to a number of asset managers around the world, but we just follow the accounting standard. I don't think there's anything particularly tricky about what we're doing from an accounting viewpoint. Andrew?

Andrew Triggs from JPMorgan. Just a question on Cero, obviously, pushed out. You've had an opportunity to test the market. Can you just give a reflection on what you're seeing in renewable energy asset M&A and especially the willingness to pay for development assets?

Yes. Yes. So just -- we obviously did -- we obviously updated our guidance and specifically in relation to the fact that we now don't expect Cero to complete this year. Look, we obviously ran a comprehensive sale process. And that sale process, I think, has given us a great deal of confidence, Andrew, in the value that's been created in that platform. Obviously, it was a comprehensive process, lots of interested parties. Just by way of sort of further background, I guess, we got to a point in December last year, having run that process where we actually entered to an exclusivity period with the buyer. That exclusivity period was running, and the expectation was that, that transaction would complete. It's not unusual. It's not -- it's unusual, but not unique, I suppose, that as you get down the process, from time to time, something upsets a process. In that case, unfortunately, the buyer had withdrawn, again, not because of Cero so much, but because we understand for some unrelated issues related to their other businesses. So we -- I think we feel very -- we feel good about the validation of the asset that we saw strong demand, I think, particularly for solar. So the point that we've been making for a while, there's probably slightly lesser bid for development assets versus operating assets. One of the things with solar, which I think is relevant, is that the time period for development to operation is actually a relatively short period of time. So I think solar is very cost competitive as you've seen, and I think that reflect -- that was reflected in the process that we ran. And obviously, the price that we thought we were going to be able to achieve was one that we thought was attractive. I was making the point to somebody earlier that plainly, whenever you're running these processes, you're obviously assessing what do you get today, so it's capitalizing the future versus what you might get when you put more certainty having more operating assets in your portfolio. So that's a decision that we'll make going forward.

And then just if I think back to the U.S. trip 2 years ago, one of the big learnings was just how aligned that business was with the financial sponsors market. I mean maybe just a preview of what we're going to hear in the next couple of days. But is Europe, do you think equally aligned to financial sponsors or by the nature of the market, it's a little bit more corporate coverage and government related?

Well, I feel like I'm going to steal Michael's thunder for a couple of days. So let me just do that, and then, you feel free to add. The -- as we said at the time, the U.S. business obviously is very focused on the private sponsor market having matured that over the course of the last 15 years. I think it'd be -- and you'll see this over the next couple of days. I think one of the things that's really interesting about the European business is the greater exposure to the corporate sector versus the private equity community. It's not that we don't have exposure to the private equity community, but you're going to hear the corporate component is much greater. And, in fact, one of the things we said, I think it was either half year result or the full year last year was that we are seeing better performance through the European M&A business, partly, I think, because the corporates have come back to the table, low cost of funding, lots of capacity to do transactions. The private equity guys are a little bit stuck in terms of their ability to realize and invest. But, Michael, do you want to add anything? Or do you want to wait for your chance tomorrow? Okay. Andrew? John?

So I thought the slides you put up just around how the business has become more annuity actually over time is quite interesting, right? And it's interesting to look at that in the context of what's happened with the ROE profile of Macquarie, how it's come down. And I understand why you want to try and sell the group as more annuity, it's obviously going to carry a higher multiple, et cetera, more attractive potentially to investors. But how do you see that within the context of ROEs kind of coming off? And then just a follow on to that kind of, is CGM as it's become a bigger component of the group, ultimately, kind of these episodic shocks kind of create these events, which drives outsized profits, right and kind of could potentially take your ROE back to a higher level? But ultimately, like you can't have both the annuity side of the group and then also actually CGM. I would actually argue if anything, over the last few years, CGM, as it's become bigger, I would actually think that the actual shape of the earnings has actually become a little bit more market facing rather than annuity.

Facing.

Yes.

Yes. So let me just take a few of those things -- take both of those things in turn. So in relation to the return on equity point, we -- as we said before, we're very comfortable that the business into the medium term should produce a return on equity in that mid-teens range, which is consistent with the past. Like if you look at the last 10 years, return on equity has been 14% over the course of the last 10 years. So we're very comfortable that the business will return to that level of return on equity. There's a few things that are pulling down the return on equity in the last couple of results. One is that we -- one is that in relation to the green assets on the Macquarie Asset Management Group balance sheet, they're obviously on the balance sheet, and they're drawing both operational expenditure and development expenditure through the P&L. So that's drawing down the P&L without the realizations. That's one point. Second point is that, from Macquarie Capital viewpoint, if you look at the step-up in capital we have allocated to Macquarie Capital's clients, it's up about 50% over the course of the last -- I guess, it's last 18 months or so, something like that. And so if you look -- if you think about that, one of the things you will hear -- you've heard over time is that book has an average maturity of about 3 years, right? And so what's happening is, there's a drag as you're paying the funding cost on the capital as that book matures. And so what we'd expect as you get to that maturity level is you start to get the realizations, the returns from that equity investing activity that Macquarie Capital stepped up over recent periods. So that should pull the return on equity up over time. Second thing, in relation to the annuity piece, I mean it's obviously good if people attribute more value to the annuity piece, and we're obviously happy for that to happen. But I think -- and we do think that -- if you think about the annuity income, it's grown at a rate of 11%, costs have grown at a rate of 8%. And in fact, costs are now relatively flat. So what we've seen in that business is you're actually starting to see the revenue growth and you're seeing the scalability that comes with the scale platform we've got in place. So we think that's very attractive from a return and investing proposition. But the other thing we think is really important about the annuity style income is it gives you the opportunity to generate those market-facing returns, right? Because you want the Macquarie Capital team to be making good decisions in relation to their equity investing, for the sake of the example, the advisory activity they take on. You want CGM to be making good decisions in relation to the risk they're taking in their inventory management trading. As we scale that annuity income, it allows the business to make better decisions for the market-facing activities as well as the annuity activities. That's really, really important in the way we think about the business. From a CGM viewpoint, one of the things that -- we've had a lot of conversations over the course of the last couple of years, making sure people understand the nature of the business in the first place, but what is really important about CGM. And again, we've talked about this now for a number of years. That customer franchise, right, that's growing at 7% -- I think we're at 3,500 customers or something like that across the group now. That customer franchise really important in terms of the regularity of income that's coming from the engagement, right? And it's not -- we're not having to sell them something special every day in truth, right? You're selling them FX solution. You're selling them an interest rate solution. You're helping them hedge the price of cocoa. These are things that are regular way activities day in, day out in the business. And so what CGM are doing is, over time, they're slowly, but surely building that franchise through expanding the customer footprint, through expanding the geographies in which they operate in terms of the products they actually offer. On top of that, what we think CGM has done a really good job and continues to do a good job is this asymmetric payoff. And that's really important. We don't -- as you know, we have relatively little market risk in that business, right? So they're actually taking very little directional risk. They're taking basis risk. They're taking location risk, right? They're not taking outright directional risk. And that underlying franchise that continues to grow allows them more opportunity to generate that asymmetric return. So we sort of feel like -- again, we feel like the ROE comes back to mid-teens. And we think as you grow that underlying annuity style income, you're generating good returns from that on an established cost base, but you're also giving the business the opportunity to position itself for outsized returns in those more market-facing components of activity. [ Brennan ]?

Just a question on your excess capital. Obviously, you showed in the slide that you've got significant amounts of excess capital. You just mentioned some of the green assets that you're looking to realize. You've got equity investments also in Macquarie Capital. I mean, how realistic is it to deploy a lot of this excess capital over and above your retained earnings in any 1 year, I guess, over the medium term? Or do you expect that you will probably be more ramping up returns to shareholders via buybacks or other methods?

