Orica Limited (ORI) Earnings Call Transcript & Summary

[Presentation]

Good morning, ladies and gentlemen, and welcome to Orica's 2024 Annual General Meeting. My name is Malcolm Broomhead, and I am your Chairman. And at today's meeting, we're holding it in a hybrid format as we did in the past, and I'd also like to extend a welcome to those shareholders who've chosen to join us online or by phone today. We do have a quorum. So, I declare the meeting open. And with your permission, I take the notice of meeting as read. I begin by acknowledging the traditional owners and custodians of the land on which today's meeting is being held, the Wurundjeri people of the Kulin nation, and I'd also like to acknowledge those people who have come here more recently, Australians all. I also acknowledge the traditional custodians of the land and waters on which Orica operates throughout the world and pay our respects to elders past and present. For your safety, I'd just like to draw your attention to the emergency exits. There are a number of them around the room and have signs above the door. Should an emergency require an evacuation, please just follow the emergency exit signs and the instructions of the Park Hyatt staff. If you have a mobile phone, please ensure it's turned off or on silent for the duration of the meeting. I'd also like to highlight that the meeting is being recorded and will be available on the Orica website. I'd now like to introduce my fellow directors and your company secretary. Seated on my immediate right is Sanjeev Gandhi, your Managing Director and Chief Executive Officer, who will be presenting with me today. Next to Sanjeev is Denise Gibson, who will be seeking reelection today; and on my far right, Karen Moses. My far left is John Beevers. Next to John is Vanessa Guthrie. And on my immediate left is Erin O'Connor, your Company Secretary. Gordon Naylor and Mark Garrett are joining us remotely today. Melbourne-based members of our Executive Committee are also here today, and they are seated in the front rows, and other members of management are here as well. So if you have any questions you'd like to ask them, they will be available after the meeting. Our auditors, KPMG, represented by our audit partner for the FY '24 reporting period, Gordon Sangster, is also here. Before we move on to the resolutions, as outlined in the Notice of Meeting, I'd like to discuss some key topics important to Orica and to you, our valued shareholders. On behalf of the Board, it's an honor to address you as we celebrate 150 remarkable years of the Orica journey. So from humble beginnings, which actually started in the Victorian goldfields in 1974, supplying the old timers going up to Ballarat and Bendigo with their explosives, we've grown to become a global leader in mining and infrastructure solutions. This is a story of resilience, innovation and unwavering commitment, and I'll talk about our rich history a little later. But starting with safety, which is our most important priority at Orica always. Sadly, this year, we reported a fatality as a result of a collision on a public road in India. The accident involved a third-party heavy haulage truck that struck our mobile manufacturing unit from behind, leading to the death of one of our employees. We conducted a thorough investigation and implemented the learnings from that sad event right across our operations. With a continued reduction in serious injury case rate and no significant environmental incidents across the global operations this year, we remain committed to fatality prevention and the prevention of harm going forward. Now moving on to performance. Orica's ability to adapt to the world as it transitions is reflected in our achievements this year. We have delivered our strongest financial performance in a decade with $806 million of earnings before interest and tax, which is up 15% on the previous year. Our continued quality of earnings and growth across all sectors reflects the successful execution of our strategic initiatives, commercial discipline and the ongoing global demand for our premium products and technologies. The final ordinary dividend of $0.28 per share, unfranked, brings the total dividend payout this year to $0.47 per share, and that is a payout ratio of 56% of full year earnings. Sanjeev will talk about performance in more detail shortly. In addition to our strong financial performance, we've also recorded significant progress towards our sustainability targets. Ahead of schedule, we this year completed out the first phase of our decarbonization strategy, accelerating the delivery of our climate change commitments, and that resulted in our net operational Scope 1 and Scope 2 emissions being 43% below our 2019 baseline. The Board and its committees have an annual program in place that covers key strategic operational oversight and governance activities to enhance effectiveness in achieving our purpose and supporting strategic decision-making, which includes sustainability and climate resilience. It's with deep sadness that we announced the passing of our former Non-Executive Director who was here last year of Orica and distinguished leader, Gene Tilbrook, in August of this year. Gene's leadership and contributions over his 10 years' tenure with Orica left the lasting impact on the company, and his legacy of integrity, mentorship and advocacy for corporate responsibility will be fondly remembered. Moving now to Board renewal and succession planning. Our Board renewal and succession planning are critical, obviously, to developing and supporting Orica's strategy, enabling us to discharge our responsibilities and to create long-term shareholder value. The skills, knowledge, experience and diversity of your Board are reviewed regularly to ensure that they are aligned to achieving our strategic objectives. And in accordance with best Orica practice, I'd like to indicate my current intention to leave the Orica Board once I've served 10 years, which will be around this time next year. So let me finish with a summary of Orica's unique history, and there is a book that some of you may have seen outside, which we'll go into this in more detail if you wish to have that. Throughout our history, Orica in its various corporate forms has undergone several quite significant transformations. But essentially, the company followed the Australian economy and the industries in which Australia is dominated, starting with explosives for the mining industry, as I mentioned earlier. The company became involved in fertilizers, paints, chemicals, plastics and pharmaceuticals as the Australian manufacturing and economic development pursued. We've, therefore, created products that have transformed everyday life. And our story began in 1874 during the gold rush here in Victoria. And it was -- we were then a small company named Jones Scott and Company and supplied explosives to the goldfields or to the old timers going up there. And the plant at which that was done is at Deer Park, which is still -- you can still see if you go around the Western Ring Road. Quickly expanding, the company merged with Nobel Explosives, named after, of course, Alfred Nobel who invented dynamite, and after whom the Nobel Prize is named. And in 1884, the Brownsburg plant in Canada was acquired, which is a crucial plant in our network today. By 1937, Deer Park began manufacturing explosives for industrial and military purposes. We clearly no longer manufacture military explosives. But in the 1940s, we then diversified into chemicals. And Dulux, meanwhile, independently had begun supplying paint to the Australian market in 1918 as part of the [ BAM ] company, which was partly purchased by ICI in 1928 and of which ICI gained majority control in 1947 and 100% control in 1988. So Dulux became 100% part of our group at that time. In 1958, the ICI ANZ Chair or Australia-New Zealand Chair, Sir Alexander Fleck opened the first skyscraper in Melbourne, now known as Orica House, which is across the road on Nicholson Street, and that's our global headquarters today, designed by Bates Smart, although only 18 floors high, it was the highest building in Australia and the Southern Hemisphere at that time. In 1961, ICI Australia and New Zealand was listed on the Australian Stock Exchange. In 1971, we became ICI Australia and in 1988, acquired Berger British Paints and Selleys, which cemented our leadership in the Australian decorative market -- decorative paint market. In 1989, the company commissioned our ammonium nitrate plant and cyanide plant in Yarwun in Queensland, which remains a crucial asset for us today. In 1998, ICI decided to get out of this part of the world and to specialize in pharmaceuticals, floating their majority share of ICI Australia, which became known as Orica on the ASX, and we were then a newly independent company. Orica owned the largest global explosives business, having bought the offshore business from their ICI parent at about that same time. And we're now the market leaders in that. And during the early part of Orica, we're also market leaders in paint, cyanide for the gold industry, chlorination of water supplies here in Australia, fertilizer, polyethylene, PVC and general chemicals, amongst other things. And it was a remarkably strong collection of leading assets and brands. In 2003, we then merged Incitec, which we owned a majority of with Pivot, and that was listed on the stock exchange. And in 2005, we purchased many of Dyno Nobel's offshore assets. We weren't allowed to get the assets here in Australia for antitrust reasons, but that secured our position as the global leader in that industry. Later in the 2000s, we rationalized and sold Aquinos, divested Incitec Pivot, demerged Dulux, and finally sold our chemicals business in 2014, which is now known as Exxon. This allowed Orica to narrow its focus to focus on it's core mining services businesses. In 1918 (sic) 2018, Orica acquired GroundProbe, which kickstarted our entry into the digital mining and technology area, pivotal to our strategy for growth today. Since then, we've continued to pursue growth, expanding our footprint and embracing new categories, new capabilities and geographies, and we're now a multibillion dollar global organization. And while that seems like a lot of changes, remember that they have occurred over 150 years. I think anyone that's been associated with this company would have the same view. We've always attracted wonderful talent, and this has led to innovation, which we've led in this country. And our commitment to safety, the environment, the community has been pivotal to our success. And that complements and makes sustainable the value that we deliver to our customers and to our shareholders. Orica now operates across more than 400 sites, servicing over 100 countries daily. And this global reach and the impact is made possible because we empower our employees to make decisions aligned with our core values. We can't run the business, clearly, 400 sites around the world, from here. Some have tried. It doesn't work. And therefore, the way is to empower people on the sites to make those decisions. And to do that, we have to be sure that they think the same way around the globe, and that comes back to values. And those values of safety, respect, collaboration, integrity and excellence, guide performance targets and behaviors. And that fosters a very strong sense of ownership, which is probably the hallmark of Orica. Before I invite Sanjeev to speak, I'd just like to thank you on behalf of the Orica Board, and we'd like to thank the entire Orica team for your ongoing dedication and commitment, which has been pivotal to the success of what has been a very busy year. Importantly, we thank our shareholders, our customers, industry partners for your continued support and investment in Orica. It's been a significant year for us, celebrating 150 years of operations, and one that will transform the company and unlock greater long-term value for shareholders. I now welcome your Managing Director and Chief Executive Officer, Sanjeev Gandhi, to address you.

