Nufarm Limited (NUF) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is John Gillam, I'm the Chair of Nufarm, and welcome to all of you to our 2024 Annual General Meeting, whether you are in the room with us or participating online. Our company secretary has informed me that we have a quorum present, and I officially declare our meeting open. I'm chairing the meeting from our headquarters in Laverton in Melbourne today, and I'm on the lands of the Boonwurrung people of the Kulin Nation, and I wish to acknowledge them as traditional owners. I'd also like to pay my respects to their elders, past and present, and to aboriginal elders of other communities who may be joining us today. The Notice of Meeting dated 15 December 2023 was made available to all shareholders, and I propose to take the Notice of Meeting as read. The online component of today's hybrid meeting is being facilitated by Computershare's online meeting platform. This allows shareholders, proxies and guests to attend the meeting virtually. All attendees can watch a live webcast of the meeting. In addition, shareholders and proxies can ask questions and submit votes. Before I turn to how to participate in today's meeting, I'd like to welcome my fellow Board members and other guests who are in attendance today. With me today is Greg Hunt, our CEO and Managing Director. Joining us here in Melbourne are Marie McDonald; Lynne Saint and Alexandra Gartmann. We have Federico Tripodi and Adrian Percy, joining us virtually from the United States where it's the early evening for them. And I'm sure you'll all understand that David Jones, who is based in Switzerland at the moment is in acceptable apology since it's well after midnight for him. In addition, Greg and I are joined in the room by Paul Townsend, our Chief Financial Officer; Kate Hall, our Company Secretary; and Grant Saligari, our General Manager of Investor Relations. And Grant will be moderating the questions from shareholders later in the meeting. We're also joined by Chris Sargent, representing our auditor, KPMG, who is available to answer any questions in relation to the financial year 2023 audit later in the meeting. This is actually Chris' final audit of Nufarm. Thank you for all your services to us over that time. And we also welcome our incoming audit partner, Vickie Carson, and I think the official changeover is when I close the meeting. Before we move to the formalities, there are several housekeeping matters regarding how to participate in the hybrid meeting, which I need to work through. So please bear with me. For those attending the meeting online, who wish to submit a written question, you may do so at any time during the meeting via the speech bubble icon on your screen. Type your question in the chat box on the right of the screen and then select send. Confirmation that your message has been received will appear above. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting, when I will also take questions from those in the room with us. Please also note that your questions may be moderated or if we receive multiple questions on one topic, we will choose -- we may choose to amalgamate them together. For those shareholders participating online, who wish to ask a verbal question, an audio questions facility is available during this meeting. Instructions on how to use this facility has shown below the broadcast window on the online platform. If you're asking a verbal question, please state your full name before asking your question, and please limit your questions to only 1 to 2 questions at a time and then rejoin the queue to allow others to ask questions. I do expect that we'll be able to answer all your questions today. In the event that we are not in a position to do so, we will answer them in due course via e-mail or posting responses on our website. Depending on your questions, I will make the decision whether I'll answer them or I'll ask a member of management, another director or the auditor to respond. Voting today will be conducted by way of a poll on all items of business. To provide you with enough time to poll, I will shortly open voting for all resolutions except Item 5, the conditional spill resolution and I'll address Item 5 later in the meeting. If you are participating online and you're eligible to vote at this meeting, a voting tab is available. Selecting this tab will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time I declare voting closed. For those of you in the room, your voting cards will be collected once voting is closed, and I now declare voting open. Please submit your votes at any time from now until the end of question time. I'll give you a warning before I move to close the voting. Michael Hutchison from Computershare will act as the returning officer for the purposes of conducting and determining the results of the poll the results of which will be announced to the ASX later today. And that deals with the formalities of today's meeting, and I'll now move to my formal address. Welcome shareholders and guests to Nufarm's Annual General Meeting for the 2023 fiscal year. Today, we have shareholders present both in person and online, so please bear with us as we ensure that everyone enjoys the benefit of full participation. I'm honored to chair an agricultural company with a unique Australian heritage, a strong global presence and one where cutting-edge science, technology and innovation are defining and driving long-term growth. My introductory remarks will be followed by a few words from our Managing Director and CEO, Greg Hunt, after which I will return to the formal business of the meeting. Nufarm's purpose. Each year, the world reaches new milestones that serve to reinforce how critical plant science and innovation are to human and environmental health. With the world's population increasing in size and prosperity, farmers around the world must produce more whilst reducing the impact of agriculture on ecosystems. Moreover, with the increasing focus on the impacts of climate change, work to decarbonize our economies continues to intensify. Nufarm's innovation and solutions lie at the intersection of these megatrends. Our purpose is to grow a better tomorrow. We strive to use plant science to help agriculture reliably and securely produce enough food, feed and fuel in sustainable ways that protect the ongoing needs of future generations. Our crop protection products mitigate the production risks faced by farmers from pests, weeds and diseases, which helps ensure populations have enough food. Further, the contribution of modern crop protection products to sustainable farming practices such as minimum and no till cropping is an often overlooked fact. And innovative solutions, such as our omega-3 canola are helping to reduce pressure on wild fish stocks in our oceans. Our carinata and energy cane crops are poised to provide sustainable feedstocks at a large scale for the rapidly growing biofuels industry as efforts to decarbonize transport accelerate. The synergies available from integrating our core crop protection, seeds and beyond yield platforms linked with continued investment in innovation and technology will drive long-term growth and strong shareholder returns. I'll now spend some time reviewing the financial year 2023. FY '23 proved to be another watershed year for Nufarm as we continue to build both capabilities within the company and execute on our growth strategy. Our beyond yield