Yes. Well, the business -- I mean, there's a few things. Thanks for the question. I mean, obviously, in that excess capital, as everyone knows, not all that excess capital is available for investment in any case. So that excess capital is above the regulatory minimum. We, obviously, operate the business above Board minimums rather than regulatory minimum. So not all that excess capital is available. That's the first point. The second point is, over time, I think the businesses have found good, accretive ways to deploy that capital. So if you look at the capital usage over the course of the last 5 years, I think it is, Sam, will correct me, over 5 years, the capital usage has gone up at about 11.5% compound annual growth rate over the course of the last 5 years. So that sort of is in excess of what we are able to achieve just by retaining the earnings. So I think the businesses are finding good opportunities. Part of that, to be fair, [ Brennan ], was regulatory. So EQS in Australia, which was a bit of a step-up. But nonetheless, the businesses themselves are finding good opportunities to grow. And I think if you think about the chart we put up pretty consistently through our results, in most periods of time, what we're seeing from an asset management viewpoint, as the team builds out, particularly the private markets capability, particularly some of those newer strategies actually require a bit more capital upfront as we establish the strategy. Obviously, the BFS business, small capital usage, but growing in excess of the mortgage market and the deposit market in Australia. So that's drawing capital. CGM, I think, what's really important there is if you think about the business, it's not a market risk business, it's a credit risk business. And so as that customer franchise grows, the way that customer franchise uses capital is really through credit capital. So we're seeing excess return -- excess utilization of capital from time to time over there. And Macquarie Capital, obviously, has had a big step in recent times in terms of capital usage. But, again, I think over time, have found themselves -- found the ability to deploy capital in an attractive way. So I think we feel good about the ability of the capital -- the businesses to find good opportunities. Plainly, one of the reasons we're sitting on the large excess, and we've made this point before, is that the returns in '22 and '23, right, $4.7 billion of NPAT in '22, $5.2 billion in '23, there were outsized returns based on the exceptional conditions that we saw across all the businesses in '22 and particularly in '23 across the CGM business. So that created that excess capital. And one of the reasons we announced the buyback, obviously, is that we felt that in the context of what the groups are able to deliver, the organic generation of the business, in the context of those 2 things, we still felt like there was excess to be able to return to shareholders via buyback. So generally speaking, I think that first point I was making on the slide, yes, the capture opportunity for the businesses, we think is pretty attractive. And it's a pretty diverse business, and people are throwing up opportunities regularly. Obviously, the way we need to work our way through it is, do we have the expertise, is it consistent with what we've done in the past, do we have the risk appetite, are we getting the right return, but that, over time, has -- we feel like the businesses capture opportunities pretty well. And generally speaking, I think we've been deploying capital at a reasonable rate. Ed?

You talked a lot about diversity today, diversity of your businesses and geographical. Can you just talk about -- obviously, CGM is roughly 50% of your NPAT now, got very strong underlying growth. Obviously, you're quite happy to take that growth going forward. And how do you see that business growing and getting a bigger and bigger component of Macquarie itself compared to the other divisions?

Yes. Well, obviously, as you know, Ed, we don't really -- it's not -- we're not dictating from the top down how much it should represent. I mean, we think that CGM over a long period of time with the 3 businesses, so it's got the asset finance business, it's got the financial markets business, the commodities business, we think over a long period of time, just given the capabilities that's res in that business, the team have found great opportunities to deploy capital, right? And if they can continue to find those great opportunities on a risk-adjusted basis, we're happy to continue to provide the capital for them to do so. But you asked the question about CGM. And obviously, we've seen the growth in CGM over the last few years. And as the business gets more diverse, and it operates in more markets, in more products and with more customers, you should see the earnings of that business step up. But that's not to take away from, I think, the capability of the other businesses to actually generate really attractive returns. And so I don't want to skew the answer to this question. At the end of the day, the asset management business, we think is incredibly well positioned with a diverse range of funds, a significant amount of capital deployed and high earnings potential in terms of base fees and performance fees and the investment-related income. So we're happy with the way that's positioned -- that business is positioned. You've obviously seen the BFS business. If you looked at the BFS business over the last 10 years, it's probably quadrupled in terms of its profitability. And, again, we feel like we've only got 5.5% of the market there on the mortgage side, probably the same on the deposit side, 1.7% of the business market. So we think there's a lot of runway for that business to grow into. And from Macquarie Capital's perspective, again, the private credit book is now $26.5 billion, still generating a NIM of between 4% and 4.5%. And Michael and the team will look at that. We've got $6 billion of capital. So I wouldn't -- I guess I wouldn't sort of overemphasize the proportionality. We think CGM has got a good runway. But each of those other businesses, we think, are well positioned in sectors that, as we talked about before, we think have structural tailwinds.

Just circle back on the green investments you talked about before. You said there was a really good appetite for solar, obviously, went into direct negotiations in December, but fell over. So how do you think about that? Or how should we think about that then for '26? Is it something you want to sell soon? Or is it something you're going to hold on to now? And also, can you touch on offshore wind, obviously, other asset? What's the demand there? And how are you thinking about the outlook for that, please?

Yes. So just to make the point, again, I mean, obviously, we felt that the process itself, I guess, validated the assumption that we've made was it was the portfolio or the platform we created has good, embedded value, and so, we're pleased about that. In terms of the timing, look, at the end of the day, as I said before, you're always balancing what do you get today for the sort of the optionality that exists between development and operation versus what might you be able to get in the future as you start to bring more of that development portfolio into operational stage. And I think at the end of the day, the team having gone down this process will then have to make an assessment as to what's the right time to maximize value for shareholders amongst those 2 choices, Ed. So I don't want to put a timeframe on it. We'll obviously have active conversations about exactly when it makes sense to do that. And there's a trade-off, right? And the good news, I think from our viewpoint, is that we obviously suspected it was well in the money and the process itself has validated that. On offshore wind, in the context of our offshore wind profile, that would -- 2 things more generally. So the first point is that our offshore wind exposure is largely European offshore wind exposure. So as we said at the operational briefing in February, relatively small exposure to the U.S. across the portfolio. It is fairly development heavy, though, and there's obviously a longer timeframe between development and operations, particularly in relation to offshore wind. And we obviously think that the portfolio of assets that we've got in place there are an attractive portfolio. But I come back to the point I made before that what we have seen -- in terms of that market, what you have seen is probably fewer buyers of development exposure in that market than we saw 2 or 3 years ago. We're still seeing transactions, by the way, in the offshore wind space, and we obviously made the point, over time, we've sold some existing operating offshore wind assets over the course of the last 12 months. So there's still strong bids for it. But I think in terms of Corio, we'll work our way through again how best to maximize the value of the portfolio in the context of the market we're seeing in. So plainly, the development activity and the time frame for offshore wind is a bit different from solar. Andrew?

Alex, just a related question to Ed's second question around the Cero valuation, which you said you're very happy with post the process. But the fact you haven't walked away from your guidance despite missing that. Can you maybe just talk about what you're seeing in other parts of -- within the MAM business that have made good or made up for that lack of income that you would have, otherwise, experienced? So where particularly does that come from? Has it been made up from? And what's the sort of saying about other parts of the business and particularly other assets within the MAM portfolio?

Yes. So the -- obviously, where the proceeds from a Cero disposal show up is that net other operating income line. As we've said through the course of the year, net other operating income, when we think about the guidance, 2 things, it's made up of a number of components, and I obviously referenced a few of them before, performance fees and our investment-related income from our interest in -- our LP interest in funds. It's obviously made up of disposals for assets that we intend to dispose off, Rotorcraft, for the sake of example. So there's a range of things that go into that. And when we think about the guidance, and this is something that is obviously consistent with what we've done over time, we obviously sort of probability weight the various things that we think will contribute to -- we think will contribute to that net other operating, which is, I guess, at the end of the day, Andrew, why we're able despite the fact that Cero -- we don't expect Cero to complete this year, while we're able to maintain our guidance of significantly up. And that's consistent with what we've done over time in terms of guidance. In terms of the underlying assets themselves, I mean, again, we've probably seen through the year that -- to the extent that we've disposed of assets, whether they be in the funds or on the balance sheet, yes, the assets themselves are attractive. They're well positioned. They're performing well in the context of the environment. Obviously, interest rates and the availability of credit have been strong through the year. And so the team is seeing opportunities to divest assets, which are generating performance fees or investment-related income or income in the portfolios themselves, which is reflective of the fact is good quality portfolio of assets. So I think we feel pretty good about how the balance sheet is positioned, how the funds are positioned in terms of their realizations. And obviously, that's coming through that other operating income line.

Alex, do you mind just clarifying back on the ROE stuff? Do you think the gap between ROE and ROTE will be materially different from now on versus what you showed on that Slide '23?

Hard to know. Hard to know. I mean, obviously, principally the activities of the group are organic. So the growth is organic. So that's not generally generating either intangibles or goodwill on the balance sheet. And that's been the case for many years, and it's still a case today. So that wouldn't particularly drive difference, so it's not so much the difference we're focused on, but we are focused on the comparability of our return on tangible assets versus others. I don't have any particular view as to whether it's going to be different going forward.