Thank you, Chair, and thank you to all our shareholders for joining us today. Let me start with safety. Safety and the prevention of harm is the #1 priority at Orica. As Malcolm mentioned earlier, sadly, we reported a fatality as a result of a collision on a public road in India. We conducted a thorough investigation and implemented learnings across our operations, and we must continue to do everything in our power to make sure everyone returns home safely every day. Over the past 5 years, our serious injury case rate has improved significantly, with the rate of serious injuries decreasing from 0.220 in FY 2019 to 0.117 in FY 2024. Despite improvements, our key focus remains fatality prevention and the prevention of harm. Moving now to people and culture. Our people are the foundation of our company and our most valued asset. Today, we are a global and diverse team of more than 14,000 people, servicing customers in over 100 countries. The dedication and capabilities of our people to face challenges and remain true to our promises ensures Orica's legacy as a global leader, which will continue, and we deliver long-term value to our customers, communities and shareholders. Orica has a unique workplace culture, fostering innovation and inclusion and encouraging the potential of people. This year, we invited our employees to share their insights about working at Orica through our employee engagement survey called Our Say. We received our highest ever response rate of 69%, and the results revealed an employee engagement score well above comparable industry benchmarks at 89%. Around the world, our people feel highly engaged and proud to work at Orica. As a global organization with people from more than 90 cultural backgrounds, we are committed to diversity. We continue to develop our women in leadership programs and remain focused on increasing the number of female senior leaders throughout our organization. Last year, we launched our diversity, equity and inclusion strategy. And while we have achieved some of our targets in FY 2024, we do recognize that for Orica to continue to be a great place to work and for us to keep attracting and retaining the best people, there is much more we can do. Moving now to our performance. This year, we continued to successfully execute our strategy and delivered another year of high-quality earnings and strong financial performance. Through our strategic acquisitions, we have positioned Orica for growth beyond blasting, becoming the global leader in each of our business segments. Increased uptake of premium products, blasting technology, digital solutions and contribution from our recent acquisitions have underpinned our FY 2024 performance. This year, EBIT of $806 million equates to an increase of 15% on the prior year. Net profit after tax was $525 million, including $115 million in profit from significant items. We achieved a return on net operating assets of 12.8%, up from 12.6% last year, driven by our improved earnings, the execution of our strategy, and very strong market demand. Orica's business segment reporting model changed this year to provide transparency across our three key segments. The Blasting Solutions segment includes Orica's core blasting and quarry and construction and tunneling operations in Australia, Pacific and Asia, North America, Latin America and Europe, Middle East and Africa. The segment contributed $755 million of EBIT, up 13% on the prior year, driven by strong commercial discipline, increased customer adoption of premium products and blasting technology, including WebGen wireless blasting, and 4D. Specialty Mining Chemicals includes Orica's existing sodium cyanide and emulsifier business, and the newly acquired Cyanco business, positioning Orica as the world's leading and largest producer of sodium cyanide. The segment achieved 36% earnings growth on the prior year and contributed $69 million of EBIT, driven by the integration and delivery of the investment case for the Cyanco acquisition. Digital Solutions comprises orebody intelligence, blast design and execution solutions and geo solutions. This includes GroundProbe and Terra Insights. These are industry-leading brands which have established Orica as the global leader in geotechnical and structural monitoring, both in the mining industry and in the civil infrastructure industry. The segment achieved 29% earnings growth on the prior year and contributed $70 million EBIT, driven by strong customer demand, integration of our Axis and Terra Insights businesses, and an improved performance, notably annual recurring revenue and churn rate. Our prudent balance sheet is well positioned to provide resilience in a volatile external environment. We have continued our disciplined approach towards capital expenditure as we supported the core business, pursued opportunities for growth and expansion and delivered on our sustainability goals. Moving now to sustainability. Climate change and decarbonization are amongst the biggest challenges and opportunities impacting our industry today. As a global leader, we are committed to achieving our ambitions of Net Zero emissions by 2050. As Malcolm mentioned earlier, this year, we completed the first phase of our decarbonization strategy significantly ahead of schedule. The installation of technology in our Yarwun site is forecast to reduce its total Scope 1 and Scope 2 emissions by 50%. The installation has accelerated the delivery of our climate change commitments, resulting in our net operational Scope 1 and Scope 2 emissions reducing by 43% from our 2019 restated baseline. We are in a strong position to continuing to deliver further emission reductions across our value chain, while creating more sustainable operational outcomes and offering our customer solutions that support their sustainability commitments. As we look ahead, our climate goals will be achievable with support and partnership with governments, suppliers and partners as we work towards a lower carbon future together. Access to competitive renewable electricity, recycled water and natural gas is absolutely essential for this transition. I would like to call out our manufacturing turnarounds team as part of our overall performance for the year. This year represented one of our most significant years in terms of planned turnarounds at our Kooragang Island, Yarwun and Carseland manufacturing plants. The turnarounds were all completed safely and successfully, which is a huge testament to the team's capability and delivery. This critical maintenance activity will ensure safe, efficient and reliable manufacturing operations into the future, and the security of supply for our customers. Turning now to community and relationships. It is important to us that we continue to build positive and transparent relationships with people in the communities we work in. Through our key areas of focus, education, environment, health, well-being and social welfare, we aim to contribute lasting positive outcomes for the people and environments within our host communities. This year, our community investment of $4 million places us on the track to exceed our corporate community investment goal of $15 million by financial year 2025. Throughout our work in host communities, our people have benefited significantly from this deeper cultural understanding and stronger ties formed with First Nations people, especially those here in Australia and in Canada. While we continue to make great progress in executing our strategy and delivering continued high-quality earnings growth, we remain deeply committed to continually improving our performance across each area of our business. We've had a good start to the new financial year. We expect the demand for our Blasting Technology, Specialty Mining Chemicals and Digital Solutions to continue to grow as we partner with our customers to satisfy their strong appetite for new technology and digital solutions. While inflationary pressures, higher energy costs and increasing geopolitical risks remain an ongoing challenge, our performance demonstrates our resilience and ability to adapt and mitigate ongoing macroeconomic and geopolitical challenges. In our historic 150th year, we have transformed Orica from being a global leader in blasting solutions with our recent acquisitions to also become the global leader in geotechnical and structural monitoring for mining and civil infrastructure as well as the global leader in specialty mining chemicals, supporting the gold mining industry and efficient mineral extraction. On behalf of our Board and the Executive Committee, we thank the entire Orica team for their ongoing commitment and dedication to delivering on our strategy and purpose. We also thank our shareholders, customers and industry partners. We look forward to continuing our collaborative partnership with you, and remain in a strong position to continue our momentum and deliver on our strategy for growth. I invite the Chair to begin the formal terms of business.