growth platforms, which we've been developing over prior years had a meaningful impact on our results. There has been a decade-long journey for our omega-3 canola platform, and we've now entered the exciting stage where this product has been successfully commercialized and we're achieving increased customer adoption and revenues. To that end, we are focused on expanding the significant opportunity in aquaculture and the recent access achieved to the Norwegian market was a very important milestone for the company. There are a number of wider growth opportunities for the technology in both animal and human nutrition, which we will continue to assess for the best way to generate value for shareholders. The development of a world-class bioenergy platform that can scale production of feedstocks to meet the growing demand for renewable fuel is well advanced. Our channel partners and grower relationships, coupled with our global partnership with BP, will help us meet this demand by processing feedstocks into renewable fuels for end users. Our carinata crop is now commercialized on multiple continents. And during FY '23, we recorded our first revenues to energy cane. Greg will talk to more detail on this during his comments. Strategies to derisk our Crop Protection business over the past several years paid off during 2023 as we outperformed many of our global crop protection peers in tighter market conditions. The resilience demonstrated by our businesses in FY '23 is a testament to the ongoing disciplined strategic and commercial focus from Greg and the Nufarm team. Our confidence in the outlook enabled the Board to declare a fully franked final dividend of $0.05 per share, bringing total dividends declared for the year to $0.10 per share, which was in line with the prior year. I'd like to spend a few moments talking about bioenergy and the Australian market opportunity and particularly to highlight the significance of opportunities for renewable fuels in the Australian market. Australia's globally competitive agricultural sector is well placed to both drive and benefit from the development of a local renewable fuels industry. Australian farmers are already providing feedstocks to support the decarbonization of transportation in Europe. Most of the canola Australia exports to Europe is converted into biofuels, thanks to the incentives for bioenergy production and use available in the EU. Renewable fuels can play a critical role in Australia's energy transition. Bioenergy Australia estimates that 45% of Australia's total energy use comes from liquid fuels, and liquid fuels remain a critical energy source to sectors such as aviation, where electrification and hydrogen power will not be viable options for long-haul flights for the foreseeable future. The Albanese government has strengthened Australia's response to climate change through legislated emission reduction targets, reforming the safeguard mechanism, progressing the aviation green paper and the formation of the Jet Zero Council. And we were pleased to see that Minister Bowen's latest annual climate change statement highlighted the potential role of low-carbon liquid fuels to strengthen Australia's energy security and create good jobs. We encourage the Albanese government to be ambitious in harnessing Australia's natural resources and agricultural capabilities to build a local renewable fuels industry that will unlock another source of revenue for our farmers. Australia urgently needs policies to accelerate the development of a local renewable fuels industry to support the decarbonization of hard-to-abate sectors like aviation. We have a narrow window of opportunity to achieve this before Australia falls too far behind other countries who already have policies successfully attracting investment to scale up their industries. Our ability to realize this once-in-a-generation opportunity hangs in the balance, acting with a sense of urgency will accelerate Australia's decarbonization, strengthen our fuel security, create new jobs and support the rural economy. I'd now like to turn to environmental, social and government priorities. While Nufarm products contribute directly to global sustainability goals, within our own operations, we accept the challenge to find new ways to minimize our direct environmental footprint. We are working towards a 30% targeted reduction in Scope 1 and Scope 2 greenhouse gas emissions from our manufacturing sites by 2030. In FY '23, recognizing the evolving needs of Board level oversight in driving sustainable outcomes, we established the Board's Sustainability Environment Committee and revised the scope of 2 other Board committees. This new committee is specifically charged with overseeing organizational performance in sustainability and environmental affairs. We are committed to diversity and inclusion, and our Board composition continues to reflect our commitment to diversity and strong governance. At the date of this meeting, 43% of the Board's nonexecutive directors are women. Across Nufarm, we have a workforce of approximately 3,000 people operating across 32 countries. At the end of FY '23, 28% of our global workforce were women and women comprise 35% of our senior leadership team. I encourage all shareholders to read our Sustainability Report, which you can access on our website. Turning to matters regarding the Board. Our Board renewal program completed its final phase in 2023. In November last year, long-standing nonexecutive directors, Gordon Davis and Peter Margin retired from the board and I would like to take this opportunity to formally thank and recognize them both for their highly valuable contributions and commitment to Nufarm. Earlier in the year, we were pleased to welcome to the Board -- earlier in the 2023 year, I should say, we were pleased to welcome to the Board, Federico Tripodi and Adrian Percy, as Independent Nonexecutive Directors. Federico and Adrian are standing for election today, and you will hear from both of them shortly. I'm pleased to let you know in advance of that, that they're making terrific contributions in line with their impressive credentials. Remuneration Governance. Since our last AGM, we undertook extensive consultation on our remuneration framework with a wide range of shareholders and their representatives. We have reviewed and reset the remuneration arrangements for Nufarm's executive key management personnel focusing on maintaining a strong alignment between the rewards we provide to attract, retain and motivate our key people, and the delivery of sustainable financial returns to our shareholders. We look forward to receiving shareholder support for these changes. In closing, having endured the impact of volatile and trying conditions in the past, it is pleasing to report a much more resilient result in FY '23. Rest assured that significant efforts continue to be made to ensure our businesses are well positioned to perform well in FY '24 and future years. Looking forward, Nufarm is entering a new chapter of transformative growth and we remain on track to meet our publicly stated FY '26 aspirations. On behalf of the Board, I would again like to reiterate our thanks to the Nufarm team for their unwavering dedication and commitment. I would also like to thank our customers for continuing to purchase Nufarm products and to all of our shareholders, thank you for your ongoing support. I'll now pass to your Managing Director and CEO, Greg Hunt.