Good one. Just trying to understand a little bit better. Then the other one was, do you think you'll have a BFS business in EMEA?

The -- I think the key to the BFS business is we're a licensed ADI in Australia. We're raising deposits. As I said before, the real driver, if you like, the driver of the growth, the constraint on the growth is the ability to raise deposits. And so I think there's -- a, we feel like there's plenty of growth left for us in Australia; b, in order for us to think about anywhere else in the world to be just a function of whether we think we've got some comparative advantage in raising deposits. So certainly no current plan to expand overseas. We've had a few forays into overseas markets through BFS in the past. We were in Canada or in Italy. We're in India. We're various other markets. We've pulled out of all those markets. And really, great strategy is all about focusing on where we -- our home market and really driving the advantage that we think we have in terms of simple digital-enabled product in the Australian market. Andrei -- sorry, Andrei has got the mic.

Just look, in relation to the growth opportunities you talked about on Slide 5 for Europe, how would a resolution to the Russian-Ukrainian war impact the operating environment and the opportunities for you?

On my slide or Rachel's slide?

Rachel's slide, yes. And just broadly thematic...

I mean, look, you're going to -- I mean, you're going to find -- you're going to have 3.5 days of talking to people who are here in the region. I mean, we obviously -- we've been in the region for a long period of time, Andrei. So that's the first thing. We sort of -- we obviously -- over the course of that 35 years, there's been ups and downs in the economies and the geopolitics around Europe for the course of the last 35 years. And so there's obviously an extreme line at the moment in terms of the Russia-Ukrainian conflict. And what we've been able to find, I think, over time is that despite all that volatility, we've been able to grow the proportion of our operating income that's coming from Europe. So if I put a stat on, if you went back to 2011, Europe represented 14% of the operating income of the group. And if you go forward to today, Europe represents 23% of the operating income of the group. And obviously, the operating income of the group has actually gone up as well. So, yes, Europe's contribution has been quite significant and an increasing proportion of the overall group. So I would anticipate, just with the way the business is positioned, that Europe over time -- the size of the markets, Europe over time, should provide for really attractive growth across the group. I mean there may be some particular things about what we're seeing in Europe today. And again, you can test this over the course of the next 3.5 days, there are particular things that are going on in Europe today that we think, and Rachel pointed this out, should be attractive for us from a tailwind viewpoint. Europe needs more infrastructure. There's -- lots more investment is going to be required in digital. We're seeing the energy transition play its way out. Yes, you're seeing -- I suspect, some of the prospective deregulation in Europe may well come to the fore, and we haven't seen that probably for the last 15 years. So all those things, I suspect, should be good tailwinds for us. But, yes, generally speaking, irrespective of that, Andrei, over the last 35 years, the business has been able to grow really nicely in Europe. Brett?

On Cero, you had a bidder who validated the value. Presumably, he wasn't the only one. There was a...

No, there is, obviously, a number of them.

It was close. So why didn't you go to the underbidder?

Well, as I said before, obviously, in a position, Brett, where we've gone to exclusivity at the end of last year and that process, we were -- it was rattling along to get to a conclusion. That hasn't occurred for the reasons I talked about before. I think what we'll do now is we'll obviously sit down and work out what's the best way to maximize value given what we know of the situation today. So yes, there are other bidders. But as you know, with these things, once you're down the path, you've sort of committed to a particular train, and we'll now reassess where we go from here.

The bidders weren't close enough.

I'm not making that comment, but I think what you should take from it is that as is usually the case when you sell an asset, it's a complex M&A process. When you go down exclusivity, you also stop other people from proceeding, which is exactly what you should do. And I think, yes, given what's occurred, we'll now sit back and work out how is the best way to maximize value for shareholders. I wouldn't comment specifically on where people were in a relative sense.

Great. Look, we're going to have about a 10-minute break just to grab some refreshments, maybe some more coffee, and then, we'll come back with the chat that Rachel will lead.

Thanks, everyone.

Thanks, everyone.

Welcome back, everyone. I have the pleasure of hosting a panel discussion with some of my colleagues from our EMEA region. I have Federica, Erti and Elise here with me. And we're hoping that this panel will give you an insight into not only the businesses operating in EMEA, but also the people, the roles that they play, how they are continuing to provide solutions to our clients in region and also bring to life the culture in -- ross our various offices as well. So firstly, Federica, Erti, Elise, thank you for joining us today and having this conversation. I might begin by asking you to introduce yourselves and share a little bit about the role and your time at Macquarie so far. And, Elise, I might start with you.

Okay. Hi, everyone. Good afternoon. I'm Elise Vaudour. I'm a Senior Managing Director in MAM and Head of Wealth for our Green Investments business. I joined from a private equity firm in 2023. But actually before that, I spent 15 years in MacCap, both across London and Paris, then moved to Paris. You can probably tell by the French accent I'm French, and I'm actually from Paris. So I hope you're enjoying it. And before that, I actually started my career at European Bank. And while in MacCap, in my last role, I was co-heading our Private Capital Markets business.

Hi, everyone. My name is Erti. I joined Macquarie in London in 2015. I originally joined in Commodities business to head our agricultural commodity business for EMEA. And 5 years ago, I moved to Paris to open our new CGM office, where I'm Head of Sales & Trading. This is our post-Brexit European operation, and we have 2 locations, one in Dublin and one in Paris. And between those 2 locations in CGM, we have about 120 people.

Good afternoon, everyone. My name is Federica Cristina. I'm a Managing Director in Macquarie Capital, currently based in Frankfurt, moving to Milan, but previously, I was also in London. So I've gone around a few of the Macquarie offices here in Europe. I have 20 years of experience as an adviser, mostly around infrastructure. Like Elise, I'm also a returner. So I left Macquarie in 2010, did other things, mostly advisory, again, and came back in Frankfurt in 2018 to help grow our business with infrastructure customers in Europe.

Thank you. And certainly, a commonality around mobility from each of you. But also, as you mentioned, we've got 2 of our Macquarie boomerangs with us today as returners to the organization. Erti, I might turn to you next and ask, we talked or I touched a little bit earlier on Macquarie Bank Europe and the growth of CGM from a regional respect. Can I ask you to talk a little about the evolution in CGM and also what impact the Paris office has had in terms of presence here in the business?

Certainly. So post-Brexit, there has been a big shift to move people more into Continental Europe and in particular, originators and salespeople. We already had the presence in Paris, of course, with MacCap and MAM for at least 20 years, and we moved 5 years ago. We already knew the French market really well, but of course, being based here has been a good move for knowing the French market. But as I mentioned earlier, we actually covered the whole Europe from Paris, and we have a full sales and trading team. We moved a lot of experts across all our major verticals in CGM on the ground. And on top of that, we also hired very good talent. In fact, Paris has access to very, very good talent as well. And so we have expanded a lot of our sales and origination team. And it's been a very interesting 5 years. If you can imagine, we moved here in summer 2020, middle of COVID still preparing for the end of the Brexit transition period and adapting to all the new cross-border rules with that change. On top of that, energy market started to be quite volatile. And of course, with the Russia-Ukraine crisis, it got even more volatile across the board of everything we trade. So increased volatility, good market conditions plus a lot more originators on the ground, it means that we went through a quite aggressive client acquisition process as well as we saw the opportunity arising. So if I look into the number of clients we cover here today, it's probably 25% to 30% more clients than when it was before we moved here before 2020. And we continue to see that growth coming. And in fact, we're also opening very soon a Milan branch to join our colleagues on MAM and MacCap already there in CGM as well.

That's certainly been a great growth story to date, and we're looking forward to what comes next. Federica, in terms of you in the Frankfurt office, I'd love you to share a little bit about how you've helped grow and mature the MacCap business there and also what you're looking forward to in relation to the move to Milan?

Absolutely. And so when I rejoined in 2018, again, back of Brexit, there was a need for people on the ground in Europe to cover clients who are based on the continent. Frankfurt was very, very successful. So I didn't need to grow that one. It was already very successful, very established, number of people in Frankfurt today around about the same number as when I rejoined in 2018. But when I was sitting there, the Paris office is very, very small for advisory. I think Fady and I kind of rejoined -- like rejoined when Fady just arrived as well. So part of my role was to really bring that connectivity between Frankfurt, London and the rest of the offices in Europe to make sure that we could provide our clients with a European perspective. On one hand, supporting smaller teams on the ground in Amsterdam, Paris and Spain. On the other hand, sort of looking opportunistically at the Italian market, as we would still do its transactions, but we didn't have an office there. So the idea was really to sort of create that connectivity between Frankfurt and London and bring that connectivity to other offices. And that worked, I think, pretty well. And now that all the other offices are kind of self-sufficient and growing, then I look forward to my next thing, which will be to then have other people helping me grow the Italian office by bringing that connectivity to Italy. It's a story of growing by adjacencies. We've been in Italy for a long, long time, but we have not been focused on advisory on a consistent basis. Well, we've been quite opportunistic, a lot of work done with MAM. I think now it's the time to sort of invest into the market and try to bring the whole Macquarie franchise to Italy.