Thank you, Sanjeev. Before commencing the formal part of this meeting, I'd just like to cover some important procedural and technical matters. This is a shareholders' meeting, and only shareholders and their proxies and attorneys are -- and their authorized representatives can participate in this meeting. And if you wish to submit a question or a comment, please ensure that they're relevant to the matters before the meeting. And if you do have a question regarding the details of the operations, management will be available outside after the meeting to answer any questions that you may have. In terms of how questions will be managed today, I'll introduce each item of business separately and invite questions on all items of business together after all items have been introduced. And I'll invite questions from the floor, followed by written questions, which have been relayed to me by Delphine Cassidy, Orica's Chief Communications Officer. A shareholder telephone line was made available for audio questions with preregistration required, however, no shareholders have registered for questions by telephone today. For those shareholders in the room here today. You'll note that there are two microphones, on there and there, on either side of the auditorium. And when I invite questions later, if you'd make your way to the nearest microphone, give your name to the microphone attendant. And if you're attending the meeting online, written questions can be submitted at any time, and to help with the efficient running of the meeting, I'll encourage you to do so as soon as possible. Please click the Ask a Question button and follow the instructions. Questions submitted online may be moderated and summarized, particularly if there are questions on a similar topic or which have already been answered during the Q&A. However, we will endeavor to make sure we broadly cover the issues that shareholders have raised. Any question or comments submitted that we consider to be defamatory or contains offensive language will not be read out or responded to. If your question is asked on behalf of a particular group or organization and you would like that known, please include that in your question. For shareholders joining us via the webcast, the virtual meeting online guide, which is available both on the Orica website and the online platform, includes all the information you need to know about how to participate in today's meeting. If you have any trouble using the online platform, please refer to the guide or call the telephone number shown on the screen for assistance. I thank you for adhering to all these procedures. Finally, in the event that we experienced technological difficulties during the meeting, we may need to take a short break. If any online attendees encounter technical difficulties, the webcast will be available after -- on our website after the meeting. As indicated in the notice of meeting, each resolution will be decided on a poll. To allow everyone attending the meeting, ample opportunity to cast their vote, I now open the polls in respect of all motions that shareholders will vote on today. A number of our shareholders are not able to join our meeting today but have taken the time to send us their direct or proxy votes in advance of the meeting. And to ensure that all shareholders who have voted directly, all proxy votes in advance of the meeting have their views known, the number of direct and proxy votes received will be shown on the screen after I present each item of business. In relation to open proxies received for the Chairman, they've been voted in favor of all resolutions. And I appoint Julie Stokes of Link Market Services Limited, the company's share register, who have examined and prepared summaries of the direct and proxy votes received, to act as returning officer for the poll. Please also note that if you are a proxy holder or attorney and your appointer has directed how you should vote on any item, you must follow that direction. And if you're attending in person, you should have registered your attendance as you entered the room today. If any shareholder or proxyholder has not registered attendance at the door, please do so now. Staff from Link are here to assist you. And I now move to the formal items of business of the meeting. The first item of ordinary business is to receive and consider the financial report, the director's report and the auditor's report for the year ended 30th September 2024. As a reminder, I'll invite questions on all resolutions after we've gone through and introduced all the items of business, and I'll therefore defer discussion on the financial report until later in this meeting. Moving on to the election of Directors. Resolution 2.1 of the Notice of Meeting seeks the reelection of Denise Gibson as a Director. Denise was appointed as a Non-Executive Director in January 2018. She is Chair of the Innovation and Technology Committee and is a member of the People and Remuneration Committee and the Nominations Committee. In accordance with the constitution of the company, Denise retires, and after being eligible, offers herself for reelection. I now invite Denise to say a few words in support of her reelection.