Thank you, John, and I add my welcome to everybody joining us today. First, let me recap on the financial year gone by, before talking about our growth platforms and the outlook for the new financial year. So financial year 2023 was a successful year for Nufarm. Advancing sustainable agriculture is at the core of our strategy and the investments that we're making in technology and our Beyond Yield platforms was increasingly evident in our financial results. We delivered revenues of $3.5 billion and EBITDA of $438 million in challenging market conditions, and this result was better than many of our industry peers. We delivered on inventory reduction targets in the second half of the year, and we finished the full year with net debt within our target range of 1.5 to 2x EBITDA. We have a strong balance sheet. Earlier in the year, we completed a review of our capital structure, which resulted in the $850 million ABL facility to stand alongside USD 350 million notes, established at attractive rates in January of 2022. Earnings from our Seed Technologies segment grew 67% year-on-year and represented more than 20% of group EBITDA. In our renewable fuels platform, carinata crops, reduces our nonfood feedstock that can be rapidly expanded on multiple continents to meet the increasing demand of sustainable aviation fuel. During the year, we facilitated the first bulk shipment of carinata under our long-term market development agreement with BP. In 2024, we plan to expand further, the carinata plantings in North and South America and undertake first commercial plantings in France and Spain, establishing production in the important European biofuels market. During the year, we recorded our first revenues for Energy Cane, which is the newest addition to our renewable fuels platform. Energy cane is a high biomass sugar cane which delivers substantial improvements in ethanol and bioenergy output per hectare when compared with conventional sugarcane and is an important potential feedstock for the second-generation biofuels. Over time, energy cane has the potential to be a significant part of our renewable fuels platform. These feedstocks are particularly relevant to hard-to-abate transport sectors such as marine and aviation, where wind, solar and hydrogen are unlikely to play a meaningful role. The International Agency or Energy Agency expects global biofuels demand to expand by 25% over the next 5 years. We believe that the technical profile of carinata and energy cane position them as leading contenders in the renewable energy feedstock sector and will provide additional revenue streams for farmers, long-term regional development and ultimately, national economic growth. Pleasingly, we continue to hit important milestones in our omega-3 platform. This is a very important growth platform for Nufarm. 80% of the world's population does not get enough omega-3 and the demand for omega-3 oils is expected to double by 2050. The current supply comes largely from wild feedstocks, which are volatile and overexploited. Our plant-based Aquaterra and Nutriterra products produced from our omega-3 canola will help meet that growing demand in a sustainable way. During the later part of 2023, Norway approved the use of our Aquaterra product in the important agriculture industry. Norway is the largest producer of farmed salmon globally, and therefore, the approval of Aquaterra in this market was a very important and significant milestone in the growth prospects for our omega-3 platform. We also made the first sale of Nutriterra, which is a source of omega-3 for human use. These achievements are reflected in our confidence and our outlook for omega-3, and we remain on track to deliver between $50 million and $70 million of revenue from omega-3 in financial year '24. For a number of years, we have been implementing strategies to derisk our Crop Protection business whilst also prudently deploying capital to achieve growth. During a year in which many of our global peers incurred significant reductions in profitability, our Crop Protection business recorded a less than 9% year-on-year decline in EBITDA. That decline followed a year of record profitability in financial year 2022. Importantly, we also continue to make significant strides towards innovation in our Crop Protection portfolio. Our pipeline of new product introductions from internal and partnered research efforts has never been stronger, and it gives us the confidence in continued growth towards our stated aspirations to 2026 and beyond. In relation to specific markets, North America delivered another solid result. Our commercial relationships with Sumitomo remain positive. We extended our distribution agreements in Canada and in the U.S. turf and ornamental segment securing our joint position in these important markets. We continue to invest in our supply chain and manufacturing facilities, maintaining our position as a reliable and an efficient supplier to our channel partners. In our European business, we have been navigating a period of product deregistrations, which in financial year '23 alone had a negative impact of EUR 25 million on our revenues. We were able to largely mitigate this impact with new product introductions and organic growth. We do not expect product deregistrations to have a material impact over the financial years '24 to '26, and we are confident in the growth outlook for our European business. Earnings were impacted by manufacturing interruptions at our Wyke site in the U.K. with under-recoveries of EUR 20 million for financial year '23. The Wyke site is a globally significant operation for Nufarm where we manufacture high-margin specialty phenoxy herbicides. In addition to the capital expenditure program that we announced in February of 2022, to address health, safety, environment and reliability issues, we are planning a further investment of $140 million to expand phenoxy capacity at the Wyke facility. And finally, to the APAC region, we continue to make progress in diversifying the earnings base to improve returns. New products launched in Australia, New Zealand and continued growth in our Indonesian business, are building earnings resilience. Discipline on working capital management, particularly in managing inventories of lower-margin foundational products is helping to improve returns. We're also reinvesting in our manufacturing facilities and are making a modest investment to upgrade our 2,4-D facility here in Laverton, which will bolster our competitive position by reducing our manufacturing costs. Turning to the immediate future. As we noted at the time of our financial year '23 earnings call, the first half of financial year '24 was expected to be challenging. And this has proven to be the case over the first quarter as the industry has continued to deal with an overhang of inventory and higher cost of goods, which has pressured margins. Pleasingly, we've seen good rainfall across the East Coast of Australia recently which is expected to lead to increasing demand for crop protection products and improved prospects for the winter crop season. Sales volumes have also improved in North America as our channel partners begin to replenish stocks leading into the spring cropping season, however, at lower margins. Generally, across the industry, channel inventories are relatively low following the COVID-related supply disruptions and volatility of active ingredient prices. In addition, grower economics remain favorable with attractive grain prices, a reduction in input costs and favorable seasonal conditions. We, therefore, expect improved demand for crop protection products in the second half of financial year '24. As a result of the challenging first half conditions in Crop Protection, we now expect that earnings will be less skewed towards the first half than previously indicated. We expect the group to return to growth in the second half of financial year '24 and we remain on track to meet our financial year '26 aspirations. As I previously stated, we also remain on track to record $50 million to $70 million of revenue from omega-3 in financial year '24. Prices for Aquaterra are expected to remain strong as reduced fishing quotas continue to negatively impact on the availability of fish oil. We're also able to confirm both additional grower contracts and intentions to plant omega-3 canola in 2024. We will be able to provide additional information when we release our first half results. However, at this stage, our aspirations to at least double revenues from omega-3 in 2025 financial year remain on track. Likewise, we are expanding plantings of carinata in 2024. We continue to diversify production across multiple geographies, which will help mitigate the potential impact of regional weather events such as the drought that we experienced in Argentina in 2023. In closing, I'd like to thank all of the team at Nufarm for continuing to deliver for our customers. Your unwavering dedication shown through again this year. And to our shareholders, thank you once again for your continued support, your confidence and your shared belief in the future value to be delivered from our business. And I look forward to providing an update on our first half performance in May. So again, thank you, and I'll now hand back to John.