Wonderful. Thank you. Elise, turning to you. It would be great to get your insights around what you've seen change since your first stint at Macquarie within MAM and then returning more recently and also hearing about some of the new business sectors that you're exploring?

Yes. And it's actually one of the reasons why I came back, not surprisingly, I guess, is that MAM, as you all know, and I'm sure are very well aware of, has built a very strong, reputable business like an asset manager that's really recognized, especially in infrastructure. But over the past few years, what we've seen and it's true for the entire sector, not just for Macquarie is that we've seen new entrants in the space. We've seen both new competitors gaining more interest for real assets and infrastructure in particular. But we've also seen new clients, like new capital entering the space. And it's a bit of an oversimplification, but to think about it, it's like for many years, for many investors in the world, real assets was really real estate. And it was actually a small part of the investor's universe that was really familiar with infrastructure. And now we see -- because also of the environment, quite frankly, like the macro environment, we see a lot of interest in the asset class. We see also a growing realization that it comes as a very good complement to equities, to bonds. And so it's actually quite interesting and an exciting moment, I think, in MAM's history because we can see the opportunity to not only grow into new sectors or deliver new products, which, I guess, any kind of pure player can do, right? But also tapping into new investor base, and that's really why I came back because you look at it and you just look at the stats, like half the global wealth is private wealth individuals. And this is growing faster than institutional money, and it's completely under-allocated to private markets. Let's not even start talking about infrastructure. So the room to grow is actually really strong, and there is a real momentum gaining from that realization that what we do is a good addition to the existing portfolios. And given Macquarie comes to the space with that very strong brand and reputation and history, it's actually a really exciting moment to be trying to deliver on these opportunities.

Certainly. And I think what we're seeing also is just the ability to have a really positive impact through all of the work that you're doing. Erti, turning to you, Elise has just touched on some of the evolving client needs and how the clients have evolved over the period -- that period of time. Can I ask you also how you have seen and are seeing the client needs change in your space?

Yes, sure. I mean, we love talking about volatility, uncertainty. I mean, I think in particular, in this region with what has happened in the last 5 years and still happening today, I think we feel that clients are quite nervous and really want better visibility. So they're really looking for more hedging needs. This is very positive for all our business, not only commodities, but also in financial business. And they want to do this with real experts as every topic is becoming more and more complex, and they want to do it with banks who have been committed to their business. I mean, you probably saw on the slide and you probably know, but in commodities, for instance, we've been here since the '80s. A lot of our peers, don't forget, they have been in and out of the business, and clients do not forget that. So I think whenever they look out there for partners, they do value our commitment to this business and our expertise. Clients do value agility as well. Everything is so fast-moving, so they want banks who actually can close the deal pretty quickly, get the approvals, structure the deal quickly as well. I think we have a strong reputation in that space as well. And, of course, there is -- notionals are becoming bigger with higher volatility, and clients are looking for credit lines, looking for capital, and they want to face a very strong balance sheet as well and a diversified balance sheet. And I think looking at all those aspects, I do feel like we have good ingredients to respond to this.

Great. You've touched, Erti, there on what you've seen in terms of the clients' needs changing. Can I ask you -- I'd like to talk a little bit about how we're leveraging the diversity of the Macquarie platform. I might ask you, if you don't mind sharing, how you've seen that change? And what you're doing from a collaboration respect, either with different parts of CGM or across the group?

Yes, I mentioned the financial crisis -- sorry, the European energy crisis here. I mean, we had a lot of clients in our resources business or our food business. All they wanted to talk at some point was about gas, power, carbon. So suddenly, we discovered that we had a lot more clients because some of them took more ownership of the risk management, which means that the same clients of one desk became clients of many other desks, in particular our energy markets. We -- sometimes we are involved in what we consider more niche products. So, let's say, for instance, we cover dairy markets, which is a huge market in Europe, but not a big financial market yet. And we onboard a client there, and the only reason we are onboarding that client can be because of that capability and suddenly becomes an FX and rates client. And we have many examples in that space. And I would say more cross division, it was mentioned earlier about financial sponsors, it's a very good example of a lot more cross collaboration happening now between, I would say, MacCap and CGM. I mean, it's not really new. We've been on this for many, many years, but MacCap has definitely a very deep relationship with a lot of financial sponsors, and a lot of those financial sponsors have hedging needs as well. So we are partnering in a very structured way, and we also found ways to not structure, but also incentivize people to really do this. So I think this has been really top of the agenda.

And Federica, I know we've spoken before about how you've looked to leverage the diversity of the platform in your various roles. Do you mind touching on this as well?

Yes. No, absolutely. I mean, from what I said earlier, literally my job description. But -- I mean, if I can answer the question from a MacCap perspective, so probably 2 ways of looking at it. Within MacCap, there's collaboration across offices as well as across subdivisions. We work a lot with our colleagues from the infrastructure and energy capital, for example. We help them buy-sell businesses with aspiring partners. We're part of the same team. So we do work together quite significantly. And what that gives us on the advisory side is the ability to actually talk to clients as if we're owner of businesses because we actually are. We can identify risks, we can identify opportunities because we've got people sitting next to us that basically talk about that every day. And almost by osmosis, you get that mindset on to the advisory business, which I think it's a unique advantage that we have in the financial advisory community. Then across businesses, I think it's fair to say that most of our clients at worst think European level, but most of them think global. So if we go to somebody and say, I'm really, really specific, and I know absolutely everything about this particular sector in this one particular country, there's probably 10 of us out of the door. So we need to be able to bring something different, and that something different is our ability to draw on our global resources and bring expertise from other countries, other jurisdictions, other continents to those clients so we can differentiate ourselves against competition, but most importantly, we can give clients a better service. Then the other part of the answer is what do we do with the rest of the group. So you touched upon the collaboration with CGM. Obviously, MAM is one of our greatest clients, but also aspiring partner in some circumstances. So we sit on different sides of the table. And that's always interesting because you see different perspectives on transactions, on sectors, but we also sit on the same side of the table. So, for example, we have a global climate task force. I knew I was going to focus on that, where people from CGM, MacCap and MAM come together to discuss the big themes of decarbonization. And those are global teams. So we speak to Australia, we speak to the U.S., we speak to Europe. And in Europe, we have the -- in a way, the advantage and the disadvantage of being at the forefront of all of that. So oftentimes, we are called by our U.S. colleagues to say, "Hey, there's some clients who want to understand how the world would think about gas in 5 years' time because you're 5 years ahead". And that's a fantastic conversation for us to have. So very long answer, but I think our competitive advantage as adviser sits in the fact that we have so many arrows to our bows, and we can draw upon the expertise globally, but also across divisions within the boundaries of what we can do.

Elise, you touched earlier on the impact that the MAM business is having. Can you talk a little bit about how we're engaging with local communities to ensure that we're having a positive impact? And how we balance our -- the commercial lens with our responsibilities?

Sure. What I often like to say is that it doesn't have to be exclusive. There are situations, and that's what we look for, where it's actually a virtuous circle, where you can actually make profitability go with impact. And I sit in the Green Investments business, so I guess in the right place to mention some examples on that. But more generally, clearly, as you all know, at Macquarie, we want to deliver a positive impact on the communities we serve. And at MAM, it's approximately 290 million people that are using daily the assets we manage, which I always find a pretty staggering number. And you look at examples, and of course, there is the way we invest and how we manage the businesses we invest in and how we ensure they deliver impact on their stakeholders and communities. That's, of course, like, I would say, minimum. But then there is also all the work we do, and in particular with, for example, the Macquarie Foundation, which I'm sure you're all aware of. And there is one example that I particularly like for obvious reasons, which is called Generation, which is basically a nonprofit network that starts from the observation. We see the energy transition, and especially in Europe, as Federica mentioned, and we see the number of skilled jobs in that space that are required over the next few years to meet the ambitions like when you hear about each country's ambition in terms of deployment of renewables, transmission and so on in this region. Of course, that requires skilled jobs. And on the other hand, you look at the job's mobility challenge and social and economic mobility. And this nonprofit is basically looking to make new skills, basically, being learned by especially people from diverse backgrounds so that they can then not only find a job, but also find a highly relevant job with a long-term carrier. And that's exactly what's happened with more than 150 learners, both in the U.K. and here in France and very high rates than of graduation and finding employments. And importantly, there are compensation, remuneration in that first job being twice higher than the previous income they had. So this is just one example. And, of course, there are many other examples and not even starting to talk about the impact we have in the businesses we invest in. But I think it's a pretty telling example and also very local.