Good morning, all. Thank you, Malcolm, and thank you to everyone for being here today and for your investment in Orica. It is truly a great privilege to seek reelection to the Board of Orica. I'm highly, highly energized by the company's performance and trajectory, and I commend Sanjeev, the executive team and Orica's global employees for their performance and strategic execution. I've had the privilege of serving as the Chair of the Innovation and Technology Committee since its first inception in June of 2019. The committee is focused on the acceleration and commercialization of Orica's cutting-edge disruptive technologies. It is very exciting to see the company at the forefront of industry innovation. Across Orica's regions, we continue to see an increased pace of customer adoption of blasting and digital technology solutions. With the company's green technology road map and commitment to sustainability. Orica will bring further value creation to the ecosystem and to its customers. I am also a member of the People and Remuneration Committee. It is central, of course, to Orica's success, and we continue to focus on ensuring the safety of our employees and the communities in which we operate. In my two successful entrepreneurial companies as well as my corporate roles, I have accumulated over 30 years of technology experience in product design, supply chain, customer engagement and commercialization of innovative products and solutions. I continue to serve as the Co-Founder and Executive Chair for ICE Mobility. In April of this year, it was my very great honor to be inducted into the Technology Hall of Fame in Washington, D.C. I am a very active industry leader in emerging technologies, commercial development and deployment. I serve on the Board of Industry Leaders of the Consumer Technology Association. In addition to my industry work, I also serve as an Independent Director on the NASDAQ-listed Vox International. It is my continued intention as an Orica Director to deploy my experience in support of the company's innovation and commercialization of disruptive technologies, and further to apply my knowledge of cutting-edge technology to support the transformational and technological strategies of the company. Should I have the privilege of being reelected, I look forward to working with my fellow Directors and with Sanjeev, and to the exceptional, very exceptional management team as they continue to advance the business results, strategic initiatives of Orica. Thank you again for your investment and support of Orica and for your time today.