Thanks, Greg. I'll now move to the discussions on the formal items of business as set out in the Notice of Meeting, and I remind you that the poll is open for voting. If you've not already done so, I encourage you to vote now. The Notice of Meeting contains all the material information in the Board's possession to assist you in determining how you wish to vote. This includes the Board's recommendation for shareholders to vote in favor of all resolutions, except item 5. Our Board renewal process concluded in 2023, as I noted in my formal remarks, with the retirements of Gordon Davis and Peter Margin, and appointments of Federico Tripodi and Adrian Percy. Federico and Adrian are both standing for election, and I will invite them to address the meeting along with Lynne Saint, who is standing for reelection. Details of each director's skills and experience are contained in the Explanatory Notes to the Notice of Meeting. And I'll now invite Federico to address the meeting via our audio link. Federico?

Thank you, John. Good morning, shareholders. Today, I am standing for election to the Board of Nufarm for the first time, after joining as an independent Non-Executive Director in June of last year. Thank you to my fellow Directors for inviting me to join the Nufarm Board and for supporting my election today. Over the last few decades, I have met organizations focused on innovation and growth strategies across the outcome, seed, food, bioenergy and feed industries. My past experiences expanded career at Monsanto to small entrepreneurial uptake innovators across the Americas including past executive experience as the CEO of a publicly traded acted company, corporate roles, research and development, boardrooms and a tech investment. I believe that technology and innovation can continue to transform our agricultural ecosystem to meet market needs and that there is an impressive number of new innovations that have not reached the market yet. Most importantly, I believe that the winners will be companies with a global footprint that have a disciplined approach to growth and innovation and that are capable of screening and advancing the right solutions with a strong focus on execution. It is my opinion that Nufarm has the right footprint, execution-minded organization and an integrated and relevant portfolio of opportunities to propel growth and shareholder value in this space. I look forward to bringing my experiences, time and commitment to the Board, including the Innovation Committee and the People, Safety and Remuneration Committee, and to contribute to these results, supporting a financially responsible execution-minded path to growth and innovation. Thank you for your support.

Thanks, Federico. Next, we will hear from Adrian.

Thank you, John, and good morning, shareholders. Today, I am standing for election to the Board of Nufarm for the first time following my appointment as an independent Nonexecutive Director last July. Thank you to my fellow directors for inviting me to join the Nufarm Board and for supporting my election today. I'm excited to have the opportunity to join the company at this stage in its development. I bring to Nufarm, my experience in working in executive positions in R&D-based companies in this sector as well as an adviser and Board member to a variety of earlier-stage companies developing transformational technology for the ag sector. I have a strong belief in the necessity and opportunity for Nufarm to move to a more innovative seed and crop protection portfolio, that will increase our value to farmers across the world. I look forward to continue working with the Board and executive team that values a healthy and productive company culture and is focused on its customers and its mission to both enhance food security and environmental help. I confirm that I have the capacity and desire to contribute as a Non-Executive Director for the next 3 years, including as a member of the Innovation Committee and the Sustainability and Environment Committee. Thank you all for your support.

Thank you, Adrian. And finally, I'll invite Lynne to speak.