Yes, absolutely. Generation is actually a global partnership we have with the foundation across each of our regions. I think, Alex, now I'm looking at you. I think it's our only global partnership through the foundation. And an interesting fact is that we've also recruited a number of people into Macquarie through the Generation program. And I had the privilege of meeting with them and understanding their journey into Macquarie and their experience with Generation just a couple of months ago, and it's honestly quite humbling, but heartwarming to hear how life-changing Generation has been for them. So definitely wonderful to hear. Turning to -- I might start with you, Federica, with this question. We pride ourselves at Macquarie on being entrepreneurial and innovative, which means that we're constantly trying to keep an eye on what's coming next. Can you talk a little bit about what you think the emerging opportunities might be to MacCap?

So very used to Macquarie mantra, which is the carbonization -- decarbonization and digitalization. I think there is no day that passes that we don't receive a phone call that somehow touches one of those 3 areas. So there's definitely opportunities there. And quite interestingly, we're also seeing the size of the company, especially in the decarbonization sphere, so things that we were looking at a couple of years ago. Maybe we're just a little bit too small for us to get involved and -- but we started to follow these companies, and now they're getting bigger. And needless to say that in a few years' time, they will require more and more capital. So we will have to help raise that capital or changing or for these assets to change into different shareholders. So that's one part. And I think we see that every day, every office has that team running. The other one is a geographical one. So I'm mentioning again moving to Italy. It's a growth by adjacencies. So we've been in Italy and in Spain for a long, long time with MAM assets with IC investments with other parts of the business, but somehow advisory has been a little bit underrepresented. And I think now it's the time to sort of invest in Southern Europe because it's a low-hanging fruit. We've got businesses. We have offices, we have relationships, so why not try and grow that franchise as much as possible alongside growing the rest of Europe when it comes to specifically the advisory piece. So yes, I think this is probably sort of sector-wise and geographic-wise. I think in terms of clients not to go back again to financial sponsors, but there's a lot of sponsors that have got a strategy across private equity, venture capital infrastructure, real estate. And when you talk to them, sometimes the line is very blurred. So there is a little bit of low-hanging fruit into sort of moving assets away from private equity hands into infrastructure money if the characteristics of the assets are there. And I mean we've been the first in infrastructure. We've been the first into core-plus infrastructure as we call it. So we're very well positioned to sort of have that transition and have assets mature into more annuity-style businesses into different hands.

And great examples of why we have such a focus on strengthening connectivity and collaboration across our business groups to support these emerging opportunities. Heads up to everyone in the room. I'm going to ask one final question to the panel, and we will have about 10 minutes to take some Q&A from the floor. So have a think if you've got any questions you'd like to ask. But my final question, and I will ask each of you, and maybe Elise, we will start with you is I'm interested in hearing your perspectives on how the Macquarie culture is helping you in your role in supporting clients.

Sure. Well, I already said that, but it's true. It's another reason why I came back. You hear a lot about entrepreneurial culture at Macquarie, but that's particularly true and that agility to really think outside the box in terms of trying to respond to clients' needs rather than predefining a product that makes sense and then trying to force sell it to the market, that's something that I personally enjoy, and I think has been really helpful in entering the clients' needs. And I think it's fair to say that, especially as we see new clients entering the space, as I was mentioning, we see a lot of their needs evolving as well. And it can go from, of course, wanting more sophistication or more granularity or more details, but it can also go to simple just like education from new entrants in the space. And I think you know that entrepreneurial culture of Macquarie together with the collaboration that Federica and Erti talked about, which really enables us on the ground to think of the best idea and the best way to position and to see what's our USP as Macquarie rather than providing an answer that's a copycat to the other 10 banks on the street, right, as Federica mentioned as well, I think that's a differentiating factor. And so I guess that's also why despite being French and living in Paris, I come back to Macquarie.

Erti, we might turn to you.

Yes. I don't want to repeat what you said because it's so true actually across the division in terms of being entrepreneurial. I think we are on top of that. What I would add is like we are encouraged very much to innovate and add new products and go after new businesses. And what I like about our core values, opportunity, accountability and integrity, is that we feel like we own the business. And I think that the clients also feel like we have skin in the game, i.e., we own in good times, we own in bad times. And I think this is very important in that client relationship, and we definitely feel that.

And if I can just add one more thing to that. If you have a culture that empowers you to grow, to think about new ways, there's also the best way to sort of keep good people, and advisory, ultimately is a people business. So what we can offer our client is the right team that can give them a good advice, can think independently, can come up with solutions, and it's much easier to have a team that works that way if the culture of the business is to actually empower people to think independently as opposed to just copy what was done before. So our culture ultimately benefits our clients because they have a bunch of thinking people in front of them as opposed to a number of executors that just do what someone else has told them to do, and that goes from the analyst to the senior MDs in the business, and that's how we tend to operate.

Great. Well, thank you, all. And definitely, some common themes, some common themes coming out there as well. So now turning to Q&A from the floor. Just grab a mic.

Brian Johnson. I've been following Macquarie for 1,000 years. I can remember when the Munich office opened because I visited. If we have a look at what's going on, like just in the last little while, Macquarie's share price has come back from $241.02 to $208.29 million. So it's been absolutely hammered. We've had Trump single-handedly changing the whole dynamics of basically the U.S. economy. Can I just get a feeling for what the 3 panelists are thinking about? How -- if we think about these big themes that have been driving Macquarie, which I think are digitization, infrastructure, electrification, could we just get a feel? Is there a scenario where the politics in Europe could change that those dynamics would change for Macquarie in Europe? Or is it still basically intact?

I can maybe start. I think in the context of -- some decisions have been made, which are reversible if you think about energy, right, so nuclear shutdown in Germany, coal is coming off as well, has to be replaced. Now, personal view, Mr. Trump has his own opinions, but ultimately, we will need power, and that power needs to come from somewhere. And in order to deliver that power, we will need infrastructure to deliver that power. So at the end of the day, there are fundamental needs that need to be met. So all of that, we're talking about digitalization, energy and so on and so forth is not politics. It's needs of real people and needs of businesses and needs of industries that need to be met. So yes, it's quite likely that things might get bumpy. It's quite likely that things might happen that disrupt this transaction on that transaction for long term, we still need power. So that investment needs to happen.

Yes. I think -- so I would agree with Federica, and I think it's back to what was discussed earlier, which is that we're in a business that's driven by tailwinds that are macro structural trends, not just like short-term movements. Of course, there is a lot of noise at the moment. Of course, a lot in the media. Now there is also a bit of a difference, as we've experienced ourselves with our businesses between what you see in the media and the rhetoric and what's really happening in the business world, to be honest. But even beyond that, the point is that the long-term macro structural trends that are demographics, that are digitalization, that are the need for infrastructure, be it new infrastructure by the transformation of our energy landscape or the replacement of aging infrastructure because, quite frankly, in this region as well as in North America, and we see the state of infrastructure, it's kind of obvious that there is like a lot to be invested in just replacing the existing one. And these are long-term trends, as Federica says, that are not going to go away just because of some noise. Now we can't ignore indeed the current environment. We can't ignore all the noise. We can't ignore the geopolitics, the tariffs and potential inflationary pressures. But actually -- the past year having talked to a lot of investors in the world, I tend to think they play to our strengths because infrastructure is a resilient asset class. You can see it, as I was saying earlier, as a good addition to a portfolio that is providing potentially lower volatility and also lower correlation to the other asset classes. So actually, all that volatility, and I'm sure Erti would agree for other reasons being the hedging side, but it's also an opportunity beyond the challenge of having to sit down, brief for a minute and go without a noise, right?