Thank you, Denise. Denise abstains from voting her own shares on this resolution, and results of direct and proxy votes received in respect of the resolution are now displayed on the screen. Resolution 3 in the Notice of Meeting is to adopt the Remuneration Report for the year ended 30th of September 2024. And as you'll be aware, the vote on this item is advisory only and does not bind the company nor the directors who remain responsible for the remuneration policy of the group. However, the Board takes into account feedback from our shareholders, including the discussion and vote on this resolution when we're considering any future remuneration strategy. The Board sets the remuneration strategy with a view to ensuring our market competitive remuneration framework can attract, retain and motivate the talent Orica needs, and which delivers outcomes for executives that are aligned with shareholder returns. The three elements of remuneration at Orica are fixed pay, a bonus for the achievement of short-term objectives and a long-term incentive plan. Full details of Orica's remuneration framework and a summary of the company's performance and the effect on remuneration outcomes of the 2024 financial year can be found in the Remuneration Report. By casting your vote in favor of the Remuneration Report, you'll be indicating your support for the remuneration strategy the Board has adopted for its most senior executives, including the Managing Director. I wish to highlight that none of your Directors nor any of the senior executives named in the remuneration report may vote their own shares in relation to this resolution. Results of direct and proxy votes received in respect of the resolution are now displayed on the screen. We now come to the proposed grant of performance rights to the CEO under the long-term incentive plan as the long-term element of his remuneration for the 2025 financial year. The actual number of rights to be granted will be calculated as set out in the explanatory notes of the Notice of Meeting. And under the ASX listing rules, shareholder approval is required for a Director to be issued securities under an employee incentive scheme. Any votes cast in favor of this resolution by the CEO or an associate will be disregarded in accordance with the ASX listing rules. Results of direct and proxy votes received in respect of the resolution are now displayed on the screen. The final item today, resolution #5, is the proposed approval of potential leaving entitlements for the Orica Directors of Orica subsidiary, company -- entities, so the Orica Directors of those subsidiaries. Under the Corporations Act, unless the shareholder approval is given, Orica's restricted from providing benefits for people who hold or have held in the last 3 years a managerial or executive office in connection with the cessation of their employment or retirement from Orica or any of its related bodies corporate. And as a global business with subsidiaries in many jurisdictions around the world, many subsidiary directors are employed in jurisdictions where the local requirements, policies and practices in relation to leaving entitlements are very different to those here in Australia. So your approval will enable Orica to treat its departing employees appropriately in accordance with the applicable laws, market practice and our remuneration practices. It also ensures that employees are not disadvantaged by moving to a different role in different part of the world or by fulfilling a role as a subsidiary Director. So approval is not being sought in relation to Orica's current team management personnel or executive committee members or anyone who is a key management personnel or member of the Executive Committee at the time of their cessation of employment, even if they are a Director of an Orica subsidiary. Our results and proxy votes received in respect of the resolution are now displayed on the screen. As I mentioned earlier, I'll now take questions on all items of business, and I'll start with questions from each microphone in turn.

Chairman, your first question is from Mr. Adam Raymond of the Australian Shareholders Association.

Thank you, Mr. Chair. The -- I'll start with resolution #1, go through them in order. I note, very good financial performance as far as what shareholders care about, which is profit, which flows through to them. But at the same time, there's been a small drop in revenue. Is the expectation going forward that, that drop in revenue is going to be reversed? Or what is the projection that is expected?

Yes, that's right. We do expect that it will be reversed. Sanjeev, do you have anything to add to that?

Thank you, sir, for the question. Revenue is not a very good proxy of the Orica business, because the revenue that we deliver, which is a function of our selling price and the volumes we move is a very direct factor influenced by our cost of goods sold or cost of raw material. And as you may know that post the COVID crisis and stabilization in the global supply chain markets, we've seen a correction downwards in some of the key input factors, and that gets translated into a lower selling price. That does not have an impact on our margins, and that's why you might have realized over the last couple of years, our earnings keep growing double digit, but our sales or the top line is flattish with a slight incline. Last year, there was a slight reduction. So this will all depend on what the future in terms of our raw material costing, which flows into the selling price, will reflect into our sales top line number. But as Malcolm said, the expectation is that we will also see top line growth coming through, but the biggest focus of myself and my management team is to maximize our earnings as you very rightly said, and to continue on that growth trajectory because that's where we return value to all our shareholders. So that's the big focus for us.