Thank you, and good morning, everyone. Today, I'm standing for reelection as an independent Non-Executive Director of Nufarm, and I thank my Board colleagues for their support this past 3 years and for supporting my reelection. I first joined Nufarm -- the Board of Nufarm in December of 2020, and since then have served on the Remuneration, Nominations and Governance Sustainability and Environment and the Audit and Risk Committees, and since July of '21 as the Chair of the Audit and Risk Committee. As an executive my reach was global, in finance, tax, treasury, ethics and compliance, governance, risk and audit, all skills, which in the Nufarm context, allow me to serve you well as we drive growth in a prudent, structured, measured way and with sound governance. I look forward to continuing to contribute these skills to Nufarm over the next 3 years. And I can confirm that I have the capacity and the desire to continue as a nonexecutive director should I be reelected today. And thank you all for your support.

Thanks, Lynne. Now we move into the question section of the meeting, and I will shortly take questions on all items of business in the order that they are submitted or on any general questions relating to Nufarm that you have. I encourage you to submit your question via the online platform, if you've not already done so. As I mentioned earlier, the poll is open on all items of business except item 5. The proxy results for all items of business are now being displayed on the screen. It's there. You can see that proxy voting indicates Item 1 is likely to pass with over 99% support. I note this is on track to be the highest level of support for our remuneration report in the past 5 years. We're very pleased we've been able to reconcile and address the feedback from a range of shareholders after last year's first strike. At this stage, Item 5 on the Notice of Meeting being the Conditional Spill resolution will not be required to be put to today's meeting and our returning officer will confirm that and the final vote immediately prior to the poll closing. And at this point, regarding Item 1, we thank shareholders for their support. I'll now take questions from the floor, and I'll ask Grant Saligari, our General Manager, Investor Relations, to read me the questions submitted online, and I will decide whether to respond myself or ask one of the directors or executives to answer. So stay on your toes, those that are here. Chris Sargent from KPMG, as we introduced at the start, is also available to answer any questions on the audit. Grant? Questions from the floor. Please raise your hand and we'll pass the microphone 2, if there are any. We do have a few queued up online as well.

Stephen here. Just a first question on the actual running of the AGM. So interesting decision to come out of Laverton as opposed to the RSVP meetings. Just interesting in your thoughts on that whether attendants numbers are higher or lower? Is it [indiscernible]? Or is it an attempt to showcase the company's [indiscernible]?

It's definitely the latter, Stephen, and thank you for attending. You're here instead of being online. So that's proof that it worked. We've been able to decide to be able to involve people in their business. I'm also Chair of another public company, CSI, where we did this earlier or middle of 2023 and the feedback from shareholders is overwhelmingly positive. They were really pleased to be able to come to the office. Yes, west gate bridge and all the works slightly inconvenient, but we've got more people here than we had last year, many, many more. So pleasing and we're committed to having a hybrid format so that if it's too inconvenient, you clearly can still participate. And we think that's a very nice balance.

You mentioned CSI, where you are the chair. So CSI's claimed order book net assets of $1.18 billion and the market cap 3.3%. So it's got to serve the balance sheet -- market cap to $2.1 billion ahead of what [indiscernible] the did assets. It's a different story at Nufarm, you were claiming the older assets at $2.3 billion and the market cap after today's 6% drop and share price is down 1.9%. So our older assets are $400 million above the market cap. I guess, so my question is to the auditor and also probably to you, Chair, and maybe [indiscernible] Chair is have we been vigorous enough in terms of book value. So the key order matters you talk about are continuing to recognize tax losses as an asset and equal value of property, plant, equipment. So it looks like there's a pretty clear argument there's some material [indiscernible] at some point. And if that were to happen, we can't understand how that intersects the banking covenants [indiscernible], et cetera, et cetera. And is there a reason why we're not to be more accurate in terms of the carrying values of our assets given what the market is [indiscernible]?

Look, I understand why you can add up the numbers and ask the question in that form. I'm not going to talk about CSI at a Nufarm meeting. They're incredibly different companies. Firstly, I'm very comfortable, and the Board is very comfortable that the way we are reporting all that we're required to report is accurate and correct and meets all regulatory requirements. And secondly, this company is much stronger financially now than it was in recent years, much, much stronger. The intersection of how the market is responding to what it perceives in the future and where we are now is something that we can't control. We do our best to disclose everything that's going on, in order that we do our best. We meet all requirements around disclosure. We do our best to make sure that our narrative is properly understood. But the global ag sector is under a lot of pressure, and some of our peers have put out very dire results over the last 24 to last week or so, including overnight. Greg's comments today should give shareholders a lot of assurance that we're on track in the manner that we felt. And we will continue to prosecute what is before us. And the fact that we're comfortable to say that our aspirations for FY '26 remain on track should also give shareholders a lot of comfort. And hopefully, that will reflect in a much stronger share price over time. Let's see if there's any more questions around the floor first, and we'll come back to Stephen if you've got some more, and we'll go to some online. But any more on the floor, sort of go 2 questions per person at a time. And then one from the floor. Okay, we'll go online. We do have some.

I have several questions to the Chairman online. First question is in relation to the financial statements and the question of shareholder is, from your accounts, there is little information without your cost structure, a single [indiscernible] on cost of sales. Is there any pressing reason?

That's an interesting question. since I answered the last financial question, I think it's time that you all heard from our Chief Financial Officer, Paul Townsend. I know that we meet the statutory requirements in terms of how we report. The question is whether we should disclose more. So perhaps, Paul, you can reflect on that.

So yes, we do [indiscernible].

Yes. Great. Thank you. Next question.