I agree. I mean, for us, actually, the recent volatility has been great for the CGM business, and in particular, when I'm talking about hedging with clients. I would just add that on those macro trends, I mean, talking again about decarbonization and what CGM is doing, I don't think we'll stop there. I mean, we -- there are so many different products and additional products we can bring to the platform across all our verticals. If you think about resources business, we have been investing into creating more and more hedging tools around critical metals. I don't think this will go away. This is definitely a global offering. In our oil business, we continue to be very involved in our traditional businesses, but of course, also positioned in things like -- which we believe there is future like sustainable aviation fuel or recycled PET for packaging business. We think there will be opportunities a lot more in gas and power, of course, with a higher share of renewables in Europe, the LNG impact as well. I think we -- there is opportunity as well in the power market around managing very short-term volatility, which will definitely be there. So I think even if there is a change in that macro environment, I think the -- if we add more products to our platform and more clients and also trade more products with the existing clients, I think we should be in a good position to continue that annuity style business that we've been talking about earlier. There is still also this small scenario of Trump making Europe great again, right? I think there is an FTA piece that was published today on this, so may be wishful thinking, but we could also be optimistic given what's going on in Europe, in particular, in Germany as well.

Yes. Germany, he is trying to help us with that.

And one final comment, I think, from me, Brian, would be that as you hear a lot about at group level, we invest heavily in the diversification of our businesses and platform, and therefore, which I should say, over time, has helped us ride different market waves and macroeconomic exposures. And we're continuing to do that from a regional respect as well. So that would be the broader Macquarie perspective is that we think that the diversification of the platform continues to position us well despite the uncertainty. Jonathan, I think it is -- no, we are going -- yes, we'll start with you, Jonathan.

Jon Mott. Question for you, Erti. You said at the start -- well, midway through that you're winning agriculture and dairy customers because during the energy crisis, they sort of need to start hedging. When you see the situational clients come along, do they tend to keep their relationship? Or is it they'll trade for a while, then the energy crisis passes and they get back to their day job and they go back to doing the things they always do, and you no longer really engage with them? So how many of your customers -- Macquarie always talks about growing the customer base, but how many of them are situational customers? Or how many of them then have ongoing long-term contracts that drive longer-term revenue?

Yes. It's the very vast majority long term. I mentioned earlier, we probably added 30%, at least in this region. But when I look into the nonreturning customers, it was less than 5% during that same period of time. The advantage is once we sign documentation, we sign master document agreements -- legal agreements, they're valid, right? We refresh the relationship. We continue to talk to them. And some years, those customers will have less need and some others a lot more. But the beauty is that once you open that optionality, that customer could be interested in another product that we can offer, and we do offer a lot of products. So it adds that optionality as well. But of course, if volatility comes back, we start to become a lot more relevant to them again. Agriculture is a good example. Actually, this year, it has been fantastic for us in agriculture, in particular, in cocoa and coffee markets. And this shows the diversity of generally the products we cover, the platform as well. In fact, we started agriculture I think in the '90s probably, and it started in Sydney. But now the biggest portion of our agricultural business is, of course, here and predominantly in the U.S. as well.

Okay. I think we -- yes.

Andrei Stadnik from Morgan Stanley. Can I ask a question for the panelists? Given the greater potential focus on ROE and return on tangible equity, what are each of you thinking about in terms of lifting ROE or return on tangible equity in your businesses?

There's no capital allocated to that capital, also to advisory, so I'll let others.

I think to be honest, the way we run these businesses, and as explained many times to you, I'm sure, like Macquarie is not a top-down culture, right? It's very much that bottom-up culture. And the way we focus on our areas for growth is just focusing on delivering outright profitability. So to be completely honest, I don't think that this new metric is going to change drastically the way we look at growing our business. It's just adding that metric. But again, as Alex mentioned, ROE remains the main metric that we have our eyes very much set on.

On the CGM business, we deploy capital, of course, for trading market risk, but in particular, credit market risk, right? I mean, Alex mentioned, we take a lot of credit risk and this credit requires capital, right? And so at every single transaction, we have metrics that we do follow, at least from a return on reg capital, return on funding, return of equity as well. We, of course, look at it much more at the portfolio level. And historically, I think our CGM business has been delivering way above the minimum numbers.

And I think that almost brings us to time, but we might take one more question.

It's [ Brennan ] from Citi. I was just wondering if you could contrast the opportunities in Eastern Europe versus, I guess, the traditional Western markets, where you have traditionally traded?

I will start on my side. Yes, we are -- we have been very present in Poland, even more throughout the energy crisis as well, where I think a lot of customers really needed us during that point in time. We're looking into adding more indices to respond to that need. Hungary is also another space where we are definitely increasing presence as well, in particular, in the energy space. But as I said, those create opportunities sometimes for other products we can sell into those markets.

So I think on the advisory side, very quickly, a lot of clients focus on OECD countries. So the opportunity set in Eastern Europe is naturally a little bit smaller. We've opportunistically worked on transactions in Czech Republic and Poland as well, I mean, adjacent markets to Germany, Austria. So we do have our eyes on that, but it's not at the moment a focus, as I said, probably Southern Europe.

Well, thank you. In the interest of keeping us to time, we'll call it there. Federica, Erti and Elise will be joining us later this evening, so you'll have an opportunity to ask questions there. Thank you for joining me.

Hi, everyone. I think the idea of this is to give you a bit of a flavor of one of the investments we've made from the Macquarie Asset Management business in France. So my name is Chris Archer. I lead Macquarie Asset Management Green Investments/Energy Transition investing team and strategy. So we kind of define, at least on the fund side, the energy transition as the non-wind and solar side of the business. So no questions on offshore wind or solar, please. But I've been with the business for 17 years, originally started out in London, spent 4 years in the U.S. after acquisition of the Green Investments Bank, where I launched the Green Investments Group over in the U.S. market and then relocated to Paris about 3 years ago now. So about a year before we made the investment into Verkor. Yes. So we met the Verkor team probably beginning of 2023 and ultimately made an investment in summer 2023 from our energy transition strategy. We led their Series C investment. So I'm delighted to have Benoit here with me. He's a pretty busy guy. We've dragged him away from his sort of management strategy off-site, which is in another sort of Parisian room, maybe as nice as this one, I imagine in Paris. So thanks very much for joining us, Benoit. I was hoping Benoit to give you a little bit of a flavor of the journey that his business has been on and both prior to our involvement and since. So Verkor is a European battery cell manufacturer focused on the auto market, founded back in 2020 by Verkor and 5 founders in total -- 6 founders. And since then, the business has raised EUR 2.5 billion and is producing battery cells for Renault, initially out of its pilot line and in construction on a gigafactory in Dunkirk, which I think we, at one point, hope to take you all to see, but I think the logistics of bussing you all up to Northern France and then getting you through the Eurotunnel proved to be a bit too much of a challenge to squeeze in this week. So sadly, that's not happening. But Benoit, thanks very much for joining us.

Could you just give us a little bit of a background and explain why in the middle of COVID, you decided to form a battery cell manufacturer back in 2020? Kind of what was the sort of vision and strategy back then?

Thank you, Chris. Hi, everyone. Happy to be here. I think it's quite simple in reality and that strategy hasn't changed. I mean, Europe has no oil, and it's not going to change. And Europe still wants to have its people and its goods move here and there. And to do that, there is no other option than moving into electrification and mobility. And to electrify mobility, either you put lines over the roads all over the place or you put batteries in the vehicles. And that is what, I think, the financial community called the megatrend, and that is not a debate. So once that is a clear vision, and France started now a long time ago because the first word speed record of a car was done in France in the '20s, but not 2020, it was 1920, when the lead acid car reached 100-kilometer per hour in 1905 or 1910, something like that. I guess you probably would never like to go in that car again, but it was quite smart at the time that engineers believe that electric vehicles were an interesting way to go. And then we moved for probably 1 century into ICE for good and bad reasons. And by the way, and that's a funny story, we've been able to have ICE because ICE have an electric motor to start the engine, because you may know that funny story -- I mean, it's late in the evening, you've had a long day, but the wife of Henry Ford was willing him to create electric vehicles. And why is that? Because at that time, you needed to use the crank to start the engine, and that was extremely dangerous because you could have the crank bumping into your arms. And he invented or find a way to invent the starter of the engine that was an electric motor. And for one such way, we use those ICE. And now we are moving into electrification. That was reinforced at European level by regulation, which says that in 2035, Europe will be all electric when it comes to new vehicles. And when you do the math, you see that you need a lot of batteries just to fuel those demand -- this demand. So personally, I was investing and running businesses before launching Verkor, and I came across that sector because by far, it's the largest place to have an impact in terms of strategic autonomy for Europe. 5 years ago, that was probably not something that was as easier as it became today. And it was a way also to leverage and industrialize existing technologies that we were pushing to their limits, but not leveraging a disruption in technology, which is also another route to start a startup. That was the vision 5 years ago. We've hired a team. We are around 900 people today. We've onboarded a large customer. The name is Renault. Those that are close to France may know that Renault has won the car of the year 2 years in a row with the Scénic car, in which we will put our batteries, also with the 5 that probably you've seen in Paris, those nice green, yellow, blue, small cars and a kind of revival of what was a Renault 5 in France 30, 40 years ago. But the market is progressively progressing. Of course, there are challenges. We will talk about that. But we onboarded that customer for a very big offtake, and we launched a first production site in Grenoble in the Alpes, and we are now building our gigafactory in Dunkirk. Maybe we'll have some pictures, I don't know.