Do you have more questions? No one else does, on Item 5, Obviously, with the changes with the acquisitions that you've made in the past year, you felt this was necessary to include this provision. How -- What sort of order of magnitude is this going to cost Orica to finance?

I wouldn't have the order of magnitude. The issue we have is we operate in more than 100 jurisdictions all over the world. And a lot of the legal entities that we have in different countries all over the world have a requirement that mandates that we need to have a Board, which is all of our local employees in those countries and jurisdictions, and they are then seconded as members of the Board of that particular legal entity. And because we are a global organization, and we keep transferring people around for people development, but also for knowledge sharing and career development. Also with the acquisitions, we've acquired in a lot more people on different kinds of REM systems. We have had an issue when people are rolling off those Boards in legal entities all across the world to take over the next responsibility that we were constrained by this particular clause, which is very typical to the ASX-listed companies. And that's why we're asking the shareholders for the allowance. I'm not sure of the quantum, it's not material. It just gives us the allowance to treat them fairly when they move on, incentivize them to move on to different responsibilities and take their knowledge and also ensure career development. I don't think it's a material number, but that's something that we can come back to you on.

And one final question. The change in the AGM process of taking questions after each point and moving all the questions to the end, what was the prompt for that change?

Just efficiency, really, because sometimes you get repeat questions and people really have a question which they ask when it refers to another matter of the agenda. So it's just a matter of everyone coming up and getting all your questions together. Okay. Any further questions from the floor? One over here.

Chairman, a question from Mr. Arthur Miller.

My question is based on the vote. All this thing, there is already decided, the vote. How the shareholders can [ reply on ] their vote, and the Chairman already second the vote for, how we can rely or believe that is correct? Who monitoring that? I don't know. You put their 99 -- most 99% vote for, all the questions here for the meeting, and that's put me a question mark, how we know this 99% vote for, where it come from. You put the proxy votes there on the screen, and 99% most is vote for.

Yes, that's true. So there's a couple of aspects to that, Mr. Miller. One is that we have very large shareholders, the fund managers who are investors in Orica, So when you get -- when all of those people are satisfied and vote for something, then there will get high percentages. The second issue, which goes to the integrity of the process is that these are all audited by our share register link. So we have an external audit process to make sure that the numbers you see are correct.

Well, the problem never mentioned in your Annual Report. At least, I had a problem with the Market Link. I have to send mails and talk to them because they didn't send the hard cop the Annual Report. And maybe the proxy vote, they had to fax that to me because I didn't have it. And I complaint to them, they create a lot of bureaucracy to give the information to me. And then I had a problem once too was all the dividends used to pay to pay direct to Link Market. Link Market didn't pay the dividends to me because they didn't have my bank account because the bank account was done with Orica in the first place. And you never transfer and they never pay. I have to go back there to complain about they pay back part of the money owned to me because I never vote, never vote agree, Orica higher market link to look after all these issues, the shareholders. And I think that's very unprofessional and a bit dodgy too because they make it difficult now, like many shareholders have the same problem. And I have a problem -- what they did, they didn't send the Annual Report, the hard copy to me. And I was really upset about it. And even though it's a part, but the corporate law to provide to the shareholder all information. And this guy they didn't. Because that how many people vote there or doesn't vote because they don't have the information. That's my question, okay? Because the Board -- I invest in 23 different companies, okay? And what I can tell you, they are all the same. It's like a political parties. They control everything, they make the [ detate ] everything. You don't accept any information. They only sometimes the shareholder association makes some comments. Otherwise, you don't take notice anything. I don't see they change the behavior of the Board is the same people and they vote for one board to the other. We have once not very good Independent Directors. It did not for one company go to the other, and they vote they getting there. How? I don't know. So that's they come to vote here. They show this all their rhetoric, how good they are. We don't know if that's the word you say. The politics, they do the same. They say how good they are and ask everybody to vote to them. So my question come back, how the integrity exists on the board, there's none. Because we don't know what they do there. They say the Annual Report mentioned something, but the things that are mentioned there is normally, you are very good, we are performing good. If you lose money, you still say we are very good. You don't tell the truth. So that's my...

Well, I reject those comments, Mr. Miller, out of hand. But look, in terms of your Annual Report, it is practice now in the ASX to send Annual Reports online. We certainly have hard copies available outside. And I'm sorry, you didn't get a hard copy of your Annual Report now. In regard to your dividend, I also apologize that you didn't get your dividend and that your bank accounts were not known to link. So that's a problem that we will fix. And if you see the Company Secretary, Erin O'Connor, after the meeting, she'll take care of both those issues for you.

The other question I would like to mention is why you don't prove the Annual Report to the shareholders. The idea, put it in internet or put a e-mail because you save a lot of money on that and put the shareholders because I cannot read the 300 or 400 pages, the Annual Report. I have to print. You save money because you don't print, how many millions of dollars cost to print all those Annual Reports. And they try to do that...

Okay. Well, I think I've answered that question -- thank you very much. we will take care of that after the meeting. And most shareholders prefer to get their Annual Report online.

Who say that? I never said that. let me finish...

I understand that. There are shareholders who prefer online copies...