There is a second question from [indiscernible].

We just need to wait for the microphone to come back. This is a low cost affair, the microphone don't move.

John, there's a question from online platform. Question is of general nature. Nufarm's businesses seem to have some [indiscernible] in the factors such as election in the United States or regular disclosure in the EU and UK. Do you have a [indiscernible].

Interesting observation. Firstly, the vast majority of what we do doesn't have a dependency on it. So plan A is fine. If for whatever reason, there's some deviation in the U.S. that would see particularly our biofuels potential in that market to be somehow slightly reduced. I'll come back to that. I'm sure the Rest of the World's demand will more than adequately compensate for that. There's a lot of regulatory advancement that's going on at the moment, all of which looks to be enhancing our prospects and lifting demand with more mandating or encouragement depending on which each country does. And the other thing to remember about the U.S. is that Washington might say one thing, but big states might do something else. So if Washington were to head left on that particular topic, maybe the likes of California and New York state would go further right. And I choose my left and right just to enjoy the just position of where those comments are coming from. So I don't think it's black and white as to what the question is, but I can understand why you had the sentiment. Rest assured we're in a good spot.

John, do you want to take question online?

Question -- just finish the online ones then come back to the floor. That might be easier for you. And is there anyone online that wanted to ask a question directly [indiscernible] as well.

There are no questions. There are several -- there are 2 more submitted.

Okay. Let's deal with the typed ones.

This is I think just a clarification terminology Chair, in the Annual Report, there is an excellent [indiscernible] the global extent of your operations. What is the difference between a C R&D center and C Innovation center?

That's an excellent question. And if you'd like to join our team as a spot the error in the annual report, you're very welcome. I'm told this question has been around for about an hour now that over time, we've been using language that's appropriate for each country. And so innovation center for Australia and R&D for every -- for the seed team in Argentina reflects just a local flavor, but we've ironed that out. And if you visit the website now, you'll find that there's one term that covers them all because there is no difference.

Final question from the online platform, Chair, I had a look at the Wyke website, where it seems that business has 85% of the global market in [indiscernible]. Could you give an indication as to where this revenue is generated to [indiscernible]?

It's a great question, and it goes to the heart of what we're investing in Wyke, it's a really important production facility for us long term. And I think, Greg, it's a good one for you to sort of expand on.

Okay. Just as a point of clarification, when we talk 85%, it's not of the global phenoxy's market, it's 85% of the specialty phenoxy's market. And as I said in my prepared remarks, higher margin, which is why we are investing additional capital in that facility. And when we look at the markets that those specialty phenoxy products get used, it's about 35% in Europe. So domestic market in the way that we think about it, 50% in North America and about 15% in the Australian market.

All right. There's no more questions online, Grant, and no one wants to pop a question over the audio facility. Okay. In the room, anyone further? We've got -- okay, we'll go...

So you are saying we are having issues with the microphone. So if you use it for us, and then we'll just restate it into the speaker for the people who aren't in the room. [indiscernible] the room.

My question is really related to biofuels, so energy cane and carinata, in BP as [indiscernible] what's standing in way for more rapid expansion?

The question is about the biofuels, so just to make sure those online can hear and energy cane in carinata and our BP deal and what standing in the way of doing more. I can assure you that the theme at every Board meeting is how do we do more because it's the most obvious thing, and it's a pretty exciting opportunity we have managing the balance between developing traits and expanding in the right -- in areas and working through quarantine and market development issues relevant to each part of the world we want to grow the crop in, but also then matching that with filling up as much as we can for BP's. Greg, I don't know if you want to cover in some more sophistication than that?

No. I mean there are some agronomic issues around carinata. It's a new crop. And often with farmers, if you're talking about a new crop, what will happen is that in the first year, they'll plant a relatively small area, and we think about 3,000 to 5,000 hectares as a development in a new market. And then once farmers understand, well, these crops grow in my soils, they grow in my climate, I can get a reasonable yield, and I can get paid well for that. And what we find is that the volumes grow. And that's been our experience in Argentina, where 3 years ago, we planted 5,000 hectares, then we went to 15,000 hectares, then we went to 30,000 hectares. Unfortunately, last year, we were impacted by the drought. But this year, we will plant in Uruguay, Brazil, again, in North America, and for the first time in Spain and France. And typically, what we find in year 2, 3 and 4 volumes start to increase. It's very difficult if it's a new crop to go into a new market and have farmers include a new crop in their rotation at significant volumes. It just doesn't happen like that. Unfortunately, it takes some time.

Terrific. Now Stephen if you have got some stuff you would like to chat to me over cup of coffee, I'd love to -- very happy to do that. And if you got a question for the meeting, you're most welcome to put it.

So obviously, last year's protests were unusually large. To have an LTI brand actually got down and a big grand strike. And you've got proxies showing that everything is sweet and happy this year. Would you like to talk a little bit about how you engaged with your bigger shareholders because you've got an interesting [indiscernible] with the 6 institutions above 5% and [indiscernible] 49%, but you've got 2 very large institutional shareholders in [indiscernible] L1, 15% and 13%, respectively. How influential were they in terms of where you landed in the changes you made in [indiscernible]? And could you also talk about whether they as your 2 biggest shareholders were given any insight into the selections you made on Board renewal. So did you consult with them? Did they make any suggestions on who is coming to the Board? [indiscernible] I'm just interested in understanding how active and engaged our 2 biggest institutional shareholders because they're not the usual passive index fund to the -- they're active, they're engaged, unusual share [indiscernible] talk a little bit about the level of depth of engagement you have with those 2 big shareholders [indiscernible]?