Yes, maybe. And just in terms of context, you -- so I think when we invested in '23, you were just beginning commissioning of that first site in Grenoble, that produces vehicles, what 3,000...

Absolutely. So when we closed the Citroen, we were having a site in Grenoble that we called an R&D line and a production site. As we speak today, it's working 24/7 producing 1,000 cells a day. So that you can imagine in a typical car, we will have 200 cells, 200 battery cells. So it means we are producing enough to supply 5 cars a day. This is small-scale production, but it's a way, a place, like a sandbox to learn, to fine-tune the processes, to fine-tune the product, to fine-tune also the industrialization, that is a challenge and to keep it on one single product. That was a decision that Verkor took from the start. The vision is to become an industrial battery manufacturer based in Europe with a sustainable value chain. And to do that, we go step by step. There is an expression that some of my team members are using to say, baby step with the world-class, meaning, you don't want to do it all at once, you want to start, stabilize the production and then expand. Because, like I was -- as you said in the management meeting today, we have requests from all over the place, but we're trying to keep it focused, deliver, execute and then expand and not being everywhere. We've seen that other projects have had some challenges.

And so the gigafactory that you're in construction now is -- will be sufficient to produce cells for about 300,000 vehicles?

Absolutely. I mean, our customer will then adapt a number of calls that they combine together to create a battery pack, and that battery pack can have different capacities. So we will be supplying in relativity 150,000 to 300,000 cars depending on the size of the pack. I believe we are producing high-end batteries with high energy density with fast charging capability. So they will be used in reasonably large packs for the cars. And by the way, one of their great car that they're going to start selling next year is the new Alpine car. Probably you know that Alpine was a sub-brand of Renault, that was more a sports car brand. It's going to be more the high-end brand of Renault, and therefore, they are going to start production of the Alpine A390 at the end of this year, and there will be produced based on batteries that we are shipping today from our global site, which is fully qualified now at the automotive standards in terms of quality, in terms of safety, in terms of performance of the product.

And for those outside of France, the Alpine brand is the performance brand of Renault that owns the Formula 1 team.

For those who are French, it's kind of a nice narrative to supply with Verkor batteries and Alpine car, because it's a mountain range in the Alps Verkor, a mountain range that you may not know, but we have not invented the name. We adapted a little bit around.

And so that original contract with Renault was obviously critical and an amazing achievement. I think you signed that sort of 12, 18 months after founding the business.

Yes. So we -- the thing is we've managed to get in touch with Luca de Meo, the CEO of Renault early in our journey. And he was convinced by the fact that he needed to have some kind of partnership, strong partnership in the battery industry for different reasons. The first one is that he is convinced that he has to go all electric. And to do that, he needs to be able to understand and scout technologies, scout opportunities and to have someone close by him to be able also to leverage what we do with his other suppliers. And typically, it's what they have been doing by having more bargaining power with others, be them Korean or Chinese. I think the second piece is to be able to codevelop some product leveraging technologies. At this stage, this is what we have done. Our product is 100% Verkor IP based on the competencies of the team and some background IP that we also secured through partnerships with material suppliers. And with Renault, what we clearly also have engaged into is to look into the future. But they have a strong request for us to focus, deliver, execute the first big project, ship them the volumes and then expand and take it from there. That's what he was clear in his vision back in the day, that was 2021. And then we started a 2-year period to qualify the product, meaning we had to demonstrate to the engineering team that we had the right capabilities to ship the first samples, and it's not 1, 2 cells, it's hundreds, thousands of cells. We are going to ship to Renault more than 200,000 cells in '25. And then the first deal between the players, and then, they are engaged one step further, and this was the topic of the Citroën into a long-term offtake agreement, which, at least in principle, mimic a little bit the typical infrastructure deals that you probably know very well with the difference that it's more to ship industrial products. And we aligned on 10-year vision that will give us capabilities to raise the money, be it in equity, in debt or in subsidies so as to be able to secure the financing. And if you took another angle, it's a way for also Renault to secure a factory, I would say, 2/3 of that factory's throughput is going to be for them. There's a limit in the exposures they are taking, at least in terms of equity, of course, because with a long engagement in terms of offtake, which goes with some kind of take-or-pay to also give comfort, not only to us as management, but also to our investors, lenders and to the global ecosystem.

Yes. And if you sort of think back when you were founding the business and working with Renault about the sort of key drivers, obviously, the vehicle electrification. You've talked about that as a macro trend. But why should batteries be produced in Europe, the importance of sustainability, the ability to trace supply chain, the fact that OEMs want to work with suppliers that are more local, where they feel they have a little bit more control over critical elements of their supply chain. How have some of those original assumptions -- and also, I guess, the strategy to focus more on the sort of higher performance, faster charging, how have those -- how is that original strategy kind of stood the test of time? Because you're coming up to -- time has moved on fast, coming up to your fifth anniversary. You've achieved a lot in 5 years, I have to say. But you're coming up to that 5-year anniversary, when you sort of look back at that and sort of looking forward, how those assumptions changed or not?

If I take it from the micro side and then to the -- micro to the macro side, I would say that on the product side, we are very proud of the product that we've developed, which is really top of the range. And we've made the right choices. So for those are probably a little bit closer to the battery world. It's an NMC battery with graphite in the anode with no silicon. And still, we are really 30%, 40% better in terms of internal resistance, meaning we are offering 30% battery charging time than the competition. So I think this is a very good product and we are proud of the team and what they have been doing. I think we avoid the risk of moving into every new hype topic because in the battery world, you will get a new fancy, new technology every other day. And it's difficult because each time you need to test it takes time because you need to run the battery cycles as they will be in reality. We still are not capable of simulating that. We do simulate a lot, but still, you need to have the batteries that will stay for 6 months in a cycle, and that takes time, takes bandwidth and takes CapEx and OpEx. So on the micro side, I would say that we've been quite positively convinced by the journey, probably we've seen that the market has changed, and the market has changed from performance to maybe affordability. That's a megatrend also that we see with pressure coming from China, and I will talk a bit about that. That is clearly also bringing some challenges. On the other side, on the macro side, for sure, 5 years ago, it was not so clear that the world probably would become more fragmented, as we can see today. If you remember, Trump started probably to challenge a bit the preexisting balance of trade. We see today that it's becoming more and more obvious, and Europe is progressively considering that it should not be too naive and put in place what it needs to also secure its strategic autonomy and way to decide. It's obvious in defense, but I think even in topics as important as mobility, transportation, it's also becoming critical. It takes clearly more time at '27 than when you elect someone that has the right to decide for everyone. But that, I think, has changed. And clearly, it was not so clear 5 years ago that we would be in a position with a need to relocalize the value chains, to put tariffs potentially or to see others putting big tariffs. We have customers today that are asking us to localize the factory in the U.S., no big surprise here, because simply the political pressure is what it is. I think the other piece is that electrification is happening -- is clearly happening, now probably has a lot of trends in the human societies, and we probably overexaggerated a little bit 3 years ago, 4 years ago. But what we do see today is that the demand is there and that when the car is at the right place with the right position, it sells very well. Of course, there are failures, but there are huge successes. So I think that trend is not changed. And towards the leap to localization, people are realizing that it's good to have consumers, it's good to have cheap product, but if you don't have producers, then the consumers are not going to have any type of power -- purchase power, simply because they need to earn money to be able to buy those cars. And this is something quite new in the minds of the politicians. It's quite new in the minds of decision-makers because in Europe, clearly, it was all about give cheap product to the consumers. And this is changing a bit, and therefore, we expect to also have some strong support coming. It's going faster in the U.S., but we see the same type of trends in Europe, not there yet, but at least that trend is also quite new compared to 5 years ago. And maybe the last piece, it's an everlasting question. What about competitiveness? How do you make sure that the product is competitive? First of all, our customers are coming to see us, and we detail the cost breakdown and the way we can finance what we need to finance, and they are keen to keep their engagement, they are keen to keep going. However, we also see that we have China that is behaving as a big industrial player with different rules, and I can detail them, but it's clearly not the same type of games. And it's clear that in Europe, to give you just one example, I still need to pay my guys, I need to pay my energy even if the factory is empty, completely different in China. So that type of things are becoming more visible now to decision-makers that are taking and will take more actions.