Let me say that. You don't want me to -- you want to overtake me, okay? Let me -- the reason you saving a lot of probably millions of dollars because when you have the 2 million or 3 million or 5 million, 6 million shareholders and it costs a lot of money for the company, but the best way you ask the shareholder to print because I cannot read the Internet all that. I have to print. And you supposed to provide that to us? You don't, okay? And the same thing, the proxy vote, you try to avoid that.

No. Look, I understand your frustration. You prefer hard copy Annual Reports. In future, if you contact the company Secretary or contact the company directly rather than going through Link, we will provide you an Annual Report.

Lastly, Chairman, let me ask you why you decided to get somebody from outside look after that. Why instead they send the Annual Report, the company direct to the shareholders, you get the market link of Computershare, the other one involved on that because all is to save money for yourself and they want more money, increase fees and everything you get every year when you at the meeting. And I vote all against that because I believe is the idea is pass the cost somebody else and the shareholders have to put this cost there in their pockets. Because you, the company is saving money, they say, look, how good we are doing. I calculate more or less those -- the cost of the Annual Report, how much cost, that costs are quite a lot of money there. And you save that money, they say how good the company is doing there. It's not real is you shift the cost somebody else, and that's why you do it.

Thank you for your point, Mr. Miller. I'll take that on board.

Chairman, a question from [ Heather Sligfhter ].

Very sorry, but I'm going to go along the same line as this gentleman. I too did not receive the Annual Report and nor did I receive the Notice of Meeting. There's been quite a few fluctuations over the years that I've been with Orica. Sometimes I get an Annual Report but I get nothing else. Sometimes I get the voting paper, I get nothing else. I send off the letters to registry to say that I do not have a computer. I know that, that's hard to believe, but there are still some people in the world who do not have a computer. I can't look up the annual report on my smart phone on a little tiny screen. No. I found over the years when I am with other companies, too, and I've had to ring the registries and ask them to send out the missing documentation that often it doesn't arrive at the time to give me enough time to read everything and then send back the voting form. So I've got a big problem there. But my biggest issue really is that I am constantly, not just with Orica, but a lot of other companies sending off letters or the preference communication form with a note attached that I do not have a computer and that I am yet again advising you that I require all documentation to the Remuneration Report for Orica today for the voting today. I've sent in my proxy vote because I didn't know whether I was going to get here to the meeting, and I voted no for the Remuneration Report simply because I didn't receive it in the Annual Report. And I have no real means of looking it up, as I said, a smartphone, a little tiny thing. So that's my -- why I...

Well, look, obviously, this is a problem, and we will endeavor to -- particularly with individual shareholders rather than the big corporate ones, and we will endeavor to fix it up. And look, if we don't, please contact the company secretary and stay on our case because we do need to fix that. Okay. Any other questions?

Chairman, we have a question from Simon Livsey.

I've got the Annual Report. I had the trouble getting it. I went to Link Market Services in Collins Street, and they didn't have anybody there on Friday to come down with an Annual Report. They said, we'll e-mail it to you. And I said, "Well, I'm not going to print off 200 pages or whatever it is." Anyhow, I got on the Sydney Link Market Services, and they said, "Oh, you can come up at the 22nd floor in Sydney to pick up a copy. No, any here." I rang Orica in East Melbourne, got on to a nice lady there, and she said, "I'll put you a copy down on the reception desk down there and you can pick it up there." That was okay. It was on the way to Computershare in Collingwood because I decided I've got a couple of bank meetings coming up this week, ANZ and National Bank, and I thought I'd like the Annual Reports, too. So on the way down here, I picked up the Orica Annual Report, then went to Computershare unannounced, said to the reception lady, I'd like two Annual Reports. 5 minutes later, they were down there. And she said, "While, you're waiting, would you like a cup of coffee? We've got a nice little cafe here." And I said, yes, that would be nice. So Computershare are #1 in the registry business. Link Market with this change of owner, they seem to be going downhill. They told me they don't have people in the office on a Friday. That's why they couldn't bring the Annual Report. So this is this working from home business. I think, if they're not providing the service, you should be getting a cut in rates.

Again, very good point. We obviously have an issue here.

And I notice we haven't had anything to mark this 150, what do you call, birthday or whatever?

Outside, their book.

No, no, no. Your picture is in that book more than anybody else. It was about half a dozen times. That would have been better off, special dividend for the shareholders, something to mark the occasion.

All right. Thank you for the suggestion.

And I hope we got a nice birthday cake out there, too.

Okay. Any other questions? Okay. Delphine, do we have any written questions?

Yes, we do. Mr. Chairman, and there are 5 questions from Stephen Mayne. He has requested that I read them at verbatim, and he sent the five questions before he headed off on his next appointment. So here we go. Under our constitution, Board nominations must be lodged between 45 and 90 business days before the AGM. With this rushed AGM, the latest nomination date was the 11th of October. However, Orica didn't release its results until 14 November. Does the chair agree it is poor governance to close Board nominations before you've told shareholders how the directors have performed? When asked this same question last year, the Chair talked about staff convenience and problems with the late January AGM. Well, why not do it in February, then, just like Aristocrat, which also has a September 30 balance stage?