I'll deal with the second question first. There is no involvement at all. The Board takes sole responsibility for the renewal program. It's been something that was laid out prior to my joining, and I've -- and my fellow directors have worked through it in an orderly way, thinking of where our business is heading, where we're going to be in 2030 and the type of people we need around our table to give us the best positive governance and experiential context to get ourselves into the best position we can given the growth options that we have. And we think -- we're very pleased with the balance we now have around the table, and that's something that we thought through ourselves. And pleasingly, our shareholders have been very supportive of that as each step has come, as you can see from the votes for each director who's joined. On the matter of the rim, I chose my words a bit earlier about reconciling, very purposely because last year, our major shareholders, we're very pleased with our structure. But our institutional shareholders represented by proxy votes were not. And it was just an absolute split along that line. We met -- and we did a couple of things. We accelerated the change to our Chair of the Remuneration Committee. And Marie took over a little bit sooner than we had planned, so that we could start a fresh with dialogue. We met multiple times with the proxy advisers, in particular, to understand their concerns and to work out how we could reconcile it. And in doing that, we then updated major shareholders on the changes we were likely to make sure we didn't lose them on the other side. The worst thing would be the turn up here and have the 50% voted no -- vote yes, and the 50% voted yes but no, it would have achieved nothing for shareholders. It just created chaos. So we worked very hard on that. When we had settled on a path that we felt reconciled, we then worked with everyone in a very orderly simple way. Just telling them here's where we're heading, what do you think? And we're really pleased to have a 99% vote because it shows that we're where we would like to be. We also made the choice, and Greg was incredibly supportive of saying, well, let's put the new rules on his previous year, Grant, which is, I think, really giving a lot of respect to all shareholders. And that's received a very high level of support, too. So hopefully, that provides the color you were looking for asking that question. All right. We've got an online question.

Yes chair, we have one further online question. It's a financial question.

Grant, it might be easier just for John to read it into the microphone?

Okay. All right. The question is, why are you not calling in the subordinated notes? The current interest rate for those notes is close to 2% above market rates. I realize the notes are included in the capital section on the balance sheet. And by buying off these notes could affect some ratios. Have we reached the question? Or is that how it's typed. Okay. Paul, you might want to head up a little bit close to here to answer that. Trying to think through what the question is...

Why you're not pulling in the subordinated [indiscernible]?

Why you are not pulling in the subordinated notes [indiscernible]?

So I guess the answer is to that question is that we're [indiscernible]. The step-up is something that [indiscernible] comes back to capacity on our balance sheet to do that. But now where leverage is at the moment, we're on [indiscernible] to students. So [indiscernible] to the extent that we do have capacity, and we do not have any alternative investment opportunities, then we look to -- in that [indiscernible] shareholder returns [indiscernible] share buyback [indiscernible]. So it's something that [indiscernible] capacity to consider.

Thanks, Paul. Nothing further online. Anything further in the room? I just remind everyone the poll is open, but it will be closing soon. So please vote if you're online and you haven't voted already. And if you're in the room and you need to vote, make sure you've got your green shareholder card and you're doing so.

Chair, as a follow-up on that. So the reason I am here is my father passed away a year ago at 95. And my mother [indiscernible] here at the portfolio and [indiscernible] are their biggest investment, at 78. So she is like [indiscernible] what do I do and what's going on. So can we -- could you just explain a little bit of the history of how -- there seem to be 2012 issue and then it was a 2022 issue, it does seem a bit expensive. How we -- you start with such an unusually large reliance on this structure. Is it the key heritage true [indiscernible]. And what sort of protection to the holder of these notes have, if profit [indiscernible] down rate today [indiscernible], what powers do you have to seize distributions? Where do the distributions seize [indiscernible] come in to play?

I'm very sorry for your loss. It's tough time for anyone to go through. I hope that's all right. I hope your mother is well. As for the technicalities of the New Zealand notes, at a very simple level, where you hinted that the history of first to Nufarm, et cetera, yes, it is entwined in the history of Nufarm. In terms of the specifics about where they kick in and kick out, I'm looking to Paul.

So, [indiscernible] was in '22 -- 2022. There was no reissued [indiscernible]. The other important base is that we get [indiscernible] treatment as from [indiscernible] So I do see [indiscernible] taken out. The returns are effectively guaranteed. We are all together to pay those returns [indiscernible].

Not that you can give financial advice.

That's why I was a little bit nervous when I saw that reference to the accounting treatment of better ratings and then I saw disparity between book value and market based. And I'll start getting thinking well, what happens if you take it right there. So [indiscernible] sort of a related question, there's been 38 takeover the last 4 years of current or former ASX 300 companies. So we haven't seen take [indiscernible] like this for a long time. [indiscernible] With our share right under pressure, I mean the [indiscernible] Albanese government wanted to buy [indiscernible] for 20% of $40 and now they [indiscernible]. Have we had any [indiscernible]? Have we had any discussions? Private equity, corporate players, because [indiscernible] taken out at the moment. And we are looking directly cheap global business. What is the situation with corporate play that you've done. [indiscernible] there is no blocking shareholder. Can you tell us a little bit about any discussions, independent people involved or what's the situation with control at Nufarm?