And I think when we originally were looking at Verkor and made the investment, there were a number of other European battery manufacturers, independent, yes, most prominent example being Northvolt but also a number probably slightly behind where Verkor is today, there's been some pretty well-publicized news around the struggles that the Northvolt has had and many of the others that were seeking financing and trying to get a gigafactory off the ground in Europe, have struggled to date. Why do you feel that kind of so far your strategy has been resistant to this, number one? Number two, there is obviously some challenges in the market, and there are some shifts. How is Verkor responding to them?

So I think the big difference I do see because I also have been an investor into infrastructure deals is that making battery is like making electrolyzers or making vehicles is about executing the industrialization of the technology. And to some extent, this probably has been, by other players, a little bit undervalued. So what we decided, so very early in the process is not to be called, for example, a start-up or the unicorn or whatever. We are an industrial battery manufacturer, which goes with probably not so fancy things, like organization, routines, quality, performance. So for some guys or girls joining us, it's a little bit less ads than expected, but I'm like, guys, we are doing batteries, we are not just bringing on the airlines, it's for sure. Then it goes with doing one thing at a time. One site, ground hub, stabilize it, ramp up, ship the product to the customer. And the gigafactory -- between ground hub and the gigafactory, the size is multiple of time of 10, but the production is going to be a multiple of 100 because the machines are going to be faster, machines are going to be more dense. So we are extremely cautious, and we are glad, and you know most of the team to have been able to, first of all, take advice coming from outside and make the team switch from that startup mindset, I would say, make it happen to the production mindset, which is tomorrow better than yesterday. It's very different mindset in reality. It sounds easy to do, very difficult to change. And we started that change quite early in our journey. And there we are today, stabilizing ground hub, ramping up progressively Dunkirk in the next 12 months, progressively, step by step and avoiding defocusing the team with launching projects all over the place. That's super important. You referred to Northvolt, Northvolt has been extremely ambitious in the vision. We've been in touch with them quite extensively, but they wanted to start factories all over the world, in Europe, the U.S., Quebec, Sweden. And that's an important piece. We had in our minds the fact that we are going to manufacture batteries and that it needed to be done with the creation of a specific management system. It's not a copy-paste from automotive industry, for example. And to localize a factory in a place where we will find the talents that we need, that factory is going to have 5 shifts over a week with guys and girls coming just to manufacture batteries. And that is a specific mindset that we still have in Europe. We do have that in France. Ground hub is more innovation, but clearly, Dunkirk is a lot about automotive, steel, aluminum industry. So you have the guys that have the mindset with the quality, the cleanliness that we do need for that. So that's what we've decided to do backed by our investors and also engaged by our customer to be probably a little bit conservative. At least I was challenged by some of my stakeholders maybe 2 years ago. And now they believe it was the right way to go, and I think we've talked a lot about that together also to keep it humble, deliver and then expand. By the way, this is what very successful Korean and Chinese companies have been doing in this sphere. It's one you have the machine to produce the machines, the machine to produce the batteries, then you can absolutely expand that, but not the reverse.

And you mentioned a little bit about sort of European kind of support and regulation. How important is that? And how confident are you that's going to survive all the competing sort of things that are drawing people's attention at the moment?

I'll just give you 2 figures. I mean, it's obvious that batteries is a thing of the future because we need to replace in Europe $400 billion of oil imports year-to-year, $400 billion of oils are imported to Europe just to fuel our cars. That has to be replaced by batteries, okay? So it's super important. Then others also understood that. The U.S. have given a EUR 35 per kilowatt hour direct support to battery manufacturing, EUR 35. Ballpark, a battery cost is EUR 100. If you got EUR 35 direct support, you can imagine the impact. So we had conversations with the European Commission to say, "Hey, look, at least you should try to match part of it." Second piece, China has been subsidizing the EV and battery industry, and this is public information with more than $300 billion over the course of the last 20 years. So now people are realizing that, that it's strategic, it's critical, but it deserves attention and support. So support has been put by some subsidies. Support will continue to keep coming, and we are in discussion with Brussels about that. What is difficult is always about speed because the vision becomes to be clearer. Now the speed of deployment and I would say the money in the bank and the money in the pocket for a players like us is going to be important. But clearly, the support to that vision is there, and this is not something that is questioned.

And Benoit, we chat pretty regularly, and every year now, we've done a sort of more formal sort of feedback session. So hopefully, I know you're going to say when I ask you this question, but you haven't told me yet. So how have you found partnering with Macquarie as an investor in the business?

That has been a great journey. And I would say maybe 2, 3 different things. I think you've been able to crush Excel by doing scenarios about Verkor. So meaning when you do things, you do it seriously. Well, it was a version with only, I think, 32,000 columns. Am I correct? Because I think today, there is no limit anymore, meaning you've been looking at the case extremely seriously. You've been asking extremely relevant and difficult questions. And I think at the end of the day, probably took 1 year to convert from the first touch point to the investment, and that is something I think that ultimately, we valued because it helped us increase the quality of the way we are doing things. And then I think in terms of daily work and daily support, honestly, it has been very rewarding, not only for me, but also for the rest of the team because you are not, I would say, a passive investor, you are more a business partner. Of course, you Chris, but the rest of the team also with the idea to support, trigger options and be there for the long term. And for us, it has been valuable in that sense. I could ask you the same question.

No, it's certainly been -- it's a very exciting business. It's certainly a very exciting business. It's certainly a business, as you say, where execution is fundamental. We actually see that a lot across when we think about investing in the energy transition, the better businesses actually, it comes down to doing the boring stuff quite well, actually, just building stuff on time, on budget, signing up good offtake agreements, that kind of stuff is the boring stuff because in the end, the end of transition is about deploying physical assets, and that's actually -- it's a lot harder than producing PowerPoint slides and running scenarios in Excel, which we are pretty good at, I have to say. Just on -- so just to wrap it up, what's next for Verkor? How do you think about the future?

So it's an interesting moment to be in. So we are having machines coming in Dunkirk. We will start shipping sales at the end of the year. And Q1, Q2, you will see those great cars in the streets. Then the question is exactly what are the right conditions to trigger the next big thing because we see a lot of requests coming. Globally, we speak to all the players in Europe, but also some in the U.S. And as we say in French, when things go bad for someone it can be a good opportunity for another one. So clearly, we see...

It sounds like a very French expression.

Maybe, I don't know [Foreign Language], but I know you speak French now. So we have opportunities. Now the not so easy part is to make the right choices to, again, add-on things rather than defocusing and creating a risk to not do things right. And in this business, it's a good thing to have options. It's also a wise thing to make the right choices. That's what I can say. So '25 production starts, and like '26, we'll be ramping up, '27 also ramping up. And then how to combine opportunities with the assets we have in a partnership mindset because I haven't touched upon that, but we are also trying to have the value chain around us in Dunkirk, but not only with car manufacturers, recyclers and all that value chain. It's not Verkor stand-alone, it's really with the partnerships that are also coming to bring competitiveness and capability to have the right quality standards.

Great. Well, look, thanks very much, Benoit. We'll just take questions over drinks and canapés, so you don't get delayed from leaving on time. But thanks very much for joining us. And look, thanks very much, you all for making the trip over to Paris to hear a bit about what we've been up to.

Thanks.

Thanks, Chris. Thanks, Benoit. So that concludes the first day. Thank you to all the presenters. Thank you, Benoit, for coming and separating yourself from your strategy today. Just a piece of housekeeping. On the back of your name cards, there's a QR code. So for those who haven't downloaded the app, download the app, fantastic app, obviously. And we will now have what I've been told some substantial canapés and drinks, obviously. So hopefully, you can all join us and join with our presenters and keep asking lots of questions. So thanks very much for joining today. We'll see you tomorrow at 9:00 a.m. for registration, and the Macquarie Capital team will give you an overview of their business. Thank you.