Okay. We have, I think, talked about this in the past. Orica has previously tried both late January and I believe, February for AGMs. The problem with that is this is a 30th September year-end company. And by that period of time, no one is slightly been interested in what occurred in the previous financial year. They're focused very much on what's happening now. And it -- so it just was too late. This is as late, one as early to get the accounts ready but also as late as possible to get it done before Christmas. I do agree that, that then has some impediments. But it -- on balance, talking with all of our shareholders, that is the best way to do it, particularly given that the holiday season then comes in between when we would have normally held our AGM in February or late January. And we are in compliance with current regulations. And so we will continue to do it and to endeavor to get the -- clearly, all the information, we need out in time. We have another question? Delphine?

Yes, the next question. At last year's AGM, you reelected and said that you probably wouldn't recontest in 2026 when you would turn 74. You also said that all other incumbent Orica Directors were capable of being Chair. Today, Malcolm, you brought forward this retirement to around your tenth anniversary on the Board, which would be December 1, 2025. Could Denise comment as to whether she'll be a Chair candidate? And will we be using a recruitment firm and canvassing external candidates when executing this Chair succession process.

Look, I'll take that question. I think I always indicated that this was about when I would step down. So I'm not sure where you got that view from Mr. Mayne. But that's normal good governance. So I think when people last too long way, start to become counterproductive. The way corporate governance works in this country is that shareholders elect the Board and the Board chooses one of their members to be Chair. We have certainly reviewed our internal Chair candidates, and we believe we have -- or the Board believes it has very good options to choose from. Obviously, we'll need to seek a new Director to replace me, and that person may or may not be a potential Chair, but it is difficult to come into any new company and Chair it straight away. So that's where we stand. We will be appointing an additional Director in accordance with our normal governance procedures going forward.

The next question is in regard to the Cyanco acquisition. In March this year, we did a $1 billion acquisition, which was funded by a $400 million placement at [ $15.84 ], a 9% discount to the current share price of $17.39. This was followed by an unfairly capped $65 million share purchase plan for your 35,000 retail shareholders. When 5,700 holders lodged $100 million worth of applications, why did you ignore written request to uncap the SPP like other companies, such as ANZ, Bank of Queensland and a few others that have been named? Why mistreat retail like this?

As far as the funding was concerned, the Cyanco acquisition, in particular, was too big to be taken on to the Orica balance sheet at that time. And therefore, the company chose to raise capital. We also raised some additional capital because of extra or -- acquisition targets of which Terra Insight has become one of them. And both the institutional and the individual shareholders' applications were very much oversubscribed, and unfortunately, there had to -- principles involved in how they got allocated, and they were -- the same scale back occurred for all shareholders.

The next question is in regard to the reelection of Denise Gibson. Denise has an unusual [ CV ] for a Director of an ASX-listed Orica, given that she's a U.S. resident and doesn't have any particular background in the chemical industry, instead being a highly regarded founder of two substantial U.S.-based companies in the telco industry. Could Denise summarize her journey onto the Orica Board and explain her ongoing connections with the company she founded? Also, what proportion of Board meetings does Denise attend in person versus online, and will this be a final 3-year term?

So I can answer most of those. I think Denise can add to them if necessary. One is Denise was selected for the Orica Board for two reasons. Well, three. One, she's a very good director, but secondly, she is -- represents North America. She is a resident in North America. And as you know, a large percentage of Orica's business is conducted in North America. So having an insight into that market and economy is really important to us. The second reason is, Denise joined at a time we were just beginning to -- our journey into away from direct blasting into digital and technology, generally. And that now is a significant business for us, earning around about $100 million of EBIT. And that's from a standing start. So Denise has been very, very useful to this company in helping us, from a Board perspective, in navigating that journey. As far as your other boards, I don't know that, that's a business of this company, but if you'd like to talk about that, Denise, you certainly can.

Yes. ICE mobility, which I cofounded and serve as an Executive Chair, was founded in 2014. So it's a 10-year-old company. It is engaged in providing unique technology and logistics solutions primarily for hardware devices that would be transported to various types of locations that have various requirements. So it's consistent with my product background, yet seeking to provide a high degree of customization to our customers that can range anywhere from a mass retailer to a business that's primarily in the technology area that needs assistance with their logistics capability. In serving on in that role, I do not serve as the CEO. My partner does. And so my involvement is very much limited to the areas of oversight strategy and governance.

And prior to her two startups, Denise was at Motorola, where she both ran some businesses, but also was Head of HR [ on stage ]. So there are skill sets from that period of time which are very relevant to what we do within Orica as well. Okay. Other questions from Stephen?

The very last question is asking, did any of the proxy advisers recommend a vote against any of today's resolutions, including this year's rem report? If so, what reasons did they give? And he's also asking why not disclose the proxy position to the ASX with the formula addresses like many other companies do? We've got -- he said that we've got this data available, so why not release it in respect to your retail holders.

Okay. Well, to give you that information now, all proxy holders voted for all resolutions this year. So no one was against. And as far as the proxy results, we disclose those to the ASX after the meeting, which is consistent with legal requirements of most ASX-listed companies. Are there any other questions at all? No? Okay. Well, look, as there are no more questions, all that remains is to complete the poll by submitting your own votes, if you've not already done so. And that concludes today's business, and I now formally close the meeting. Please join us outside.