Stephen, you are very experienced in these matters. And you know that as a board, this is one of the most sensitive things. And actually, we can't say anything that's useful to answer that question. If something is going on and we're relying on nondisclosure because incomplete. How on the earth can I answer it. And if we say nothing is going on, people might interpret that another way. So it's a very difficult topic. What you can -- what shareholders should be very clearly in their understanding is we're committed to growing this business in a strong, sustainable way. It wasn't a small thing for us to do to come up with the FY '26 aspirations and to public statement. And if you look to our FY '23 financial statements, what you can see in there, particularly in the rem section is how we've tied those aspirations to management outcomes. There is a very strong message from the Board as to what -- where we're heading and what we are focused on. And in terms of corporate activity, that is our focus. We believe we are undervalued at the moment, we're determined to change that. What is very interesting in a wider Australian context is the vast majority of Australia's ag sector is privately owned. Australia has an amazing ag sector. It punches above its weight globally, both in terms of production, quality and in innovation, in particular. And yet -- and the capital markets, it's largely ignored, and the short term is in the capital markets makes it very difficult for the cyclical -- the natural cyclicality of agriculture to be dealt with. So most [indiscernible] will hold it privately. And that's frustrating. But we're determined to give every Australian shareholders and those globally that want to invest a chance to be part of what we believe is a very exciting global innovation ag story.

[indiscernible] A couple of things on AGM [indiscernible]. I've done [indiscernible] online [indiscernible]. Great that you're doing hybrids, so thanks for that. [indiscernible] in the future. [indiscernible] you don't do questions as a job lot and that you follow the agenda. So when you're sitting at home and you tick, I've got a question on the LTI, it's a bit tough. [indiscernible] So you don't have a board meeting and say, "Hey, I was on the agenda. Has anyone got a question on anything? You follow the agenda. So it's more respectful to [indiscernible] et cetera, et cetera.

Well, we'll have to agree to disagree on that. This is an effective way of running a meeting, and we've had very good discussions on meaningful things as a result as opposed to -- you can generally find, if you stick to the agenda, there are quite meaningless discussions on [indiscernible]. So it's about -- that's a personal preferences where we're comfortable with the manner in which we're doing it and that will be the way we continue.

Final thing on processes. You put on proxy at start of the meeting, which has taken the heat out of the room on the rem. A lot of people say, "Oh, we never spoke to properly because they want to [indiscernible]. So if you're going to do it early, [indiscernible]. Now, lot of the companies are doing this now. [indiscernible], which is more companies are doing. Because this is really an election results in [indiscernible] and then we discussed the election results. So that's probably what the AGM really is. And you've done really well, 99% [indiscernible].

Oh, no. I think they went, yes, yes, yes. I'm actually doing a cross audit of all senior management votes. There's a zero in on what happened here.

Finally, we've got 15,000 shareholders, probably at 300 voted. So trying to get this up some companies in tenth Acacia last year are disclosing the results by our shares and shareholders like in the skin. So conditions got the data, you can just put it out there. Now unfortunately, it will show that there was probably a majority of small [indiscernible] voting against rem. So you'll get it the going. Now I will tenant some flavor of brand, and it will actually be the shareholder's headcount both and actually close to 50-50. But it is still data that will encourage retail shareholders to vote. Because we just feel [indiscernible]. If you disclose how many voted, more are about to vote. So that's a transparency question. So when you do the results announcement, can you include the headcount vote? And so if I go now, I can see my vote in results as opposed to it being swamped by the big [indiscernible].

We'll take that on those for next year. We're locked and loaded on what we'll do today, okay. I understand your point. We had a very high level of voting to start with and a very high level of support.

Now also, could you make a copy of the [indiscernible] online? Because you did that with your earnings results, you've got a decade of transcripts and audio, but I couldn't find any record of last year's AGM online. Again, just respecting the small shareholders. Just can you put the [indiscernible] transcript. So anyone who's not here and 99% are not here, can able to see what happened.

Look, in the end, we just we want people to participate if they are able to attend, they can. I don't think it's hard to keep the audio up for long if we took it off after because no one has visited it. Yes, it's not hard to have it there.

[indiscernible] has been doing AGM transcript since 2003. It's just the level of transparency to tell [indiscernible] keep a record [indiscernible] what happened at the AGM, not just what the Chairman [indiscernible] but what the actual discussion was.

I'll take that on notice as well, but it won't be hard for us to put at least the recording of it online for those that are interested. We might try and run down the rabbit hole of whose [indiscernible] to find out who is diving into it. That's just a joke, who would be interested in an AGM. All right. I think we're all done. Thank you all for your attendance. It's terrific to be here and be able to welcome you in the Nufarm headquarters. And that concludes the discussion on the items of business and all the matters we needed to cover in our meeting. I just need to check that we collect the cards. That's important to sign that for you. And any sign that we will need -- item 5. Okay. So we'll keep the poll open while we collect the cards. If you voted online, you don't need to. Did you vote online Greg?

No, I did not.

Are you responsible for the percentage of votes in [indiscernible]. Anyone else that needs to vote? And online -- for those -- how many do we have online? All right. All right. So we can close -- no one's got a card, we can close the meeting. Yes. All right. Thank you. I now formally close the poll for the meeting. Final poll results will be released to the ASX and posted on Nufarm's website later today. Thank you very much for your participation. On behalf of the Board, that's a very sincere thank you from all of us, and the meeting is now closed. Thanks very much.